1938-05-06

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, hon. mem-
bers of this house and the people of Canada generally will have learned with deep regret of the passing at an early hour this morning of His Grace the Duke of Devonshire, who held the high office of governor general of this country from 1916 to 1921.
The Duke of Devonshire inherited and honourably maintained an ancient family tradition of public service. Before coming to Canada he had already, as a young man, sat in the House of Commons for almost two decades and had occupied important posts in the British ministry. Nor did his active participation in the public life of the old land cease with his term as governor general. From 1922 to 1924 he served as secretary of state for the colonies, which portfolio he held at the time of the imperial conference of 1923.
But it is his years as governor general of Canada which are uppermost in our thoughts to-day. Those who were responsible for the conduct of public affairs during the Duke of Devonshire's term of office realized how much his English traits of composure, of balance and sound common sense contributed to the steadiness of national life in those critical years. In his person the Duke of Devonshire was kindly and friendly, deeply and genuinely interested in the well being of his fellows in all walks of life. Many who knew him even but slightly will recall his quiet, unremitting and generous support of worthy causes and his interest in all that pertained to Canada's social, cultural and economic activities. In his official capacity the Duke of Devonshire discharged his duties with constant regard to British tradition and British constitutional practice.
The people of Canada will recall the charming and delightful personality of the Duchess of Devonshire and the manner in which, along with the members of their lovely family, she shared the interests and labours of her husband. To Her Grace and to the members of the family in their bereavement I should like to extend on behalf of the members of this House of Commons and of the people of Canada the expression of our very sincere sympathy.


Right Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, on behalf of those who constitute the official opposition I desire to associate myself with the observations of the right hon. Prime Minister (Mr. Mackenzie King).
The Duke of Devonshire came to Canada at a very difficult time. The war had been in progress for some years, and conditions were certainly anything but satisfactory from the

The Late Duke of Devonshire
standpoint of the allied cause. It was my privilege to see much of him, after I had left this house, because of his active participation in the work of the Red Cross society. Perhaps he could be best characterized as possessing common sense to a very singular degree. His balanced judgment, his calm approach to the problems of the country and that sterling common sense which always manifested itself enabled him to deal with very complex problems, not only of administration but also of policy, affecting not only the Red Cross society but also other organizations that had to do with the life of our country at that time, notably the Patriotic Fund.
The Duke of Devonshire was the first head of his great family to undertake the service of the crown overseas. It was an experiment for the head of that great Whig family, one of the most powerful of all the illustrious families of England. How successful that experiment was and how well he discharged his duties is a matter of history. He was interested in everything that had to do with the welfare of this country. I think one of the most powerful addresses I ever heard made by a public man was an address he made at a time when the fortunes of the war were running very strongly against us. That magnificent courage which is a distinguishing characteristic of men of his race was never more manifest than on that occasion, and I shall carry with me always the memory of that occasion. He seemed to be an apathetic gentleman, but in point of fact he was most observant and had a very keen interest in everything that was going on around about him. I remember his indicating that he thought one of the greatest compliments ever paid to him was by the stock men of the west, who found him possessed of such wide knowledge with respect to live stock that they wondered if they could not secure his services as a judge aiter his term of office had expired here as governor general. He had a very great appreciation of the compliment thus paid to his knowledge of live stock, of farming and of everything that had to do with agriculture. His wide training in public life, to which the Prime Minister has referred, enabled him not only to discharge the constitutional duties of governor general with great acceptance, but to be of the utmost assistance to those who were responsible for government at that time. I know that the prime minister from 1911 until 1921 would, if he were present, pay high tribute to the assistance the governor general gave to him in the discharge of his very onerous duties.
Her Grace the Duchess of Devonshire, a daughter of the distinguished Lord Lans-downe, who had been governor general of Canada, seemed almost intuitively to know this country and its peoples. Her charm and remarkable understanding and intelligence were manifest on all occasions, so that I can say frankly that everyone felt at home in her company. The family, when they were all here, were an aggregation of young men and women such as one would find in any well conducted home.
Our sympathy goes out to the Duchess of Devonshire and to her family in the great sorrow they have experienced. Although the Duke of Devonshire during the last few years had not been able actively to participate in public life, his interest in Canada after his recovery from a stroke was always manifest, and I fancy there are very few Canadians who came in contact with him who have not been invited to partake of his generous hospitality, whether in his home in London or at his great estates in Derbyshire and Yorkshire. Every Canadian was always welcome; the latch-string was always down. He will be greatly missed by all Canadians who knew him, and it must be a matter of profound satisfaction to those associated with him, and to his family, that he was able to make so great a contribution to the public service of the empire at a period of great stress and strain.
I am sure, Mr. Speaker, you will on behalf of this house express our sincere sympathy to the Duchess of Devonshire and the surviving family of our former governor general in their bereavement.



FARM IMPLEMENTS COMMITTEE


[Stage Direction]
The house resumed from Thursday, May 5, consideration of the motion of Mr. Johnston (Lake Centre) for concurrence in the second report of the special committee appointed to investigate farm implement prices, presented to the house on the 8th of April, 1937.
Mr. G. E. WOOD (Brant):: Mr. Speaker,
I have listened with a great deal of interest to hon. members who have given expression to their opinions and their interpretations of the report of the special committee on farm implement prices. After paying strict attention to their contributions I have come to the conclusion that there are only two sides to every question-the side I take, and the wrong side. I sometimes marvel at the ability of some hon. members to bring out the phases

2614	COMMONS
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of a particular argument which go to prove anything they wish to prove, and at their attempts to leave an impression favourable to the cause they desire to support.
The hon. member for Greenwood (Mr. Massey), in high-sounding phrases, endeavoured to pose as a man attempting to clarify the national air from the creation of false impressions, and his statement with respect to the speech of the Minister of Agriculture (Mr. Gardiner) has tended only to strike one more blow upon the wedge being driven between certain sections of the country. Having regard to the record of the party with which the hon. member is associated, he should be the last to emphasize this particular virtue, because I am satisfied that the party to which he belongs has made the greatest contribution towards driving that wedge between the agrarian and the industrial interests.
The hope of Canada lies in a great national party, a party whose principles are liberty of thought, liberty of conscience and liberty of action. There is always more or less of a conflict, under our constitution, between the local and the larger interest, and it is the duty of those who happen to be responsible for the smaller interests to bring the needs of those smaller communities respectfully to the seat of government, so that the different interests may be woven together into a great national fabric which will serve as an instrument to be used for the well-being of the nation as a whole. It must be understood by all that people in different communities cannot be expected to hold exactly the same viewpoints.
I do not propose to enlarge upon the arguments which have been placed before the house by the special committee, because I believe the ground has been pretty well covered. Any figures I may have accumulated have already been given, and I refuse to repeat what has already been said. The fact still remains, however, that no matter what arguments have been put forth, since 1930 neither the implement manufacturer nor the farmer has received a reasonable profit.
I believe there is a solution of our difficulties, and it does not lie in extremes. I wish to go on record as taking what I believe to be the middle-of-the-road course, one which will give adequate protection to industry without jeopardizing the interests of the consumer. My belief is that freer trade is the best form of protection, because after all our interests must be those of the great masses of the people. The working man must be protected; he must have a larger market in which to sell the product of his labours. There must be low cost production so that there may be an outlet for the product of the working man;

goods and services must be available at prices which will not too greatly reduce the purchasing power of the consumer and which will encourage the sale of more goods and produce more opportunities for labour.
When I speak of industry I include all the forces contributing to it. Capital, labour, and the consumer, all play a part in our economic life. There should be harmony among all these classes so as to encourage a reasonably fair exchange of services. Many arguments going back into ancient history have been made in an endeavour to produce evidence to bear out what hon. members have attempted to prove. I feel that perhaps the most futile of all performances is a bemoaning of the past, its mistakes, its missteps, its missed opportunities. We cannot recapture the past, even if we try. Let the dead past bury its dead, and let us live for the future.
I believe we are at the beginning of a new era; we must face conditions as they are. We must accept the facts. It is always wdse to look at the past and to examine the experiences we have had so that we may plan more accurately for the future. I believe legislation in the national interest and capable of application could be brought down in this connection. We have disadvantages to overcome, but on the other hand we enjoy many natural advantages. As people living on that section of God's earth situated north of the forty-ninth parallel of latitude, around the great lakes, we can develop an economic structure by taking a middle-of-the-road course, honestly facing the surmountable difficulties which are blended in with the natural advantages that we enjoy. We can make this country one in which people may have an opportunity to give expression to their choice of whatever particular type of life they wish to pursue.
True, while this is primarily an agricultural country, there are many of our population who are not natural farmers and who find an outlet for their energies in industrial fields. I feel that we should provide an opportunity for these people. In this new era into which we have entered, notwithstanding what our opinions may or may not have been in the past, there are certain conditions which we have to face. There is a tendency to-day toward balanced economics. One of the difficulties that must be surmounted in industrial life in Canada is the fact that our geographical conditions are such that we have an added expense in freight rates on account of having a long haul over a practically barren country. This is particularly true with respect to agricultural implements. This in itself adds to the

Farm Implements Committee Report
cost to the western consumer of many of the products he uses from the industrial east.
A report from the Canadian National Railways shows that we deliver freight on that line for practically -97 of a cent per ton mile. The fact is that there is 1,000 miles of territory along this line in which very little business is done in agricultural implements. This does add to the cost to the consumer.
One of the advantages enjoyed in the United States is the fairly even distribution of farm implements over the whole country. The Canadian manufacturer has to pay freight on this 1,000 mile haul, which extra cost must necessarily be charged to the consumer of his product. I take the view that that has a tendency to increase the cost of Canadian-made machinery to the Canadian farmer. I might note that all this extra cost is not charged against the western consumer; a certain percentage is charged to the Ontario farmer. On a binder weighing approximately one ton there would be an additional freight charge of $10 due to its having to be hauled 1,000 miles through northern Ontario. This should be taken into consideration in making any comparison with United States prices.
A comparison of prices from 1913 to 1925 is hardly fair, because part of the increase in price is due to the fact that some of the equipment was not included in the implements sold in the earlier years. I remember several years ago when a sheaf carrier was not considered in the standard price of a binder. Pole trucks were not used at that time and their cost was not included. We have to look at the situation as we have to face it to-day. There is also the matter of Alemite greasing, but in my view the advantages of this added equipment are more apparent than real. However, it adds around $13 to the price of a binder. We farmers have demanded that it be included and we must pay the price. The same thing applies to the oil bath mower, which adds another $16.50 to the cost. All these things should be taken into consideration when making comparisons. I am prepared to listen to any arguments advanced in favour of this added equipment, but I am a little doubtful as to the value of these things as far as service is concerned. Nevertheless they are the style, we demand them and we get them. As a practical farmer I happen to have in my bam to-day a binder that has cut thirty crops. It never had a pole truck or Alemite greasing but I expect that it will cut a few more crops, or at least I am
51952-166*
hoping it will. I submit that some of these older implements had the ability to do the work just as well as those being sold to-day.
I believe that the industrialists in the Dominion of Canada have an opportunity to manufacture goods for the citizens of this country, but their place in the economic life of Canada is such that they must provide the goods and give a service to society that will compare with the purchasing power of the consumer. It is noticeable down through the history of industrial life in Canada that when the prices of farm products are in close relationship to the prices of manufactured goods, that is when we have enjoyed the greatest measure of prosperity. I should like to draw attention to a chart which goes back to 1917. It shows that the periods in which we enjoyed the greatest measure of prosperity were the periods when the prices of farm products exceeded those of manufactured goods. From 1917 to 1920 agriculture and industry enjoyed an unprecedented measure of prosperity. From 1921 to 1926 there was a considerable slump and during this period the prices of manufactured goods were considerably above those of farm products. From 1927 to 1929 the ratio of farm product prices increased and we again enjoyed a measure of industrial progress. From 1930 to 1936 the prices of manufactured goods were higher than the prices of farm products and we all know the condition of affairs that existed in that period. From 1932 there has been a gradual increase in the purchasing power of the farmer and the accompanying impetus to trade bears out the argument I have made. Prosperity of industry is dependent upon the prosperity of agriculture. I do not think anyone denies this.
I often wonder why there are not more steps taken to improve this condition of affairs and to keep the country from getting into the slough of economic despondency as often as it does. The argument of extremes has been used; we have heard the argument of exclusionists and of those who hold the opposite view. But these arguments of extremists remind me of the farmer who attempted to hook on to his loaded wagon with a long chain at the end of the wagon tongue. When he endeavoured to pull his load he found that when he tried to turn a corner he eventually landed in the ditch. It seems to me that many of the arguments that have been advanced here were simply a hope that by going to the extreme the wished-for results would be obtained. I do not believe anything will be gained by taking that attitude.
2616	COMMONS
Farm Implements Committee Report
I submit that we should take the middle-of-the-road course and I contend that that is the course taken by this government. They have reduced the tariff whenever it was thought wise so to do. They have acted in a manner that they believed was in the national interest. This process must be slow. I believe this government has gone a long way and the figures prove that it has been successful. Since 1937 the purchasing power of the farmer has been coming up closer to the prices paid for manufactured goods. If we can continue this condition of affairs, there is no question that prosperity will be the result. '
I have every reason to believe in the good judgment of the Minister of Finance (Mr. Dunning). I believe he will follow what has always been the policy of Liberalism and see that no harm is done to industry. The functions of government will be used for the furtherance of industry and the continued development and welfare of the people at large. I hope and trust that we will come to the point when we shall have stability in tariffs. The tariff is an instrument which we have always had, and it could be used for revenue purposes. The protection that a tariff for revenue gives incidentally is justified, but when it comes to applying the tariff to the point of exclusion I do not think there is any justification for it.
In passing let me say that the right hon. leader of the opposition (Mr. Bennett) made, in my opinion, a splendid contribution to the national life of this country during his term of office. During the election campaign of 1930 he used some rather strong phrases, which I am not going to repeat now, to the effect that he would protect the markets of the Canadian people, and I can remember after that campaign how some of my good Conservative friends naturally drew my attention to the election results, and my answer was, "Well, I hope and believe that Mr. Bennett will give us an application of those principles which he has been advocating." I am prepared to give him credit for honesty of conviction; for he did apply high protection, and he was successful at least in showing the Canadian people that that is not the road to recovery. I believe, furthermore, that he convinced many even of his own party of that truth, because they are not talking protection so much to-day. I think the right hon. gentleman contributed to giving the death blow to exclusionist protection at least.
The attitude I am taking may not suit either side, but I do not know that I have a right to take sides. I am trying to give ex-
I Mr. Wood.]
pression to my own views. I had occasion last year to travel through the west and I visited many of my colleagues on their farms. I found them all extremely fine hosts. I had heard down in Ontario that many of the difficulties of the west arose from the fact that the average farmer there did not farm properly but simply mined the soil. I am prepared to say for our western farmers, and my opinion may have some value because I have always lived on the farm, that the west is manned by the finest group of farmers that I think you could find in any section of this country, and I say that advisedly. I believe they are doing everything possible, with conditions as they are, to better themselves and to meet the situation as they find it to-day. Unfortunately there has been a national calamity which has made it very difficult in some respects for our western farmers, but they are facing the future with a courage that I think is wonderful; I doubt whether we farmers in Ontario could stand the adversity which our fellow-farmers in the west are facing so courageously.
I have mentioned that that industry has certain surmountable difficulties in connection with freight rates, but against that the western farmer has the advantage of cheap land. It is marvellous to see the amount of energy they can accumulate with the modern agricultural implements they have to-day. Their land works much easier then ours does in the east, and they have the advantage of cheap land. We ask them to take that natural advantage and blend it with some of the disadvantages they have, and perhaps we can share some of the advantages we have and blend them with their disadvantages. We need the west, and we want the west to prosper, because after all the west is the great market for many of the products of the east.
I am going to take this opportunity to give the results of a little survey I made of what I saw on my trip to the west; last year. I quietly took the opportunity to go to the various country stores to see what I could find that was representative of the town of Paris and the city of Brantford which I have the honour to represent in this house. In almost any community of any size I saw in glaring print "Massey-Harris implements'' and "Cockshutt implements." Travelling through the country where there was roadbuilding I would come across road-building machinery, and almost invariably it was from Adams Limited at Paris. On the way out I noticed that the sleepers were equipped with blankets from Slingsby Manufacturing Co., Ltd., Brantford, and even the men were wearing suitings and overcoats made by Slingsby's.

Farm Implements Committee Report
I have already spoken of the hospitality of my western hosts. As I went into some of their lovely homes I noticed that where they had waxed the hardwood floors, nine times out of ten they were using Johnson's wax, made in the city of Brantford. If they could afford to put a carpet on the floor you would see if you turned it up, that it was a Harding carpet, made in the city of Brantford. I did see some buildings painted, but I saw a lot more that needed paint. Those that looked fresh with paint I noticed were using paint from Scarfe & Co., Ltd., in the city of Brantford.
I went on from Winnipeg to Vancouver. I happened to be standing on the street in Vancouver when I met the hon. member for Marquette (Mr. Glen), and I drew his attention to a truck body that went by, which was made by the Canada Carriage Co., Ltd., in Brantford.
1 went up the inlet to a place called Ocean Falls, a narrow inlet where the only means of communication is by water. There I stood on a wharf which is used by a company manufacturing pulp and paper. They were using pulp machinery made by Waterous Limited of Brantford.
I went on to Prince Rupert, and going through a hardware store I saw they were selling products of the Crown Electric Company of Brantford. In Winnipeg I ran across a Harold Sanderson refrigerator made in Paris. Everywhere I went there were evidences that Penman's underwear, made in the town of Paris, was being widely sold in the west.
I must not overlook the fact that a large proportion of the farmers were using good judgment by buying Brantford binder twine. We are very proud of the Brantford Cordage Company, which has been able to exist in the city of Brantford without any measure of protection. As I went into the homes I would see the Locomotive washer, which is made in the city of Brantford, and looking through the jewellery stores I would see jewellery boxes made by E. A. Gunther of the city of Brantford. Last but not least-I have already mentioned the generous hospitality of our western friends-in our travels through the country, as we stopped at some inn or lunchroom, naturally the ladies always chose a Dinner sandwich and Crispy Crunch made by the Paterson Biscuit Works of Brantford, which was founded by a predecessor of mine who represented that constituency as minister of customs in the Laurier government previous to 1911.
What I wish to draw attention to is that it ill becomes us in the east to speak at all
disparagingly about the west or even about their opinions. I hope I am charitable enough to recognize that what they say is worth listening to, even if we do not agree in every sense of the word. We will take all these various viewpoints and bring them here to the foot of the government, as good Liberals should do. If we are to be national we must welcome various viewpoints. It is only by bringing those various points of view before the government that we shall be able to effect a compromise, which is the only possible basis of solution of our problems. If each one insists on enforcing the will of one particular section of the country, nothing is surer than that the wedge of which the hon. member for Greenwood spoke will bring about disaster.


Mr. MALCOLM McLEAN (Melfort):: The fact that the subject of this debate has been before the house off and on for so much of this session-


Mr. SPENCE:: 
Mr. MASSEY:: I do not wish to interrupt the hon. gentleman but I am sure that he wants to make an accurate statement. The price reduction was made in October, 1921, and the reduction in duty of 2J per cent was made on May 24, 1922, a matter of eight months.
I was in error when I said six.


Malcolm McLean: The figures that I have in my hand are those of the International Harvester Company of Canada, Limited, and I believe they are probably correct:
" Schedule of manufacturing costs, 8 foot binder, using an average burden, 1913, and 1919 to 1936 with sales realization comparable thereto."
The reduction made in October would not be of much value in that year, but 1922 is shown to be the year when the reduction was made. I do not propose to follow that further except to say that it was not the first time that the industry in Canada did make reductions in deference to public sentiment. In 1893 similar reductions were made after a campaign carried on by many people against the comparatively high prices that then prevailed. As one who attended every sitting of the committee which I possibly could, I would say that it is not a single thing alone that has caused an increase in the price of late years or has caused the high prices that have worried the farmers and others in the country. My hon. friend from Greenwood (Mr. Massey) in dealing with the industry said something about the lack of consideration for the workers. He said, referring to the industrial worker:
What of his job, which provides his means oi livelihood, when his expenses are so heavy and when the uncertainties of his position these days are a constant source of echinated worry ?
I confess I had to look up the dictionary for the meaning of the word " echinated." I thank the hon. gentleman for introducing it to the house.


An hon. MEMBER:: What does it mean?


Malcolm McLean: Someone asks what it means. It is descriptive of the problem we are investigating at the moment. It is a "prickly" question bristling with difficulties, and sometimes those who touch the bristles are liable to be jabbed by them. The point I wish to make, while thanking my hon. friend for this addition to the knowledge and culture of the house by his use of that very descriptive word, is with reference to what he said about the difficult position of the worker in the industry, the weight of his expenses and so on. That is one of the complaints I make against all artificial costs and burdens that are laid upon industry in Canada. In the long run the worker does not benefit, and as a net result of all these various burdens placed one on top of the other, constantly pyramiding, there is danger some day of the whole structure falling down. If that table standing there on four legs is tinkered with, if someone says that this corner is too low and therefore puts a piece under this leg, raising it to that extent, we all know what will happen. When you raise that leg for the benefit of the owner of industry, someone else will want to raise the leg next to it for the benefit of the workers in industry and that will leave your table lopsided. Some bright mind will then undertake to raise it at the other end, putting
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a piece under a third leg for the benefit of the financiers and transportation interests, and finally the consumers insist that they should have their corner raised too, and that is sometimes attempted. The result is that your table is raised equally all around, and you can see what that means; the level over all is the same as before. But in the meantime you have added a heavy cost to industry and that additional burden must be levied ultimately against many with small incomes, those in receipt of small fixed payments of various kinds, and who cannot benefit from the adjustments made.
Among the factors which the committee was told contributed to the increase at the present time were materials, labour, factory burden, freights, commissions, time sales, collections, bad debts and the lack of volume. There is another one that they should have added and that is the matter of financing, because unquestionably when any industry gets into the hands of financiers, the money men, who think that wealth consists of money and papers, then it is going to add to the burden of running that industry in many ways which often bring it to the brink of failure. I should like to look at some of the arguments advanced in the committee with respect to various materials, and I notice that there were some curious anomalies. In connection with paint, which is an important item, the price of flax seed went down and the price of linseed oil went up. Undoubtedly that added to the cost of machinery. In connection with lumber, we are told that Canadian white pine and British Columbia fir in 1913 stood at 100 a thousand, I presume. By 1936, white pine was 149 and British Columbia fir 113. But in 1935, a little before the time when the increase in implement prices was put into effect, British Columbia fir stood at 93 instead of 100 as it was in 1913 and as against 108 in 1930. So that these figures do not show any upward trend. Pig iron, taken at 100 in 1913, was in 1935 up to 111.


Richard Bedford Bennett: The year 1913 is not fair.


Malcolm McLean: No, it is too much in favour of the industry, I imagine; 1913 was before the war. If, however, there is any other reason to indicate that it is not fair I shall be glad to take some other year. In 1924 when we were nearly normal, pig iron was 143 as against 111 in 1935, and in 1930 it was 120. Steel bars in 1924 stood at 151; in 1930, 113; and in 1935, 109. Coal shows a little reduction. In 1924 it was 227; in 1930, 218; and in 1935, 190. Linseed oil was 93 in 1932 and 121 in 1935; as against 199 in 1924.

Oak lumber was down from S167 in 1924 to $107 in 1935. Freight on implements was
153-9 in 1931 and	the same in 1935.	A look
at wages will give	us some interesting figures:	
	1930	1935
Blacksmiths.. ..	
236	174Machinists	
228	173Pattern makers.	
238-8	186-3Moulders	
204-7	163-3Painters	
195-8	162-5Labourers	
191-8	169-2
Apparently those are on a percentage basis. So unquestionably it was not the price of materials or the cost of labour that brought about the increase at that time, and that is borne out by the evidence of Mr. Morrison. Some people have been afraid that the worker in industry was getting less out of it than he did in previous years, due to technological improvements and so on. At page 57 of the evidence taken last year it is shown that the ratio of materials to labour in prime costs during the years 1913 to 1921 compared as four is to one; that is, materials were four and labour one. For the past ten years the figures have been 76 57 to 23 -40, or slightly over three to one. In other words the position of the worker when employed had improved comparatively in that time.
One of the great increases that I find-and I believe it is related to the cost of financing and also to the reduction in sales-is in connection with the factory burden. The Hamilton plant of the International Harvester Company I think is run efficiently, but the factory burden as compared with productive labour was 118 per cent in 1913. In 1929 it was up to 136 per cent. For the fiscal year ending 1932 it reached the figure of 526-80 per cent. In 1935 it was down to 196 per cent, and was still on the way down when this investigation was being held. Somewhat the same situation exists in regard to the Massey-Harris Company, although there the figures are not quite so extreme. I know the books were kept in a little different manner, but approximately the same result is shown. In 1930 the factory burden was 267 per cent in relation to direct labour. For the next few years the figures were as follows:
Per cent to direct labour
1931		 476
1932		 474
1933		 384
1934		 270
1935		 220
I have in my hand the answers given by Mr. Morrison, in which he admitted that material cost was coming down. I shall not take time to read his answers, because I think that is generally admitted. The same

Farm Implements Committee Report
is true of wages, as compared with other years. As between 1926 and 1936, when the last investigation was held, materials had decreased from 66-1 per cent to 58-2 per cent. Wages showed the following figures: For 1926 an average of 52 cents per hour; for 1935 an average of 49 cents per hour, a decrease of 3 cents per hour or about six per cent. If my memory serves me aright these are the figures of the Massey-Harris Company. The submission was made by the company at that time that by keeping together a skeleton force composed of foremen, straw bosses and men a little above the general rank and file, the cost was greater than it otherwise would have been. Possibly the difference should have been charged to overhead, but in any case the skeleton organization was being kept together in that way, and no doubt that was quite proper. Nevertheless the fact remains that during that period wages dropped by about three cents per hour, or approximately six per cent. It was admitted quite freely that labour and material costs and budens were coming down, but the argument was advanced that selling prices had to be increased because burdens particularly had been so high from 1930 to 1934, the period during which we had 476 per cent as the burden cost of the Massey-Harris Company and 526 per cent as the extreme cost of the International Harvester Company, and it was during those years that money was being lost by the company.
A good deal has been said from time to time with regard to the number of men employed in this industry. I recall quite well that when duties were low several years ago this industry employed a good many thousand men. The figure of employment for 1936 was higher than that for 1935, and in 1936 the number of workers in the Massey-Harris shops was 1,721. The total in 1935, including factory executives, engineers, factory workers, general executives and office personnel at head office and branches was 2,061. When one looks back a few years and remembers the seven or eight thousand men at one time employed by this company, one realizes not only the loss that has ensued to the men who remained on the payroll but the greater loss suffered by the men who were dropped from the payroll, who once worked for the company but who lost their employment because these machines were not being sold.


Mr. GOLDING:: They employed nearly twelve thousand at one time.


Malcolm McLean: Yes, and that dropped to two thousand only a couple of
years ago. The general manager of the company was asked whether or not he and his company were under any disadvantage as compared with their principal competitor in Canada, and his answer was that he did not think they were under any disability. Neither in wages nor in material was that Canadian company under any disadvantage as compared with their rivals. I have before me figures showing the wages paid from 1926 on, in the different lines of work. I am not going to read those figures, because time is passing quickly, but I do say that Canadian manufacturers are not at any disadvantage in relation to competitors either in this country or in the United States, for the simple reason that wages are somewhat lower in this country. Another United States company which recently established a branch factory in Canada, the John Deere Company, furnished figures with regard to wages paid at the Welland plant. In 1935 the average was 39-2 cents; in 1936 it was 44-5 cents. The company also furnished information as to comparable wage rates at their plant in Wisconsin, indicating that in 1935 the average was 43-1 cents per hour, or nearly 14 cents more than the Canadian average, and in 1936, 57-6 cents per hour or 13-1 cents higher than the rate they were paying in Ontario. Yet the claim is being made that they must get that or this protection in this country because of the higher wages they have to pay, and the higher cost of material. One rather interesting admission was made by the vice-president of the American International Harvester Company, the president of the Canadian organization. The questions and answers on the point are as follows:
Q. I thought that from your long intimate experience you might be able to assist the committee bj1, telling us whether it was lower in the United States or higher in Canada?
A. It would be away lower.
Q. The retail prices of comparable implements ?
A. I should say that they would be lower m the United States than in Canada. I gave you that before.
Q. Would you suggest by what percentage, over a long range viewpoint?
A. I could not answer that. I could not answer it when you asked me it before, and I cannot answer it now.
That evidence is to be found at page 456 of the last inquiry. Unquestionably prices would be lower, according to Mr. Morrison's information.
One of the important points we have to keep in mind is that during the years of so-called depression an immense amount of purchases were required and should have been made, but could not be carri-'1 through because
2622	COMMONS
Farm Implements Committee Report
of lack of purchasing power of the customer. This condition was not confined to the wheat growers of Saskatchewan, Alberta and Manitoba. I am not asking for consideration on farm implements and separators only for the western farmers. The man in the east who has to buy a cream separator or an implement has as much right to consideration as the man in the west. Sometimes the eastern farmers suffer more because of the fact that they carry on a more diversified form of farming. They have to carry a wider variety of implements than do the farmers of western Canada, where the same implements can be used over a greater acreage. Eastern farmers were not able to buy those implements during the years when butter, dairy products generally, animal products and poultry products were selling at very low prices. They had to do without repairs which were required, and as a result there was a backlog, as it is described, which accumulated until the years 1935 and 1936, at which time it was estimated that implements to the value of at least $197,000,000 would have to be purchased at the earliest possible date.
It was at that time that the implement companies, having in mind the burden of past years, their lack oif sales and their financial costs, finally decided they were going to raise the prices. They made that decision at a time when it looked as though many farmers would have to go on the market for requirements of new machinery, and repairs to old. It is because the implement companies took action at that time, when material, labour, interest and other charges were going down, .and because they chose that time to increase their prices, that much resentment has been aroused in the minds of those who have to buy their goods.
There is one interesting point to which I should like to draw attention before my time is exhausted. A former general manager of the Massey-Harris Company, Mr. T. A. Russell, as reported at page 465 of the evidence of 1936, was asked about the question of distribution, and in summarizing the items entering into the high cost of implements I believe the following observations by Mr. Russell are very significant. He is reported at page 465 as follows:
It seems a perfect tragedy on a morning in collection time to see eight men starting out with eight automobiles who have got to be paid by somebody, to collect accounts.
Someone has to pay for the collection of the money. Mr. Russell stated that on one occasion, when he was new in the business, he approached a competitor, a man who had been in the business all his life, and asked

if it was possible for them to join in a certain amount of cooperation, particularly with respect to collections. Apparently he failed in that direction, and made no further effort. He said he would be glad to discuss the matter further. I am hopeful that as a result of the inquiry steps will be taken by the implement companies to help themselves through cooperation, or in other ways.
I am not going to spend much time on some other factors which have hindered and made more difficult the position of the implement companies and their efforts to solve their own problems. In this category would come customs duties and regulations, fixed values for duty purposes, excise taxes, sales taxes and other burdens which have entered into their costs. Some time ago in the house I referred to the apparently irregular manner in which values were fixed for duty purposes as against one implement company and another, and pointed out that the condition led to discrimination and the retention of profits in the United States which should have been shown as having been earned in Canada. That condition has caused a loss to the revenues of Canada, and has also caused loss to the people buying goods so affected. The point has been considered, however, and at this time I shall not enlarge upon it.
I should like to emphasize that when in 1935 and 1936 reductions in tariffs were made on imported implements, those reductions were largely passed on to the customers; there is no argument about that. According to the evidence of the general manager of the Massey-Harris Company and the president of the International Harvester Company of Canada most of those reductions- not quite all-were passed on to the purchasers. A rather significant point in connection with the reduction of values was raised by Mr. Morrison of the International Harvester Company. Counsel was asking him about changes which had been made. The questions and answers are as follows:
Q. Tell me this, Mr. Morrison: who would institute these changes, what would give rise to these different changes that you have related to us; action on the part of the company or action on the part of the Department of National Revenue; or, could you tell us?
A. I do not believe I can give you an answer very definitely in regard to that. The change that was made in January, 1917, was the result of a visit which some of the Harvester men made to Ottawa to discuss the matter with the proper officials.
Q. Can you recall what happened with respect to the change that was made on May 7, 1935?
A. That was the result of representations made to the officials where this change was solicited.

Farm Implements Committee Report
Q. And the one in January of 1936?
A. I do not know what prompted that change.
Q. It was not solicited by your company?
A. I am not sure.
Q. You simply do not know?
A. That is it.
Mr. Morton:	It was on the basis of representations which we had made at one time or another to the department.
I read these lines in order that the house and country may be more insistent that when changes are made by the department of revenue they be made in such a way that one may know what he should pay for goods brought into the country, and at what prices goods should be valued, according to their cost.
In the few minutes I have left I should like to draw attention to some of the recommendations in the final report and summing up of the committee, which I believe are most important. Recommendation No. 7 is as follows:
That farmers have a right to expect the price level of farm implements to be based on the most efficient and economical manufacturing and distribution cost.
I believe everyone will agree that that is a reasonable claim, because if farmers can not produce and market in the most economical and efficient manner the goods they have to offer, through the use of these implements, then we must lose our place in the markets of the world. It would be nonsense to talk about using the surplus products at home, because there are not enough people in Canada to use the great volume of products available. The resources of Canada, while extensive, are not greatly diversified. They consist of a few in large quantities, rather than many in smaller quantites. We have minerals and timber and farm lands upon which to get grain and other products, but if we are going to retain our hold on the markets of the world the goods that we sell must be produced and marketed most efficiently. In order to attain that efficiency the farmer has a right to insist that the goods he buys shall be sold and distributed in the same efficient manner.
Recommendation No. 14 of the report of the committee reads.
That the relative increase in the cost of labour has been one of the important elements in the increase of prices occurring between 1913 and 1936.
That is a statement rather than a recommendation. While that is true, I would point out that artificial increases in the cost of living have made the real wages received by the worker in industry less than his apparent wages. This is true with the exception of the
period 1930 to 1935, when on account of the low prices of farm products and foodstuffs his real wages were higher than his apparent wages. While that is so, probably only one man is employed to-day in the implement industry as compared with five or six employed formerly. It would be far better to have
10.000	men working at wages comparable to what they were in 1913 or 1926 than to have
2.000	men working at wages that are apparently higher. Even if they were higher in fact, the results would not be as beneficial with a smaller number of men actually at work.
This decrease in employment has not been due to technological improvements, as is demonstrated by the automobile industry in Detroit. With every improvement in machinery in that industry there have been more hours of labour required at higher wages. The workers in that industry receive the highest remuneration.
Recommendation No. 16 reads:
That it is the opinion of the committee that the cost of cream separators to the consumers should be reduced and with that end in view recommends that this item be placed on the free list.
If nothing else is done at the moment, that is one thing that should be done in order to give our farmers, who are in a most difficult position, a chance to reduce the cost of producing their farm wealth.
Recommendation No. 17 reads:
That reduction in the tariff should and does, in the long run, tend to lower the price level to the farmer, depending on the extent of free price competition in the industry.
Even without much free price competition in the industry in Canada it is evident that the reduction in the tariff has resulted to some degree in reduced prices for goods imported.
Recommendation 19 reads:
That the provisions of the Customs Act and the Customs Tariff Act affecting the importation of farm implements should be clarified and simplified.
Recommendation 20 reads:
That regulations of the Department of National Revenue, under the above provisions, have resulted in the inequality of treatment of importers of a like class and that the whole matter should be the subject of survey by the minister of that department.
I am glad to be able to say that that principle has already been accepted and that an investigation is now under way.


The DEPUTY SPEAKER:: The hon. member's time has expired.


Some hon. MEMBERS:: Go on.


Frederick George Sanderson: With the unanimous consent of the house.
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Malcolm McLean: I have only a few more paragraphs. I thank the house for its courtesy in letting me finish and I assure hon. members that I shall not take up many minutes of their time.
Recommendation 21 reads:
That these regulations have resulted directly and indirectly in the retention in the United States of profits arising out of the operations in Canada of certain United States companies and that these profits have been subjected to income tax in the United States instead of in Canada.
No. 23 reads:
That recent reductions in tariff and other trade barriers resulted in the Canadian companies lowering their prices on certain farm implements imported from the United States, but the United States companies manufacturing a full general line in the United States and marketing these in Canada, did not lower their prices generally on importations other than those affected by the price reductions of the Canadian companies, indicating the lack of free price competition in the industry.
That is an indication of what I suggested at the outset, that when men of money rather than engineers have charge of producing factories we are likely to find this condition of affairs. We are likely to have competition in many ways but no competition in price or in selling.
Recommendation 25 reads:
That in order to assist the farm implement companies to satisfy the requirements of agriculture in the matter of farm implements in the next few years, the committee is of the opinion that the duty on materials entering into the manufacture of farm implements should be removed or that the farm implement companies should be granted a drawback of any duties paid on materials entering into the manufacture of farm implements.
I do not think any one will deny that if a reduction is made in the duty on farm implements, in all fairness this should be done.
No. 26 reads:
That the last recommendation is made on the assumption that any saving to the companies resulting therefrom should be passed on to the purchaser of farm implements in the retail price.
No 27 reads:
That the cost of credit to the farmer purchasing farm implements on time is excessive and the companies should take immediate steps to reduce these credit charges.
Recommendation No. 28 reads as follows:
That the profits to the farm implement companies on the sale of replacement parts is excessive and the price of these to the consumer should be materially reduced.
The cost of repair parts has been one of the worst factors facing the farmer in the past few years. Many were not able to

buy new implements and they found the cost of repair parts very high. These are a few of the recommendations that I should like to emphasize.
It might be found necessary to set up a board such as the board of railway commissioners, or some other authority constantly to check wages, prices and other costs of the companies engaged in this industry and be ready to take necessary steps to see that the farmers are able to meet their needs with implements that are produced, distributed and sold in the most efficient manner. Such a board should see to it that the waste and high costs at present prevailing were in large measure eliminated.


Mr. J. J. DUFFUS (Peterborough West):: Mr. Speaker, I	rise to take part	in	thisdebate for the purpose of correcting certain statements	that	have been made	in	thischamber in connection with the report submitted by the hon. member for Lake Centre (Mr. Johnston):	I desire at this time toconvey to	him	and the members	of	thecommittee	my	congratulations upon	the
great amount of time and labour they have given to this subject. I have either listened to or read in Hansard most of the speeches that have been delivered during this debate, and was present in the committee when some of the evidence was given. To say the least, I submit respectfully that some of the speeches and some of the reports are at variance with the facts so far as one of the industries in my constituency is concerned, namely, the De Laval Company Limited, manufacturers of the finest cream separators in the world.
I desire to refer to remarks made by the hon. member for Selkirk (Mr. Thorson) on March 15 of this year. I do not wish to imply that my hon. friend was not sincere when he made his observations; having a very high regard for his integrity, but I do think he was labouring under a misapprehension. At page 1352 of Hansard he is reported as having said:
. . . the De Laval Company is not a manufacturing plant; it is simply an assembly plant. The cream separator end of the business is a very small proportion of its total business.
And further:
The amount paid to Canadian labour is only a small fraction of the cost of the cream separators assembled at the De Laval plant. For example, out of a total factory cost of $59.65 per separator, only $1.69 is paid to direct Canadian labour.
That information was obtained from page 1238 of the report of the committee, which says:

Farm Implements Committee Report
The committee points out that over the ten-year period, the labour cost on its separator made in Peterborough, Ontario, only amounted to $1.69.
The period referred to is from 1926-1935. That was prior to the time the company began to manufacture separators in Peterborough. In other words, they were brought in from the United States, and that item of S1.69 was only for the work of balancing the bowl after the machine had arrived at their Peterborough plant. I have read the evidence, Mr. Speaker, and cannot find where the De Laval Company gave any similar information. Let it be distinctly understood that I hold no brief for the De Laval Company or any other company, but if an hon. member makes erroneous statements about any industry in the constituency which I have the honour to represent I claim it is my duty to correct them. Indeed, I hold that the same applies to agriculturists, workers, business men, returned soldiers, people on relief, or any other class of citizens about whom misstatements may be made. I submit it is my prerogative as their representative to protect their interests.
I am very familiar, Mr. Speaker, with this industry, the De Laval Company Limited, manufacturers of cream separators in the city of Peterborough, and may say that I am very proud of it. When first elected alderman to the city council of Peterborough some years ago, this was the first industry I assisted in inducing to locate in that great industrial centre. To give the house some idea of the magnitude of the company, there are sixteen acres of ground occupied by the [DOT] company, located at the corner of No. 7 highway and Park street south, and it would be worth the while of hon. members to visit that factory if they have the opportunity. Originally this plot was a cornfield. Quite naturally the crop was developed from com to ensilage, to cows and to milk and its products and the equipment necessary in the processing of them, such as milking machines, cream separators, pasteurizers, churns, and many other accessories required in that business.
The De Laval Company in Peterborough is the largest and best equipped factory manufacturing milk handling equipment in the British empire. More than 14,000 square feet are embraced in its factory buildings, one wing alone of the factory being 600 feet long. The manufacturing operations include all processes, including foundry work and castings. Over one-half mile of railway enters the property, serving the shipping warehouses and incoming materials. The factory also includes steel working equipment, plating
equipment, electric welding and many other processes required in converting the raw metals into the finished separator.
The employees of this company are of a very high standard. There are 246 factory workers, and 126 of an office and sales force, or a total of 372 employees dependent on this industry, and as well there are 2,500 representatives throughout Canada.
Contrary to the implications contained in the remarks of the hon. member for Selkirk, the manufacture of cream separators comprises about one-third of the total business of this company. What is more, and very significant, the Canadian content, including material, labour and so forth, amounts to 51-58 per cent of the total construction of their cream separators, as follows: Parts purchased from other Canadian factories, 12-59 per cent; Canadian labour, 22-57 per cent; Canadian supplies and expense materials, 14-23 per cent; Canadian duties, 1-51 per cent.
May I point out, as hon. members have been referring to an increase in the price of farm implements during the past year, that the De Laval Company has not increased the price of its separator during the past two years.
There are very many important and essential manufacturing industries in Canada whose product does not contain 51-58 per cent of Canadian content, and no hon. member of this house would knowingly be guilty of misrepresenting or deprecating their importance. Far from being assemblers only of separators, this company performs as many as five hundred operations on a single separator. The parts on which operations are performed in Peterborough number fifty-nine. Included in these fifty-nine items are some of which several of each are used in the manufacture of each machine. I should like to give a list of the parts used in the manufacture of De Laval separators in its Canadian plant in the city of Peterborough and the number of operations on each:
Casting for disc washer, 3; cap for disc washer, 10; body for faucet, 8; plug for faucet, 12; bowl nut, 12; latch for supply can bracket, 3; latch for can, 4; worm wheel, 20; intermediate disc, 6; top disc complete, 16; driving dog bushing, 6; tubular shaft complete, 29; wrench for bowl nut, 6; speed indicator complete, 7; supply can bracket, 6; pin for latch, 3; supply can spider, 14; neck piece, 16; outer gear guard, 8; crank handle complete, 3; collar for ratchet crank, 11; crank arm complete, 15; gear shaft, 4; gear, 10; bottom screw, 10; stool, 13; pail shelf and bracket, 9; bushing for pail shelf, 4; shell for cream cover, 5; spout for cream cover, 6; skim milk cover complete, 4; shell for S.M. cover, 5; spout for S.M. cover, 6; cream cover complete, 4; float complete, 9; supply can, 12; leg for supply can, 5; fauoet
2626	COMMONS
Farm Implements Committee Report
complete, 6; bowl shell, 17; cup for regulating cover, 6; regulating cover, complete, 6; rod for disc washer, 10; tube for disc washer, 6; disc washer, 10; wire handle, 5; cream cover complete, 4; shell for regulating cover, 6; P.S. hub cap, 3; retaining collar (C.S.), 7; retaining collar (G.S.), 6; pinion and shaft, 9; nut, 8; W.S. spindle, 20; dust cap, 5; top bearing spring, 8; bezel, 4; frame, 18.
1 hope the information given to the house will convince the most skeptical hon. member that the De Laval company is absolutely a manufacturing industry and not merely an assembling plant.
Seventy of the splendid employees of this company are specifically engaged in the manufacture of cream separators, thus maintaining and keeping off relief about 265 Canadian citizens.
In addition, this firm has $42,060 invested in new, up-to-date machinery and equipment for turning out its machines on a highly satisfactory basis to the Canadian farmer. Moreover, it carries in stock at all times over $100,000 worth of spare parts for satisfactorily servicing these machines in the hands of the Canadian farmer. A significant fact is that the company can readily supply all parts for all types and models of its machines manufactured and delivered to the consumers by them during the past thirty years. I submit, Mr. Speaker, that this is a service vastly different from that given by many firms, which do not pretend to assist the farmer by making it possible for him to retain his machinery on a satisfactory and economical basis over such a long period of time. I should point out that thousands of Canadian farmers have found on their hands obsolete and orphan machines constituting a complete loss, as a result of buying from sources from which no reliable and continuous service has been given.
May I also draw the attention of the house to the fact that obsolescence in service parts and supplies amounts to $10,000 annually, and in addition, thousands of dollars' worth of jigs, tools, dies and so forth.
Permit me to say that those who gave evidence before the committee on behalf of the De Laval Company were not given a fair opportunity to obtain and give correct information in that they were called by telephone and asked to present themselves at once. This did not give them time to equip themselves with full and detailed information with which to appear before the committee. Surely, Mr. Speaker, you will agree with me that they were thus placed at a great disadvantage in obtaining and submitting the correct information. Furthermore, I believe that the

method followed was more in the nature of an inquisition than a fact producing procedure.


Mr. JOHNSTON (Lake Centre):: I might
point out to my hon. friend that a considerable time before the De Laval people were called before the committee they had been supplied with a questionnaire. If they had not prepared themselves surely that was not the fault of the committee.


Joseph James Duffus: Shall I submit, Mr. Speaker, that at any rate they were under a misapprehension. It is true that in the evidence given by Captain Cutmore, of the De Laval company, he submitted an item of $4.30 for direct labour. He was right in his contention in this regard, as he understood the question, but what he understood was meant was, the labour applied direct to the parts while they were being manufactured and assembled. The answer he gave did not include such items as supervision, clerical, receiving and stores, shipping and trucking, inspection, cleaning, small tools, casting preparations, sundry labour, bonuses, watchman, foreman, gateman, experimental engineers, draftsmen, and additional obscure expenses such as power, water, fuel, fuel oil, taxes, insurance, maintenance, interest, etc. In other words, these were not and should have been included in factory cost set-up, just as much as the labour in manufacturing the parts from which the separator is made.
I would strongly recommend for the consideration of the government and the house that the duty be removed entirely from all imported parts used for repairs by the farmer in the field. This would greatly reduce the cost of repairing and reconditioning his machines, and result in a substantial saving to him. Indeed I would go further and just as strongly recommend, for the consideration of the government and the house, that all imported parts and material required for the manufacturing of all farm machinery and equipment be admitted duty free. This would very materially reduce the farmer's production costs, which is most essential in increasing his prosperity.
I am wholly in favour of the recommendation of the committee that some agency of government should carefully analyse and correlate the evidence as it appears in the records of the committee, and in addition should obtain the results, when available, of the inquiry now proceeding in the United States, and in due course present a report on both matters to the Minister of Agriculture (Mr. Gardiner), a copy of such report to be filed with the records of the committee.


Mr. LEADER:: Before the hon. member
sits down I should like to ask him a question. I hated to interrupt him when he was dealing with the splendid factory they have at Peterborough, and its efficiency, but in the evidence we received from the De Laval people they told us that they were importing from Sweden cream separators under 500 pounds capacity. I should like to know if they are still doing that.


Joseph James Duffus: I believe there is a demand for a small separator of that type, and that some are being imported from Sweden and distributed to their customers.


Mr. H. W. WINKLER (Lisgar):: So much has been said on the subject of the motion of the hon. member for Lake Centre (Mr. Johnston) for concurrence in the report of the special committee that it is difficult to break new ground. I had thought at first that western members would be the only ones concerned, but I am glad to see that there has been an expression of opinion from nearly all parts of the country. That is as it should be, for nowadays agricultural implements play an indispensable part in farm operations, no matter how small. Per improved area, figures as to the investment in agricultural machinery show that the prairie provinces have the lowest price relationship of all.
In a bulletin based on census figures, entitled New Machinery and Repairs in Relation to Farm Expenses, by Ian McArthur, the province of British Columbia leads with an investment of $18.28 per improved acre; Nova Scotia follows with $12.50, Ontario with $11.45, Prince Edward Island with $10.60, New Brunswick with $9.96, Alberta with $6.55, Manitoba, $6.44, Saskatchewan, $5.53. In the same bulletin four figures are given as to the cost of farm machinery in proportion to farm expense. Nova Scotia is lowest with 5-56 per cent, Quebec has 5-8 per cent, Ontario 5-9 per cent, and Saskatchewan 11 per cent. Those are the only four figures supplied.
In the same bulletin is given the accepted figure for the average life of farm machinery. This is placed at fifteen years. I would contend however from personal experience and from the experience of western farmers with whom I have spoken that while this may be a fair figure for farms east of the great lakes, it is not so for the prairie provinces.
Just as the cost of machinery in proportion to farm expense is proportionally twice as high on the prairies, so I would say the average life of an agricultural machine would be half of what it is in the east. Dragged over a much larger field area, machines wear out that much faster.
Farm Implements Committee Report
In regard to the value of implements and farm machinery in the three prairie provinces, I am taking the figures supplied by the Dominion Bureau of Statistics for the year 1936. The value of farm implements and machinery in Manitoba that year was $35,828,300; in Saskatchewan, $119,321,100; in Alberta, $80,039,700. The total for the three provinces was $235,189,100. Assuming implements last fifteen years, then one-fifteenth of that amount, or $15,678,000, would have been spent in replacement in the year 1936 had that been a normal year.
On page 2424 of Hansard of April 29, the Minister of Agriculture (Mr. Gardiner), referring to the write-up in price of a binder as a representative implement between 1913 and 1936, and deducting from the 1936 figure the uncontrollable increase, concluded there still was a nineteen per cent increase in price. Nineteen per cent of the normal replacement cost of $15,678,000 would be $2,978,000, which would be a very conservative estimate of the cost of the write-up to the farmers of the prairie provinces in 1936. If the average life of an implement were ten years instead of fifteen, and I maintain this is still a conservative estimate, the annual burden on western farmers would be close to four and a half million dollars, or about twenty-one dollars average per farm.
The heart of the difficulty lies in the fact that since 1932 the cost of manufacturing agricultural implements has gone down while the price to the farmer has gone up. In the case of a binder this difference has been $27. Reference has been made to the tariff on agricultural implements being placed at 25 per cent by the late administration, and to a reduction by the present government, first to 12J per cent and then to 7} per cent. Reference has also been made to the increase in prices by the implement companies on three occasions within the same period. We have seen taunting articles in the press referring to this situation and pointing out that the Liberals claimed that a reduction in tariff would mean a reduction in price, whereas exactly the opposite occurred. Within the last few days I have been speaking with a member of this house who heard that some of the western members were going to ask for a complete wiping out of the remaining 7\ petr cent tariff. He thought that it would not have the desired effect any more than did the previous tariff reductions, first of 12i per cent and then of 5 per cent. We were going about it the wrong way, he thought. If what we wanted was lower prices, he thought we should try raising the tariff. If that be true, then I say
2628	COMMONS
Farm Implements Committee Report
that we have excellent grounds for suspecting the existence of a combine in view of what has happened already. If it be so, then that settles the matter. This government should, in my opinion, take steps to find out at once whether it is so. There is a Liberal policy to deal effectively with such a situation.
Mr. H. J. PLAXTON (Trinity) In rising to take part in this debate I wish to state at the beginning that although I represent an urban constituency I have served my apprenticeship on a farm as a hired man. The experience and knowledge which I gained in that field of employment have influenced me greatly, and I say in all sincerity that there are very few members in this house who are any more sympathetic to farmers' problems than I am. I have the honour to represent the constituency of Trinity in the city of Toronto, and those residing in that area, thousands of whom are wage earners, sent me here to protect and further their interests to the best of my ability. That I believe I have done, but still I would be derelict in my duty were I not to speak on this question.
As is true of most problems there are two or three sides from which this subject can be argued. My purpose is to present the case of the wage earner, who is directly or indirectly identified with the manufacturing of farm implements in Canada. May I say I am interested only in the practical aspects of this problem and not in theories. I am interested in the things that I can see, not in a -maze of statistics and the erroneous conclusions which they very often support. I am interested more in the welfare and happiness of my constituents. I am interested in the numbers that are unemployed and on relief. I am interested in the equity in homes, representing in many cases life savings, homes that have been foreclosed during the past few years.
In my opinion the blight of the recent depression fell upon the homes of the working men of the country just as well as on the farms, and I intend to oppose any move which proposes to cast another blight upon the homes of literally hundreds in my constituency. Let me express this obvious truism at the outset. Agriculture as an industry is, I submit, no longer confined to the farm alone. I claim and will prove that hundreds, if not thousands of wage earners in Toronto, and particularly many of my own constituents who are engaged in the manufacturing of farm implements, contribute just as much to the production of wheat in Canada as does the farmer himself. In the early days of the opening up of the west farming was largely a matter of manual

labour. The harvest train took thousands of men from the east to the western plains to assist in the harvesting of the crop. Modem machinery has changed all that. Today the work of the farm is shared between factory and field. Many of the men who used to be on the western plains or in the fields of eastern Ontario in harvest gangs or threshing crews, or who plowed the straight furrow behind the walking plow, are now in the ranks of the farm implement industry, which now enables the farmer to do work not only at a minimum of cost, but with a minimum of effort, assisted only sometimes by the members of his immediate family.
To-day, in my judgment, the artisans in the farm implement plants of Toronto and Brantford, are farmers just as much as their colleagues in the field, and great has been their contribution to the primary industry of the dominion-agriculture.	During the
last five or six years development on development has taken place, each one making a tremendous contribution to the major problem of reducing the cost of producing a bushel of wheat. Take the one way disc seeder, which replaced three machines, the plow, the cultivator and the drill. Then there is the modem rubber-tired tractor, light in weight, economical in fuel, high in speed, which replaces to-day the hundreds of horses and the men who were required to look after them in the past. Then there is perhaps the greatest development of all, the small eight-foot binder, driven directly by the power shaft from the tractor, enabling one man alone to harvest and thresh a crop, aided perhaps by his boy, who drives up to the combine when the grain compartment has been filled, empties it, and delivers it to the elevator.
It is interesting to note in this connection, that, according to figures which have been checked by the agricultural colleges in this country, the farmer using this type of equipment reduces his cost of operations in preparing his seed bed, seeding, harvesting and threshing, over the older methods, from fourteen cents a bushel down to five cents, or a saving of nine cents. Here, I submit, is a record of which this industry can be proud, an economy which overshadows almost to the point of eclipse the price increases which have taken place since 1936, owing to the mounting costs of raw materials and labour, of which we have heard so much in this house, and which, to use the figures which the hon. member for Lake Centre quoted on March 11, amount to S4,000,000. Con-

Farm, Implements Committee Report
sidering this sum in relation to the average yearly wheat production in Canada, it amounts to approximately only one cent a bushel.
Much has been heard of the privation and hardship which the farmers have undergone in Canada, all of which is tragically and abundantly true. But what about the hardships and privations of the farmer's counterpart, who, during the years of depression, sought his livelihood in the farm implement plants of the country? What about the tragedy of long periods of unemployment, low wages, shorter hours, loss of homes, and in many cases relief? Truly, the farm implement workers have suffered along with the farmers, and the toll they have paid to the depression has been no less than the farmer's. Had it not been for the splendid artisanship of these men, their ability to produce quality goods which have set up a demand for Canadian implement products in every agricultural country in the world, their plight would have been more serious and their weekly pay envelopes less well filled than they are at the present time. Just as Canadian farm implements pioneered the plains with the early settlers, so did they break new ground in many foreign countries. The word "Canada," whether painted on the frame or cast into the implements which were built here, made this country's name a household word in the agricultural countries of both hemispheres.
Winnipeg
Oil bath mower	
$116	84Six-foot binder and truck	
288	72Ten-foot rake	
62	22Tandem disc harrow	
135	06Hammer mill	
190	06Drag harrow	
19	74Lever harrow	
56	92Eight-foot one-way disc	
331	51
Unsatisfactory as the income of the farmer still is, the prices of his products have risen substantially since the lowest point of the depression in 1932. Was it unreasonable, therefore,, that his colleagues in the farm implement industry, faced with rising costs of living, should have sought in 1936 and 1937 wage increases which, modest as they were, naturally were reflected in the cost of the goods produced? From the point of view of the balanced economy of this nation is it not a great blessing that the men who previously worked in the fields of Canada and who were released from that occupation through the adoption of modern, up to date machinery, have found jobs in the factories which produce this equipment? If these 51952-167
With what handicaps have these men had to contend? The upward surge of national self-sufficiency and the urge towards a more balanced economy have resulted in nation after nation endeavouring to develop and foster its own agricultural implement industry under the cover of tariffs. In the case of Australia that tariff now is around 45 per cent; in New Zealand it is over 37 per cent, and even in the Argentine, a country in which there exist none of the raw materials necessary for such an industry, the tariff is 10 per cent. Other countries such as Germany, France, Hungary and Denmark have gone still further by either totally prohibiting the importation of farm implements or restricting their entry through quota systems. Is it to be wondered that the workingmen in these great plants are literally dismayed, as I am, when they hear proposals that the already extremely low tariff of 74 per cent, which protects their livelihood in this country, should be removed; particularly when they are conscious of the fact that, with the exception of the United States to which our implement prices are comparable, the machines which they produce in the Toronto and Brantford plants are placed in the hands of the farmers of this country at prices well below those at which they are sold in any foreign country?
In this connection permit me to give the following comparison of the selling prices of some typical machines:
Great Britain	South Africa	New Zealand	Argentina$150 13	$147 50	$144 00	$167 86343 96	359 38	324 00	338 8094 84	75 00	98 56186 46	184 66	248 73	275 66	267 9625 00	29 66	27 7265 57	78 00	368 43	417 50	437 05
factories had not existed in Canada these men would have been obliged to swell the ranks of the unemployed.
In evaluating this industry correction must be made of a statement made in this house by the Minister of Agriculture (Mr. Gardiner), namely that the implement industry in Canada employed only 4,159 men. In this connection I must add that the minister took these figures from the 1937 report of the special committee, and these figures indicated the employment as of the year 1935. The fact is that one company alone has more than 3,500 men actually on its payroll in Canada to-day, and it is estimated that the total number of wage and salary earners in the implement industry is in the neighbourhood

2630	COMMONS
Farm Implements Committee Report
of 11.500. This does not take into consideration the vast army of men who sell the products of these companies on a straight commission basis, and whose number, it is estimated, exceed the 11,500 I have just mentioned. Then back of these men is the great army of workers who produce or sell the manufactured parts and the raw materials, such as the steel, lumber, paint, pig iron and coal, that go to make up these implements.
In conclusion, Mr. Speaker, permit me to make this final observation. In these days when there has been no more urgent demand or need for a unified Canada I plead for a discontinuance of any ill-considered propaganda which can only serve to promote differences and discontent. I further plead for unity between all sections of Canada; between the country and the city; between the farmer in the field and the worker in the factory. I plead for unity for the common good of the Canadian people, who owe their allegiance to one country and one flag.


Mr. W. J. WARD (Dauphin):: Mr. Speaker, in rising to take part in this debate I should like first to refer to the address delivered by the Minister of Agriculture (Mr. Gardiner) on Friday evening last. I think his speech merits the commendation of all those who believe in the cause of agriculture and its struggle for a fair deal, something it has never had under federal policies. It is true that at times-pretty generally under Liberal governments-agriculture has received better treatment. Liberal governments and lower tariffs are synonymous terms, and we must give credit to the present government for the extent to which they have gone in an effort to relieve agriculture, for which I speak more particularly, of the burden which it has of late been carrying.
Before proceeding with my general remarks I should like to make reference to the speech delivered by the hon. member for Macdonald (Mr. Weir). I am sure he did not intend to do an injustice to any individual or any organization, but he referred to a letter which had been distributed among the members of this house, coming from the secretary of the United Farmers of Manitoba. May I quote what the hon. member said:
" He suggested that something had to be done, and asked what the government was going to do. At the same time that gentleman, for whom I have the highest personal regard, offered no suggestions. He is secretary of a farm organization which, to my mind, has a great opportunity to encourage the development of cooperative organizations which could bring about a greater saving in the price of farm implements than any other policy which might be adopted."

With that I entirely agree, but I want to remind the hon. member that the policy and motto of the united farm movement of Manitoba has always been one of organization, cooperation and legislation. Proof of that is to be found in the resolution passed at the last annual convention of the United Farmers of Manitoba at which I was present. May I read two clauses of a resolution dealing with the farm implement situation:
That we specifically direct our protest to the Manitoba representatives in the House of Commons, urging them to use all their power to bring about effective action on these problems.
I should like to point out here-and I believe I am not unfair in my statement-that the hon. member for Macdonald and myself would perhaps never have been heard of outside the boundaries of our own province had it not been for the united farm movement. We are a product of that movement.


Mr. WEIR:: The hon. member is not suggesting I was critical of the united farm movement, is he?


William John Ward: 
Mr. SPEAKER:: The hon. member must read the statement. It is not customary to allow statements to be placed on Hansard without their being read. It is only with the leave of the house that the Minister of Finance (Mr. Dunning) is allowed to table documents during his budget speech.


William John Ward: I shall be glad to read it, but it has been given to the house before. I should like to have it accompany my remarks to-day. The house has heard this statement read before, and I ask permission to have it placed on Hansard.


Walter Edward Foster: With the unanimous consent of the house.


Mr. DUNNING:: What is the table?


William John Ward: It is a table from the report.


Charles Avery Dunning: Is it already on Hansard?


William John Ward: It is already on Hansard. I should like here to point to one item only. In 1936 this company was able to sell an eight-foot binder at a clear profit of $79.26 after all costs had been taken care of. Surely that is a sufficient profit to enable the company to carry on successfully and reduce implement prices.

Farm Implements Committee Report



INTERNATIONAL HARVESTER COMPANY OF CANADA, LTD.

[Stage Direction]
Year	Material	Labour	Overhead or Burden	Experi- mental work	Com- mission	Freight	Total Cost	Price to the Farmer (cash price Regina)	Differ- ence1913	-45.56	11.97	17.96	0.34	30.45	17.80	124.08	167.02	- 42.941919	-94.83	24.85	37.27	1.01	34.00	22.33	214.29	261.00	- 46.711920	-92.74	31.78	47.67	1.31	33.00	19.17	225.67	269.00	- 43.331921	112.12	31.65	47.47	1.29	44.00	20.00	256.53	326.00	- 49.471922	-80.51	22.56	33.84	1.98	41.00	25.02	204.91	266.00	- 61.091923	-80.54	21.85	32.77	1.15	47.00	25.02	208.33	274.00	- 65.671924	-83 62	22.20	33.30	1.15	41.00	26.13	207.40	308.00	-100.601925	-80.47	22.57	33.85	1.73	40.50	25.02	204.14	283.00	- 78.861926	-77.50	28.85	43.27	0.79	40.50	24.70	215.61	283.00	- 67.391927	-75.42	26.22	39.33	0.63	40.50	24.70	206.80	283.00	- 76.201928	-76.48	23.03	34.55	0.76	44.50	24.98	204.30	283.00	- 78.701929	-75.60	24.81	37.22	0.91	44.50	25.42	208.46	283.00	- 74.541930	-76.35	24.39	36.44	1.31	46.50	25.42	210.31	278.00	- 67.691931	-81.50	27.09	40.64	3.88	46.50	25.42	225.03	278.00	- 52.971932	-87.01	27.16	40.74	9.64	46.50	25.12	236.17	273.00	- 36.831933	-79.35	20.65	30.98	2.50	44.50	25.12	203.10	263.00	- 59.901934	-75.11	21.51	32.26	2.71	44.50	25.12	201.21	263.00	- 61.791935	-70.56	20.48	30.72	1.56	44.50	25.87	193.69	263.00	- 70.111936	-71.06	22.62	33.93	2.55	45.50	26.08	201.74	281.00	- 79.26
At the conclusion of last session I made an extensive trip through the United States for the purpose of investigating the prices charged for farm implements and the methods of distribution. I visited many large industrial centres as well as other smaller towns and cities. I found that their method of distribution was almost identical with that in use in Canada. I found also that the prices of implements compared favourably with those charged in Canada. I called on many farmers and I found them using the same adjectives when referring to the implement manufacturers as are used by the farmers on this side. I found that on January 1, 1936, they, too, suffered an increase of ten per cent in the prices of implements, which was coincident with the rise in prices in Canada. I say they suffered because they are struggling for existence the same as the Canadian farmers.
I found that the prices charged for binders, plows, seed drills, cultivators and manure spreaders were the Canadian prices, less the freight, the 7i per cent duty and a few other incidental charges. For example, a seven foot binder was selling for $246 in Iowa when the same binder sold for $298 in Saskatchewan. Prices of other implements were in proportion. Something has been said about the implement people getting together in August, 1935. Reference to the report of the committee will show that the officials of two of the large companies admitted that they did get together for the purpose of considering matters of common interest. But what would be of more interest to the industry than the elimination of competition? Of course they did not admit they had arranged a standard price scale which would apply to both countries; but the proof of the pudding is in the eating, and I am inclined to believe, and I hope the house will appreciate this, that this meeting in August, 1935, was in anticipation of a possible change of government in Canada, in which event certain tariff changes were almost certain to be made. They were on safe ground in this, that implements are perhaps the only commodity manufactured on this continent where a general agreement or cartel could be successfully put into operation, because we do not import implements from any country except the United States and the United States imports none except from Canada.
From inquiries I made in the United States last year, if there had been complete free trade in implements entering Canada, a binder would have sold for about twenty-five or twenty-six dollars less than it sold for last year, and even that amount would have been a great benefit to the farmer who finds himself in need of a binder but has great difficulty
2634	COMMONS
Farm. Implements Committee Report
in making both ends meet. A saving of twenty-five dollars would have meant a great deal to him.
I should also like to remind my Ontario farm friends that we in the west pay out in freight nine cents out of eveiy dollar expended in the purchase of farm implements, and that in itself is sufficient to make or unmake the farmer.
I would also remind the house of another condition in the west from which we suffer. We are marooned in the heart of a great continent, far removed from tide-water, with a long rail haul and high freight rates, and freight rates have been increased about 50 per cent in the last few years. If, in addition to long rail haul and the high freight rates, we have the cost of maintaining the industrialists of eastern Canada, it becomes a very heavy burden indeed. We have to compete in the open markets of the world when we sell our products. We compete with the Argentine, where labour is practically all native or peon, working for a few cents a day, and where I understand the farms are located pretty much on the great rivers that traverse that South American country, and a great deal of the grain is delivered on flat bottom boats which carry it to tide-water at a low rate. In any event there would be only a short rail haul. We have also to compete with Russia, with its state labour. We have to compete with the outside world in everything we sell. We sell in the lowest market, in the open markets of the world, but when we buy our implements and other necessities we must buy in the most highly protected market of the world. This makes it very, very difficult for the people of western Canada particularly to carry on under such trade arrangements.
I might remind the house that when we sell our wheat we must pay the freight to tide-water, and the average freight rate on wheat from prairie points is eighteen cents a bushel. There was a time for several years from 1931 to 1933, inclusive, when the price of wheat in western Canada averaged forty to fifty cents a bushel, and to have to deduct eighteen cents from that amount for freight alone it was an extremely serious matter for the farmer.
I should like to say further, in my condemnation of the system of bonusing the industrialists, that perhaps we have built up a false state of society; perhaps we have, through the bonus system, raised the cost of living in our cities to the point where it is -necessary to maintain a very high price level for manufactured goods. I spend some of

my weekends motoring through good old Ontario. I do so for the purpose of information. I like Ontario and its people and the countryside, but it grieves me very much when I see the dilapidated farm homes and the number of abandoned farms. Then I drive into one of your industrial centres, small or large, and there I see an almost vulgar display of wealth, in the form of luxurious homes, housing perhaps the owners of these factories, with their yachts on the St. Lawrence river or lake Ontario, and two or three cars, simply living in the lap of luxury while the whole countryside around them, the very market for their products, going down and down and down. I made a trip through Huron county not so long ago. And I do not wonder that the hon. member for Huron North (Mr. Deachman) makes the speeches he does in the house. On one road I counted five farms one after the other with good buildings, brick or stone houses, big barns, but nobody living on any one of those farms. Why? They had all moved into the cities because of the unnatural conditions created there through the bonus system. What the end will be here in Ontario I do not know, but I think it may be even worse for us in the west.
I am not surprised at what has happened politically in Alberta in recent years. Do not forget that in Alberta the freight rate alone on wheat-my Alberta friends will correct me if I am wrong-averages nineteen cents a bushel from points in central Alberta to the head- of the lakes. How could they carry on under those circumstances and pay the prices they have to pay for the goods they have to buy? I believe the Canadian farmer is the most industrious and intelligent man to be found in any part of the whole world-, and if he is given an even break, if he is given the privilege of buying in the same market in which he sells, if he is given the privilege to buy at world prices, he will be able to compete with any country in the world. But the dice are loaded against him. Under present conditions he cannot compete in the markets of the world. How can he, when he has to pay around 50 or 60 per cent more for his goods than he would have to pay if it were not for the tariff? I have before me an invoice of goods imported into Canada within the last few days. It covers a shipment of cotton underwear, and what could be more universal than that? The tariff has been reduced considerably on cotton underwear since the present government has come into office; but I find that on this shipment of goods, the price was raised -by the time it reached the ultimate

Farm Implements Committee Report
consumer, by reason of duty, excise tax, sales tax and the profit added, by something around 65 per cent.
Charles Avery Dunning: No, no. The sales tax must have been included.


William John Ward: I am very glad the minister has raised that point, because in my computation I took the price paid for the goods, the original cost plus the duty; I added to that the excise tax; I added the sales tax; then I added the profit taken between the custom house and the consumer, and it amounted to about 65 per cent of the original cost.
After all, the duty does not end at the boundary; it just nicely begins there. That is the point which I believe we have been missing, quite innocently, but the impost goes on until it reaches the consumer. If I am in business and I invest SI,000 in goods in the United States and I have to invest S200 more when they reach the boundary, I am going to add my profit to the $1,200 and not to the $1,000 only. So the impost continues, as I have said, until it reaches the consumer; we must get that point clear in our minds. That is why the country is going down as it is, while our cities build up. I am astonished that our leading statesmen are not more alarmed at what is happening in this regard. One cannot go around the country and see barn doors falling off, gates hanging on one hinge, buildings which have not been painted for the last fifteen years, and half the farm, if it is occupied at all, seeded down to grass because the farmer cannot afford to operate it, without realizing that we cannot have such conditions and maintain a healthy country society. Perhaps by reason of the bonus system, we have built up a false social structure in our large industrial centres. What I should like to see is the creation of conditions in this country which would make it so attractive to our young people that they would want to live on farms. We must find some means of attracting our people to the farms in greater numbers.
I might remark here that until recently we in the west regarded ourselves as being in the heart of a great continent, but within the last few years we have been brought a little closer to tide-water through the port of Churchill. Very little, however, has been done to encourage trade through that port. I am sorry the Minister of Mines and Resources (Mr. Crerar), who represents that constituency, is not in the house, because I should like to suggest to him that the establishment of a bonded warehouse at Churchill would do a great deal to encourage trade
through that port. Many heavy commodities like binder twine, plate glass, barbed wire, rolling mill products and china, of which we import a great deal, could come in through that port at a great saving to the west. It is a thousand miles closer than Montreal to the centre of consumption in the west, and I believe it could be used by the producers of those commodities in countries like Holland, Belgium, France and Great Britain, which export them to Canada. The farmer needs his binder twine in April and May, in any event not later than June and July, and not in August and September, when ships come into Churchill. The hardware man wants his glass in March and April, not in the fall. There are many commodities which could be brought into Churchill if we had a bonded warehouse there. I think in that way we could do something to encourage the importation of goods required in the west.
I have under my hand a statement of the freight rates actually paid at the present time, showing the savings that could be effected if we could use Churchill to a greater extent than we are doing to-day. For example, the freight on a carload of poultry from Dauphin, which is a central point in Manitoba, to Churchill, would cost $262. That same carload shipped to Montreal would cost $457 at present freight rates. To ship a carload of eggs from Dauphin to Montreal costs $394; it would cost $264 if routed via Churchill. Remember that Churchill is the same distance from the markets of Europe as is Montreal. I could mention many other lommodities. Take cattle; the freight rate on a carload from Dauphin to Montreal is $191, whereas the rate to Churchill is $102, or a saving of $89. That is a considerable amount when one does not get very much for the cattle anyway. I sincerely hope the government will give serious consideration to the suggestion to establish a bonded warehouse in Churchill.
In the course of this debate reference was made to the help given to the west by eastern Canada. I want to assure eastern members- although, thank God, I do not live in the dried-out area-that there is no one more grateful than I have been for the very generous assistance given to the west by the people of eastern Canada, in contributing, as they did, more than a hundred carloads of fruit and vegetables last year to the dried-out area, and we are also grateful to parliament for the money voted to assist the people in those localities. But I took the trouble the other day to get from the statistical branch the value of agricultural production of the three prairie provinces in the

Farm Implements Committee Report
last twenty years, and I received these staggering figures. We produced agricultural products in the three prairie provinces to the value of $70,115,000,000. We may very properly ask, What has become of that seventy billions? You will find, if you go around Montreal, Toronto, Hamilton, Brantford and all the other industrial centres of eastern Canada, a great deal of it. It is very difficult for us to calculate just how much of that seventy billions of dollars has gone to the upbuilding of Toronto. I believe that if it had not been for the west Toronto would be a little straggling city of not more than two hundred to two hundred and fifty thousand, and Hamilton would be no more than a good sized town, because seventy-five per cent of the products of these cities have gone west of the great lakes.


Charles Avery Dunning: Where are these members from Hamilton?


Mr. HAYHURST:: There would be no Brampton at all 1


William John Ward: I do not know. The greenhouses might still be there. However, I think we must realize that the farmer has not had a square deal so far as fiscal matters are concerned. No less a person than the right hon. leader of the opposition (Mr. Bennett), speaking in Saskatoon on June 20, 1930, made this statement:
There is only one way we can get the moneys of England for Canadian wheat, rather than Russia and the Argentine and how is that? By providing our wheat cheaper than the others.^ Is that not so? And how are we going to do it? This is what we are promising at any rate to do.
Well, we did have cheaper wheat during the term of office of the right hon. gentleman. We had the cheapest wheat that this country and the world had known in several hundreds of years.


Walter Edward Foster: I am sorry to have to inform the hon. member that he has exceeded his time.


William John Ward: I should like to continue for just a few moments.


Walter Edward Foster: With the unanimous consent of the house.


William John Ward: I believe the right hon. gentleman was right. If we have to produce our wheat as cheap as, or as he stated, cheaper than other countries-and I think there is no one in the house in a better position to know than the right hon. gentleman; we know he never was wrong-how in the name of com-
mon sense are we going to do it while buying in a market where the values of the articles which go into production are enhanced forty, fifty and sixty per cent by reason of tariffs? It is not possible. I hope, before the budget comes down, the finance minister will be able to see his way clear to remove all duties from farm implements. That may not have so great an effect as we expect; it may not reduce the price so much as we would like, but I am sure it will be something. I hope he will -wipe out the duties on farm implements, and also on cream separators. I hope he will go a long, long way-as far as he has ever gone before-in reduction of tariffs. I should like to see him make the same strides in reducing duties that he did in 1930. It was a great gesture, if nothing else, to the farmers of this country. I hope before the budget comes down, he will see his way clear to give serious consideration to this matter. He is an ex-farmer himself.


Charles Avery Dunning: I object to the "ex"; I still pay the bills on the farm.


William John Ward: I am pleased to know that the minister is still directly engaged in agriculture; that makes it all the better, and I am much more hopeful now that we shall get something substantial in the coming budget.
On motion of Mr. Motherwell the debate was adjourned.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
The house resumed from Tuesday, May 3, consideration in committee of Bill No. 15, to incorporate the Niagara Falls Observation Bridge Company-Mr. Damude

Mr. Sanderson in the chair.
Section 9 agreed to.
On section 10-Expropriation.
Richard Bedford Bennett: There is only one comment that might be made on this section. It states:
The company may expropriate and take any lands-
I think it should say " in Canada," to make it clear, because this bridge we are talking about is a bridge that crosses the whole stream. Here we are conferring powers upon

Niagara Falls Bridge
the company as a whole, whereas our power clearly is limited to Canada. The same thing applies to other sections as well, but I do not propose to devote further time to this bill. I have served the purpose that I had in mind; I have secured the information that I desired and it has been placed upon Hansard as indicating my view. The action that was taken, by deleting the words at the end of section 8, makes clear, in part at least,, what I think should be done. Certainly I do think it will be found necessary to reconsider the whole situation with respect to these matters, because it must be clearly apparent to every thoughtful man that we cannot impose tolls in the United States, on their part of the bridge. Our railway commission cannot do that; that must be reasonably clear. It must be equally clear that we cannot confer any powers of expropriation upon a company to exercise such powers of eminent domain in another country.
As I say, I am not going to do more than merely indicate these views, without taking time to press them.


[Stage Direction]
Section agreed to.
On section 11-Tolls.
Richard Bedford Bennett: I must put myself on record at once in connection with this section. Just imagine, sir, this parliament being asked to say:
Subject to the provisions of the Railway Act the company may charge tolls for the use of the said bridge, approaches and facilities, and may regulate the tolls to be charged.
The mere statement of it in itself carries a refutation. Our railway commission cannot regulate the tolls for the use of that bridge from the middle of the stream into the United States or from the United States to the middle of the stream, as it can for that part of the bridge which is in Canada. We have no power to regulate tolls in another country, and as the section reads that is what it means.


Frederick George Sanderson: Shall section 11 carry?


Richard Bedford Bennett: On division.


[Stage Direction]
Section agreed to, on division.
Section 12 agreed to.
On section 13-May receive grants.
Richard Bedford Bennett: I think this section was amended by the committee.


Frederick George Sanderson: On the copy I have this section is deleted, and the next section is 14.


Richard Bedford Bennett: It is still in my copy of the bill.


Charles Avery Dunning: In the reprinted bill I have there is a section 13.


Richard Bedford Bennett: I know objection was
taken to this, in regard to bonuses and so on, and it may be that the committee struck it out. There was objection to the company receiving grants and bonuses, and the chairman says this section is marked "expunged" in his copy. If the government of Ontario is going to build the 'bridge, the government might not want this section in the act.


Mr. HOWE:: If it is to be built by private financing it may be that the government will be required to supplement that financing. Under the circumstances I see no objection to this section.


Richard Bedford Bennett: I know it was struck out in part; I cannot say as to the whole section. It was struck out in part, I assume, because of these words at the end of the section.
. . . or as subventions for services and may dispose thereof and may alienate such of the said property as is not required for the purposes of the company in carrying out the provisions of this act.
The first part of the section, enabling the company to receive grants, bonuses or gifts, is not an unusual provision with respect to any company.


Charles Avery Dunning: What position are we in now, Mr. Chairman? We have a bill from the committee from which, according to the authenticated records, this section has been struck out. There must be a proper way of having that reconsidered, if the committee so desires.


Frederick George Sanderson: My information is that this committee can restore this section if it so desires.


Richard Bedford Bennett: Upon notice. I had to give notice the other day. A private bill requires notice of one day of proposed amendments. I suppose if it were struck out by the committee it should be regarded as being out of the bill.


Clarence Decatur Howe: I think we all agree that there is no harm in the first part and no purpose in the second part. If I could obtain unanimous consent I would move that the part of the section after the word "guarantee" in the thirty-eighth line be deleted, and the balance remain.


Richard Bedford Bennett: Would not the motion be in the first instance that section 13 as printed be restored to the bill, with the exception of the words following the word "guarantee"
Niagara Falls Bridge

in the thirty-eighth line? It does not appear why this section should be struck out; there is no reason why they should not receive gifts if they wish to do so. They should have the capacity to receive them.


Charles Avery Dunning: It would require unanimous consent to waive the notice.


Clarence Decatur Howe: I so move.


[Stage Direction]
Motion agreed to.
Section as amended agreed to.
On section 14-Amalgamation with other companies or authorities.
Richard Bedford Bennett: I cannot help thinking,
Mr. Chairman, that if the Minister of Transport would give the same attention to section 14 as he has given to the section which was eliminated he would find it a little difficult to understand. It is a most extraordinary clause. As the matter now stands, all through the bill this company has been called "the company," and it is given power to fix tolls and do everything else under the control of Canadian authorities. It is now proposed to give it power to amalgamate with any other company in Canada or the United States. Then it is proposed that the amalgamated companies shall still be subject to the control of Canadian law. I only point out that if that is so, nobody will ever be able to get very far with it. Those opposed to the bill would perhaps be doing the best thing in the world by simply saying, "Pass it; and pass it quickly."


[Stage Direction]
Section agreed to.
Section 15 agreed to.
On section 16-Borrowing powers of amalgamated company.
Frederick George Sanderson: The committee amended section 16.


Richard Bedford Bennett: What is the amendment to section 16?


Frederick George Sanderson: The amendment carried by the committee to section 16 was this:
(2) In any amalgamation under this section with other companies or authority the Canadian shareholders or members of such authority shall not be less than one-lialf.


Richard Bedford Bennett: That is contained in
section 14, as reprinted, subsection (2).


Frederick George Sanderson: The copy I have
shows the amendment on section 16.


Richard Bedford Bennett: But it is already in section 14, Mr. Chairman.


Frederick George Sanderson: Shall the section as
amended carry?


Richard Bedford Bennett: Which one?


Frederick George Sanderson: Section 16.


Richard Bedford Bennett: Sixteen? Is that amendment made to section 16, too?


Clarence Decatur Howe: No; I think we already passed the amendment under section 14; section 16 should be passed as it stands.


Richard Bedford Bennett: Yes. If the minister
will look at section 16 as it stands, he will see the absurdity of what is being undertaken. The governor in council is to allow the new or amalgamated company, which includes a company in the United States of America, to borrow up to S4,000,000. We have already authorized the company incorporated under the legislation to borrow $4,000,000. Surely the minister does not ask any one of us with reasonable intelligence to become a party to this section? I shall not waste time about it. I said at the start that I would content myself with pointing out these facts.
Just look at section 16:
Subject to the approval of the governor in council, the said new or amalgamated company may from time to time borrow-
Up to $4,000,000. We have just authorized the company, which was one of the amalgamated companies, to borrow up to $4,000,000. What is more, how can the governor in council deal with the affairs of a company which is in the United States? The amalgamated company may be in the United States; it says distinctly that this is so. However, I am merely stating my objection.


Clarence Decatur Howe: I think the position is clear. We, the Canadian government, must start the ball rolling by establishing a Canadian company. Similarly, in the United States an American company must be established to obtain rights in that country. This bill permits the two companies to amalgamate, and any act of theirs must be subject to the approval of the Dominion of Canada and, I assume, also subject to the approval of the United States. I believe the last four or five international bridge bills which have passed the house have a similar section, and it seems to me it operates entirely satisfactorily.


Richard Bedford Bennett: It will not operate in that way if any lawyer worth while deals with it.


Frederick George Sanderson: Shall section 16 carry?


Richard Bedford Bennett: On division.
Section agreed to on division.
Section 17 agreed to.

Companies' Creditors Act
On section 18-Retirement of corporate obligations.


Richard Bedford Bennett: In view of the statement made in the letter read the other day, it seems to me section 18 should be somewhat different. I draw the minister's attention to that fact. However, I shall not waste the time of the committee; I am merely pointing it out.


Frederick George Sanderson: Shall section 18 carry?


Richard Bedford Bennett: No.


[Stage Direction]
Section agreed to, on division.
Section 19 agreed to, on division.
On section 20-Consent of Niagara parks commission.
Richard Bedford Bennett: It is extremely doubtful whether there is power to enact that section. If it is declared work for the general advantage of Canada, as Mr. Edwards pointed out in his opinion it is within the exclusive jurisdiction of this parliament. We, only, have to deal with it. The section refers to obtaining the consent of the Niagara parks commission. We have the power, I suppose, and ask that they give their authority-if that is what it means.


[Stage Direction]
Section agreed to.
Sections 21, 22 and 23 agreed to.
Richard Bedford Bennett: The preamble has not been passed.


[Stage Direction]
Preamble agreed to.
Bill reported.


Mr. H. E. BRUNELLE (Champlain) moved:: That a message be sent to the Senate to acquaint Their Honours that this house disagrees to their amendment to Bill No. 13, "An Act to amend the Lord's Day Act" for the following reasons:
1.	The amendment penalizes the corporation while the object of the bill was to impose the penalty for breach of the Lord's Day Act on any person being a director, officer, superintendent or employee of a corporation.
2.	The amendment will be ineffective inasmuch as it does not raise the minimum penalty imposed by the present statute.
3.	The imposition of fines without imprisonment have no practical effect in offences against such a law as the Lord's Day Act.
And that the Clerk do carry the said message to the Senate.


[Stage Direction]
Motion agreed to.


[Stage Direction]
1932-33, 23-24 george v
The house resumed from Tuesday, March 8, consideration of the motion of Mr. Bertrand (Laurier) for the second reading of Bill No. 26, to repeal the Companies' Creditors Arrangement Act, 1933.
Hon. CHARLES A. DUNNING (Minister of Finance): Mr. Speaker, if this house were to agree to the second reading of this bill the result would be in principle to agree to repeal a statute now on the statute books. I do not think the house would desire in any casual or offhand manner to eliminate from the statute books a piece of legislation which may have wide importance, at least in the minds of some people, without there first being a detailed study of the matter by one of the Standing committees of the house. If it is in order to do so, I would move that this bill be not now read a second time but that it be referred to the standing committee on banking and commerce for consideration and report.
Richard Bedford Bennett: The general rule is that a bill cannot be referred until after it has been given second reading, although there are special circumstances where it can be done.


Charles Avery Dunning: The clerk informs me that the correct motion is that the bill be not now read a second time but that the subject matter thereof be referred to the standing committee on banking and commerce. I am inclined to the view that if the Companies' Creditors Arrangement Act is to be repealed, certain provisions therein will have to be considered in relation to the general provisions of the Bankruptcy Act. For this reason I would prefer that the whole matter be studied before final action is taken by the house.


Richard Bedford Bennett: The question as to
whether or not this legislation should be repealed is one of great importance as it affects the ability or capacity of companies to make compromises, having regard especially to the position of preferred shareholders. It was not enacted until such time as the privy council had rendered a decision in Royal Bank versus Larue. The matter was subsequently referred to the Supreme Court of Canada which held that it was within our competence to enact. I have been advised that this legislation has been extremely useful to many people. It has enabled arrangements to be made without the necessity of receivership
Railway Act-Grain Rates

or bankruptcy proceedings. The motion of the Minister of Finance (Mr. Dunning) that the subject matter of the bill be considered by a standing committee, is, I think, highly desirable. It does not pledge the house to accept any principle with respect to the legislation, but it affords an opportunity to study the whole question, namely whether the legislation is useful for the purpose for which it was enacted.
Motion (Mr. Dunning) agreed to.



RAILWAY ACT AMENDMENT


[Stage Direction]
The house resumed from Friday, March 11, consideration of the motion of Mr. Reid for the second reading of Bill No. 18, to amend the Railway Act (rates on grain).
Mr. E. E. PERLEY (Qu'Appelle):: Mr. Speaker, I moved the adjournment of the debate on this motion on March 11. Nearly two months have passed, and I regret that a bill as important as this one has taken so long to reach this stage. I trust that the house will facilitate the passage of this bill. I would suggest that the government take it over and have the railway commission deal with it accordingly.
On three occasions, twice during the former parliament and once in 1936, I moved resolutions that, had they met with the approval of the house, would have meant reductions in the domestic freight rates, similar to what is being provided for by this bill. On one occasion I secured from the then Minister of Railways and Canals, the Hon. Doctor Manion, a promise that he would recommend to the board of railway commissioners the bringing into force of an agreement between the provinces and the railways to provide for a reduction in domestic rates going westward. This agreement came into force on March 10, 1937, to cover movements from points on the prairies to the Fraser valley and the British Columbia coast. This was covered by tariff item 145, C.R.C. 154. It effected a reduction in the domestic rate from Edmonton and Calgary to Vancouver from 41^ cents to 30 cents per 100 pounds. However, this arrangement lasted only a few months.


Richard Bedford Bennett: Why was it discontinued?


Ernest Edward Perley: I think the submission was made by the railway companies to the board of railway commissioners that the rates were not profitable, and the previous rates were

restored. On the occasions I have mentioned, the hon. member for New Westminster (Mr. Reid), who introduced this bill, did not support my resolution. However, he continued to introduce a bill each year calling for a reduction in freight rates. The argument which has been advanced against his bills is that their passage would upset the whole freight rate structure. That argument has always been presented when any attempt has been made to obtain a reduction in domestic rates. This bill is similar in principle to my resolution and I propose to support it.
As I stated a moment ago, this bill deals with a special class of freight, and its acceptance would not upset the freight rate structure. The poultrymen, the dairymen and the stockmen of British Columbia would benefit materially if it were accepted, and the grain growers on the prairies would also be assisted by having access to an increased market in British Columbia for coarse grains. Many different organizations in western Canada, particularly farm organizations, have passed from time to time resolutions which have been presented to parliament asking for a reduction in domestic rates.
It is not necessary to-night to burden the house with comparisons of rates. The hon. member who sponsors this bill has covered that matter quite well. He has dealt with rates in both eastern and western Canada, and I think the figures he placed on Hansard make out a good case for his bill. However, I should like to direct attention to the rates which apply from Indian Head, Saskatchewan, near to my home town, to Vancouver. The domestic rate is 52 J cents, and the export rate 27 cents per 100 pounds. I claim that is an unjust rate and the producers have cause for complaint.
The hon. member, when speaking to his bill, mentioned that some three and a half million bushels or more did go from the prairie provinces to British Columbia under these present rates and that the consumers in British Columbia paid nearly $450,000 more in freight rates than they would have done had the rates prevailed that he is asking for in his bill.
I wish to deal briefly with the question of corn. Com is imported into British Columbia and is used there for feed purposes by the poultry producers and dairymen. It is estimated that com equal to about 1,500 cars of barley is imported into British Columbia each year. That is a very considerable market if we had it for coarse grains, and I think we can prove that coarse grains are equal in food value to com. Experiments have been carried

Railway Act-Grain Rates
on at different experimental stations to ascertain the feed value of corn and barley, and in practically every instance barley has been proven equal to if not better than corn for feeding hogs, beef and dairy cattle and poultry. So, if the western producers could get a market there for their coarse grains, barley and oats, there would not be any loss to the British Columbia producers so far as feed value is concerned.
Parliament, I admit, is not a rate fixing body. I remember that in the former parliament we were always confronted with the argument that we must not do anything to upset the whole freight rate structure, but I claim that the rate I have cited to-night from the central part of Saskatchewan to Vancouver is discriminatory and unjust in its present application.
For the information of members of the house who were not in the former parliament I want to quote from a decision given by the board of railway commissioners in 1922. The late Hon. Frank Oliver, in giving a dissenting judgment to the decision given by the board of railway commissioners in that year, said:
There should not be any differential at all, especially on coarse grains and low grade wheat going to British Columbia.
I think that is a pretty fair argument. I have already mentioned that we might get a market in British Columbia for some 1,500 carloads of barley alone, and at thirty cents per 100 pounds that would mean 8220,000 for the railway company taking it through the mountains into British Columbia. I may point out that the railway companies do not derive any great revenue from the freight on corn. Corn comes in by vessels, and while it is distributed by the railways to the interior, the rail haul is short and does not provide a great revenue for the railway companies. On different occasions the railway companies have said they were willing to assist, and I think we should give them an opportunity to do so.
Prior to 1897 we had a rate on grains to Fort William from the province of Saskatchewan and western points of about two cents less than the present rate. For example, the freight from Indian Head to Fort William was seventeen cents per 100 pounds. At the present time we are paying nineteen cents, and the farmers cannot understand why in this day and age, with all the improved transportation facilities that we have, with large engines hauling twice the number of cars, of twice the capacity, and the same crew operating the train, they have to pay more than they did twenty or thirty years ago. I
think the farmers of western Canada are justified in feeling that way about it. If we had the rate reduced to what it was prior to the Crowsnest rates, it would mean a saving to the farmers of the west of about three or four million dollars in freight on their wheat alone, and I think we should have that low rate restored.
I shall not take up very much more time, but before closing I would say that freight rates are of such importance that they should be considered with respect to other commodities than grain. I think we should have a considerable reduction in the freight rate on implements going west, particularly in the carload rates. We have heard a great deal in the house within the last day or two with respect to the prices paid by the western farmer for farm implements, and I heard the hon. member for Brant (Mr. Wood) say this afternoon that he had used a binder on his farm for thirty years. When one considers the increase in the price of binders, it would not bother him very much if he had to buy only one in thirty years; but if we had a reduction in the freight rate on implements going into western Canada it would be of great value to our farmers, and I think our time could have been better spent within the last day or two if we had been discussing something along that line.
I would also mention the freight rate on coal. I think there should be an adjustment in that rate, particularly from point to point in the western provinces.
Bill No. 31, which has been presented to the house, is now before a special committee. Certain sections of that bill dealing with rates are objectionable, particularly the one dealing with agreed charges. I consider that dangerous, and I hope, when the bill comes back to the house, that provision will have been struck out. I know the farmers of western Canada are anxious that no measure should pass the house containing a provision which would make it possible in any shape or form to establish a monopoly in rates in any commodity. They are anxious that no bill should come into effect that would mean an increase in either the outgoing rates from the prairie provinces or the incoming rates, and I hope, when that bill returns to the house, it will have been so amended that such a thing is not likely to happen. In due course I trust we shall also get a very substantial reduction in the rates on grain, implements and coal.
In conclusion, Mr. Speaker, I trust that the hon. member who has introduced this bill will see fit this year not to withdraw it, as he did on former occasions. It is true the bill
Railway Act-Grain Rates

did not get very far in other sessions, and was finally withdrawn by the hon. member, but I would suggest that this year he endeavour to have the government take over the measure and push it through. I understand that during the campaign in 1935 he assured the electors in the province of British Columbia that if there were a change of government and his party came into power, there would be no difficulty in having the government accept his biil or bring in a similar measure.


Mr. REID:: It is not true.


Ernest Edward Perley: In conclusion, I wish to say that I am heartily in accord with the hon. member's bill. I regret that he did not see fit to support me when I was introducing resolutions that would provide for practically the same thing as his bill. However, on this occasion I am supporting him, and I hope the bill goes through in good time this session.


Mr. McIVOR:: What effect will this change in rate have on rates to Fort William? I was just wondering whether the Minister of Transport would assure us that the rates to Fort William will 'be reduced accordingly.


Clarence Decatur Howe: I think I can promise that.


Mr. ANGUS MacINNIS (Vancouver East):: I wish to say just a few words in support of this bill. I congratulate the hon. member for New Westminster (Mr. Reid) upon sticking to this matter so tenaciously over the years. I am quite satisfied that in this respect the province of British Columbia has a grievance and that this grievance should be rectified. There is an argument in favour of this bill which I have not yet heard brought forward in this chamber. My hon. friends across the way, with a few exceptions-that is with the exception of the Minister of Finance (Mr. Dunning) and one or two others-are, I believe, low tariff Liberals.


Charles Avery Dunning: Mr. Speaker, on a point of order, that reference to myself is entirely inaccurate. My hon. friend well konws it too.


Angus MacInnis: I did not hear the point of order.


Charles Avery Dunning: The point of order is that the reference to myself is entirely inaccurate. I ask my hon. friend to take my word for it, and withdraw.


Angus MacInnis: In what respect, I would like to know, is it inaccurate?


Charles Avery Dunning: Entirely opposed to the truth.


Angus MacInnis: I must take it that all
hon. members on the other side are low tariff Liberals.


Charles Avery Dunning: That is quite satisfactory.


Angus MacInnis: I think the Minister of
Finance will admit that there was a little ground, anyway, for my confusion in the matter.


Charles Avery Dunning: Not so far as I am concerned.


Angus MacInnis: To get back to the point, this discrimination in railway freight rates acts in the same way as an increase in the tariff would, on commodities hauled to Vancouver which are affected by the discriminatory rate. As there is no discrimination between grains used for domestic purposes on the eastern haul. I do not see why there should be any difference in rates regarding the western haul. Even if there were ground for some difference the difference is altogether too great, that is a domestic freight rate of 414; cents as against an export rate of twenty cents. I cannot find anyone who can make a case for discrimination of that kind. The province of British Columbia is well suited to the production of certain commodities as far as its limited agricultural area is concerned-poultry products and the like-and if the freight rate were equalized and the domestic rate brought down to the export rate, we could produce poultry products much cheaper than we can do now.
There is hardly anything which can be said on this matter that the hon. member for New Westminster has not already said, and I just wish, with these words, to give my support to the bill.


Mr. J. H. BLACKMORE (Lethbridge):: I, too, wish to support the hon. member for New Westminster (Mr. Reid). It is my firm conviction that a gross abuse has developed, perhaps quite without the cognizance of a great many hon. members. There appears to me to be a situation under which the three prairie provinces are suffering which, when the full extent of it is understood and appreciated, will be astonishing. It has seemed to me that the freight rate structure, especially the local domestic structure, is such as to render industrial development in the western provinces almost impossible. I shall have more to say concerning this matter at a future time when it is more in order. At the present time I support the hon. member's bill and urge him to go forward with it.

Railway Act-Grain Rates


Mr. A. A. HEAPS (Winnipeg North):: This parliament is a legislative body, and I have always contended that as far as possible we in our capacity as members of this house should refrain from becoming an administrative body. There are few lion, members, I care not in what part of the house they sit, who can discuss the subject of freight rates with any degree of understanding in so far as the dominion is concerned. I know very little about it, and I think the same is true of many other hon. members. In previous years I have invariably contended so far as a bill of this kind is concerned that, while there may be a good deal of merit in the contentions of the hon. member who sponsors it, the principle is one which I cannot support. The proper principle to follow is that this parliament should not be a rate fixing body. The moment we start fixing freight rates I do not know where we are going to start and where we are going to end. I would far sooner leave the matter to a body properly constituted and created for that particular purpose. I do not know whether the railway commission are making a good job or a bad job of fixing freight rates.


Thomas Reid: The trouble is they are not.


Abraham Albert Heaps: If they are not, the proper course is to change the personnel of the commission and not to let us as members of parliament become involved in creating a rate structure of which we know very little. There may be a hardship involved in what the hon. member has stated, and nobody yet so far as I know has explained the reason for this differential between export and local rates. It is quite possible that the export rate is far too low, and I have been wondering whether, if the export rate were raised to the level of the domestic rate, that would satisfy hon. members from British Columbia. The fact that the export rate was reduced to a very low level, perhaps, for competitive purposes, may not be altogether a good reason for bringing the domestic rate down, although there may -be some grounds for it. My contention, which I have previously maintained in the house, is that as a member with very little knowledge of the freight rate structure I am not, if I can possibly avoid it, going to be a party to fixing freight rates in any part of the dominion. On the other hand, if perhaps there is fault to be found with the composition of the railway commission or if they are not doing their job properly, the remedy is, not to attack the freight rate structure but to attack the railway commission and change its membership.


Clarence Decatur Howe: This bill has been before parliament each year since 1933, and, I believe, almost everything that requires to be said on the subject has been said. I can only reiterate what I have said each time when the bill has been discussed, namely, that the consideration of freight -rates, being a highly technical matter, is one for the board of railway commissioners and not for parliament. I think parliament has acted on freight rates only twice since the board of railway commissioners was established. On both those occasions parliament acted because a change was to be effected in a statutory rate and the change could be effected only by statute. The Crowsnest pass rates were established in 1897. The rates were changed in the early years of the war, having been an intolerable burden on the railways under the stress of those days, and after the war parliament acted again to restore the Crowsnest rates. We all start from the position that the Crowsnest rates are adequate, representing a fair return to the railways for a given service. That, of course, is entirely erroneous. If we could restore the other conditions of 1897, rates of pay, prices of equipment and supplies, and other conditions which obtained at that time, such rates would no doubt be profitable. The board of railway commissioners have made a statement in that regard, and I think it well to remind the house of it. In its judgment of October 14, 1924, in the Crowsnest pass case, the board said:
The Canadian Pacific railway rates, as contracted for. by the agreement of 1897, while then fair and reasonable under then traffic conditions, are not adequate to present conditions of traffic, and do not furnish an adequate return for the service concerned, and are not fair and reasonable, representing as they do but 35 per cent to 60 per cent of rates found adequate under present traffic conditions.
That is the situation in which grain is moved to-day, at a rate which the board of railway commissioners have found represents only from 35 to 60 per cent of an adequate return.
There is no objection to moving grain for export at that rate. The railways have not protested and no one has protested. Why? To move grain for export in competition with other countries of the world more favourably situated as to geography, it is necessary to be able to move it at an extremely low rate; and that being recognized, the railways are willing to do their share. I have no doubt they accept the fact that, as this is necessary to the national economy, it is a desirable movement for the railways.
Railway Act-Grain Rates

We come now to the domestic rate, which is a movement within the country. I think it has always been accepted; I know it has always been accepted since railroading began, that there is a difference between the export movement, which is highly competitive with other countries, and the domestic movement of grain within the country. We find a differential existing in all of the large consuming centres of Canada as between the export rate and the domestic rate. The board of railway commissioners have examined the domestic rates for movements to British Columbia and have found them to be fair and reasonable; nevertheless the railways have, by agreement, introduced, voluntarily and without compulsion on the part of the board, a lower rate to move feed grains, that is, the lower grades of wheat, and coarse grains, destined for consumption in British Columbia. Again, they did that in the national interest. The agricultural industry of British Columbia is a matter of interest to all Canada, and the railways agreed to transport feed grains to that consuming population at a rate greatly reduced below the domestic rate. Having done that, they have made, I believe, a sincere attempt to satisfy the requirements of that area. As a matter of fact, this arrangement was made in settlement of the demand of the western provinces that the Crowsnest rate should apply on domestic grains. The offer was made by the railways, and accepted by the provinces, and I think we can regard it, remembering the circumstances of the arrangement, only as an agreement binding on both parties. However, the fact that this subject has been repeatedly brought up in parliament indicates that there may be a grievance, or if there is no real grievance, that a great many people believe they have one.
One thing that has been particularly stressed in the presentation of the case by the hon. member for New Westminster (Mr. Reid) is that the rate on mill feeds moving into British Columbia should be carried at the same rate as that which applies on the movement of feed grains. The hon. member gave the house a rather erroneous impression of the rate at which these mill feeds move. He gave the house the impression that they now move at the domestic rate from mill to consumer. This, of course, is not the fact, as those hon. gentlemen who are familiar with milling in transit rates must be aware. The mill feeds move from the farm to the mill on the
domestic rate for that particular haul, and then the flour and by-products move through to destination on the balance of the through rate. The balance of the through rate is, in some instances, lower than the feed grain rate; in some instances it is higher. In discussing the matter with the railways, I have expressed to them the opinion that the grievance or supposed grievance of the people of British Columbia is a matter that should receive consideration with a view toward removing the possible grievance.



FOREIGN POLICY IN QUIRT AS TO COMPREHENSIVE STATEMENT BY PRIME MINISTER

[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: On April 1, the Prime Minister (Mr. Mackenzie King) told the house that for two months he had been trying to have an item in External Affaire taken up so that he might have a chance again this year to place before the house a comprehensive statement with regard to foreign policy. That was on April 1

I don't know whether it was April Fool's day or not-but apparently for three months the Prime Minister has been endeavouring to get foreign policy before the house. An item was introduced the other day, but there was no discussion. I should like to ask the government when we may expect that statement.


Right Hon. ERNEST LAPOINTE (Minister of Justice):: In the absence of the
Prime Minister I should not like to give a definite answer. My hon. friend knows that the occasions have not been very numerous on which the Prime Minister could have had an opportunity to make that statement, but he told me to-day that he intends to make it in the course of next week, if he has an opportunity to do so.



LIVE STOCK ACT


[Stage Direction]
On the orders of the day:
Hon. II. H. STEVENS (Kootenay East): Might I ask the Minister of Agriculture (Mr. Gardiner) if he would be good enough to lay on the table the file of his department containing correspondence between himself or
[Stage Direction]
Supply-Agriculture
the officials of the department in the live stock branch and Mr. Todd, of the packers' association, or any of the heads of the packing companies, regarding regulations appertaining to the administration of the Live Stock Act with respect to the marketing of live stock in the stockyards or in packing plants, and as to grading and1 such like. I am asking the minister to lay the file on the table, since I do not wish to put the department to the trouble and expense of having a copy made by way of a return. There is no doubt that it must be a file of considerable dimensions, and if it were laid on the table one could look it over while it was in the custody of the clerk and at the same time avoid the trouble of having a great deal of correspondence copied. Perhaps that could be done prior to the consideration of the estimates having to do with the live stock branch.
Hon. J. G. GARDINER (Minister of Agriculture):: I shall try to have that done.



UNEMPLOYMENT


[Stage Direction]
On the orders of the day:
Angus MacInnis: In the absence of the Minister of Labour (Mr. Rogers), there is a matter I should like to draw to the attention of the other members of the government. During the discussion of the unemployment and agricultural assistance bill I had occasion to direct attention to the serious situation in the city of Vancouver owing to a large number of homeless single unemployed men congregating there. Within the last two days I have had two telegrams, one since I came into the house this evening from the secretary of the single unemployed men, pointing out that four thousand men were at the limit of their resources and asking that the government take immediate action to take care of the situation. The other telegram was from the secretary of the United Church presbytery of Vancouver representing fifty-nine congregations, also drawing attention to the dangerous situation resulting from the concentration of single unemployed men in Vancouver since the closing of the camps.
In the absence of the Minister of Labour I wonder if the other members of the government who are present would draw the matter to his attention and urge that some action be taken before any trouble develops.
51952-16S


Ernest Lapointe: I may assure my hon
friend that this matter will be called to the attention of the Minister of Labour, and that any information he has in his possession will be given to my hon. friend on Monday.

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



DEPARTMENT OF AGRICULTURE

[Stage Direction]
International Institute of Agriculture, $12,000.
Mr. SENN:: When the committee rose the other evening this item was under consideration. I had asked the minister just what publications were issued by this branch; to whom those publications were sent, and what their nature was. The minister had partly finished his reply when the committee rose, and I should like him to complete it now.


James Garfield Gardiner: Yes, I was just in the midst of reading the list of publications subscribed for, and I think I had reached No. 3, the Monthly Bulletin of Agricultural Economics and Sociology; International Bulletin of Plant Protection; Monthly Bulletin of Agricultural Science and Practice; Bulletin Mensuel de Renseignements Economiques et Sociaux; Bulletin Mensuel de Renseignements Techniques; Moniteur International de la Protection des Plantes; Monthly Crop Report and Agricultural Statistics; Bulletin Mensuel de la Statistique Agricole et Com-merciale. There are ten of them in all.
A sufficient number of each is obtained to satisfy the needs of government libraries, agricultural libraries, professors in agricultural colleges, provincial ministers and deputy ministers of agriculture and heads of branches and divisions of the dominion Department of Agriculture. None of these is distributed to the press, but the copies stored in the main library of the Department of Agriculture are always available to any publicity organization which may need to consult them. Besides these periodicals, the main library of the Department of Agriculture receives copies of every publication, either memoirs, bulletins, or leaflets, issued by the International Institute of Agriculture. These are also available to the public interested.


Mark Cecil Senn: I understand that most of the bulletins are of a scientific nature, and no doubt would be of very little interest to agriculture generally or to the trade. But there is one set of bulletins that, I believe, refer to monthly crop reports and statistics as to



Supply-Agriculture-M arketing
agricultural production and surpluses throughout the world. I wonder if those bulletins are available to agriculture, and particularly to the trade, and if arrangements are made so that they may be made available to people dealing in different classes of farm products.


James Garfield Gardiner: All information of that kind which would be valuable to agriculture here and to those engaged in business having to do with agriculture is incorporated in our own statistical publications and sent out in the usual way.


[Stage Direction]
Item agreed to.
Marketing services-Marketing services administration, $50,000.
Mr. STIRLING:: Mr. Chairman, I have been seeking an opportunity, and here it is, to draw attention to some egregiously false information which was contained in a cable dispatch from London last summer with regard to the grading of apples. In this matter I certainly am not critical of the minister; rather do I seek his assistance, for the cable that I am going to read takes in vain the name of his director of marketing. It is a serious criticism of the trade commissioners of Canada and also a criticism of that portion of the fruit branch which has to do with inspection, upon which we in British Columbia rely to such a considerable extent and which we trust so well, because of their assistance in enabling the shippers and the producers to pay more and more attention to quality. The cable in question came from Mr. Grant Dexter, London correspondent of the Winnipeg Free Press, and was dated July 15. It reads as follows:
Dean A. M. Shaw, chief of the marketing section of the Canadian Department of Agriculture, and a group of senior officials of this department are finding plenty of reasons why Canada's exports are not growing as rapidly as desired. The conclusions are based on a two weeks intensive study of the British market. Out of their investigations here it is safe to predict will come a severe overhauling of the Canadian government's export grading regulations, and a tightening up of their enforcement. The inquiry has revealed that many Canadian products are not being shipped to Britain in the way required by this market. Tests made of shipments of canned goods and fresh fruits, notably apples, proved conclusively that inferior products are being sent here under Canadian top grades.
Canada's finest, upon examination, turned out all too often to be wretched goods which could not possibly qualify for high grades if the Canadian inspection service were adequate. Boxes of apples, with good fruit on top and bad underneath, occurred too frequently under close inspection of these officials to bring real satisfaction with the efficiency existing in the federal inspection service.

Naturally that caused considerable stir in British Columbia. I can tell the story I wish to tell most quickly by reading an exchange of letters which took place. On August 12,
I wrote the Minister of Trade and Commerce (Mr. Euler) as follows:
I have just returned to the Okanagan after a short absence, and I find a stormy atmosphere consequent on some allegations, as to the quality of our fruit in the United Kingdom market, by Grant Dexter.
I am in fairly close touch with the situation at both ends, and if this condition prevails, it must have come about fairly recently.
The industry is taking the matter up with the Department of Agriculture and with Mr. Shaw, but I want you to tell me what your trade commissioners have to say, for if things have gone bad recently, they would have certainly reported it to you, and they can also bear out, or disagree with, my opinion that our stuff has, in recent years, reached the British market in very good condition. So, at least, I have been informed over there on frequent occasions, and it was certainly so considered at the time of the 1932 conference.
It is a very, very, serious statement and one which I think the government must take notice of. I enclose one of the many references to the matter in the valley papers.
The minister replied through his private secretary, and enclosed a copy of a letter which had arrived from the Canadian government fruit trade commissioner in London. I shall read one or two paragraphs of the letter from London, which is dated August 20, 1937:
In the first place there were no Canadian boxed apples on the market during the whole period of the delegation's visit to this country and therefore it was impossible for any member to make the inspections reported and there is not the slightest trace of truth in the published statements-"boxes of apples with good fruit on top and bad underneath, occurred too frequently under the close inspection of these officials." It is presumed that Mr. Dexter obtained information by interview, but I find it hard to believe that any member of the delegation made such a statement, it is really an accusation of deliberate fraudulent packing. Further, I know of no importer of repute in the United Kingdom who would have made such a statement to the member of the delegation responsible for reporting upon the fruit situation. I have been concerned with the Canadian fruit industry for many years and innumerable opportunities have occurred to examine boxed apples in the packing house and in the markets of the United Kingdom and Canada, and I can state with emphasis that my experience has been quite the reverse to that as reported by Mr. Grant Dexter.
I would say that there is not an atom of truth in the report on boxed apples as published by the Winnipeg Free Press and further there is no justification whatsoever for such a statement.
I have discussed this matter with Mr. F. Hudd-

He is Canadian trade commissioner for Canada in London.
-and he has had several conversations with Mr. Grant Dexter. I understand that Mr. Dexter realizes the error in his cabled dispatch and it occurred to me the best manner in which the matter could be settled was for Mr. Dexter to withdraw his dispatch.
At the same time the Minister of Trade and Commerce sent me a copy of a letter he had written to the Winnipeg Free Press, dated August 31, as follows:
Inasmuch as the dispatch from Mr. Grant Dexter published in the Winnipeg Free Press under date of July 15th was definitely inaccurate and could hardly fail to injure our export trade in the commodities mentioned, I feel it is only proper that you make some adequate correction.
I enclose for your information a copy of a letter which has been received from Mr. W. B. Cornell, Canadian Fruit Commissioner.
In a subsequent letter the Minister of Trade and Commerce sent me a copy of the second Grant Dexter cable. The cable is dated at London, August 19, and is headed "Bad fruit not sent from B.C." The text is as follows:
Cables and letters received here indicate that the British Columbia apple growers have drawn an unintended and unwarranted conclusion from your correspondent's dispatch of June 15 regarding inquiries by Dean Shaw and his associates into the quality of Canadian foodstuffs exported to this market.
The apples referred to as being found good on top and bad underneath did not come From British Columbia. It was never suggested that they did. I
I pause there to draw attention to the fact that not only were there no boxed apples in London at that time, but the boxed apples which reach London during the course of the year are 90 to 95 per cent British Columbia apples. The cable continues:
The apples and canned goods named by your correspondent were only examples of the food products shipped to this market and opened under the eyes of the Canadian officials which proved deficient in quality but all the Canadian apples shipped here did not come from British Columbia. Other products could have been cited.
Tightening of the expert grading regulations and an intensive educational campaign among Canadian exporters is regarded as' certain at the next session of the dominion parliament when full details of the departmental inquiries here will doubtless be given official form.
Regarding British Columbia apples, careful inquiry among the trade fails to uncover any complaints as to quality or packing.
The reply received from the Winnipeg Free Press by the Minister of Trade and Commerce, dated September 3, is as follows:
I beg to acknowledge your letter of August 31st, calling attention to the dispatch from 51952-168J
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Grant Dexter which appeared in the Free Press July 15th. Since then we have published a further dispatch from Mr. Dexter which expands the brief extract from it mentioned in the letter from Mr. Gornall. I think it has been made amply clear that there should be no unfavourable reflection upon boxed apples from British Columbia sold in the British market, and this forms in my judgment the "adequate correction" which you suggest.
I then wrote the Minister of Trade and Commerce on September 18. I first referred to the fact that he had sent me a copy of Grant Dexter's cable and Mr. Ferguson's letter, and then continued as follows:
The cable maintains the original assertion m a slightly modified form, that "food products shipped to this market and opened under the eyes of the Canadian officials" are "deficient in quality" and I hope that you will go over the head of the managing editor and obtain an honest retraction of a journalistic libel, published as prominently as the original falsehood.
I can assure you that the matter is by no means dead here, nor in the other fruit growing parts of Canada. The public has been told by a widely read journal that "boxes of apples, with good fruit on top and bad underneath, occurred too frequently under the close inspection of these officials." The statement is emphatically denied by the Fruit Trade Commissioner in Great Britain, and the evasive later comments of the correspondent read strangely but they are approved by the managing director.
The journalist is fond of telling us that all he wants is news, accurate news, and that he has as high a regard for ethics as has any other professional man. If the editor of the Winnipeg Free Press endorses that constantly reiterated view, he cannot fail to give proper denial to this falsehood.
The correspondence ends with the reply to that letter from the Minister of Trade and Commerce. The letter, which is dated September 29, 1937, reads:
While I am inclined to agree with the thoughts expressed in your letter of September 18, I do not believe any good purpose could be served by going into this matter further with the Free Press. Possibly if you eared to ventilate this in the house it would do much more good.
I do so. I appeal to the minister for his assistance. This is an absolutely false statement. I assume that this man is a Canadian and that he has the confidence of the Winnipeg Free Press. I am ready to concede to the members of the press every desire to follow the ethics of their profession, just as I as an engineer try to follow the ethics of mine. Undoubtedly at times journalists will be in error as I have been in error as .an engineer. But over the course of years that I have been connected with the fruit industry the Winnipeg Free Press has never been ready to give accurate or reasonably fair

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information with regard to the fruit industry, even in this country. For its special representative in London, presumably sent there because it has confidence in him, to send back such a cable as that, merely means that he is doing damage to a Canadian industry.


James Garfield Gardiner: I only wish to state that Mr. Shaw, the director of marketing in the department, made a denial at the same time with regard to boxed apples from British Columbia.


Grote Stirling: That is very little to get from the minister.


Mr. COLD WELL:: Mr. Chairman, perhaps the matter I have in mind could be raised just as well on this item as later on. I would direct the attention of the committee and the minister to the need for a more intensive advertising of our farm products, not only abroad but in Canada. I am informed that the Department of Fisheries has increased the consumption of fish in Canada by some 14 or 15 per cent by means of an advertising campaign. One farm commodity that has fallen in price to a considerable extent during recent years is eggs. I have before me a statement issued by the bureau of statistics which shows that the per capita consumption of eggs in Canada has decreased in a rather spectacular manner during the last ten or eleven years. I should like to quote the per capita consumption for different years:
Year	Eggs
1927.
1928.
1930
1932
1934
1936
361
296 299
297 287 272
268 260
Perhaps the minister has the figure for 1937, but I was not able to obtain it. From 1927 to 1937 the per capita consumption of eggs in Canada decreased by eight dozen. It seems to me that this condition could be remedied to some extent. I do not know whether egg substitutes have anything to do with the matter, but I do know that the depressed conditions under which the majority of our people have had to live during recent years must have had something to do with the decrease. However, the fact is that when everything was very cheap, the per capita jonsumption was very low. Economic conditions improved to some extent in 1936, but the decline in egg consumption still continued.
We all know that throughout the farming communities of Canada eggs are not merely
(Mr. Stirling.]
a side line but, like the cream can, they help to pay for the groceries on the average farm. Anything that can be done to increase the demand for eggs, either by export or by way of home consumption, would be of great help to the agricultural communities generally. Eggs contain probably the highest food value of any food and increased consumption would improve the physique of our younger people and the health generally of all the people of Canada.
Setting aside the question of purchasing power which is bound to enter into a discussion of this kind, I feel confident that even with the purchasing power which now exists, if the department carried out a plan somewhat similar to that of the Department of Fisheries, the consumption of eggs could be easily increased. This item deals with marketing services administration, and I considered it was the proper place to bring this matter to the attention of the committee. Could the minister tell us if anything along this particular line is being done?


James Garfield Gardiner: The activities in connection with advertising have been speeded up since the department was reorganized and the marketing branch established. The statement which first appeared in the press with regard to the consumption of eggs was not an accurate interpretation of the statistics. Just about that time they were changing the form in which the statistics were given out. This misinterpretation was corrected later on.


Mr. COLDWELL:: The figures I quoted are from the bureau of statistics.


James Garfield Gardiner: The first statement was issued by the bureau of statistics and there was a misinterpretation of the figures. The decrease of eight dozen per person is much more than what actually occurred, although there was a decrease. I have not before me the correction which was made of that particular figure. We have speeded up the advertising of different farm products within Canada. The Department of Agriculture has the responsibility for the advertising campaign within Canada. We have spent some money on this during the past year and intend to spend what is provided in these estimates for the different purposes during the coming year.


Mr. NEEDHAM:: I should like to ask the minister a question in connection with marketing in England. I have in my hand a report of an interview with the Hon. T. C. Davis of Regina in connection with his trip to Eng-

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land to be present at the coronation. He refers to the wonderful experience he had, and in conclusion the report reads:
The speaker also dealt briefly with Britain's rearmament program and the fact British people were inclined to slight Canada's goods because Canadians were not making any contribution towards the defence of the country which is her greatest market, Britain.
That is a startling statement to be made by the attorney general of one of our provinces who had just returned from the coronation. I do not know what foundation he had for that statement, but perhaps the minister would say something regarding its accuracy.


James Garfield Gardiner: I was not, of course, at the coronation with Mr. Davis, and I do not know what basis he might have had for any statement he might have made. Again, this is a press report of what he is presumed to have said, and I would hesitate to comment upon it in the committee at this time.
Mr. SEN'N: I have in my hand a report entitled, The British Market and the Canadian Farmer. It is the report made by a committee which, I understand, was sent to Great Britain to study the marketing there of Canadian farm products, and was headed, I believe, by the director of marketing services, Mr. Shaw. It is a very interesting report indeed. It was released, I think, in the fall of 1937, and there is some story to the effect that it had been released for only a very few days when further distribution of the publication was suppressed. I do not know if that is entirely correct or not, but the report does to a certain extent undoubtedly condemn the work which was done by trade commissioners in Great Britain in days gone by.
When I first understood that the Department of Agriculture was to be reorganized, I made a statement in the house to the effect that the minister had employed very capable men indeed to head these different services. I am not personally familiar with Mr. Shaw; but I know he enjoys in the west a good reputation as an agriculturist, and I would ask the minister to tell the committee just whait his particular qualifications are from the standpoint of the marketing of farm products. That is my first question.
My second question is, Who is responsible for the committee going to Great Britain to make the investigation? I notice that the report contains a number of recommendations, and I believe the minister has already taken steps to see that some of them are put into effect. I was present at a meeting of the
council of agriculture in the Chateau Laurier some little time ago, where the minister made an address, and made certain representations as to what the Department of Agriculture intended to do to implement this report and assist in the marketing of farm products. There are a number of recommendations, however, in regard to which I do not know whether the minister intends to carry them out or not.
The first recommendation which the minister mentioned, I think, was that we should have a national mark on our products, and I am fully in accord with that recommendation.
I also understood the minister to state that an agricultural commissioner was to be sent to Great Britain for the purpose of returning information to the Department of Agriculture in Canada and perhaps to other people as well. I would ask him to tell us if that appointment has been made, and, if so, who the gentleman is, what his qualifications are, and what his instructions are. It seems to me there might be difficulty between such a representative of the Department of Agriculture and representatives of the Department of Trade and Commerce who are acting over there in a similar capacity. If the minister would let the committee know just what this gentleman's duties, will be, I think it would be of interest to all of us.


James Garfield Gardiner: Mr. Chairman, as has
just been stated, a committee representative of agriculture went to Great Britain last summer and made certain investigations into the marketing of Canadian farm products in Great Biitain, and later made a report upon what they found in the old country. That report, as has been indicated, was published last fall. More than five thousand copies of the report were printed, and copies of that report were sent to the press throughout Canada and to certain farm organizations, with the intention of having a general distribution made up to the number of copies which had been printed. Practically the whole publication, somewhere in the neighbourhood of 4,800 or 5,000 copies, was distributed. At that time attention was called particularly to the press report which went out covering the report itself, and some exception was taken to statements in the press report summarizing the report itself. As a result of some of these complaints I suggested that the report as then published be not sent out to the general public. The early part of the report consisted of recommendations to the department and, to an extent, to other departments as well.

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Mark Cecil Senn: Would the minister say where those objections came from?


James Garfield Gardiner: They came through the press, to begin with. They appeared in two or three different newspapers throughout Canada.


Mark Cecil Senn: Were no representations made by particular interests?


James Garfield Gardiner: Not to my knowledge,
no; but these complaints which came in drew the matter to my attention, and I brought it to the attention of the government at the time, and suggested that the report which was to a considerable extent a recommendation to the different departments of government be not sent out to the public in that form, but that it be reprinted in a form which would indicate the action of the government rather than the recommendations to the government. The report was reprinted in that form and is being circulated to all those who made application for it.
I think I can best answer the next part of the question submitted by my hon. friend by reading from the reprinted issue of that publication. It states the policy as announced at the meeting to which the hon. member referred, in these terms:
With the winding up of the schemes operating under the "Natural Products Marketing Act'" completed, the dominion Department of Agriculture has given careful consideration to the recommendations set forth in the report of its investigating committee and has decided upon a policy in relation to the market in the United Kingdom.
Under that policy the department proposes:
A.	To see that Canada sets her own house in order by cooperating with provincial departments to have production improved and developed in most favourable locations and by ensuring, as far as possible, that no merchandise unsuitable to that market be exported to the United Kingdom and that what is exported be improved in quality, packaging and labelling.
B.	To cooperate with producers, exporters, brokers and the trade in the United Kingdom in maintaining, until the product reaches the consumer, the standard of Canadian agricultural products in conformity with the grades, packaging and labelling provided by Canadian regulations.
C.	To advise, cooperate with and assist all government, producer and merchandising agencies in placing Canadian foodstuffs effectively before the British housewife.
I shall now develop these main recommendations in greater detail: A. A number of products are already in such a condition that the full story can be told about them-i.e., cheese, bacon and breakfast foods. A great deal of work is required with others, in particular canned goods and poultry.
1.	We propose that definite steps be taken to see that the fullest information about the character of the United Kingdom market be given to the producer.

All possible means should be employed to this end;-e.g., through provincial departments of agriculture, at conventions, by special meetings, by carefully prepared articles in the agricultural press, by the issue of special booklets, and by any other useful method. The aim of all this should be to- show the producer the severity and type of the competition he must meet, the particular requirements of the market, the necessity for meeting these requirements, the need for paying particular attention to such matters as labelling, and, in short, the necessity for doing his part in proving to the housewife and to the trade in the United Kingdom that the words "Canadian Product" always mean a reliable, quality product. We also feel that at every step the producer should be kept fully informed of what is being done to increase the demand for his product on the British market.
2.	We have had ample evidence that the grading of certain Canadian products has continued to improve. The matter is of such importance, however, that we feel it vital to stress the necessity of further careful attention to grading, particularly in regard to fostering, as far as possible, a standard, to all graders in every part of the dominion.
3.	The only proper basis on which the two main policies, (B) and (C), as outlined, can be carried out is by emphasizing the consistently high quality of Canadian products. Publicity for an inferior article is not only worth nothing, but is definitely harmful to all good products. We have considered very carefully whether it is advisable to prohibit entirely the export to the United Kingdom of all low-grade products. Such a prohibition, we feel, would entail a severe hardship upon individual producers, as there is a low price market in Great Britain which may be invaluable to the producer who, for instance, owing to unfavourable climatic conditions, has a large amount of low quality products.
It is essential, however, that more and more of our products should be of high quality so that agencies placing it on the market can maintain it in high favour. We therefore intend to advocate:
(a)	The adoption of a national mark for Canada's high grade agricultural- products shipped to the United Kingdom.
(b)	That the use of this mark be made compulsory on specified products provided they attain the requisite standard; that this mark be made the focal point of any publicity and advertising campaign; by this means the mark would assume a definite and valuable significance.
(c)	That the right to use this mark where it is not compulsory, be accorded only to producers under licence, provided that their products attain to the required standard to be laid down by the dominion Department of Agriculture.
(d)	That, with proper safeguards, the right to use the mark be accorded to United Kingdom importers or blenders who import Canadian products in bulk and package or blend them themselves.
(e)	That this mark be either an emblem or label, so designed, either by shape, colour or wording, or a combination of these, that it can be readily identified by the British housewife.
(f)	That sub-standard products have a distinctive mark.


Mark Cecil Senn: That is a change from the
original copy, is it not?


James Garfield Gardiner: The last paragraph,
(f), is slightly changed from the original copy, that is from the recommendation. This is the policy as laid down. These are not the recommendations. It is based on the recommendations.


Mark Cecil Senn: Are copies of the revised
report available?


James Garfield Gardiner: Yes; I think they are now.


Mark Cecil Senn: Will they be circulated?


James Garfield Gardiner: Yes; they are being
circulated to anyone who makes application for them.
B.	The dominion Department of Agriculture intends to follow, in relation to other products the practices pursued in relation to cheese and bacon which have met with good results in recent years.
C.	The dominion Department of Agriculture does not conduct advertising campaigns in Great Britain, and never has. Advertising is conducted under the direction of a publicity committee presided over by the Canadian high commissioner in London. The marketing service of the dominion Department of Agriculture will cooperate in every possible way with the publicity committee or any producer or merchandising agency interested in promoting the sale of farm products in the United Kingdom.
The dominion Department of Agriculture will appoint an agricultural commissioner in London to direct the services of those following our commodities and to report back to producers from the United Kingdm, Ireland and Europe. This official will also provide the department continuously with information regarding agricultural developments in those countries."
With regard to the next part of the question, which had to do with the extent to which these undertakings have been carried into effect up to date, I can read into Hansard the next page of this report.
1.	An agricultural commissioner, to be stationed in London, England, has been appointed. He is to be responsible for directing the services of those who are employed, or may be employed, by the dominion Department of Agriculture in Great Britain, Ireland and Europe. He will further observe agricultural developments within these countries which may be of special interest to Canada, and report such developments to the dominion Department of Agriculture.


Richard Bedford Bennett: Who is that?


James Garfield Gardiner: The gentleman appointed is Mr. Allen, of the university of Saskatchewan at Saskatoon. He was previously in eastern Canada. To give his full record, may I say that he was bom in England; came to Canada as a young man; homesteaded in the province
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of Saskatchewan somewhere in the vicinity of the town of Kindersley; enlisted during the war; went overseas, and served in the army during that time. Following that, he worked on farms in western Canada, attended the agricultural college, and is a graduate of the university of Saskatchewan. Later on he took advanced studies in Cornell university, giving special attention to production and marketing, and served in the state of New York for a time following that before returning to the university of Saskatchewan as head of the economics work of the college of agriculture associated with the university of Saskatchewan. He was obtained from there, and is taking up his duties in London on the first of May. He has gone to England.


Grote Stirling: Will he cover all Canadian products in England?


James Garfield Gardiner: As this statement
indicates, he is in charge of all of the activities of the Department of Agriculture that are represented in Britain. We have men who check the cargoes that come in at the different ports. We have men who check the grades of products. He will have charge of all officials of the department-there are some six or seven of them over there at the present time- and any others who may be appointed for the purpose of carying on activities having to do with agriculture.


Ernest Edward Perley: What is his salary?


James Garfield Gardiner: It is $5,280. It is the same salary as the trade commissioner receives ; that is, it starts at $5,280 and advances. It is on the same basis as that of the trade commissioner.


Ernest Edward Perley: And his expenses, of course?


James Garfield Gardiner: He has an expense account allowed on the same basis as a trade commissioner.
2.	A standardization trade mark has been adopted. This will be used as a national mark on certain grades of commodities produced, manufactured, packaged or processed in Canada under authority of acts administered by the dominion Department of Agriculture.
The mark which has been adopted is the head of a Royal Canadian mounted policeman, got out in a form which will suit the different packaging that is used in connection with farm products.
3.	Arrangements have been completed to have a definite quantity of fresh killed beef forwarded weekly to the London market. This will consist of high quality beef, shipped in sides, the object being to demonstrate the possibility of placing fresh Canadian beef on

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the London market. The intention is to compete directly with the home killed beef rather than the chilled and frozen products of other countries.
4.	The seed of a particularly promising new variety of tomato has been purchased. It has been distributed among canners throughout Canada who have undertaken to have the crop produced and processed under the supervision of the Department of Agriculture. This particular variety is very promising, and it is hoped that it may be the means of improving our product on the British market.
It was found by this committee on their investigation in England that the type of tomato we were growing in Canada did not compare favourably with the type of tomato which was being received previously from Spain. During the time the Spanish war has been in progress we have had a great opportunity to place our tomatoes before the British people, and it was thought that by improving the tomato itself and getting a superior type, more solid, and with less juice, we could better suit the British market and better establish ourselves there.


Richard Bedford Bennett: A tomato that does not break up in cooking.


James Garfield Gardiner: Yes.
5.	A comprehensive study of processing and handling of export bacon is under way. This is under the direction of the National Research Council in cooperation with the dominion Department of Agriculture.
And, I may say, the Department of Transport as well.
Such questions as flavour, colour, keeping qualities, processing, packaging, stowing, etc., are being approached from a scientific angle in an effort to improve and standardize this product.
6.	Most of the recommendations made in regard to poultry are already embodied in new regulations. Several trial shipments of fresh eggs have been successfully made to the British market and it would appear from the results to date that there is a definite possibility of establishing a regular trade in fresh eggs.
This is a new venture, undertaken in the first instance by one of the packing companies in cooperation with the government of Quebec a few months ago, and our department has undertaken to assist in promoting it.


Richard Bedford Bennett: How is the assistance
given?


James Garfield Gardiner: By the assembling and servicing of them and seeing that they are up to standard, and also by getting them forwarded under certain conditions.


Richard Bedford Bennett: We do not pay any part of the transport?


James Garfield Gardiner: No.


Richard Bedford Bennett: I should think there
would be difficulty in competing against the Dutch.


James Garfield Gardiner: We have very favourable reports on shipments that have gone forward in comparison with the fresh eggs of Great Britain itself.


Mark Cecil Senn: The best quality is being sent.


James Garfield Gardiner: Yes, and in small cartons, easily handled.
7.	Several of the recommendations made in regard to fruit and vegetables are also embodied in regulations already worked out and in operation.
8.	A satisfactory method of marking Canadian cheddar cheese has always been regarded as extremely difficult.
One of the difficulties experienced there was that customers very seldom knew that they were actually buying Canadian cheese. Most of the products from the other dominions are so marked that anyone can take home a part of the product and know where it came from. There was always some difficulty in the marking of Canadian cheese by reason of the manner in which it is put up.
This difficulty has recently been solved and it is now possible to use a mark which is not only permanent and distinctive but entirely practical.
That is being put into effect in connection with the manufacture of cheese from now on.


Mr. BROOKS:: What is the mark?


James Garfield Gardiner: "Canada" stencilled in
so that it shows at all times on the wrapping of the cheese.


Ernest Edward Perley: How is the bacon marked?


James Garfield Gardiner: I should like to complete the reading of this first.
9.	Transportation as it applies to the handling of perishable products at Canadian docks is under investigation.
This is the difficulty that has always existed. Danish bacon is shipped in special boats built for the purpose and is loaded in a special way. Argentine beef is handled similarly. There the beef goes into cold storage at the wharf and is kept at a constant temperature as it crosses the wharf to the boat. It is at the same temperature in the boat, never varying more than one degree from the time it is put into cold storage until the time it reaches the market. We have no such service and with our present volume we could not have it. We have this experience, too, that much of our bacon is produced in Saskatchewan, Alberta and Manitoba, some of it being cured there, put into cold storage or

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refrigerator cars, and the temperature is not the same at the top and the bottom of the car. There is a variation in the car itself. When the product reaches the dock, it is sometimes left for a time on the dock subject to heat, especially during the months of July and August, and is finally raised and put in the hold of a boat. In other words, it is subject to changes of temperature. The Transport department, the research council and the Department of Agriculture as well as the Department of Trade and Commerce are cooperating at the present time in conducting an investigation into ways and means of providing facilities at our docks from which bacon is being shipped, so that the bacon can be transferred from warehouse, or the car in which it is shipped to Montreal, to the boat without undergoing this great difference in temperature, which it experiences particularly in the two months to which I have referred. I am informed that the greater part of the difficulty, most of the complaint with regard to the quality of our bacon, has to do with shipments sent forward in July and August, largely because of that variation in temperature which takes place at different points.
The Department of Agriculture in cooperation with the national research council has the matter under consideration. This problem is one of great national importance, a satisfactory solution of which will have a very definite bearing upon the future development of Canada's trade in perishable products with Great Britain.
10.	Assistance rendered by the department during the autumn of 1937 was largely instrumental in placing a herd of over 150 head of carefully selected Canadian dairy cows (Holstein-Friesian) on a farm in the county of Chester, the very heart of one of the best dairy districts in England. This herd has naturally received wide publicity and as a direct result several orders for cattle of similar type have already been received.
It is very important that this work should be forwarded at this particular time. I understand it is the intention in Britain for the first time to carry on an active campaign against tuberculosis among the cattle in that country; and while that check is being made on dairy cattle in Great Britain, it is most important that the country which perhaps has advanced, certainly as far as any other country in the world and it may be further than any other in the direction of ridding its herds of tuberculosis, should be kept prominently before the British people as a place from which new herds can be obtained or cattle to replenish herds can be shipped to Great Britain at the lowest possible cost.


Mark Cecil Senn: I have listened with a good deal of interest and attention to what the minister has had to say and to his explanation of what is intended and what is going to be required of the commissioner when he goes to the other side and takes up his duties over there. I asked the minister, however, whether any of the commissioner's activities were going to interfere with those of the representatives of the Department of Trade and Commerce, or exactly how the activities of the two departments would be kept distinct and separate so that there would not be overlapping and consequent difficulties. He has told us that the commissioner will have many duties to perform in the collecting of data. No doubt he will have to build up an organization because he will not be able to do all the work himself. The minister has told us what the salary of one gentleman, the commissioner, is going to be. Is there any provision in these estimates for a staff apart from the supervision of the work of the people already over there.


James Garfield Gardiner: Under the general
marketing vote for this division of the department we can make appointments to clerical positions, such as a secretary for the commissioner, and also other appointments under the provisions of the vote itself for any assistance he may require; but at the present time his staff is composed of about six men, I think, who have been in England representing the department for many years. I think the first appointment was made in 1912, and from that time down to the present additions have been made to the number. No new appointments were made by the present government until we appointed this last representative. He really takes the place of Mr. Wilson, who previously occupied a similar position in the department, and who a few years ago was transferred from the Department of Agriculture to the Department of Trade and Commerce. He is still in the employ of the latter department in London.


Mark Cecil Senn: In the same capacity?


James Garfield Gardiner: Not in the same capacity; he is under the Department of Trade and Commerce in another capacity, but he is advising in connection with matters concerning the sale of farm products. We are not undertaking the sale of farm products, but we are following those products through to the consumer. We are carrying on investigations as to the quality and grade of the product. We shall do that very much in the manner that investigations were made last year; that is, probably an individual will

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go and purchase a commodity from time to time and check it to find out whether the standard is being maintained. The mark which a few moments ago I indicated had been adopted will be on all the highest standard products, and we shall attempt to see that these products reach the housewife in England on the standard required by our regulations in this country. There is no reason why there should be any conflict of activity at all as between the Department of Agriculture and the Department of Trade and Commerce, and I think I can assure the committee and the hon. member that there will be none.


Mark Cecil Senn: The minister was just speaking about the high quality that w'ould be required in connection with goods sent to the United Kingdom, and he also made the statement that there might be some sub-standard products shipped to that market. The first recommendation he read states that no merchandise unsuitable to this market should be exported, and that what was exported should be improved in quality, packaging and labelling. Then, on another page he read a statement to the effect that they had cons: lered whether or not it was wise entirely to prohibit the export of low grade products to the United Kingdom, and further on the report states that at the moment they are not prepared to make any such recommendation.
Then, when we come to the question of the mark, this is the question I want to ask the minister. He has made a change from the recommendation in this report, which reads as follows:
That for the export of sub-standard products the word "empire" be substituted for the word "Canada" or that regulations be made limiting the size of type that may be used to show their Canadian origin.
It seems to me that is treading on rather dangerous ground.


James Garfield Gardiner: That is why we changed it.


Mark Cecil Senn: I know the minister has changed it to some extent, but I should like to know just how sub-standard products are going to be marked, if they are to be marked at all; or are they to go into the British market without any distinguishing features about them? If so, will the consumers know they are Canadian products and judge Canadian products accordingly? It seems to me most dangerous to have our first-class products marked Canadian and to send to the old country other Canadian products which may destroy the reputation which otherwise might

be built up. I should like to know just how these products are going to be marked, if they are going to bear any distinguishing Canadian mark, and I want to warn the minister that I am afraid it is a dangerous practice to follow.


James Garfield Gardiner: I should like to direct the attention of the hon. member and the committee to the fact that the publication from which quotations are being read is the report of a committee. Most of the members of that committee were not employees of the government at all. One was the president of a live stock association; another was a canner in the province of Ontario, and others were men not in the employ of the department.


Mark Cecil Senn: There were some pretty good men on that committee.


James Garfield Gardiner: Yes, there were very good men on the committee. This is just like the report of any committee or commission that might be appointed by the government. The government is not bound by what is in the report, which is made to the government and the people of Canada to indicate what this committee thought with regard to the whole matter. The publication now being put out contains all the information in the report that might be considered of value to the people of Canada in assisting them to produce and market their products properly. In addition, it contains that part of the recommendations which has been adopted by the government and made a part of the government policy.


Richard Bedford Bennett: Does it contain all the recommendations?


James Garfield Gardiner: We have not followed them all.


Richard Bedford Bennett: Does the new report
contain all the recommendations?


James Garfield Gardiner: The new report contains all the recommendations in connection with everything we have done.


Richard Bedford Bennett: But not those recommendations which were not acted upon?


James Garfield Gardiner: This report does not contain all the recommendations. Where they made some special recommendation with regard to a particular product that recommendation does appear, but the body of the recommendations at the beginning of the report is not published in this new edition. The policy which is to be followed by the

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government is published. The hon. member for Haldimand quoted paragraph (f) of the report:
That for the export of sub-standard products the word "empire" be substituted for the word "Canada" or that regulation be made limiting the size of type that may be used to show their Canadian origin.
When we gave consideration to that recommendation the thought which came to me and to the officials of the department was exactly the thought which came to my hon. friend, that this would not be fair to other parts of the empire. Probably it would not be fair to ourselves to have those products marked in that way. I think this was suggested by the committee because they found that there were many products being sold on the British market as empire products, and they suggested sending over this second standard of our products as empire articles, but we did not think that would be fair either to the other parts of the empire or to ourselves. We realize, however, that certain Canadian products of what might be called the second standard, or a lower standard, are demanded by certain customers in the old country who probably cannot afford the highest quality.


Richard Bedford Bennett: Is that apparent on the cartons themselves?


James Garfield Gardiner: It will be apparent in this way, that only the higher standards will bear the mark to which I have been referring. Our trade mark will appear only on the high standards, and the lower grades will have marked on them the actual grade of the commodity.


Richard Bedford Bennett: That is, none will be marked grade 1 except those bearing this trade mark?


James Garfield Gardiner: Yes; grade 1 will be those bearing the trade mark.


Mark Cecil Senn: Just in that regard I should like to ask the minister about our exports of bacon. We send three different grades of bacon to Great Britain, and within each of those three grades there are three classes. Is the minister now telling us that only the highest grade of bacon, averaging from fifty-five to sixty-five pounds, will be marked as Canadian, and that none of the other grades will bear that mark? Just what is the policy of the department in regard to bacon? That is really the most important commodity we ship to the British market, and it is a product in connection with which the grades and quality and reputation should be very carefully guarded. Perhaps I shall have something to say about bacon at a later date, but I
think it is important to know just how our bacon is being marked, whether only the highest grade will be marked as Canadian bacon, whether some latitude will be allowed, or how far down the grades are going to be marked as Canadian.


James Garfield Gardiner: It took some little
time to get a mark which might be considered national, and distinctive from any other, and one which at the same time has not already been employed or registered by others. For that reason we were not successful until within the last ten days in satisfying all concerned as to what the mark ought to be. That mark has now been adopted and is in course of being registered. Registration may be completed, but, if so, such completion has been effected only within the last few days. For that reason we have not worked out a definite policy with regard to the different products. If bacon is adopted as one of those products to which this particular standard should apply, then the standard mark will appear only on the best grade of bacon sent over.


Mr. STEVENS:: The point to which the
minister has referred is of tremendous importance, because in this class of goods bacon constitutes the largest single item for export. Under grade A are included fifty to fifty-five pounds, fifty-five to sixty pounds, sixty to sixty-five pounds and sixty-five to seventy pounds. We also have bacons made from selects, bacons, butchers, lights and heavies. There are five classes of hogs which go into the making of bacons for grade A. This should not be allowed. I would impress strongly upon the minister that if a mark is to be adopted or applied1 to bacon it should be applied only to the best Canadian bacon made from the best class of hog, and only to the most uniform type; because it has been demonstrated clearly that our best bacon will compete successfully with the Danish bacon, which is the highest class product on the British market.
I noted a few words from the report quoted by the minister a few moments ago, a report the circulation of which I believe was unfortunate. The words were to the effect that there is a market for a low grade quality. That is precisely the argument which was advanced by the leading packers; they argued in favour of the inclusion of these varieties of hogs in the processing of Canadian bacon. They said there was a market and a demand for a little lower grade of bacon.
Thanks to the policy followed by the Department of Agriculture over a number

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of years in stimulating the production of improved types, I think we are now in a position to get an abundance of selects and bacon hogs, out of which could be processed not only the quantity required for the British market, but sufficient to take care of a substantial portion of the Canadian demand. If a mark is adopted, it should be applied only to bacon which will compete with the Danish product. The other grades, if sold, should be sold as second grades, because unquestionably the price obtained on the British market for our bacon affects the price and production of hogs in Canada. It is vital to the farmer that great care be taken in connection with the marking of our bacon.
Is the mark obligatory? Is there any regulation or any law by which the department may force an exporter to use the mark, or what is the regulation? Is it just a voluntary mark which may or may not be accepted? Before I resume my seat I should like to add one further word of commendation for the action taken by the Department of Agriculture, as indicated in the second sheet read by the minister. Many things were indicated there which I believe should be done, and I must commend the minister for having adopted the suggestions. But I should like to add this further word, that in the first report a good deal of gratuitous criticism was directed against the Department of Trade and Commerce, the department which really dealt with the selection of products in Canada. Now that the minister has taken the course indicated in the list of adopted recommendations, much of that will be removed. I must say, however, that it was most unfair to lay the blame upon or to imply that the blame must be placed at the door of the Department of Trade and Commerce and its officials in London, because it should not be placed there.
I can say from experience that the Department of Trade and Commerce marketing agencies in their reports to Canada have for years drawn attention to these matters, and have sought to have improvements made in many of the recommendations included in the report. It is to my mind highly desirable that action be taken along the lines indicated by the minister. It would be unfortunate if there should develop a conflict of interest between the two departments, but certainly the main thing is to have something done. If it can be done now and in this way, then progress will have been made, and such progress should be commended and supported. But it would be unfair to allow the inference to remain that officials of the Department of Trade and Commerce, and
tMr. Stevens.]
particularly Mr. Wilson, had in the slightest degree been derelict in their duties overseas.
I say that because I consider Mr. Wilson, who was formerly an official of the Department of Agriculture and was taken into the Department of Trade and Commerce while I presided over it, discharged his duties in an exemplary manner, and did splendid work for the marketing of Canadian products.
The great difficulty was in connection with the grading before the product left Canada. The adoption of the recommendations indicated by the minister will, I believe, be a distinct step forward in that respect. May I now repeat my question:	Is the use of the mark
to be made obligatory or voluntary? If it is voluntary, what steps have been taken to secure its use? I say that because if it is not generally used it is not going to be of much value, and particular care should be taken in connection with its use in relation to bacon.


James Garfield Gardiner: The regulations in connection with1 the use of the mark have not yet been drafted. It is just now being registered. But the regulations as drafted will make it obligatory upon any of those possessing or producing products of the types involved to apply the mark to the higher grades. Otherwise they will not appear on the market as higher grades.


Henry Herbert Stevens: There is power under the present law for that?


James Garfield Gardiner: Yes, I understand so.


Grote Stirling: Will it apply only to
certain products?


James Garfield Gardiner: It will be applied only
to certain products to which it may properly be applied. As we go along we may be able to apply it to others.


Grote Stirling: Is it contemplated to
apply it to boxed fruit?


James Garfield Gardiner: There is no decision
on any of those matters yet. I should not like to make a definite statement because they all have to be given consideration. But, as was indicated by the hon. member for Kootenay East, if it is applied to bacon, as he stated, it will apply only to top grades.


Henry Herbert Stevens: That is one of my quarrels with that particular export. In my opinion grade A should include bacon made only from selects, but instead of that it includes bacon made from five different grades of hogs. That is absolutely wrong, and I think it is a distinct detriment to the producer through lowering the price of hogs in Canada:

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James Garfield Gardiner: The question raised is quite controversial. It is very difficult for a layman to determine when bacon is select and when it is one of the lower grades when the hog is still running around. Much of the grading that is done in Canada is done while the hog is still running around. I think I am right when I say that grading in Denmark is all done on the rail after the hog has been killed. It is much easier to determine whether or not a hog is select when you see it hanging up. A hog graded while still alive might be classed as select, and yet, when converted into bacon, it might be of a lower grade. It is difficult to say that the bacon from a hog which had been graded as select when it was still alive will be of that particular grade.
The figures indicate that there has been rapid progress in this country toward rail grading. The first criticism I had after coming into the department came from those who were opposed to this type of grading. They had heard a report somewhere that we were about to pass legislation enforcing rail grading. Their objection was that in a country like Denmark, where all the hogs are owned by a cooperative of the producers, where they are fed according to the regulations of the cooperative, where they are housed according to the regulations of the cooperative, where they are selected and, I believe, actually killed and marketed by the cooperative, it is easy to maintain a standard and to carry on rail grading without the producer himself suffering any disadvantage.
The first objection to enforcing rail grading in Canada at the present time is based upon the wide distribution of our people from one ocean to the other, the different conditions under which feeding is carried on, and more particularly the fact that if we are going to have this type of grading, all hogs will have to be slaughtered in a slaughter-house or abattoir. The producers maintain that they would rather take their chances on grading when the hog is running around the yard. I am not in a position to state definitely that we can adhere as closely to regulations with regard to selects as they are able to do in a country like Denmark. However, we are advancing rapidly toward the rail grading of hogs. They are all graded in that manner in the maritimes. I was looking up some statistics the other day, which I am sorry I have not with me to-night, and I was surprised at the rapid increase in the last three years in rail grading. If we continue at this rate we shall soon reach the point where we can have something of the kind suggested.


Henry Herbert Stevens: I should not like the committee to get the impression that I am agitating for rail grading and doing away with the present system. I was complaining that there was included in grade A these different weights to which I have referred. Whether they are rail graded or graded on the hoof makes no difference if you ensure that there will be in grade A only that weight of side which is considered to be the best for the British market. I referred to the five different grades of hogs to indicate the wide variety of sides that were included in grade A. This lack of uniformity is largely responsible for the ten to fourteen shillings difference in price in what is received for our bacon and Danish bacon. It is against that practice that I have been speaking this evening.	[DOT]


Ernest Edward Perley: Has any progress been made in having the packers adopt a uniform system of processing in order to produce a uniform quality of bacon? A select hog may go into one packer and come out a certain grade, while a similar hog may go to another packer who is not using the same system of processing, and it comes out a different grade altogether. The minister stated that certain interests had agreed on this trade mark. Just who were those interests?


James Garfield Gardiner: I am not in a position to state the concerns to which this trade mark was submitted. It had to be examined in relation to the trade marks of the different concerns that had already registered trade marks with the proper authorities. It was finally determined by council that this was the proper mark to indicate to people outside as well as in Canada that we considered it a quality product and one that could be depended upon.
In connection with processing, I think it will be admitted that each of the larger packing houses, as well as some of the smaller ones, maintain that they have the best process. They contend that they have been successful in producing a taste, if nothing else, for their bacon, which is preferred by a great many people. I doubt if we would succeed in attempting to have them all use exactly the same process, and I doubt very much if anything would be accomplished by doing that. The companies have a cooperative arrangement by which they exchange certain information as to the best methods of protecting themselves against deterioration of their products. I do not think there is any necessity for the government to do anything in the way of enforcing this, because it is recognized already by the companies that it is to their advantage to do so.

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William Hayhurst: Could the minister give us the results of the investigation carried on by the Department of Agriculture to determine the grade of hog most suitable for rail grading and most likely to meet successfully the competition of Denmark?


James Garfield Gardiner: All I say with regard to that is that any one travelling across Canada will realize that we have a national type of hog. The long Yorkshire type has been in this country for a number of years and it has been pretty well standardized all across Canada. The Yorkshire type is the prevailing type at our shows and it will be found in almost any farm yard. The department feels that it would be a mistake at the present time to discourage the farmers from continuing with that common type.


Mark Cecil Senn: I should like to say one word more about this mark. It seems to me that this is one of the most important departures we have had for some time. It is particularly important in regard to the shipment of our bacon to the old country. Perhaps we get more benefit from the Ottawa agreement in the sale of our bacon in the old country than in the sale of any other product, and as an hon. member said a moment ago, it is regrettable that our bacon at the present time sells for so much less in the British market than bacon from any other country except perhaps the Balkan states. The. report I have in my hand, which we have been discussing, gives two or three reasons why our price should be and is lower, and, among others, the fact that there are. so many different grades of bacon going from Canada overseas. But, in addition, there is another statement made on page 33 of the report which is very important. It says:
Some of the larger wholesalers have made very definite representation in regard to the large volume of box cuts being shipped from Canada.
Further down it says:
37.107,089 pounds were shipped as hams, and 24,015,918 pounds were shipped as box cuts.
And again:
Wholesalers put forth the argument that the large quantities of Canadian cuts have a depressing influence on the price of Canadian Wiltshires.
I wonder if the mark is going to be put on hams and box cuts. That particular type of meat would be classed as No. 1; it seems to have a depressing influence on the price of our bacon in Great Britain, and the price we receive there undoubtedly settles, to some extent at least, the price of hogs in Canada.

So I think every effort should be made to see that we get the very highest price possible over there because it means money in the pockets of our farmers; but if we continue to send over these box cuts and picnic hams in ever increasing quantities, I do not know just what the result is going to be.
An answer to a question that was asked here by the member for York East (Mr. McGregor) shows that in 1935, 17,000,000 pounds of box cuts went over there; in 1936,
30,000,000 pounds; and in 1937, 35,000,000 pounds, in addition to a large increase in the volume of hams sent over there. While our export of Wiltshires is increasing as well, it is not increasing so rapidly as our shipment of these other cuts which are said to have a depressing influence on the market. I think the minister would be wise to see that steps are taken to have Wiltshire sides shipped in as large a volume as possible to the mother country. After all, I believe we have nearly enough select hogs produced in Canada to supply our trade with the mother country if they were all used for that purpose, and I believe they could all be used for that purpose. It is true perhaps that some of our own people would like the very best bacon that could be produced, but on the other hand I think nine out of ten would not know the difference between bacon produced from a bacon hog and bacon produced from a select hog. I am sure I would not myself. I think we should take the same steps which are being taken by Denmark and other countries to see that only the very highest quality is sent over there, and in as large a volume as possible. I would ask the minister if any steps are being taken to see that this is being done.
I would ask the minister one other question, which he might answer at the same time. If the mark is used, it will have to be very carefully guarded to see that nobody uses it on a product that should not be graded as No. 1. Is it the intention of the department to see that all goods which are shipped to the old country are graded by government graders, because it seems to me that is the only way in which we can carefully guard the mark to see that it is not improperly used?


James Garfield Gardiner: Practically all the products that go to the old country now are graded by government graders, and it will be the intention to improve on any grading that is now being done.


Mark Cecil Senn: They are graded only by
sample, I understand, at the present time, are they not?

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James Garfield Gardiner: It would be impossible to grade every package that goes over or anything of that kind. That is the very reason why we have placed the commissioner in England, the very reason why we want this work supervised. We expect to check the product that goes to England much more carefully than we have done up to date, in connection with the grading and packaging and everything that has to do with it. If the mark is applied to bacon-and I would hope it will be-it will be done for the purpose of ensuring that as large a percentage as possible of the shipment of bacon to Great Britain will be of the very highest quality. That will be the objective of the department in everything that is done in connection with it, and I can assure the hon. member that it will be the objective in connection with all our farm products, including bacon, going to Great Britain.


Grote Stirling: The minister has stated that he has not finally decided what products will come under this mounted policeman's head. I hope that he will give the matter a great deal of consideration before he includes boxed fruit under it. I wonder if he would see fit to consult the industry, or at least to seek their opinion, before he makes his decision. I make that suggestion for this reason: For a considerable number of years now, boxed fruit of that description has been graded efficiently, I think. The shippers largely have their own brands which are established in the British and northern European markets, and it appears to me that it would be of assistance to the minister in arriving at his decision if he would first seek the opinion of these established shippers of boxed fruit.


James Garfield Gardiner: There is no doubt that the shippers of all products which are being shipped will be consulted very fully before any decision is reached.


William Hayhurst: In reference to the
remarks made by the hon. member for Haldimand, the quality of the hogs raised in western Canada must naturally vary, and if we had a market for only our very best quality in Great Britain we should have to find a market for our other products. I know that in London the best hams are the Cumberland hams. That is a different type of pig from the Yorkshire, and I do not know whether there are any Cumberland hogs raised in this country. However, we know that changing economic conditions have made it very difficult for importing nations to import only the highest quality of goods, and I believe it is
important not only to grade the goods but to have an efficient sales force over there with a proper sentiment towards the English purchaser, and in sympathy with the British market. The commissioner would do more good by meeting these people who sell these products in the Smithfield market. I am speaking now as a person brought up in the old country, and I am looking at the matter from the point of view of marketing goods through personal services, because I believe that if the sales force is of the right type a good many of our difficulties would be ironed out. As a western farmer I realize what a tremendous quantity of hogs are sold at times that are probably slightly under the highest grade, and therefore we must develop a market for all types besides the very highest type of Wiltshire bacon.


Ernest Edward Perley: Would the minister inform the committee what is the total cost of the report?


James Garfield Gardiner: I have not the exact amount here. The cost was not very high; indeed it was low. The other day a question in regard to the matter was placed on the order paper, but I am not sure that it has been answered yet.


William Hayhurst: When was this report first sent out?


James Garfield Gardiner: I think it was on December 8.


Mr. THOMPSON:: There is a matter which I wish to call to the attention of the committee, and I think it may well be done in connection with this marketing act. It has to do with our dairy business. I wish to call the attention of the committee to an extract from a speech made by the minister.


James Garfield Gardiner: I wonder if the hon. member would allow that to come up under dairying, if it has to do with dairying.


Thomas Alfred Thompson: It has something to do with marketing as well as with dairying.


James Garfield Gardiner: There is a dairy vote. But it is all right.


Thomas Alfred Thompson: The minister made this statement as reported on page 162 of Hansard:
The cheese producers of Ontario, with the assistance of the Minister of Agriculture of the Ontario government of that time, cooperating with the dominion government, sent their secretary over to England to advance the sale of cheese in that market.
I wish to point out just what have been the results of the cooperation between the department of agriculture of Ontario and the Department of Agriculture of the dominion.

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The minister said further in that same address that in 1900 Canada produced 220,000,000 pounds of cheese and that in 1935 the production had fallen to 100,000,000 pounds; that in 1907 Canada sold to Great Britain 190,000,000 pounds but that in 1935 the amount sold had fallen to 52,000,000 pounds; and that in 1907 New Zealand had sold 27,000,000 pounds to Great Brtiain but in 1935 they had increased that amount to
197.000.	000 pounds. These figures are correct. But the minister said that when he saw those conditions he went over to England to examine into the marketing of Canadian cheese in the old country. When he arrived there, he said, Canadian cheese was not being advertised; he saw New Zealand cheese and Australian mutton and butter advertised, but no advertising of Canadian cheese. I might call his attention to the fact that in 1934 the Ontario government robbed Canada of the greatest advertising agency we had by closing Ontario House in London, where our goods were being advertised.
The impression that was left on the house by the remarks of the minister was that New Zealand had crowded Canada out of the British market. That is not so. New Zealand never crowded Canada out of the British market; Canada herself receded from that market. Great Britain bought our cheese and paid us a premium for all that we could supply her. The amount of cheese we sold in Great Britain was the amount of high quality cheese that we could produce. There was a sale for it there if we could produce it. We must take into consideration the different conditions. One thing the minister did not tell us was that, while our cheese sales to Great Britain had diminished to that extent, the production of dairy products in Canada had increased very rapidly; that our milk production was rapidly increasing and was being consumed in other lines.
New Zealand has a population of about
1.600.000,	almost entirely rural. One of her principal exports is cheese. Canada has a population of 11,200,000 with over fifty per cent of them residing in the urban centres, non-producers of agricultural products. While New Zealand's principal export is cheese, Canada makes cheese only out of her surplus milk. No cheese factories will be found around our large centres as cream, whole milk, butter and ice cream are required to supply the demand. One has to go into backward places removed from the great industrial centres before one finds a cheese factory. In fact, as I heard one prominent dairyman say the other

day, in Canada cheese was always looked upon as a poor relation of the dairy business; it got what was left over. That is a fact. We are large consumers of whole milk. We are one of the largest consumers of butter in the world. We consume large quantities of cream, and people are using more cream than they ever did before; one might instance the ice cream trade. When all those demands are supplied we make our surplus into cheese, and Great Britain has been paying us a premium on it. We have had no trouble in selling it; there was a ready market for it there. Fifty per cent of all the milk produced in Canada is going into butter; we are making into cheese only eight per cent of the milk we produce. To indicate the extent of the increase in the consumption of butter, we are making to-day in Canada 69,000,000 pounds more butter annually than we were making ten years ago and consuming practically all of it ourselves; in fact, this year we have imported large quantities of butter to supply our own local demands. Of all the dairy products produced in Canada, 93i per cent are consumed by the Canadian people; we export only 64 per cent.
Let us consider the difference in the manner in which New Zealand cheese and Canadian cheese are handled on the British market. New Zealand sends her cheese in consignments, in large shiploads. It is put into cold storage in London, Liverpool, Glasgow and other large cities; she has her agents there selling that cheese on commission, and they are advertising it.


Mr. POOLE:: Government agents?


Thomas Alfred Thompson: Yes. Cheese is being handled there cooperatively by the New Zealand government and they are selling that cheese on commission; they are out advertising it. But Canadian cheese is sold by cable in Canada before it leaves this country. Our cheese is not sold in Great Britain except by retail; it is sold in this country before it leaves our shores, and it goes into the hands of the trade in that way. Great Britain as I have said, pays us a premium on that cheese.
What I wish to call to the attention of the committee is that the cooperation which has been taking place between the Ontario department of agriculture and the dominion Department of Agriculture has not been in the best interests of the dairy business, because they have been directing their efforts to the selling end of the business, the cheese being sold on its merits, and have neglected the producing end of it. Those of us who

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are connected with the dairy business know full well that we have individual cows which are producing from twenty to twenty-five thousand pounds of milk a year. We have many dairy herds which are producing individually between ten and fifteen thousand pounds of milk. But the average dairy cow in the Dominion of Canada produces less than five thousand pounds. While we cannot all have these high producing cows, there is. far too much difference between the possible and the actual. That is where the quantity comes in. Then there is the quality to be considered.
Let me now refer to the report that has already been discussed to-night. I want to show what these men have to say with regard to cheese. On page 42 I find the following:
Canada's success in marketing cheese in the United Kingdom depends upon the quality of the product, and every possible effort should he made to improve the quality still further. . . . Continued effort should be put into the endeavour to improve the quality of cheese. . .
This report is correct. Our goods were sold on their quality and a premium was paid for them. Our problem was to produce goods of that high quality and there was a ready market for them. In 1934, when the present Ontario government came into office, they found an organization known as the Eastern Ontario Dairymen's Association which had been in operation for sixty years and had built up that great dairy business of eastern Ontario, where the largest percentage of high grade cheese has always been manufactured. They were getting a provincial grant of $1,500 at that time:, but the then provincial minister of agriculture, Mr. Duncan Marshall, saw fit to withdraw it. A deputation from the dairymen's association, comprising some of the outstanding dairymen in the province, waited on him, and he assured them that in future the farmers would have to pay their own shot; that there was no more government money to be put into the industry. That was that. What he did was this: We had at that time a few small organizations known as cheese producers' associations, and they got behind an effort to organize one in every county. There had been some of them before that. They organized a cheese producers' association for the province of Ontario, so that they had a central organization for Ontario and smaller county organizations. These are organizations of producers which can do splendid work in the dairy business. I have no fault to find with them in any way; but they were badly led; their activities have not been directed along the proper channels.
They have been directing their efforts towards selling a product that was sold on its merits, and have neglected the producing and quality.
After the grant was withdrawn and the association which had built up a great industry was put out of business, the Ontario department passed an act permitting the Cheese Producers' Association of Ontario to assess five cents per 100 pounds against all cheese sold in the province. In 1936 this association collected directly from the farmers $22,000. Last year they collected $38,671, and the Department of Agriculture of the dominion made them a further grant of $5,000. They employed a secretary at Belleville to whom they paid $3,000 and expenses, and they sent a man to England, giving him $5,000 and expenses. This man at Belleville bought a few thousand boxes of cheese and shipped them to England, and the man there peddled them around London. That was one of their activities. The other one was this-they held a convention.
Before I go into that, I would call attention to a statement made by the minister, and I think it was a very timely one. He drew the attention of the committee to the small quantity of cheese being consumed by the Canadian people. Let me put on record the per capita consumption of cheese in a number of countries: Switzerland, 23 pounds; Holland, 14f pounds; France, 13i pounds; Denmark, 13i pounds; Italy, 12 pounds; Germany 11| pounds; Britain, 9J pounds Scandinavia, 7 pounds; New Zealand, 4i pounds; United States, 4f pounds; Canada, 3f pounds. We have Canada and New Zealand, two of the largest producers of cheese, with the smallest per capita consumption. I know nothing of New Zealand; but so far as Canada is concerned, I think this small consumption is our own fault. With a slight increase in the home consumption of cheese and we would have little to export. What is the trouble? We are great consumers of butter. Go into any hotel or restaurant and the waiter will put a piece of butter on your plate, and if you use it, give you another piece. They replenish your supply. Did you ever see them put a piece of cheese on your plate? If you asked them for a piece they would give you a small, little sample which you could put into your mouth all at once. If we used cheese on the table as we use butter, we would double the consumption. The people are not eating cheese, because they cannot eat what they do not get. Quite a large sum of public money has been expended in a way

The Late Mr. Betts

which in my humble opinion has not been in the best interests of the dairy business. I have before me the auditor's report for the cheese producers' association of Ontario. As I have already told the committee, they were engaged in two activities. One was buying cheese in Canada and sending a man over there to sell it, trying to break up a cheese buying and selling organization of which this country is justly proud and which New Zealand would like to have.


Frederick George Sanderson: It is eleven o'clock.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Monday, May 9, 1938