1938-05-09

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, parliament was just about to reassemble at the beginning of this session when members of the social credit group were called upon to mourn the loss of one of their number who had entered the House of Commons for his first time at the general elections of 1935. Within a few weeks thereafter we on the government side sustained a similar loss in the passing of one of our younger members who had been returned to parliament also for the first time at the last general elections. To-day, immediately opposite, on the side of the official opposition, there is a vacant seat which was occupied during this session by one of the younger members of the Conservative party who, too, became a member of this House of Commons for the first time at the general elections of 1935. We are thus reminded that death is no more a respecter of political parties than of persons.
On Tuesday last it was known that Major F. C. Betts, the member for London, in pursuit of a favourite recreation, had left Ottawa to go to one of the nearby streams or lakes, to enjoy a day's fishing. When he did not return to keep the engagements he had previously made there began to be concern as to the circumstances which might have occasioned his prolonged absence. Much anxiety was felt as to what fate might have befallen him. Nevertheless, at the time of
TMr. Thompson.]
adjournment on Friday evening last all had hoped that he would somewhere be found in safety and brought back to his family and to the service of his country, in parliament and elsewhere.
Unfortunately the anxieties of those who feared that Major Betts had met his death by accidental drowning were only too completely realized on Saturday morning when his body was found in the Blanche river, a short distance from where he had parked his car some days previously. The remains have been taken to London, and to-morrow members of all political parties will assemble at the funeral service to be held in the late member's native city in order to pay their last tribute of respect to his memory.
I shall leave it to my right hon. friend the leader of the opposition (Mr. Bennett) to speak more particularly of the loss which he personally and members of his party have sustained in the passing of one who was so closely identified with their interests. I should like, however, to say on behalf of hon. members of all parties how greatly shocked we were to learn that one so prominent in his party, one whose career was so well known, and who possessed so much of opportunity and capacity for public service should have come to the end of his days practically at the beginning of his parliamentary life.
It is generally known that Major Betts served with real distinction during the period of the great war. At the early age of twenty, he enlisted in the Royal Canadian Horse Artillery, and during the war was twice wounded. In his chosen profession of law, his attainments had received marked and well-merited recognition from his associates. He was an ex-President of the Middlesex Law Association and at the time of his death was a member of the council of the Canadian Bar Association.
During the years 1928 and 1929, Major Betts served as a member of the London county council. From the part he took in discussions in this house hon. members will recall his wide range of interest in public questions. Though in the Commons but a short time he showed clearly his desire and ability to debate the different subjects which were of concern to parliament. He was one of the most active members of his party.
Personally and on behalf of my colleagues and all hon. members on this side I should like to extend to my right hon. friend and to those who sit around him the expression of our sincere sympathy in the loss which the Conservative party and he as its leader have

The Late Mr. Betts
sustained in the passing of one who so loyally supported the party, its principles, and its leader.
I should like to say, on behalf of all hon. members of this house, how very deeply we feel for the young widow and infant daughter who have 'been so greatly bereaved, as also for other members of the family who have suffered so great a loss under circumstances peculiarly poignant.


Right Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, the tragic circumstances to which the right hon. leader of the government (Mr. Mackenzie King) has referred make it unnecessary for me to do more than thank him very earnestly and sincerely for t'he kind terms in which he has extended the sympathy of himself and his colleagues to those of us associated together here as the official opposition.
It is a little difficult to do more than express sorrow on an occasion such as this, when one whom we have known so closely and intimately 'has left us under circumstances so very, very sad. The late Major Betts bore an historic name in the city of London, and early developed those characteristics which he had inherited. You might say that his life divided itself sharply into four divisions. He was a student in t'he schools of his own city and at Ridley College, St. Catharines, where he made for himself a distinct place. Then, while only twenty, he enlisted in the service of his country and within a few months was in France, where he gave such an excellent account of 'himself that promotions followed rapidly. Twice wounded, the later wound being rather serious, he returned to his home and was demobilized early in 1919, having been actively in service until the end of hostilities.
Then came the third division of his life, that in which he served his profession as a lawyer. He was admitted to the practice of law at Osgoode Hall, as was to be expected from one with his antecedents. He took an active interest in the profession, becoming president of the bar of Middlesex and later being elected to the council of the Canadian Bar Association. Then, as might have been expected, he embarked upon the fourth branch of his activities, that of public service. He served in the city council of London and in 1935 became a candidate for his party, and after a strenuous campaign was elected to the House of Commons. I recall being in London just before that election. I had met Major Betts only once before, I think, but I was struck with the thoroughness with which he was conducting his activities. He had visited the
factories; he had ascertained the conditions under which work was being carried on; he had come in contact with the works people in all these factories and had familiarized himself with the products of his city in every branch of industrial activity. I then concluded, from what I saw, that in all probability he would be returned.
When he came here he immediately went to work, which is not what new members always do. So far as he could he made himself master of every matter that he took in hand. He was particularly interested in problems concerning returned soldiers and those that had to do with the militia with which he was associated, being on the reserve of officers. I recall very vividly discussing with him the question of his activities. I pointed out to him, as I have to many younger men, that there is only one way by which you may attain success either in the practise of law or in public life, and that is by work; and whether or not he found it easy, undoubtedly it was his duty to endeavour to express himself on every question that 'he thought of sufficient interest to warrant his intervention in the debate. He found it a little difficult at first, but confidence came, and I think my hon. friends opposite will agree that he was attaining that measure of confidence which enabled him to speak with a measure of certainty and conviction with respect to the many problems in which he interested himself.
It hardly seems possible that, not yet forty-two years of age, one who had escaped gas, bombs, shells and shrapnel, and attacks by sea, land and air, should lose his life under the circumstances to which the right hon. the Prime Minister has referred. Yet so it is, and it.is a striking illustration of what a man of old said: Death hath so many doors to let out life. He is gone out of one of the most unexpected doors, having safely passed all the others to which I have referred, except that he was wounded in passing. He passed by those doors in a foreign land, across leagues of sea, only to lose his life within a few miles of these parliament buildings while engaged in a little harmless recreation. Death indeed hath many doors to let out life.
I think it must be a matter of satisfaction to all of us that men of his training interest themselves in public life, and I trust that his example may be followed by many, in this new country which so much requires the services of those of his type, who are prepared to place themselves at the disposal of their country whenever the opportunity offers whether in offering their lives as a willing
The Late Mr. Bells

sacrifice, or their time for the promotion of the welfare of their fellow citizens in days of peace.
All these things have to do with a public career, but there was the private side to the life of Major Betts that we cannot overlook. He had but recently been married, and had a young daughter not yet six months of age. I think those of us who may have seen him night after night, between ten and eleven o'clock, busily engaged in writing, realized that he was writing a note to the loved ones at home. He never wearied of speaking of his wonderful wife and child, and I read in the press that small photographs of them were found upon his person after his death. Those of us who had the privilege of meeting his mother when she came to Ottawa at the opening of this house, when her son took his seat, will realize something of what her sorrow must be, that one who had escaped death in so many forms had to meet his end under the tragic circumstances to which we have referred. Indeed we who knew him as a comrade, as a colleague, had become so accustomed to his cheery ways that usually he was referred to in no other terms except the word "Freddie." He made for himself so secure a place in the hearts of all who are here that it is impossible to contemplate as a reality the fact of his leaving us. We think of it only as something that is not yet real, that one to whom we were speaking but yesterday, so it seems, has gone from us, and that he shall return no more to this house, neither shall his place know him any more. These words from the book of Job fittingly express the situation.
We would indeed be a poor people, Mr. Speaker, poorer than we are, if in the midst of all this sorrow and sadness we had not the firm hope and conviction that after all, although death has so many doors to let out life, it is in reality the gate to life eternal. With this thought we shall cherish the memory of a dear friend, a devoted colleague, one who had endeared himself to us in so many ways by so many little acts of kindness that his memory will live with us until the end.


Mr. C. G. MacNEIL (Vancouver North):: Mr. Speaker, on behalf of the members of this group I desire to join in the expression on the part of this house of keen regret at the untimely passing of one of our number, and our sincerest sympathy for those who have been bereaved in such a tragic manner.
Some of us gained a closer acquaintance with Major Betts than otherwise might have been possible in the ordinary associations of this house. This was because of the warm-
IMr. Bennett.]
hearted comradeship that he invariably expressed towards his fellow ex-service men. In this way we learned to appreciate his manly qualities, his unfailing courtesy, and his very definite and keen interest in the welfare of his former comrades-in-arms. We shall miss him. Ex-service men within and without this house mourn his sudden death and salute the memory of one who proved himself, in the highest sense of the phrase, an officer and a gentleman.


Mr. J. H. BLACKMORE (Lethbridge):: Mr. Speaker, I desire to express through you the sincere sympathy of this group with the members of the house for their great loss and with the members of this good man's family in their bereavement.
I was impressed with the words of the right hon. leader of the opposition (Mr. Bennett) in which he showed so clearly how full had been the life of this man, and pointed out how strange it was that he should die as he did. One cannot escape the thought that it occurred as it was designed to occur, and that the great poet who said "there is a divinity which shapes our ends" was expressing what has been and will continue to be a truth so long as the world endures. Therefore perhaps it is well that we should look upon the bright side of this untimely event. It is well perhaps that we should look to the dawn that arises rather than to the sunset which is fading.
Tennyson said at one time that there must be other greater work for the Duke of Wellington to do than that which he did when he fought at Waterloo. There must be other greater work for Major Betts to do than the great work which he has already done, even although that work was sufficient to fill completely a most valuable life.
I rejoice over this man's life because of two things which have impressed themselves upon my mind through my knowledge of him in this house. The first was what he did in the service of his country, and I think there is nothing greater that a man can do. Greater love hath no man than this, that he offer to lay down his life for his friends. He did his work there well.
In this house he fought consistently for the interests of the returned men. As the days go by it will become increasingly evident to all the members of this house and the people outside that we in Canada, much as we have done, have leflt far more undone that we ought to have done for the returned men. It therefore is a misfortune to lose a man who has been so active for the returned men.
I feel also that it is a great privilege to die in harness. This Major Betts has done.

The Late Mr. Betts
I think the last time there was a debate in this house in which he could be interested, he took part, and took part well.
While I regret greatly that he has passed, there is cause for satisfaction in the fact that the misfortune has associated with it so many things which can ameliorate the suffering which all must feel.


Mr. D. G. ROSS (Middlesex East):: Mr. Speaker, I feel that I cannot refrain from adding a few perhaps intimate but none the less sincere remarks to those the house has
just heard from the right hon. the Prime Minister of Canada (Mr. Mackenzie King), the right hon. leader of the opposition (Mr. Bennett), the hon. member for Vancouver North (Mr. MacNeil), and the leader of the social credit party (Mr. Blackmore). Because of these eloquently worded tributes I am reluctant to add anything, and yet with the sincere appreciation I hold of Major Betts' military record-he served with the twelfth battery, C.F.A.-I should feel I was derelict in my duty if I did not add a humble and sincere word.
The returned soldiers of the house numbered just under two score-thirty-nine in all-but to-day we are thirty-eight. This is the first break which has occurred in our ranks. I attended the same school, Princess avenue in London, as Major Betts, or "Freddie," as many of us affectionately knew him, and when I recall the many months of keen suffering that he endured following the termination of the war, and remember that by a high measure of courage he recovered and became an extremely valuable member of this house, I feel that as one who was a comrade-in-arms, and who represents a constituency adjoining his own-in fact, over a score of divisions in my riding of Middlesex East pierce into the very heart of the city of London-I could do no less, and I can do no more, than in this house to pay him this humble tribute.
May I not add on behalf of every returned soldier in the house a last deep measure of sincerest sympathy to his young and charming wife, his grand old mother, and all relatives. After all, he fought a good fight; and there is always the incomparable consolation expressed in those lines of the great Athenean orator, Pericles.
They shall not grow old, as we that are left grow old;
Age shall not weary them, nor the years condemn.
At the going down of the sun and in the morning
We will remember them.
Mr. ARTHUR J. LAPOINTE (Matapedia-Matane) (Translation): On behalf of my
French-Canadian fellow war veterans, I wish to join the distinguished gentlemen who have just spoken, in voicing my deepest sorrow for the death, which happened so suddenly and in such tragic circumstances, of our lamented colleague the hon. member for London, Mr. F. C. Betts.
While attending meetings of war veterans who were members of this house, it happened quite frequently that I sat next to him and on such occasions, overlooking our differences of opinion in the political field, we often had very friendly conversations. I was thus in a position to appreciate his warm-heartedness, his great courtesy, his kindly spirit and his good breeding.
The hon. member for London will be sadly missed in this parliament.
I wish to tender my heartfelt sympathy to his sorrowful wife, to every member of his family and to the hon. members of this house who belong to the Conservative party.
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): On behalf of the members of the House of Commons committee on civil service, I extend our most profound sympathy to the family of the late Major Betts and to his friends and colleagues of the Conservative party. He was a barrister of note, a gallant soldier, a parliamentarian of great experience acquired in a rather short time; he was a very able debater, and a sportsman. The floor of the house is not always a dividing line between members of opposite political affiliations; and sometimes, during the heat of a debate, I was at times the recipient of very gracious notes from the hand of the late member for London. He was a good friend; he was of genial disposition, and his passing is deeply regretted by all. On the evening before his death I happened to meet him. He took his wallet from his pocket and showed me an heirloom, containing the picture of his infant daughter in the arms of her mother. I have told the members of the House of Commons committee on the civil service that they were the finest group in the house. The late Major Betts was one of them.



GRAIN INQUIRY COMMISSION


Hon. W. D. EULER (Minister of Trade and Commerce):: Mr. Speaker, I lay on the table two copies of the report of the royal grain inquiry commission. The report is now being printed and will be ready for distribution in about a week.
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FARM IMPLEMENTS COMMITTEE


[Stage Direction]
The house resumed from Friday, May 6, 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.
Hon. W. R. MOTHERWELL (Melville):: 
Mr. BRUNELLE (Champlain) (Translation) :: Mr. Speaker, the question under discussion is of deep interest to the fanners. They need government assistance, and I am happy to note that this government desires to help them as much as possible. The report of the committee appointed to investigate the prices of farm implements, which we are now discussing, has established the existence of certain abuses on the part of the manufacturers and recommends a further reduction in customs' duties on farm implements.
I wish to take a few moments of the time of the house to express my approval of this report which, from beginning to end, is favourable to the farmers.
The .present discussion will indicate to the entire country that this government is not satisfied with merely praising the farmers of Canada, but really wants to help them. The attitude of the political parties on that point is being clearly defined. The supporters of the government are all stating their approval of the report and of the committee's recommendations tending to the reduction of farm implement prices, while the members of the opposition, from first to last, at least those who have taken part in the present debate, are opposing them.
The situation is clear. On the one hand we have the interests of the powerful, of the financiers, of the manufacturers, and the Conservatives are upholding them. On the other hand, there is at stake the welfare and interest of the weak, of the poor, of those who lack organization and money, the interests of the class which is admittedly the most important, because it is at the root of all national progress, in a word the interests of agriculture, and the Liberal party is upholding them.
It is in 1878 that Sir John A. Macdonald inaugurated a policy of protection for Canadian industries. This policy, it was said, was intended to aid only infant industries. Ever since, the buyer and consumer of Canada has been paying a bonus to the Canadian manufacturers. Ever since, the cost of living has been higher in Canada than in the United States. An automobile selling in Canada for $1,350 can be bought in the United States for $1,000. A radio costing $75 in Canada sells for about $25 in the United States, and so on. Farm implement prices have always been from 10 to 20 per cent lower in the United States.
All that is the result of the tariff policy initiated in 1878 for the protection of infant industries. After sixty years of existence

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Canadian industries should be old enough to be weaned. It is now the farmer's turn to come into his own, to be able to pay what he owes and to buy at prices proportionate to those which he obtains for his products.
The Conservative opposition assume the defence of the manufacturers. They are constantly speaking of the inalienable rights of the powerful, of the rich, of the manufacturers, of the trusts-of vested rights. In order to give a plausible appearance to their love for the powerful, opposition members state that they are seeking to protect the workers employed1 in industry. The farm implement industry employs four to five thousand1 workers. I also am anxious for the welfare of these four or five thousand workers, but I am specially concerned about the welfare of the five million Canadians living on the land.
Farmers are sometimes called the monarchs of all they survey. They should be the monarchs of the land, but they are not. They have been dethroned in the course of the last few years, in many cases; they have lost their independence to become, to a great extent, the slaves of their creditors, of the powerful, of the manufacturers including the manufacturers of farm implements. I am not so much concerned in knowing whether the lowering of the tariff will have much or little effect on farm implement prices than I am in doing well what is to be done, in order to have the satisfaction that comes of the performance of one's duty.
On page 1295, we find recommendation No. 23, which reads as follows:
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.
Now let us examine, in the light of statistics, whether it is the farmer or the manufacturer who is worthy of sympathy and assistance. Here is a page in the history of the International Harvester Company and the Massey Harris Company, based on their financial results, as shown on page 1224 of the report:
Financial history of the International Harvester Company of Canada Limited, from 1903 to 1935 inclusive:
In the period from inception to 1912 it earned $3,500,000, paid interest on all advances from the parent company and, if the policy of later years was followed at that time, earned in
addition an undetermined amount of profits retained in the hands of the parent company. This was on a capitalization of $1,000,000.
In the period from 1913 to 1919 inclusive, it earned $3,000,000 plus a profit retained in the United States estimated at $4,200,000 and, in addition, paid interest on all advances from the parent company. This on a capitalization of $1,000,000 up to 1917; a capitalization of $10,000,000 in 1917 and a capitalization of $15,000,000 in 1918 and 1919.
In the years 1920 to 1925 inclusive, it made profits of $800,000 after absorbing the heavy losses of 1921 and 1922; received a surplus of $287,556 from the International Plow Works of Canada Limited and earned for the parent company a profit, retained in the United States and not shown in the operating results of the Canadian company, estimated at not less than $4,000,000. In these years it paid no interest on the advances received from the parent company and the capitalization was maintained at $15,000,000, increased by surplus, reserves and moneys owing to the parent company, to an average of $30,000,000 per annum.
A dividend of $3,000,000 was taken in 1921 by the parent company.
In 1926 to 1935, it earned on a different basis to the foregoing at least $24,500,000 on an adjusted capitalization claimed to be about $39,000,000.
Now as to the Massey-Harris Company Limited.
The company had its inception in 1891 with the merging of the Massey and Harris interests; the paid up capital of the company at its inception being approximately $3,500,000 of which $300,000 was paid in cash and the remainder was given in exchange for the assets of the constituent firms in the merger.
In the period from 1891 to 1912 this original capitalization of $3,500,000 plus $1,000,000 additional cash capital received in 1911, enabled the company to return the following values to its stockholders-
I will not quote the particulars, Mr. Speaker, but those returns amounted to $28,953,349.
During the years 1913 to 1921 inclusive, cash dividends were paid to a total amount of approximately $9,142,000. Stock dividends were declared in 1916, 1918 and 1920 to the extent of $11,044,200. Of these, however, nearly $9,000,000 represented profits in the period ended in 1912.
The period from 1922 to 1925 showed no appreciable change in the position of the company. It paid no considerable amounts in dividends and earned no large profits.
The loss for the period 1926 to 1935 inclusive, will be found stated in another section of this report as over $15,000,000.
The dividends paid during the same period were as follows:
Dividends paid on Preference Stock:
Fiscal year ending in-
1926	
7%	$ 846,2931927	
7%	846,2931928	
7%	846,2931929	
7%	J year 423,147
5% J year 302,247
1930		 5%	604,495

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Dividends paid on no par value Common shares:
Fiscal year ending in

1929	$1,269,440
1930	 1,637,016

Mr. Speaker, I need not comment upon that for the figures speak for themselves.
. I had not intended to take part in this debate, but my concern for the farmers of my constituency compels me to do so. I am sincerely convinced that we can never do too much on behalf of the farmers. If it can truthfully be said that agriculture is the foundation of our country's prosperity let us be careful lest that foundation should collapse, let us maintain it strong and firm. It is unfortunate, in my opinion, that the farmers should not be better organized and more united, for that is a cause of weakness. I admire the farmers and I am concerned about the welfare, for I believe that in their own way, the Quebec farmers have been heroes in the past, on account of the hardships they had to suffer and the sacrifices they were compelled to make; but their descendants, instead of reaping the benefit of those sacrifices and hardships, are now facing almost insuperable difficulties. I admire the farmers of my province, and I am concerned about their welfare because they are courageous, industrious and serious-minded. I admire them for the reason that if fascism, communism, socialism and other similar doctrines ever really threatened to overrun our country, the last shot fired against them would come from the people of my province.
I will vote in favour of the report and the recommendations of the committee on farm implement prices, because I think it is an indisputable fact that the prosperity of the farm implement industry is directly based upon the prosperity of farming. Consequently, they must cooperate in such a manner that the farmer, when he has to sell his produce at the lowest prices, should not be forced to buy his farm implements at high prices; in other words, whenever the prices of farm products fall there should be a similar reduction in the prices of farm implements, and vice versa.


Mr. W. A. TUCKER (Rosthern):: Mr. Speaker, at the beginning of this debate it was not my intention to take part in it, but since that time some remarks have been made which I believe should not be permitted to go unanswered.
In the speech he delivered on Thursday, May 5, the hon. member for Greenwood (Mr. Massey) is reported at page 2583 of Hansard to have said:
It is not the 7J per cent alone on implements which is at stake in this debate. We are debating a principle, and tied up with that principle is not only the future welfare of this dominion, but the unity of Canada as well. I deplore such utterances as have been made in this house and in this debate-yes, and deplore them in the sacred name of Canadian unity.
When the sacred name of Canadian unity 13 thrown into the balance in an attempt to justify the exploitation of one part of the country for the benefit of another part, I cannot sit in my seat and remain silent. There has been too much in the way of attempting to use patriotism and the like to justify exploitation and to persuade others to undergo exploitation. In my opinion that is one of the reasons for the disunity in Canada at the present time.
For an example of this sort of thing-before the election in 1911 a trade agreement was made with the United States which to-day most people will admit would have been to the great advantage of Canada as a whole. One of the reasons why people in Ontario and western Canada were persuaded to turn down the agreement was a campaign of patriotism and an appeal to Canadian loyalty. The hon. member for Greenwood referred to the noble part the Canadian farmers had always been willing to play in the building up of industries in Canada, and the implication seems to be that the Canadian farmer should go on submitting to the payment of taxes to corporations on everything he buys in order that the manufacturing industry of Canada may prosper.
If it could be shown that the manufacturing industry passed on to Canadian workers the benefits it received from Canadian farmers, there might be something in that argument. I do not think there would be much in it, because I doubt very much whether a government has a right to say to over half the population engaged in the basic industry of a country: "We will give certain people the right to tax you, to make things worse for you and your children, in order that a certain other branch of the population may be better off." That has been referred to in times past as the New Feudalism, the right to private taxation given to certain industries and private corporations. But does it actually have that effect of benefiting labour? The
fMr. Brunelle.]

Farm Implements Committee Report
hon, member for Greenwood actually said that he was speaking not in favour of the Implement industry or of the farming industry, but in favour of the workers and the people engaged in farming industry. The thing that strikes me in regard to that contention, Mr. Speaker, is this: Does a high tariff increase the number of people engaged in the implement industry? Exports of farm implements in 1933 were valued at 81,324,776, tvhile the imports amounted to 82,208,028. In 1936 our exports of farm implements were worth 86,344,000, and our imports 86,182,000. I. ask those who make such a plea on behalf of those engaged in the farm implement industry, is it not much better to have trade flowing so that you manufacture and export 86,344,000 worth of farm implements rather than
81,824,000	worth? And our imports did not go up proportionally as fast. Can anyone, in view of these figures, place much reliance on the suggestion that the tariff should be maintained because it helps workmen engaged in the farm implement industry?
Furthermore, if you are going to have unity in this country it must be based upon justice as between different parts of the country and as between the different industries of the country. You cannot have unity based upon such things as were revealed in the textile investigation. One company engaged in the textile industry was permitted to charge high prices and pay itself roughly 98 per cent interest on the investment, in its common shares over a period of twenty-nine years, while the labouring people were paid lower wages than were paid in the United States and they themselves were paying more for the things they had to buy than they should have had otherwise to pay. That is giving the right of exploitation, of private taxation, and it is not conducive to unity or a sense of satisfaction on the part of the people of Canada. Moreover, Mr. Speaker, I think if one had at heart the unity of this country he would say that those suffering the most, those lowest in the scale of economic wellbeing should be the first to be assisted.
In a speech in this house on February 1 the hon. member for Huron North (Mr. Deachman) gave some figures in regard to the average earnings of the Ontario farmers. At first I intended to go into the earnings of farmers throughout Canada as a whole, but I realized that this might not be a fair comparison because of the drought in the west during the past few years, so I thought we might safely rely upon the figures of the hon. member in regard to the earnings of Ontario farmers as illustrating the general position of
the farmer in Canada. You will remember, Mr. Speaker, that in his remarks he gave figures, which appealed to me, at least, as being fair, indicating that the average farmer in Ontario earned 8362 net a year, and that was after allowing wages of only 8155 to his son or daughter-not a high amount, since most farmers have at least one son or daughter working for them. Is not the farming industry then the one worst off and the one most entitled to consideration?
I have heard speakers discuss in this house, and I have worried over it myself, the situation that has arisen in this country under which even when you have increasing trade and increasing industrial activity you still have large numbers in the cities unemployed and on relief. I suggest to you that this is the result of our attitude towards our different industries. I suggest that the reason we have not even more unemployed and even more people on relief in the cities is that the people in the country who would like to go to the cities and engage in industry realize that if they did go they would not be able to get work and would have to go on relief. But I suggest that if you keep on putting manufacturing industry in a preferred position, as compared to agriculture, even if you increase the number engaged in industry by fifty per cent within the next six months and take those people from the relief rolls of the cities and towns, the same number will flock in from the country to take their places and attempt to find jobs.
I submit that. you have to attack this problem in a fundamental way. You have to make the basic, most important industry in this dominion-agriculture-the attractive industry, or at least as attractive as other industries. You have to make it so attractive that those engaged in it will not be always looking for an opportunity to go to the cities and towns in order to get into manufacturing industry. If you do not do that, no matter how much you develop industry you will attract more and more people from the farms to take the places of those absorbed in industry, and you will have no permanent solution of the problem of unemployment and relief. On the other hand, if the agricultural industry is treated properly and made more desirable, the people presently engaged in it will remain so engaged; others will be attracted to it, and you will be decreasing the number unemployed and on relief. Then, as people remain and more go on the farms, the demand for the goods produced by manufacturing industry will be increased. That, I suggest, is a fundamental approach to this
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problem, but the attitude of the Conservative opposition in this house is designed all the time to throw the thing more and more out of balance, to make things more desirable in manufacturing industry and less desirable in the basic industry of agriculture.
We have heard a great deal about labourers in industry, but there are labourers in agriculture also. I think any one who knows anything will realize that labour in the farming industry is not treated from the standpoint of hours of work, holidays or rate of pay, as well as labour in industry. That is not the fault of the farmer; he could not possibly pay any more than he does, but why is it that those who profess to be so much concerned about the labouring man never raise their voices in this house on behalf of the working man on the farm or the farmer's son working on his father's farm? They always speak on behalf of the labouring man in the city, the labouring man in industry. I suggest to you, Mr. Speaker, that the labouring man on the farm is just as important, and that he also should have defenders in this house. After all, agriculture is a very important branch of industry in this country. For example, from 1931 to 1934 inclusive the average number of men engaged in industry was 523,972. What are the figures in regard to those engaged in agriculture? Including members of families actively engaged in farm work we had 1,621,000 people employed in agriculture, or three times as many as were engaged in industry. So I say that if we are going to lay a permanent foundation for unity in this dominion we must make things better for that million and a half who have to make their living on the farms. After we have done that we can and should concern ourselves about those others who are not so badly off. For I should like to make it quite plain that I am not against making things better for the worker in industry. As the Minister of Agriculture (Mr. Gardiner) said the other night, a policy of lower tariffs alone would make things better for the industrial workers.
I have cited the figures indicating that the value of farm implements exported in 1936 was much higher than in 1933. We had the experience of more men employed in the farm implement industry after the tariff reductions of 1924 and 1925. In this connection there is also another feature which I should like to draw to your attention; it is a matter which I have always had a good deal of difficulty in understanding. It is why those engaged in manufacturing fann implements in this country need tariff protection 
at home when they can ship their products abroad and compete in the foreign market where they have no tariff protection. Here they have an advantage in that they do not have to pay so much in the way of freight rates, and if they can ship their goods abroad and compete in these foreign countries why should they require protection in Canada? Let me refer again to the figures I mentioned a moment ago. In 1936 the implement industry actually exported goods to a higher value than the implements that were imported in the same year. I will recall the figures again. In 1936 the agricultural implement industry of this country exported $6,-
344,000	worth of agricultural implements, and there were imported in competition with that only $6,182,000 worth. In other words, there was a favourable balance of $162,000, which we shipped out and sold in competition with the implement manufacturers of the world. Where, then, is the justification in forcing the farmers to subsidize the farm implement industry and pay more for their implements when that industry can compete with outside industry in the markets of the world?
There is another aspect of the matter that should be considered-and I am trying t6 cover the ground rapidly and deal with the principles involved as I see them. We have well established in the economic set-up of this country the idea of drawbacks, the idea that there shall be a refund of the tariff paid upon the raw materials that went into the finished product which is shipped out to compete in the markets of the world. I ask you, Mr. Speaker, is there any industry in this country that has to compete more with the low paid labour of the whole world than the agricultural industry? Agriculture has to compete with the low paid worker in Africa, in Egypt, everywhere. His tools, his implements are raw materials of the farmer. He has to sell his products in the markets of the world in competition with the people of all other nations, no matter how low paid their labour may be, and one of his raw materials is certainly farm implements, the means whereby he produces his products. Implements are one of the things he uses to produce his wheat, his butter, and so forth. If industry which asks for protection insists on getting drawbacks on the scale it does when it sells its products in the markets of the world, is not the farmer, who is made of flesh and blood and must live, just as much, at least, entitled to a square deal? Is he not entitled to drawback-a refund-on the basis of the excess he pays for his implements on account of the tariff policy protecting industry? When we

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hear of the sacred name of Canadian unity, it is time our people began to see that we should base that unity on a fair deal to all parts and all classes of Canada.
Recently a prominent man in this country, making a submission to the royal commission investigating dominion and provincial relations, said that because of the difference in economic conditions as between one province and another some of the provinces could not afford certain social services while others could; that it was not fair to ask the richer to contribute to the social services of the poorer and therefore the best and fairest thing was to leave social services on a provincial basis. I ask you, Mr. Speaker, if Canada is not a nation? Do we not say to the individual Canadian: You must contribute to the national exchequer? In time of war did we not say to him: You must go and fight for Canada? Then when he needs help in the way of social services, are we to say to him: No, you are not a Canadian; you are an Ontario man or a Saskatchewan man? Are we to say that when it comes to upholding Canada, a matter of giving perhaps one's life for one's country, he is a Canadian, and that it is an obligation to Canada as a whole, but that when it comes to the state helping him in his hour of need, there shall be first-class Canadians and second-class Canadians, to be helped or not depending upon what part of Canada they live in? It is that sort of thing that is helping to break up Canada and make people feel there is not a real Canadian spirit, a real spirit of justice and fair play among Canadians as a whole, as there should be.
The fundamental question before us to-day is this: Are we at last going to do justice to the basic industry of this country, or are we going to permit it to continue to be exploited on behalf of one particular industry?
There are one or two other remarks that were made with which I should like to deal; I cannot deal with all of them. The hon. member for Greenwood (Mr. Massey) said, at page 2580 of Hansard:
But I do know that the implement industry feels that prices should be based on costs, not on the law of supply and demand.
And the hon. member suggested that he was favourable to that idea, that the prices of the things the farmer has to buy, one of his raw materials, his farm implements, should be based not on the law of supply and demand, but on the cost of production in Canada, knowing at the same time that the selling price of the products the farmer has to sell will be based to a preponderant extent upon supply and demand in world markets. Is he
prepared at the same time to say that the selling price of the things the farmer produces shall be based on the farmer's cost of production? I just wonder if the Conservative opposition in this house is going to say: We are going to treat the farmer differently from the manufacturing industry. Is it going to say that the manufacturing industry will be permitted to get together by open or secret agreement and charge prices based on their cost of production, while the farmer shall be exposed to getting what he can in the markets of the world? Or is it their policy to say to the farmer: We are going to reimburse you the cost of production on your apples, your cheese, your butter, your wheat, on your oats your hay and your barley? We should hear what their policy is. If they are going to talk about the needs of industry, let us have one and the same policy for the farmer and for industry. If you are going to say that the price of farm implements should be based on the cost of production and a reasonable profit, then those who talk about the unity of Canada should be saying that the farmer should be treated in exactly the same way. If they do not do the one, they should not do the other. If they are not willing to do both, let them stop talking about the unity of Canada.
There is another thing I should like to say in conclusion. The Crowsnest pass freight rates have been dealt with in this house. This solemn agreement made with the railways provided that, amongst other items, no higher than a certain rate should be charged on goods hauled to the west. That agreement was abrogated by act of this parliament. The Crowsnest rate on farm implements should be restored at once.
I hope democracy is a real thing in this house. The last convention of our party held in 1919, came out, as I understand it, for the free importation of farm implements, one of the raw materials of the farmer. We have been again returned to power by the people of this country. We must let the peoples' will prevail. Special pleading for special interests should no longer prevail in this matter to the slightest degree in this House of Commons. The expressed will of the people who voted for a low tariff policy should be given effect to by legislation. There should be no more argument, no more delay, no more procrastination, with people still enjoying special privileges given by high tariff. The tariff should go down, and the tariff on farm implements especially should go down, or even be wiped out altogether. We are told by the Conservative party, that they had
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an agreement with the farm implement industry that if the Conservative government would give them the right to charge their prices under the protection of a high tariff, they would not raise such prices; and we have been told that they have kept that agreement. We also know that the cost of producing farm implements in 1936 was less than in 1932. We know further that since this government got into power, the manufacturers, instead of lowering the price have twice raised the price of their implements, and done it the second time in the face of a finding of a committee of this House of Commons that the first raise in price was not justified. We know that, and yet we say that taking off the tariff will under present conditions effect a reduction in price. If that is not the case; if the implement industries of the North American continent have things so organized that they can raise their prices when their costs come down, and can do just as they please with the people of Canada, then I suggest to you, Mr. Speaker, that the sooner we know it the better. The sooner we take the tariff off and see whether that alone will work to lower prices, the better. If it does not work, I suggest we should then put the efforts-the full power-of this government and the finances of this country behind the development of a cooperative movement to manufacture and supply the farmers with farm implements at cost. If the embattled farm implement industries of this country, which have built themselves up under protection given by the Canadian people, have now got to the point where they are ready to challenge the people and their representatives in parliament, and to do as they please with regard to the needs of such a basic industry as agriculture, it is time for this parliament and this government to take up the challenge and show the implement industry and anybody else who may be looking on that parliament is supreme, and that if we cannot get justice in one way for the farming industry we will get it in another.
I beseech the house to pass this report. I suggest that the government go further and take the duty off agricultural implements. I further suggest that they reduce freight rates to the Crowsnest Pass level. They should then watch things very closely, and if prices do not come down at least to a figure comparable to prices in 1932, when costs were lower, other decisive action should be taken to see that justice is done to that fundamental industry which is now so depressed in this ?ountry, the farming industry.


Mr. W. F. RICKARD (Durham):: I had not intended to speak on this motion, nor do I now intend to take up very much time, but, as a farmer who uses farm implements, first hand, I feel that I should make a few observations.
I was much interested in listening to and reading the speeches of some hon. members.. I listened to the hon. member for Greenwood (Mr. Massey), and noticed that he made, a definite point of the services which imple-. ment companies render to the farmer. Well,, as a farmer I always thought that I had; to pay for the services I received from agents of implement companies. Every time that the agent of the Massey-Harris or any other company comes to my place to repair a,-machine I pay for that service out of my own pocket and, I think, very dearly. It is true, that services are rendered in connection with new machinery, such as delivering it and setting it up and keeping it in shape for a short period, but all that is charged up to the cost of the implement. Services and repairs,, particularly the latter, are altogether too. expensive. If a farmer has to buy repairs to-day for a binder, or for that matter any other machine, he might far better buy a new one.
We realize to-day that to farm successfully and to compete in the markets of the world we must have good implements. But I agree' with the hon. member for Brant (Mr. Wood) that it is very doubtful whether all these latest improvements, such as alemite greasing, oil bath mowers and pole trucks, which add to the cost of the implement, are worth the extra expense. Of course if we demand these things we have to pay for them. But certainly there is too much difference between' what the farmer has to pay for his equipment and what he receives for his products. Some will say, let the government do something to increase the price of what the farmer has' to sell. But I believe I am speaking for the' farmers of my constituency when I say that the prices of farm produce during the past two or three years-that is for the farmer who has anything to sell-have been fairly good, much better than they were in the period from 1930 to 1935. True, the price of cattle has been lower this year than last, but 6 or 6| cents a pound is not a bad price, unless the speculator paid too much when he ; bought his cattle and put them in the stable in the fall. Hogs have fetched a good price ; and grain a fair price. But the operating expenses of the farm to-day are too great. Taxes and all overhead expenses are too high.

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As in the case of improved farm implements, we have demanded these improvements and we have set a standard of living which seems altogether too high. It is all very fine if we can keep up with it and pay our way, but I do not believe we can.
I am not a free trader, and certainly I am not a high protectionist. I believe that the middle course is the proper road to take. However I do not think that the implement companies, in the face of the reduction of the tariff on farm implements, had any justification for raising their price, notwithstanding what has been said about the increased cost of raw material. Had these companies shown any tendency to meet the needs and requirements of the farmer I would have favoured giving them the benefit of the doubt, but as it is I should like to see the duty taken completely off the importation of repairs for farm implements and, unless we get better cooperation from these companies, taken altogether off farm implements. It seems to me that implement companies are creating a monopoly in order to get more for their machines. If on the other hand they would try to reduce the price, and thus sell more implements-for to-day there is scarcely a farmer who does not need new implements- they would increase employment for thousands of men who are dependent on industry for a living anti enable them to buy more farm produce.
In my riding we have no farm implement company, but there are several other very important industries. We have a fertilizer plant which makes fertilizer for the farmers' use, and to-day it is doing a bigger business than it has done in years.
There must be a common understanding between capital and labour and between industry and agriculture if we are to retain our democracy. Farmers should do what they can to cooperate with the manufacturing companies, and the men working in those industries should strive to cooperate with the farmers. I say again that if these companies persist in maintaining high prices for their .mplements we shall have to go as far as we can to stop that sort of thing. It has always happened that when prices of farm produce are in close relationship to the prices of manufactured goods we have the greatest measure of prosperity, and that is invariably under a Liberal government. I believe that, under the leadership of the Prime Minister (Mr. Mackenzie King) and the Minister of Finance (Mr. Dunning) we shall go a very long way in that direction. I am not in
favour of appointing any more commissions to investigate these things. As a government let us take action ourselves.
Before I sit down let me congratulate the mover of this report, the hon. member for Lake Centre (Mr. Johnston) upon having brought it before the house.


Mr. J. D. MacRAE (Glengarry):: The people of the constituency I represent are largely employed in farming, and the question of farm implement prices is of keen interest to me. The west reckons its purchasing power in bushels of wheat, western Ontario its purchasing power in pounds of beef, but the farmers of Glengarry county are largely engaged in dairying, therefore their purchasing power depends on the price they receive for a hundred pounds of milk.
During the years 1930-35 milk manufactured into butter and cheese was making a return to the farmer of sixty to sixty-five cents per hundred pounds. At that price it was impossible for them to replace their worn-out machinery. It was amazing, in travelling through the country, to see the number of machines that were held together with hay wire. In 1913 a farmer could purchase a binder for $137, and he received at that time about one dollar per hundred pounds for milk delivered at the factory door. This made the purchase price, in terms of pounds of milk, 13,700. In 1938 a six-foot binder suitable for use in Ontario can be purchased for $263. Milk is now yielding about a dollar per hundred pounds. So that it will take 26,300 pounds of milk to purchase that binder. The purchase of other farm implements is on a similar scale. As was pointed out to the committee, the price of the binder at factory was $123 and the retail price $263, leaving a spread of distribution costs of $140, which seemed to me to be excessive. If the farm implement companies would agree to eliminate much of the high pressure salesmanship and try to reduce distributing costs, it would greatly benefit the country.
I am fully convinced that if we had a fair exchange of commodities in our production it would do much to solve the difficulties in the economic situation which we are now experiencing. If this condition could be brought about we would not need to consider the social credit theories of Alberta. The hon. member for Haldimand (Mr. Senn) suggested that as this committee brought in its report two years ago its findings do not apply to present conditions. The hon. member for Greenwood (Mr. Massey) intimated that he had severed his connections with the
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implement business six years ago, and therefore he can no longer speak with authority on the production side of the question. Much as I admire his fluency of speech I cannot admire his train of thought.
Right Hon.R.B. BENNETT (Leader of the Opposition):	I am greatly tempted to make
a speech in reply to the many observations that have been made in this house on this report, but I shall refrain from doing so, and shall endeavour in a very few sentences to bring to the attention of my fellow members and my fellow citizens some of the reasons why I feel that we should not engage in the form of sectional warfare in which we have been engaged in the last few days.
I confess that there is no matter in which, since I went west forty years ago, I have had a more sustained interest than the price of farm implements. The real story of farm implements is almost romantic. If we carry our minds back to the days of the prophets of old, the ox as he trod out the corn was not to be muzzled; if we remember the tale of the gleaner as recorded in the book of Ruth, and the crude instruments of which we now have the evidence in our museums, we can understand the extent to which the farmer of this country is dependent upon the manufacturer.
It does seem to me very strange that in this house we should be constantly apologizing for the manufacturer. Sometimes I find it difficult to understand that state of mind. Who is the manufacturer in Canada? I hold in my hand the book supplied by the Department of Trade and Commerce to every member of this chamber, and when I turn to pages 46 and 47 I find the value of agricultural production, and turning to page 94 I find' the value of our manufacturing production. I find that in 1936 the total value, in all provinces, of agricultural capital, including live stock, implements, machinery, lands and buildings, was placed at $4,628,-
375,000,	in round figures. Turning to manufacturing production I find it estimated thus in 1935:	Capital, $4,698,991,000, with nearly
25,500 establishments employing 582,000 persons, with half a billion paid out in salaries and wages, and almost a billion and a half paid out in the cost of materials, with a gross value of products amounting to nearly three billions.
Why, then, should we be so apologetic when we speak of the manufacturing industry of Canada? Why should my fellow Canadians be so apologetic on the one hand and critical on the other of the industrial life of the
country? For my own part I am proud of it, as I think most Canadians are. We go about the dominion speaking of what we. have been doing and of what we have accomplished. I realize, of course, that the manufacturing business in Canada became very great during the war for reasons that need not now be discussed, and I realize that our plants attained a measure of efficiency and effectiveness that they had not before known. The real question that we have to face in connection with agricultural implements is not limited to implements alone. The flail- and I daresay there are members of this house who have never seen a flail-the sickle and the cradle have given place to the binder and the combine; and the application of high mechanical skill has developed the mowing machine, the rake, the tractor, the caterpillar tractor, the power-drawn harrow and ploughs and implements that are used for the purposes of cultivation not only in this country but in every other country in the world, whether it be in the cotton fields in the south of this continent or in our wheat fields, or our com fields, or our potato fields. Whether it be in any of these fields there is usually some special implement or instrument th^t is utilized for a specific purpose.
I make these observations by way of introduction; for, as I have said, the temptation to engage in a partisan discussion of the situation is very great. I do not propose to take part in such a discussion; for I do not believe that the men to whom reference has been made are endeavouring to exploit the Canadian farmer. I have under my hand one of the last reports of an implement company, the Massey-Harris Company; I find that one of the directors is a member of this house, Mr. W. H. Moore; and I find that others who are members of that board of directors are men who, I am sure, have a high sense of their obligation to every part of our population. Does any hon. member believe that these men are endeavouring to exploit the farmers of the country for selfish purposes? I think not. If I were engaged in a partisan discussion I could point out how strange it is to have the suggestion made that prices could be fixed by this government or by this parliament, which, as the privy council has decided, has no jurisdiction over pricefixing except in times of emergency; or that we should exercise control over the capitalization of companies, when all the companies to which reference might be made are companies which attained their powers in those halcyon days between 1920 and 1930?

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I want to ask my fellow members one question: Is it desirable that Canada should have an agricultural implement industry? That is the first question which I suggest should be answered. In Russia when they first outlined their five-year plan they concentrated their efforts upon being able to produce implements of production. I have lived long enough in this country to see it suffer because we had not refined material with which to meet our own requirements, notwithstanding that we were sending out in ingot form the raw material that we required in refined form. I could give instances now, if it were desirable, in which Canadians had reason to apply for the use and purpose of a certain type of refined material which we, owing to our great production of electrical energy, sent from this country in ingot form; but owing to the prior claims of other purchasers in another land we were not able to secure a supply for our wants.
Sometimes it has been said that instruments of production should be placed upon the free list, and that Canada is not interested in the development of an industry for the production of instruments or implements of production. Nothing could be more injurious to this country than that we should be without an agricultural implement industry. When the great war came upon us a great implement factory in Great Britain was taken over by the state and used for the production of munitions of war, and the export business of that organization vanished. We in this country I think would, almost by common consent, answer in the affirmative the question, shall we have an agricultural implement business in Canada? True we have had such an industry here since 1847. We have had an industry here which developed from very small beginnings. Those who are familiar with the romantic story of the development of the industry in the United States, of the efforts of McCormick, need not be ashamed of the efforts made by our pioneers, who were not machinists in the large sense of the term, or trained engineers, but who established the industry in this country. Necessity was the motivating power behind them, and they worked out in a small way just what, for instance, MacKay did in Australia. There they have still preserved the little area in which MacKay began the production of agricultural implements for that great commonwealth, the industry having now grown to a very great business. They have their implement business; they realized that it was essential that they should have it. Disturbances in transport, something always
to be considered; the necessity for the preservation of neutrality, always important; the utilization of an implement factory for wa purposes, always a possibility: these factors alone, apart from every other consideration, necessitate that the Canadian people should have in this country an agricultural implement industry.
Then if my fellow members answer that question with me in the affirmative, they realize that at the present time we have four large industries engaged in the production of agricultural implements. Our ploughs have a reputation in the Argentine second to none in the world. Our machinery produced in Germany and France is second to none. And even in the United States of America one of our factories has a very efficient production service. Our implements or instruments of production are well and favourably known. Under these circumstances, having had an industry for many years, and agreeing, as I trust my fellow members do, that we should have such an industry, there must be a condition attached to it, or conditions. What are the conditions? The conditions are two:
(1)	that the quality of the implements thus produced should be as good as it is possible to produce anywhere in the world; (2) that the price should bear a just relation to the cost of production. Are there any other conditions that one would suggest with respect to a matter of kind, once you have concluded that you should have the industry?
The next question, then, that we would have to answer, dealing with this matter purely as a business transaction, is, how can we accomplish this end? By what means can we ensure to Canadians a domestic implement business in all its branches, ensuring not only the industry but the quality and the reasonable cost of the product? Well, various means have been suggested from time to time in the world's history as to how that might be accomplished. But every nation in the world has had recourse to one device to accomplish that end. Great Britain was the last to adopt it, because by reason of her established trade and her banking and finance facilities in London, Great Britain had been able to bring to her shores vast quantities of raw material which could be fabricated at very low prices. Those of my fellow members who have read the life of John Morley will remember with what resentment he contemplated the possibility of there being any interference with the contractual rights of those who employed labour at any price they saw fit, of any age and for any hours of toil. That state of things is past.

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The device or method, then, that we and every other nation of the world have adopted to accomplish that end is the tariff. The Minister of Labour (Mr. Rogers) said the other day that you could not contemplate this country now without tariffs. Tariffs in Canada owe their continuance to two facts which cannot lightly be overlooked. One is our geographical position. Whether you or I like it or not we are, as the Prime Minister (Mr. Mackenzie King) remarked the other day, part of the North American continent. On the North American continent we have
125,000,000 people who have by mass production carried industry to a point of effectiveness and efficiency unknown in the world before. There has been nothing like it in labour-saving devices, in the methods utilized by the genius of inventors to carry forward their undertakings. And the other fact is that with a small population we are endeavouring to develop a vast area in which we have provided facilities for transport, by sea and land, to an extent that really menaces the economic safety of our country. In other words, we were over-ambitious; we contemplated a vast population which has not materialized, and eleven millions of people are carrying a burden which can be borne only if we maintain some form of industrial activity.
As part of the second reason I have given- and it might be regarded as a third-you have the consideration which I trust will always be in the mind of every hon. member, namely the shifting of our population. So long as you had in Canada a population the major part of which was rural, you had a situation which was not very difficult to deal with. But to-day we have a population the major part of which is to be found in cities and towns. That has created for all governments-and I trust hon. members will agree with me as I proceed, because I am trying to keep away from controversy-a problem of great magnitude. Think of it: over one-half of the population of this dominion has gone to the cities and towns. That became apparent for the first time when the census was taken in 1931. It has been greatly accentuated since that time. Our population in cities and towns has grown and grown. People are going from the country to the towns and cities, in the west chiefly because of crop failures and in eastern communities for other reasons which need not here be discussed; and the result is that to-day, in this early period in our history as a dominion -only now, be it noted, something like
[Mr. Bennett.!
seventy-one years, which is but nothing in the life of a country-the major part of our population is in cities and towns.
Any student of history knows what the result of that is. A man does not need to be a trained economist to recognize the seriousness of the result of that condition. What has it done? It has placed upon the cities and towns the necessity of providing some form of industrial life, unless that population is to be maintained on relief by the state. That is the real fact of it.
Now, the necessity for some form of tariff being admitted-


Walter Adam Tucker: We do not admit it.


Richard Bedford Bennett: The hon. member says, "we do not admit it"; I had hoped that in view of the statement made by the Minister of Labour the other evening we would be a unit on that point. It is true that in the United States with respect to raw materials high tariffs have been very largely replaced by free entry, and it is true that in this country the free items are very much more numerous than the average man realizes, as he will learn if he will study the tariff. The tariff as a structure was designed to encourage the development of the country, and to provide us with facilities whereby, in a moment' of stress and strain, we might be able to maintain our position.
I know there are very acute differences of opinion as to the extent to which a tariff should be imposed. But I cannot think there are many members of the house who are realists who will not admit that the tariff is no longer a question of discretion on the1 part of governments; it is a necessity. Then, if that be so-and I submit it must be so- is not our only question the consideration of what shall be the extent of the tariff? Is that not the only question? And if that, is the question to consider, what factors: enter into it? I suggest to hon. members that in a country with a population so sparse,, inhabiting an area so vast, and with an urban population so great relatively to the: rural population, subject to the conditions I have imposed as to quality and price, the tariff should be such as to give to the Canadian producer in factoiy and mill the business: of his own country. I have never hesitated for a moment to say that I apply that prin-, ciple also to agriculture.
The hon. member who spoke a moment ago was hardly familiar with the tariff history: of the country. I trust I am not becoming controversial when I say that we encountered much criticism because we endeavoured to see

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that the farmers in and about the great cities, whether growing fruit or market garden truck, should be protected from the climatic advantages which belonged to their competitors in another country.


Walter Adam Tucker: Anyone will throw a sprat to catch a whale.


Richard Bedford Bennett: Yes, but this was not a sprat to catch a whale.


Walter Adam Tucker: For all the benefit it did agriculture, it was.


Richard Bedford Bennett: The hon. member for Rosthern must excuse me if I decline to enter into a controversial discussion with him, because I am going to continue my observations on the basis I commenced them. But I shall have much pleasure in entering into that phase of the matter on another occasion.
Let us proceed farther. Is it right to suggest that the Canadian manufacturer should have the major part of the market in this country on condition (a) that his quality is right and (b) that his price is fair? The hon. member for Lake Centre (Mr. Johnston) agrees with that.


Mr. JOHNSTON (Lake Centre):: I agree if the price is right.


Richard Bedford Bennett: I followed the hon.
member, and I wish to be fair. He has said that he agrees with that view if the price is right, and the quality is also right.
We now come to a consideration of these two factors. I have already dealt with quality; nothing further need be said about that. It is admitted by even the most censorious. I now proceed to the question of price. I have said that I have been forty years in western Canada. In civil life I was a member of the bar, a solicitor as well as a barrister, and I can recall that as a youth, when I went there first, in the old office I saw accounts sent from the United States by implement firms to collect from those who had shifted residence from the United States to Canada. I can remember, too, being struck by the notes signed for Deere and McCormick machinery, and things of that kind, and I frequently talked with them about the situation. I do not mind saying that I frequently talked with the representatives of the manufacturers because to me, coming from eastern Canada, it was a little difficult to understand just what these high interest rates meant-so much per cent per month, and matters of that sort. Well, I slowly learned what was involved, namely the tremendous losses sustained by the manufacturers. Just as they pointed out, these people had left their country and gone
o!'J52-170i
to another, taking with them their implements which were not paid for in full; and there were the difficulties that came about by reason of servicing, parts and matters of that kind, together with the many uncertainties connected with the business on account of uncertain crops.
But I saw a lessening of the conditions imposed in those notes. I remember that the late president of the Massey-Harris Company, Sir Lyman Jones, came to western Canada on one occasion to look over the various agencies of the company and discuss this very problem with them. He was most anxious that farmers should get their implements at the lowest possible price consistent with a fair return upon the capital. And I remember asking the present High Commissioner for Canada in London. Mr. Vincent Massey, who was president of the Massey-Harris Company, in order that I might make the statement publicly, whether or not the Massey-Harris Company had ever sold implements abroad for less than they were sold in this country. He made an investigation and assured me that I might say publicly, as I did on more than one occasion, that they had not charged for their implements abroad a lower price than they had charged in Canada. That was something I was anxious to know; I was proud to have him make that statement and, as I say, I repeated it publicly on many occasions.
What is a fair price? I wonder if we would think it fair to have someone say to us here that he thought fifty cents a bushel was a good price for the wheat of the Minister of Agriculture (Mr. Gardiner). I wonder if we would regard it as fair for someone to come to a professional man and attempt to fix his fee. I heard a story of one of the most eminent United States surgeons who, having operated upon a distinguished and rich patient, had a cheque sent to him for a very large sum of money. He sent it back; he said "Our patients do not fix our compensation." They may discuss it, but the charge is made by the man who has something to give or sell, or a service to render.
Although there is a permanent board to deal with these matters, it was suggested that a committee of the House of Commons should deal with this question. I ask my fellow Canadians, is that fair? Each of us, while exercising the utmost care in the world, cannot help being actuated by some political or personal concern. We are the representatives of parties, and unconsciously we find our: minds warped or, shall I say, just a little given to supporting a particular view; and

Farm Implements Committee Report
with that state of mind we have a committee that is going to investigate a situation or a condition and then make a recommendation as to the correctness or otherwise of these prices. Is that quite right? Is that quite fair? I pointed out that it was suggested in part of the report that the farmer was being exploited. I said I thought on reflection that one of the hon. gentlemen who spoke the other evening would hardly think his desk-mate, Mr. Moore, who is a director of the Massey-Harris Company, was endeavouring to exploit anybody. From what the house knows of his interest in the farmers, does it think he is endeavouring to exploit them? Yet he is a director of this enterprise.


Mr. WOODSWORTH:: Mr. Speaker, I rise to a point of order. I wonder whether it is quite fair to refer to a member of this house by name, and put anyone who chooses to criticize a certain policy in the position of criticizing the personal qualifications of a member of the house? We have had the report of the textile commission which shows that a great many gentlemen who stand very high in the estimation of the people of this country have been guilty of exploitation. I do not want to accuse Mr. Moore of being guilty of exploitation.


Richard Bedford Bennett: What is the point of order?


Mr. DEPUTY SPEAKER:: The hon. gentleman has stated his point of order, and in my opinion it is not well taken.


Richard Bedford Bennett: I was about to state, Mr. Speaker, that I think what may be said with respect to one is equally true with respect to all who are charged as trustees with the maintenance of these industries.


Walter Adam Tucker: The point of order was not stated by the hon. member for Winnipeg North Centre (Mr. Woodsworth). I suggest on a point of order that there is a rule that nobody, not even the leader of the opposition (Mr. Bennett), is permitted to refer to another member of this house by name. I submit that is a point of order which certainly can be raised


Richard Bedford Bennett: I had already thought of that very carefully, Mr. Speaker. I am now speaking of a gentleman in his capacity as a director, not as a member of this house. He is the member for Ontario.


James Shaver Woodsworth: I was interrupted
by you, Mr. Speaker, while stating my point of order; I was about to state it much more definitely. I do not think that even the
I Mr. Bennett.]
leader of the opposition, with his long parliamentary experience and occupying the prominent position he does, has the right to transgress the rules of this house, as I think he is doing, by designating a member of the house by name. That was why I rose. I do not think he can very well refer to a member of the house in one capacity and in the next breath refer to him in another. It was for that reason I raised the point of order.


Frederick George Sanderson: I have already given my ruling on the point of order.


Richard Bedford Bennett: I can assure you, Mr. Speaker, that I have very carefully thought of that question. I have here several names under the heading "directors";
G. W. Allan, K.C. J. S. Duncan J. H. Gundy F. P. Jones J. A. Kilpatrick J. F. Lash, K.C.
G. W. McLaughlin W. H. Moore F. K. Morrow T. A. Russell, LL.D. E. R. Wood, LL.D.
I shall overcome any difficulty that may be experienced by the hon. member for Winnipeg North Centre (Mr. Woodsworth) and the hon. member for Rosthem (Mr. Tucker) by saying that I understand that the W. H. Moore whose name I have mentioned is the member of this house for Ontario, so all difficulty on that score will disappear.


William Lyon Mackenzie King: That complies with the rule; the other did not.


Richard Bedford Bennett: Yes; that complies with the rule.
I desire to make it abundantly clear that I do not believe it is quite right to charge men with exploiting the farmers of the country unless there is some evidence to support that statement. I should be only too willing to uphold any remedy that might be offered for the purpose of preventing exploitation. But there is one test which is not unfair, I submit to hon. members; that is, the audited reports of the enterprises themselves. Whether or not enterprises have made profits is usually indicated by an auditor's report, and those reports do not indicate that for years these enterprises have made substantial profits, nor have they made any returns commensurate with the capital employed.
It was suggested

and I want to get away from that

that the capital structures were not all that they might be. Well, at least they were capital structures that were authorized by the laws of the country, and so far as I have been able to ascertain upon inquiry it has not been charged that there was any water in the capital stock of these

Farm Implements Committee Report
enterprises, either the common or the preferred stock. The change took place from what is called a par value stock to a no par value stock. The change of the unit was a change to which I am personally opposed. I have been steadily opposed to the idea that no par value stock is a sound way to deal with capital structure. But that has nothing to do with the matter; the law authorizes it. As my colleague, the hon. member for St. Lawrence-St. George (Mr. Cahan), pointed out in this chamber some years ago, it would be impossible to change that now, because of the number of enterprises that have shares of no par value, without doing great violence to the whole theory upon which company business is transacted in Canada. That phase is not one that arises here because it is not said, as far as I can see, and so far as the evidence taken is concerned, that there has been a watering of the stock of the enterprise. The change of the unit from a par value stock to a no par value stock may produce, as I sometimes think it does, an erroneous impression in the minds of individuals, but it certainly does not have the effect of watering the stock of the enterprise. That is a matter which I think is sometimes overlooked.
What other question have we that has to do with the fairness of the prices charged? The fairness of the price charged for any commodity is reflected largely by the extent to which the commodity is sold. Let me give an illustration. If you have a limited unit of production your overhead is correspondingly high with respect to (a) taxes, (b) interest on borrowed money, and (c) interest on your fixed obligations-your bond interest and matters of that kind; it has nothing to do with dividends. That can be overcome only in one way; that is by increasing your volume of production, thereby lessening your unit cost. I am going to make in a moment the declaration which I think should be made, that a high duty, or a duty that some hon. members would call high in view of the discussion that has taken place in the house, would have the effect of lessening prices. I am going to do more; I am going to show that this is exactly what did happen in this country, and I am going to give the reason why.
If your units run to only one thousand, and your overhead is one thousand, then you have one dollar per unit of fixed charges, and the wheels go round without added cost as the number of your units increases, except for the small cost that is incident to production itself. The moment you increase
your production, you lessen the unit charge for taxes, interest on borrowed money, interest on your bonds. If, when you are producing but one .thousand units, these three things amounted to S500, you have to add fifty cents to the cost of each unit; but if you increase your production to five thousand, then only ten cents must be added. There is the position. If we are going to get cheap articles in Canada we must do everything within our power to increase the volume of production, which means what I started out with, namely, to as great an extent as possible we should give the Canadian market to the Canadian producer, price and quality being comparable.
Why have we had from time to time to maintain in this country duties that some people think unreasonable? The reason is that it was the only method by which we could secure that mass production without which there can be no cheapening of the price of the commodity. Labour costs in Canada and the United States are comparable. I go to the United States and look at a factory there. Then I go to Australia. I went through a factory in Australia with great care. I look at the factory there; I find the number of units a year that are produced of mowing machines, binders, rakes, or whatever it may be, and I know then what the cost per unit must be to meet interest on borrowed money, taxes and everything of that sort.
We have at this moment a fifteen per cent corporation tax, which is a higher figure than it was in 1930. That tax must be borne by the manufacturer, and he passes it on, of course, to the ultimate consumer, which means the division of the sum total of that tax by the number of units he produces. If the number of units produced is small, the tax is high. The producer may borrow money to expand his business, and if the interest on that borrowed money is divided by only a small number of units, it means that the cost of interest on borrowed money per unit is high. But as you increase the number of units produced, the interest cost is lessened.
Take a bond issue. It is true that some of these implement companies have not been able to meet their bond interest, and they have asked the holders of the bonds to agree to lessen the interest charges over a period of years in order that they may be able to get on their feet. Leaving aside politics for the moment, how would you meet the situation as a man of business? You have a cement mill. Its capacity is five thousand barrels, and you are producing two thousand barrels a day. What will you do? You will do everything in your power to drive that up to five thousand barrels in order to re-
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duce the cost of cement to the consumer, because the fixed charges are passed on to the consumer before profit has to be considered. Now look at the taxes. There is income tax, fifteen per cent; that is the corporate tax. Then there is the provincial tax, if you are in Ontario.


Mr. DUNNING:: That is after cost of
production.


Richard Bedford Bennett: I say that is included
in the cost of production.


Charles Avery Dunning: No.


Richard Bedford Bennett: Excuse me; it is. When the Minister of Finance says that fixed charges are not included in the cost-


Charles Avery Dunning: I did not say that. Income tax is on earnings, after the cost of production has been met.


Richard Bedford Bennett: Surely, but the manufacturer has to make allowance for these taxes in fixing the price at which he is to sell if he is to make a profit. Does anyone suggest that when I go to sell my goods I have not to consider the tax I have to pay on my earnings?


Charles Avery Dunning: Income tax is in a different class from the other taxes.


Richard Bedford Bennett: It is a tax on profits that are shown. If no profit is shown, no one need be concerned; but if he makes a profit, the state taxes him fifteen per cent.


Charles Avery Dunning: Fifteen per cent of the
profit, which is determined after production costs.


Richard Bedford Bennett: I include that as part
of the selling price if he is going to make a profit. We have the same view, but the minister desires to express it in another way. I am not going to get into a partisan discussion. I put it to you: As a matter of business what would you do? Suppose you were an executive, a member of a board of directors; suppose you had your own business; what would you do?


Walter Adam Tucker: I would not raise prices. I would sell less goods if I raised prices.


Richard Bedford Bennett: If the hon. member would not raise prices, then he would continue to have a loss and he would be bankrupt at an early date. Surely the hon. member realizes that if you continue to sell for less than your cost of production you are going to be bankrupt at an early date.


Walter Adam Tucker: Are they selling at lower prices than in 1932 when costs were higher than now?


Richard Bedford Bennett: I am just coming to that; it brings me to the point I am going to make. In 1930-31 we had occasion to consider this very matter. I said a moment ago, Mr. Speaker, that no matter had given me more concern as an individual or as a public man than the question of the cost of various commodities in this dominion, and I believed that if I could give the market of Canada- I said it standing in the Prime Minister's place over there-to the Canadian producer, I would increase his volume to such an extent that his unit costs would be less and he would be able to sell his goods cheaper. I took from the Canadian manufacturers a letter saying they would not raise their prices if this protection were given to them, not for exploitation, but that they might have this market and decrease their unit costs.


Mr. McLEAN (Melfort):: Would the leader
of the opposition permit a question?


Richard Bedford Bennett: Certainly.


Malcolm McLean: May I ask if the International Harvester Company of Canada, which is one of the largest manufacturers of the article under discussion to-day, signed a letter to that effect?


Richard Bedford Bennett: My memory is, No. But
they did not raise prices.


Malcolm McLean: They had no market. They were wise.


Richard Bedford Bennett: Had they not? Well, we shall not discuss that phase of the matter. This is not for the moment a partisan discussion. How are you going to deal with that situation? How are you going to secure to the Canadian producer, manufacturer, the home market to the greatest possible extent and not permit him to raise prices? First, we got him to sign that he would not do so. Ah, but you say, you cannot rely oh that. We always become very doubting when we have to deal with that phase of the matter. But if hon. members will turn to chapter 30 of the statutes of 1931, they will see in section 17 how it was dealt with. It is referred to by . Mr. Justice Turgeon in the textile report. Let us read it:
17. (1) In the event of producers of goods taking advantage of any duty imposed under this act to increase the price of such goods to the consumer, or using any such duty to maintain prices at levels deemed by the governor in council to be higher than should prevail, having regard to general economic conditions in the country, the governor in council may reduce or remove such duty.
(2)	In the event of any one such producer violating the provisions of this section, the governor in council may impose upon all the

Farm Implements Committee Report
products of such producer, or any of them, an excise duty equivalent to the amount of customs duty which would be paid by such goods if the same were imported into Canada under the provisions of the general tariff, and the same shall be collectible as a tax, and the provisions of the Income War Tax Act as to the collection of taxes shall be applicable hereto.
Provided, that neither subsection of this section shall apply to agricultural products.
There was the condition to which we were directing our attention. There is the remedy suggested. It divides itself into two phases. One relates to the individual who gets out of line, pays no attention to anything, but just raises his prices for his own purposes, having regard to his geographical location or some other such cause. What do we do? We impose an excise tax equal to the customs tax. Then there is the class as a whole, the agricultural implement producers as a whole. We say to them that if they do this, then we remove the duty altogether. What is more-


Walter Adam Tucker: Did the right hon. gentleman do it in regard to textiles?


Richard Bedford Bennett: We did it with respect to glass, and we increased the tariff on textiles so as to give them the home market in this country. We did more; before we left office we took off, with respect to the British Empire, part of the specific duty and also, as perhaps the hon. gentleman will remember, the excise tax.


Walter Adam Tucker: Were they not exploiting the people of Canada?


Richard Bedford Bennett: The evidence was quite the opposite. But that has nothing to do with the matter at the moment.
Let us go a step further. The hon. member for Portage la Prairie (Mr. Leader) said the other afternoon that the implement tariff of 25 per cent imposed in 1930 was the highest tariff that we have had in this country. It was. It was put into effect purposely. It was done for one purpose and one only-to secure the home market to the Canadian producer. I am not putting that forward as a partisan matter. It was intended to do that very thing; it did it, and what was the result? Notwithstanding the fact that we had drought and other bad conditions, there was a lowering of prices in this dominion. There was the effect, and it was logical. How could it be anything else? You have reduced your unit costs because you have given the manufacturer an expanding volume of business, and of course he is able to reduce his price. I have not any doubt in the world that if the agricultural implement producers in this country
had a 17J per cent tariff they could reduce their prices, and I have not any doubt that they would do it.


Walter Adam Tucker: They are producing more units now than they were doing in 1932.


Richard Bedford Bennett: Certainly.


Walter Adam Tucker: Then why, on the right hon. gentleman's argument, are they increasing prices?


Richard Bedford Bennett: The answer is perfectly clear. In 1932 we fixed the price on the basis of 1930. At the present time we have increased costs of raw material and labour, which were not a factor at that time. The undertaking, it will be remembered, was with respect to other factors than raw material. But could we get away from merely partisan thought about this, and just ask ourselves the question whether as business men sitting with a board of directors we would not agree that if we had a market of 10,000 units as compared with a market of one, we could lessen our price? What would we do? I ask my hon. friend who moved this motion, What would he do?


John Frederick Johnston: I would say this to the right hon. gentleman. Everyone, I am sure, will appreciate that the matter of volume is a factor. But with regard to the farm implement people, during the last two years their volume has increased materially, and yet during that period we have had two increases in prices.


Mr. GARDINER:: And raw material is down.


Richard Bedford Bennett: That is a very simple matter. From 1930 to 1935 the increase in volume was negligible. In other words, there never was a fair opportunity to try out the effect of this legislation, because of the drought in western Canada and the severe losses that were experienced there. I put to this house and to my fellow Canadians, forgetting their politics, just this question: Would any one of you, sitting at the head of the table with a board of directors, not say "If I could make my business 5,000 units I could reduce the price per unit as against it only being one or two"? My hon. friend who moves the motion says that is so. All right. Then let us give them the chance.


John Frederick Johnston: What are you going to do on the other hand when, instead of reducing the price, an industry increases the price when there has been an increase in volume?
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Farm Implements Committee Report


Richard Bedford Bennett: The answer to that is that you have increased external competition by reducing the tariff to 7i per cent. That is the real reason.


Walter Adam Tucker: They are now selling more at higher prices, so that does not hurt them.


Richard Bedford Bennett: No; that is not the argument. If my hon. friend the member for Rosthem were engaged in industrial activity, and were consulted by someone who told him that he was making no money and that he found himself unable to continue to operate at all unless he sold more than a thousand units in his business, the hon. member for Rosthem would advise him that the one thing to do was to increase his volume, and by increasing his volume lessen his unit costs.


Walter Adam Tucker: Not if he were selling six million abroad and two million at home.


Richard Bedford Bennett: The real difficulty is that you could not do it.


Walter Adam Tucker: That is what we are doing now.


Richard Bedford Bennett: Do you know what we are doing? Again, I am not going to be drawn away from what I shall designate as purely a little business talk to my friends here, and not a political discussion at all. I put it once more to the house whether or not the net result of increasing the volume is not to reduce the unit cost if you give the opportunity for the increased volume to be sold here. That is all. I have gone into this matter at great length because I want to make perfectly clear the purpose of the legislation that placed a high duty, the highest this country has known, upon agricultural implements. It was done, as I said when standing in the Prime Minister's place over there, for the purpose of giving Canadian producers the market; and it was done with two conditions, one affecting the individual and the other the industry. We made it possible that they could become effective if the situation prevailed for which they provided a remedy. It did in the case of glass, and action was taken immediately by the governor in council. What is more; there was one complaint which I recall with regard to prices, and on investigation it turned out that it had reference to raw material and nothing else. Every time any question arose where it was suggested that there should not be an increase in price, we investigated.
How can we hope to maintain this industry unless we can give it a market? I am not unmindful of the fact that one of these companies has a business in Germany, a factory

in France, a couple of factories in the United States, an interest in the Sunshine works in Australia, and works at Brantford and Toronto; but they are not manufacturing abroad solely to sell here, and the prices of their competitors, if they were able to sell their surplus goods in this country, with our limited production as against their mass production, would be lower than ours, and they would put us out of business. We would fail. That is all there is about it. It is the 125,000,000 beside us as against 11,000,000 here that must be considered; it is the unit cost of mass production as against the unit cost of our limited production.
Take cream separators, to which reference has been made. Do we want a cream separator industry in Canada or not? The hon. member for Peterborough (Mr. Duffus) says, "Yes, we need it"; the hon. member for Renfrew South (Mr McCann) says so too. Well, if we want this industry we ought to give it a fair opportunity with competition from abroad. May I point out-and it is one of the reasons I rose in my place-that in 1932, when we negotiated the British preference, we asked the British people, when the preference was given, whether or not they could undertake to provide us with cream separators in addition to what we ourselves were producing. The firm of Lister and Company had been providing cream separators for a long time in New Zealand; they supplied half the requirements there-and in New Zealand they make as good butter as anywhere else. The British government took over the plant when the war broke out, and because of that, the United Kingdom shipped to Canada only two separators in 1932. In 1933 there were shipped 535; in 1934, 956; in 1935, 1,355; in 1936, 1,994; in 1937, 3,163. We gave the preference to those producers who were well established in this country and they added to what we ourselves were doing. We believed that it was desirable to maintain the industry, a belief which is indicated by the addresses in this house, and we therefore passed the legislation to which I have directed attention. Is it desirable to do away with that British preference, to deny to this old and established house the preference we gave them in 1932 and for which they paid handsomely? As the hon. member for Haldimand (Mr. Senn) has made clear in the house, they gave ample compensation for it, and established for our products in their markets a position which more than balanced what we did for them.
As I have pointed out, unless we are prepared to take such action as may be necessary to ensure that volume can be maintained

Farm Implements Committee Report
in Canada we are bound to increase unit costs; and an increase in unit costs means that, without a duty or with a nominal duty, an unfair opportunity will be afforded the country with mass production to compete against us, with our production on a limited scale and with a population of 11,000,000, especially having regard to the fact that over half of our population now find homes in cities and towns rather than in the rural sections as heretofore.
There are other matters to which reference has been made. There is the effect upon our country's economic structure, not with respect to income tax alone but with respect to municipal taxes, provincial taxes, taxes on individuals, and the question of employment, direct and indirect. When I went into the factory in Australia I saw at once that coal was being used in large quantities, and so was coke. That gave employment to the coal mines at Newcastle. I saw at once that there were workmen engaged with wood, and I knew that meant work in the forest and everything connected with the fabrication of wood. I saw steel, and I knew that steel had been manufactured at the plant I had seen a few days before at Newcastle, just as in this country pig iron and steel in Canadian factories gives employment to men in Cape Breton or Hamilton or at the Sault. I realized that all these things combined to create the interdependence of industry, the relationship between the production of the raw material and the production of the manufactured article in its finished form. We must be prepared as men of business to deal with this matter in a purely business way and to provide, not protection for exploitation, but that measure of protection which will ensure equality of opportunity to Canadians with our limited market, in order that they may compete against the mass production of other countries, and that can be brought about only by the methods to which I have directed attention. I suggest that this report, if acted upon, will strike a blow at industry, will increase unemployment, and will render it far more difficult for the government to deal with the complex and difficult problems with which it is faced.
I yield to no man in the desire for cheap agricultural implements for the men who toil on the soil. I have studied this question since I first went to western Canada, and I have no doubt that if the house were prepared, with the legislation which is now on the statute books, to increase unit production in Canada to a point where we might be able with certainty to contemplate a market for Canadian production on the conditions that I have outlined, we would be able to
reduce prices materially, because the unit cost would have been reduced strictly in accordance with increase in volume-and the volume here is so small, with 11,000,000, so insignificant compared with 125,000,000, in the manufacture of machines for use in the cotton fields in the south and in the wheat fields of the north, for use with vegetables and corn, with every kind of production of the farmer, as they are in that great republic, and with unit costs continually being reduced by mass production. What it is proposed to do, as suggested by the hon. member who moved the adoption of this report, would result in lessening the unit production by reason of increased competition for the moment by those engaged in mass production on a scale of which the world has never seen the like.
Let me refer again to what Mr. Fielding said in this house as Minister of Finance when he pointed out the dangers of a people finding their factories closed by competition from abroad. He said: "You will get cheaper goods for the time being, much cheaper; but in the end, when your factories are gone, when your mills are closed, when your countrymen are unemployed, the price will be the price that the monopolist fixes; and you will have no control over him, because you cannot get your Canadians to start again." If any hon. member is interested in reading the history of tariff legislation, he will find in the library many books upon the subject. If the principle my hon. friend contends for had been applied, you would not have what you have in this country to-day, namely, the production of Canadian steel rails for our railways. When I first went west I travelled on rails manufactured in the United Kingdom and in Germany. They bore the mark of Krupp or Barrow and other names. My inquiries-and this is subject to correction-lead me to believe that there is not now a rail on the main line of the Canadian Pacific between Montreal and Vancouver which was not made in Canada. I also believe, although upon this too I speak subject to correction, that the same is true with respect to the Canadian National Railways. Is that not a striking illustration of what I say? We gave them the entire volume of Canadian business. Yet forty years ago practically no rails were produced in Canada.
For that reason I have endeavoured not to enter into a controversy with those who have spoken before me on this question; there will be ample opportunity to controvert what I regard as some mistaken statements which have been made. But I appeal to them to ask themselves whether or not it is doing a service to this country to create an impression which
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I say, with great deference, I believe is unwarranted, failing to realize that 11,000,000 people, if they are going to continue and maintain their integrity as a nation, must be prepared to see to it by adequate safeguards that they secure for their own manufacturers the largest possible volume of business that the country affords.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. C. R. EVANS (Maple Creek):: 
John Horne Blackmore: Mr. Speaker, to one without party prejudice- and I think I can claim that-listening to this discussion there comes a sense of bewilderment and frustration. Here we have had about three or four different points of view expressed; one declares that you must have higher tariff, another that you must keep tariffs where they are, another that tariffs must be lowered and still another that there should be no tariffs at all. In the midst of it the Minister of Agriculture (Mr. Gardiner) rises in his place and gives a very fine, straightforward talk. If we could only be sure that the Minister of Agriculture had the disposition, in the first place-which I rather think he has-and the power, in the second place, to do what he implied in his speech he would do. probably we could breathe more easily; but I am inclined to be afraid that about all we will get out of this situation will be more compromise.
Compromise is a very fine thing, Mr. Speaker, providing one individual does not have to do all the compromising. What has been happening for the last forty years in western Canada, and, I fancy, in other parts of Canada as well where there is agriculture, is this: If you can imagine the agricultural interests starting at one end of a line and industry starting at the other, each of them entitled to fifty per cent of the line, probably there was a time when people tried to give each group the fifty per cent of the line to which it was entitled. But gradually the secondary producers have been claiming sixty, sixty-five, sixty-six, seventy, seventy-five and eighty per cent of the line, while the farmers have been continually pressing for at least fifty per cent. Now, with industry calling for eighty per cent of the line and the farmers claiming fifty per cent, it is not difficult to see about where the compromise is going to fall. Unless something is done very quickly the farmers are going to be "compromised" right out of the picture; that is actually happening at the present time to a very dangerous degree.
I think in what I have to say I shall follow the general outline adopted by the right hon.

leader of the opposition (Mr. Bennett). I thought he made a very fine address just before six o'clock, and I am sure he will be quite pleased to consider the problems of the farmers under exactly the same headings that he used. His first question was something like this: Is it desirable to have an agricultural implement industry in Canada? I am going to grant that it is desirable, but I am going to ask this counter-question: Is it desirable that we should have an agricultural industry in Canada? Just as the right hon. leader of the opposition concluded that everyone would answer yes to his question, so I assume that everyone will certainly answer to mine, Yes it is desirable that Canada should have an agricultural industry. Let us start as members of this parliament on that basis: It is desirable that Canada should have an agricultural industry now and in the future. There are several reasons why that is so. I think it is not necessary to stress them before this house, but it might be well to mention just a few.
In the first place, all secondary industries must recognize that without the farmers their prosperity would be greatly hampered, so that to be able to keep the goose laying the golden eggs it is important that we give the goose at least enough feed to keep her alive. But that is not all. While there is a great tendency for people to move from the country into the city-and that we will all grant- still when they get into the city they must be fed, and they are fed largely from the farm. All the fine observations which the right hon. leader of the opposition made this afternoon were perfectly sound, and I do not question them for one minute. But if in time of national emergency we should find ourselves in an extremely embarrassing position without secondary industries, how much more grievous would be our position if we should find ourselves with a seriously depleted agricultural industry? And that is becoming at the present time not only a possibility but a probability.
While we must be able to find food for the teeming thousands who are increasing in numbers in our cities, yet more and more we must look to a more suitable way of feeding all our people. We in Canada are not commencing to consume the agricultural products which our population should consume. I was much surprised at some facts I found bearing on this question which I am now going to submit to the house, and I think hon. members will find them interesting:
An inquiry instituted in the United States and worked out by dietetic experts and agronomists in the United States Department of Agriculture revealed, with respect to agricultural production, that if every person in the

Farm Implements Committee Report
United States could have a thoroughly adequate diet, it would be necessary to bring under cultivation 40,889,000 acres more than were under cultivation in 1933, or 22,391,000 more than the average under cultivation for the five years, 1928-32. The details of the increased production over the average for 1928-32 that would be necessary, are illuminating; they include: An increase of 76 per cent in dairy cattle; 43 per cent in beef cattle; 68 per cent in veal calves; 22 per cent in hogs; 42 per cent in sheep and lambs; 36 per cent in poultry. It would be necessary to increase the acreage under vegetables by 204 per cent; under citrus fruits and grapes 112 per cent-
That item, of course, would not apply to Canada:

and under small fruits 282 per cent. True, the acreage under wheat in this dietetic plan would he reduced 57 per cent, but that would simply remove the United States completely out of the international market.
Lest it be assumed that the cost of this diet is extremely extravagant we add that it amounts to $12.75 per week for a family of five, statisticians of the United States say that only 21 per cent of the people can afford that amount of food.
I am much afraid, Mr. Speaker, that the conditions obtaining in the United States obtain in equal degree in the Dominion of Canada, and that probably only twenty-one per cent of the population of Canada can afford to have what they need of the agricultural products which we in this country are equipped to produce in profuse abundance. But we are adopting from year to year policies which I am convinced are depleting our agricultural productive power. The statement may sound extreme, but all you need to do to realize its truth is just to travel through our great agricultural areas, where you cannot fail to be impressed by the tremendous number of farms that have been deserted. Why have they been deserted? Last year I had the privilege of travelling through a large part of the splendid province of British Columbia, and I was astounded at the number of fertile fruit farms that were standing idle. I was told by people who knew, that it would not pay even to trim the fruit trees. Why? "No sale," they said; "what's the use?"
What are we doing in Canada? We are destroying those fruit-producing areas as surely as I stand here. "Well," some people may say, "what can we do about it?" Well, we are the government of Canada. Perhaps no more needs to be said.
If the United States needs to increase her ability to consume agricultural products, then surely we need to, as well. But the all important thing, as I see it, before we learn how to enable our people to consume these
products, is to see to it that we do not destroy our ability to produce them, so that we shall have them to consume when we learn how to do so. This is a far more serious matter than I fear the average individual in this country realizes. In the report of the nineteenth session of the International Labour Conference will be found this statement;
The cares of the American, Argentinian, Australian, Canadian or eastern European farmer would be conjured away if the urban populations of Europe and America could eat even a little more bread, butter and meat per head.
We are worrying about overproduction on our farms. There is a suggested solution, although up to the present time, strangely enough, though I have listened with great care, I have not heard advanced in this long debate, which has continued ever since the early part of March, a single constructive idea as to how we can enable our people to consume more except the suggestion from the Conservative party that if you put up a sufficiently high tariff wall you will enable your producers to get the home market. I grant that .there may be some virtue in that suggestion. I shall not discuss it at all now, except to say that the most remarkable thing about it is that if that is the solution, it is strange that our people have been fighting over the question for all these generations and have not yet been able to come to a satisfactory decision about it. That is dismaying! If we must continue through another series of generations before we can decide which of these two policies is the better for Canada, what is going to happen to Canada in the meantime?
Is it desirable that Canada should have an agricultural industry? I have dealt with that from two standpoints. There is a third one. Three provinces of this dominion are primarily agricultural provinces. If we destroy the agricultural industry of this dominion, indisputably we destroy those three provinces. I think that can be said with complete confidence. I know it is not clear to a great many people-it would not have been clear to me if I had not gone into the subject with some care; I should still have thought just as an ordinary citizen-yet the policies in operation to-day are destroying those three provinces economically.
Suppose we grant for the sake of argument and progress that it is desirable to have an agricultural industry in Canada; then I should like to follow the two lines of argument which were pursued by the right hon. leader of the opposition. If they apply to the secondary industries they must apply
2690	COMMONS
Farm Implements Committee Report
with equal force to the primary industry of agriculture. His first statement, as I recall it, was that the quality of the product should be of the best. If there is anything which has desolated my feelings during the last seven or eight years it has been to see, in travelling through the splendid agricultural regions of my home province, to what an alarming degree the quality of production has been falling. I was raised on a farm; my roots are right in the soil, and I know whereof I speak. Where, as recently as 1928, we found it profitable to keep up our fine breeds of cattle, both milking and beef breeds, of swine and poultry and sheep, we no longer find it profitable. It now appears not economically sound to spend the amount of money on breeding stock which years ago we expended, for the reason that there is not a sufficient margin to make it pay. The result is that all over the agricultural areas of this country, at least in the three western provinces, people in general are unable to keep up the standard of quality, although there are exceptions. Generally speaking, the products of the cattle, sheep, horse, swine and poultry producing plants are depreciating rapidly, largely because the owners cannot replenish their breeding stock. That is a serious matter. Furthermore, the equipment is deteriorating. It is a rare experience to pass a farm where they have been able to paint the buildings. All over Canada, I find, it is an uncommon thing to see a farm where a new home or a new barn has been erected. As the hon. member who spoke a few minutes ago said, the farmers generally speaking are "getting by" by every means they can contrive with old machinery which should have been discarded years ago. What does that mean? It means that if we should be plunged into a national calamity comparable with the one which overtook us in 1914, it would be impossible for a considerable length of time for us to reach a parallel degree of production. I believe there can be no satisfying answer to that statement. We are not keeping up the quality.
Then, on a great many farms the land has been allowed to become weedy. Why? Because the farmers are not as good as they were? No; because they simply cannot afford to cultivate the land as they feel it should be cultivated. In many places fertility is decreasing because the farmers are unable to provide fertilizers; they cannot apply the crop rotations which should be employed in order to preserve the land; in many instances they are unable to adopt farming methods which will preserve the soil. So to 
a disquieting degree we are failing to keep up our quality. I am familiar with the exceptions. There will be in a given area three or four, or perhaps five or six such, depending upon the size of the district; but the majority, the great body upon whom we should depend, are not able to stand up to the difficulties.
The next important statement which the leader of the opposition made, and which is perfectly sound, is that price must cover costs, I believe hon. members who have been indulgent enough to listen to the remarks of our group have realized that over and over again we have stressed that your price must cover your costs. In laying down that principle the leader of the opposition was genuinely progressive in his economics. On that score let us examine the position of the agricultural industry. A farmer's costs are fixed. The leader of the opposition said that a manufacturer's costs are fixed. We will grant that. But few people realize that the farmer's costs are more inevitably fixed than those of the manufacturer. Let us examine them for a few moments. The farmer's handling charges must remain permanent. He has nothing to do with transportation charges. Out in the west an attempt has been made to enable trucks to replace other means of transportation; but, unbelievable as it may seem, there has been-a most assiduous movement to impose such licence fees on the trucks as to hamper that means of reducing costs. The farmer's interest.' rates are also fixed, or were until certain provinces began to move in the matter. His taxes' are fixed. The farmer carries in the main the provincial, municipal and also school taxes throughout vast rural areas, and from those charges there is no escape. Everything he buys has the price fixed, but not by him. It matters not how many members he sends to. parliament: they lift their voices as men crying in the wilderness whom people indulgently and with patience abide, but concerning whom nobody ever thinks it necessary to do anything.	.
Consider the manufacturer of this binder of which hon. members have been speaking; does he depend upon supply and demand before he decides what his price is going to' b ? No; he knows in January what the price will be next August, and he manufactures the' number of implements which he thinks will be demanded and can be sold. Contrast that with the situation which faces the farmer. I am not making any charges concerning what has happened in Canada, but this thing has. generally occurred. Manufacturing industries have got together and have agreed upon at

Farm Implements Committee Report
fixed price. This has been brought out time and again by speakers in this debate. I think it was elicited clearly in the investigation. Thus they formed a cartel and they fixed the price.
Now the tariff comes in to help them. Strangely enough, when a tariff question is to be decided, the men who can get close to the powers that be and make their influence felt are the men of wealth, the men who are concentrated. What chance have the farmers, scattered over thousands of miles? Again, their voices are as voices crying in the wilderness, they are scarcely listened to; the result is that the tariffs are set to suit the manufacturers. This painful truth cannot, I think, be questioned. All this debate that we have had during the last few days has tended to show the same thing. We are concerned earnestly about seeing that the Massey-Harris Company recovers its costs, but we are never worried about all the thousands of farmers whether they even survive or not.
It is commonly believed that there is a free market. Many people talk about free markets. I ask hon. members how much freedom there is in the market I have indicated, when these big concerns are able to get together and decide what the prices shall be. How can anyone call that a free market? Some hon. members have suggested in this debate that if we removed the tariff between Canada and the United States it would automatically bring down the prices of implements. I do not argue that; but I notice, from the figures I have of costs across the line, that they have similar troubles there. So, how much good it would do us to remove the tariff entirely, is a debatable matter. Competition among these men does not cut prices; it used to, but they have learned better now. One powerful man in my constituency told me in a conversation years before I was elected that big men do not fight each other. That statement I find has much more meaning than I thought it had when I first heard it. Big men cooperate. Contrast that situation with that of the farmer. The farmer's prices are not protected. If there is any protection it is meagre. I will grant that the hon. member for Brantford (Mr. Macdonald) gave us a fine statement with regard to the amount of protection that farmers have. But when you compare the amount of protection that the farmers have on their prices with the protection these "infant industries" of ours have on theirs, you are impressed mainly by the disparity.
The farmer sells his goods in the open market and competition does have something
to do with his prices; the law of supply and demand also undoubtedly has something to do with them. He has no way by which he can limit production and set a price, producing only what he is able to sell at a given figure. When his price begins to go down he does everything in his power to keep his business going and he increases production more and more, with the result that he only aggravates the situation for himself by producing tremendously more than is required, thereby bringing prices down still further. Contrast that with the situation confronting the manufacturer-and remember incidentally that this situation as a whole faces three provinces of this dominion-and then meditate what are the causes of Canada's "stresses and strains". How can the farmers live under such conditions?
There is another matter to which I should like to refer. The farmers' price fluctuates from day to day. Tens of thousands of farmers are virtually ruined because they are compelled by force of circumstances to sell when the prices are down, and they are mortified a few weeks afterwards to find that prices have gone up, which would have doubled their income from a hard year of toil. Someone else has the advantage; they have not. And usually that person is not in any of the three western provinces. I have not spoken very much for the farmers up to the present time, though my constituency is primarily agricultural. If I start talking about farmers' problems I am perfectly at home; the only reason I have not spoken about them before is that I am intent upon a solution rather than upon railing against their ills. When we in parliament have decided that these difficulties do exist, and when we have decided further, as I am sure we have, that something must be done, what do we now do but shrug helpless shoulders and wave helpless hands and say, "I am sure I don't know what to do". There must be a solution. Consequently I have not spoken very much about the inequities and the disabilities under which my constituency suffers. We know all about these. We fancy that the men whom we sent here in previous years told the house all about them.
Lest there should be some people who may be inclined to think that what I am saying is not completely justified-my statement with regard to the way in which the big interests are able to set prices-let me refer to three or four -bits of evidence. Gardiner C. Means of Columbia university in 1935 issued a document which is called Industrial Prices and Their Inflexibility. In this he shows the way in which prices and production varied between
2692	COMMONS
Farm Implements Committee Report
1929 and 1933. His figures are extremely illuminating. I am going to put the figures on Hansard and then talk about them for a few minutes, because, to a large degree, in these figures lies the cause of our woe in Alberta, as well as the woe in Saskatchewan and Manitoba. At least, here lies one of the causes of the trouble in connection with this very question we are now discussing.
There are two columns, " permanent drop in prices " and " permanent drop in production." The first item is agricultural implements, the very item we are discussing to-day. The permanent drop in prices was six per cent, which means that the lowest drop in the prices of agricultural implements in the United States between 1929 and 1933 was six per cent. Contrast that with what happened to farmers' products! Implement production was curtailed or limited or reduced to artificial scarcity eighty per cent. Let me give the table rapidly and stress the last one, which is agricultural production:
Price v. Production
Permanent		Permanent
	drop in	drop in
	prices	production
Agriculture implements.	6	80Motor vehicles	16	80Cement	18	65Iron and steel	20	83Auto tires	33	70Textile products	45	30Food products	49	14Leather	50	20Petroleum	56	20Agricultural commodities.	63	6
In other words, prices of agricultural commodities dropped sixty-three per cent, while farmers were able to limit or reduce production to the extent of only six per cent.


Charles Avery Dunning: Those figures all relate
to the United States?
The Statistical Year Book of 1935-36 of the world economic survey gives certain pertinent
statements:	Decline in	
	Production	Price
	per cent	per cent
United States		.. 46-2	29
Canada			27
Germany	.. 46-7	28United Kingdom.. .	. .. 16-5	7
These have to do with manufactured goods during the year 1932. Truths about agricultural production in various countries are set forth in the following quotation from The World Economic Survey, 1935-36:
In the same period agricultural production maintained an increase of three per cent and agricultural prices declined as much as fifty-eight per cent in Canada, fifty-seven per cent in the United States, and forty-nine per cent in Argentina, while in European countries where governments intervened to shelter their farmers the decline was less; in Germany thirty-five per cent, and Italy thirty-seven per cent, and in Great Britain twenty-eight per cent.
The former figures had to do with secondary industry production. In every instance there was a limit to the production, while in the same period agricultural production showed an increase.
My soul longs for the time when I can see Canada somewhere in the lead of these countries which are doing something for their farmers, but I have not been able to see anything so far.


Charles Avery Dunning: To what years do those figures relate?


John Horne Blackmore: The year 1932.


Charles Avery Dunning: Why not get some recent figures?


John Horne Blackmore: It would be extremely interesting to have those. They probably will come out.


John Horne Blackmore: Yes, but I have some that relate to Canada. In Canada, by the way, there was an increase in agricultural products instead of a decrease, but in the United States the decrease was due to the way in which they manipulated agriculture. The leader of the opposition said that if you raised the tariff and enabled industries to sell all their goods, or to get all the market, then automatically that would cause them to increase production to such a tremendous extent that factories would be able to sell more cheaply. There is soundness in what he says; but here is the other side of the picture, and it had considerable bearing in the United States with, I venture to say, repercussions in Canada.


Charles Avery Dunning: They show a very great improvement.


John Horne Blackmore: I am glad to hear it, but we have not noticed it much out in the west.
The protection for agriculture is very meagre. If we are going to solve this problem about which we are talking, we must adopt some means designed to achieve the end which President Roosevelt apparently had in mind in his policies under the NRA and the AAA, the object being to bring primary producers' prices into line with secondary production prices. In Canada we have not given protection to our primary producers.

Motions for Papers
I have here a statement of an investigation conducted by the Edmonton chamber of commerce during the last year, which I shall read:
Alberta is handicapped frequently by a tendency under national tariff policy to facilitate the entry of agricultural products of other countries in return for concessions to Canadian manufactured goods.
This tendency is illustrated in the existing trade agreements with Australia and New Zealand, respectively, under which Canada reduced her duty on Australian and New Zealand butter in return for concessions by those two dominions on automobiles, rubber goods, newsprint, lumber, paper, fish and other manufactured goods. Similarly, under the agreement with New Zealand, the duty on mutton was reduced. The free entry of vegetable oils under the trade agreement with the United Kingdom already mentioned above is another illustration of this tendency. Moreover, the variation in duties on agricultural products of these kinds results in serious discouragement to the development of the production in Alberta of dairy and animal products, with a consequent obstacle to the diversification of farm production.


Mr. SPEAKER:: I regret to inform the
hon. member that his time has expired.


John Horne Blackmore: I shall conclude
very quickly. The result of the whole thing is that we are simply not doing for agriculture what must be done if we are to maintain a sound economic structure in this dominion. What must we do? I suggest as palliatives, these, mainly drawn from the committee's report: Let us give our farmers protection. If the secondary industries must have protection, surely the farmers must have it also. We must be prepared to give subsidies perhaps. We must reduce the protection to secondary industries to an extent which at least will enable the farmers to live. We must make a great many freight rate adjustments in the interests of farmers, and see to it that there is a fair price for agricultural products as well as for the products of secondary industries.
Motion (Mr. Johnston, Lake Centre) agreed to, on division.



MOTIONS FOR PAPERS


Mr. QUELCH:: For a return showing the names of concerns who tendered for the erection of the Bartman dam, the amount of each tender, the name of the successful tenderer, the amount paid to date to the company that built such dam. Also a copy of the specifications in connection with this work, and a statement as to whether or not the construction was done according to (specifications.
l'eTETE, N.B., LIGHTHOUSE KEEPER


Mr. PERLEY (for Mr. Brooks):: For a copy of all correspondence, documents and papers of all kinds, in the possession of the government, relating to the appointment of a lighthouse keeper at L'Etete, New Brunswick.



NATIONAL EMPLOYMENT COMMISSION-LOW RENTAL HOUSING PLAN

Mr. WALSH:: For a copy of the complete report and detailed plan of the national employment commission as submitted to the Minister of Labour on low rental housing plan.



LAHAVE, N.S., SUB-COLLECTOR OF CUSTOMS AND EXCISE

Mr. TUSTIN (for Mr. Brooks):: For a copy of all letters, correspondence, and documents of every kind relating to the appointment of one Malcolm Wilkie, as subcollector of customs and excise at the port of Lallave, Nova Scotia.



GRONDINES, QUE., POSTMASTER

Mr. HEON:: For a copy of all correspondence, reports and other documents, in the possession of the Post Office Department, relating to the dismissal of Mr. Cleophas Sauvageau, postmaster at Grondines, province of Quebec.



HURON RESERVE, LORETTEVILLE, QUE.

Georges-Henri Héon: For a copy of all correspondence, letters, telegrams, reports and other documents in the possession of the government, relating to certain differences between Ludger Bastien and Elzear Sioui of the Huron reserve at Loretteville, Quebec.



CANADA-UNITED STATES TRADE AGREEMENT INQUIRY AS TO PROGRESS OF NEGOTIATIONS

[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: Perhaps the first minister would not mind my asking him a question which he frequently used to ask when he was leader of the opposition. What is the progress of the trade negotiations with the United States of America? We would like to be advised-I think I quote his words-as to what the progress has been, and the present state of negotiations.


William Lyon Mackenzie King: To which I may say, in reply to my right hon. friend: The progress up to the present is favourable.


Mr. STEWART:: Favourable to whom?

Unemployment-Single Men



CALGARY STRIKE


[Stage Direction]
On the orders of the day:
Mr. C. E. JOHNSTON (Bow River):: Mr. Speaker, I should like to ask a question of the Minister of Labour (Mr. Rogers). On May 4 the Minister of Labour was asked a question with regard to a telegram received from Calgary respecting a strike in that city, stating that the city of Calgary is imposing a penalty of two dollars per week per family in order to break the strike. I should like to ask what investigation has been made. It is a serious situation, and one which needs clarifying.
Hon. NORMAN McL. ROGERS (Minister of Labour):	I have no further information
upon that matter, other than that which was brought to my attention before. The question is one of provincial and municipal administration, and has not been brought officially to the attention of the Department of Labour at Ottawa.


Charles Edward Johnston: Does not
the fact that the dominion contributes a certain amount of that expense make it a responsibility of the dominion?



UNEMPLOYMENT


[Stage Direction]
On the orders of the day:
Hon. NORMAN McL. ROGERS (Minister of Labour):	Mr. Speaker, on Friday last a
question was put by the hon. member for Vancouver East (Mr. Maclnnis) with respect to the position of single unemployed men formerly employed in the forestry conservation camps in British Columbia. I may reply that during the winter months of 1937 and 1938, under a dominion-provincial agreement with British Columbia, some 4,600 men were provided for under these forestry plans. They were paid at the rate of thirty cents an hour, with a deduction for board, and a portion of their pay was deferred and made payable to them after the termination of their service, by vouchers negotiable at the post office. I should mention that, during the same period, in addition to the forestry plan 300 men were given employment in British Columbia on farms. These special plans for dealing with the transient problem in western Canada during the winter months were terminated at the end of April. In dealing with this problem in British Columbia and

in other provinces we have acted and are acting upon the basis of consultation and cooperation with the provincial governments.


[Stage Direction]
Hon. NORMAN McL. ROGERS (Minister of Labour) moved the third reading of Bill No. 105, to assist in the alleviation of unemployment and agricultural distress.
Richard Bedford Bennett: Mr. Speaker, I desire to avail myself of this opportunity to deal with the statement made a few days ago by the Minister of Labour (Mr. Rogers) in connection with this measure. I was called out of the house at the time he was speaking, and so I did not deal with his statement at that time.
As reported at page 2527 of Hansard for May 3, I said:
The minister selected a very bad illustration indeed. The Fort Henry work was done under contract, and the contract was let by the provincial government. It is all very well for the minister to say that he asked the provincial government that there should be no discrimination. But the contractor, the Frid Construction Company if I remember aright, bad as one of its officers, according to the letterhead I have, the president of the Kingston Liberal Association. And in answers to questions put upon the order paper, not one, two or three, but many of them, we have it indicated that men were given employment on the recommendation of that very man. Those were men who had no more claim upon employment than others unemployed. They were not selected by their names being taken out of a hat; they were not called; but this man sends a letter and on the strength of it we are told by the return filed in this house-not veiled insinuations of the leader of the opposition-that these men went down to Trenton and other places and were given their positions on the recommendation of that man.
Mr. Rogers: At Trenton, does my right hon. friend say ?
Mr. Bennett:	I think Trenton was one of
the places.
Mr. Rogers: But this was not relief work.
Mr. Bennett: Oh, then there is a distinction between the two?
Mr. Rogers:	Certainly there is.
I said, "if I remember correctly,"; I did not have my papers with me. But I immediately got them when I went upstairs, and had I been in the house when the hon. member was speaking I would have at once answered his question. As reported at page 1846 of Hansard for March 30, 1938, the hon. member for Rosedale (Mr. Clarke) asked

Relief and Agricultural Distress
whether Mr. Robinson was employed as a carpenter at the signal corps, Barriefield, under the Department of National Defence, and also on whose recommendation he was employed, together with two other questions. The answer was that he was employed on the recommendation of Mr. A. E. Stansbury.
The same hon. member asked a similar question with respect to Roy Graham, and the answer was "Mr. A. E. Stansbury." He asked the same question with respect to William Fowler, and the answer was "Recommended by Ontario Employment Agency."
The hon. member for Rosedale asked with respect to where this camp is located, and the answer was that it was situated in Frontenac-Addington. He asked a similar question with respect to Henry Bearance, and the answer was that it was on the recommendation of A. E. Stansbury. Then, there is a question at the top of page 1847 with respect to Mr. John Doyle, asked by the hon. member for St. Paul's (Mr. Ross), and the answer was that it was on the recommendation of Mr. A. E. Stansbury; and the same with respect to Mr. Harold Johnston.
I said that I had in my hand what purported to be a letter head of the Liberal association, and while I was not sure as to who Mr. Stansbury was-and I am not-the letter head says: "Kingston Liberal Association, Bagot and Princess streets, Kingston; A. E. Stansbury, president; J. C. Reynolds, secretary; phone 2423."


Mr. ROGERS:: But if my right hon. friend will permit, he said-


Richard Bedford Bennett: I am coming to that.


Norman McLeod Rogers: He said there was a connection with the Frid Construction Company.


Richard Bedford Bennett: Yes, and I am coming to that. I believe that the A. E. Stansbury whose name is at the top of that letter paper is the A. E. Stansbury who made the recommendations referred to in the extracts I have read from Hansard; and I said that if I remembered aright, it was the Frid Construction Company. As q matter of fact, there are three construction companies. There is the Frontenac Construction Company, that came into being in recent years, since this government took office, I am informed. There is the Campbell Construction Company, which came into being in recent years, and there is the Frid Construction Company. I was in error in stating that Mr. Stansbury was president of the Frid Construction Company, but I was not in error in stating that he has
been directing employment with respect to the work at Fort Henry as well as in other places, including the work at Barriefield to which reference has been made in the questions which were asked, although those appointments had to do with more permanent positions. One of them we shall have occasion to discuss when the estimates are under consideration.
The other point that was made was that Mr. Stansbury was the president of the Frid Construction Company. That was entirely erroneous as I find by reference to the papers. I said, "if I remember aright," and I did not remember aright, because there were these three companies. Mr. Stansbury was not the president of the Frid Construction Company, and I do not know what his relations were with respect to either of the other two companies.


Norman McLeod Rogers: If I may ask, does my right hon. friend believe it is proper to make a statement of that kind upon the basis of fault}' recollection; to have a statement of that kind go out and then have it corrected or denied some days afterwards? Should not these statements be made on the basis of facts?


Richard Bedford Bennett: It was a correct statement of what is occurring in Kingston and Frontenac with respect to employment. It is there conducted on the basis of politics, purely and simply; men are giving out jobs and using money paid in by the taxpayers, including myself, in order to give employment to one political class and no other. That is what is going on, and one of the men principally responsible for it is Mr. Stansbury, about whom we shall have something to say later when the estimates are under consideration. I do not think the hon. gentleman need have any fear about Mr. Stansbury 'being in any sense, shall I say, libelled or slandered, or that any false impression may be left with respect to him. That need not for one moment engage the hon. gentleman's sympathy or care or worry; I can assure him of that. I think I can say with all certainty from the investigations I have thus far made with respect to the appointments which have been made in connection with these companies that have complete control of these matters, that I have nothing to withdraw; and I say further that it is largely through the work of Mr. Stansbury and one other, whose name we shall mention at the appropriate time, that people who are not willing to subscribe to the tenets of the Liberal party as represented by their association were unable to get

Relief and Agricultural Distress
employment, although they had the same right to it, were just as decent people and had the same claim as Canadians upon employment provided by the money of the taxpayers as had the men whom I have mentioned. I desire to make that abundantly clear, and if there was an error with respect to the position which this gentleman occupies, I greatly regret having made that statement; but it was made with the qualification, " if my recollection is correct," and my recollection was not correct, as I immediately verified when I went to my room, and had the bill not been disposed of I would have made the statement when I returned to the chamber. The hon. gentleman said, very correctly, that he intended to mention it when I was here, but the opportunity did not arise either for him to make the statement or for me to make it before I was called out of the chamber; hence it is that I avail myself of this opportunity on the third reading of this bill, as the minister did when the bill was in committee to make the statement he did.
There is only one point I desire on the third reading of this bill to make abundantly clear. It is that we have reached a stage in this country where I believe common decency necessitates that men should not be compelled to yield such convictions as they may have or such views as they may entertain to a political organization for the purpose of securing employment provided by the money of the taxpayers. For that reason I said the observations of the Prime Minister (Mr. Mackenzie King) the other evening were splendid, and I repeat that it was a splendid statement to make. It indicated an earnest desire, I thought, to meet this situation; and if those to whom I have referred-and I say again that Mr. Stansbury, the president of the Liberal association, is one of the principal offenders in that regard-will be governed by the statement made by the Prime Minister that there will be more opportunity for those who have a just claim for employment to find it, and there will be less reason for complaint by the taxpayers that their money is being utilized for the purpose of providing employment only for those who may be politically opposed to them.


Hon. GROTE STIRLING (Yale):: I should like to direct attention to some figures which the minister gave at the close of the discussion in committee on this bill. He was referring to the cost of administration, and he read certain figures indicating what that cost had been, according to his information. The figures that he gave struck me as being extraordinarily high, although I was not able to trust my
[Mr. Bennett.J
memory for details as to what were the exact figures. My recollection was that for the first completed year administration for the relief camps cost in the neighbourhood of $80,000; the cost for the following year I thought was $100,000 to $120,000.
I obtained the first volume of the four which were tabled by the minister himself on March 16, 1937. It is called Final Report on the Unemployment Relief Scheme for the Care of Single Homeless Men, administered by the Department of National Defence, 1932-36. I find from this report that the administration, from the inception in October, 1932, to October 31, 1936, for the four years amounted to S489,665, which is rather less than half the figure mentioned by the minister, for one of the years.


Norman McLeod Rogers: What was that figure, if I might have it again?


Grote Stirling: It was $489,665. I
challenged the accuracy of the figure when the minister gave it, and he replied, "That is the cost of the administration staff." So it is quite obvious that in the figures which he gave some other items have been introduced under the heading of administration which were not included in the report which was tabled by the minister. I shall be glad, therefore, if the minister will have inquiries made as to the accuracy of the figures he gave and what items were included to change entirely the figure for the four years given in the report itself.
We are quite accustomed to Liberal speakers presenting arguments against the relief camps. There was quite a volume of Liberal opinion in this country that was not unfavourable to the policy which the previous government was endeavouring to carry out in a time for stress for the care of the single, homeless unemployed, but it was noticeable in the house and in the campaign that Liberals, speaking with partisan motives, were never ready to make any appreciative reference to the work which was undertaken, and no reference is ever made to the work that was accomplished by those men. It was charged that they were not too well treated. It was charged they were improperly working. It was charged they were an unhappy set of people who did little or no work. I who was for a time connected with it know full well that those charges were without foundation, but I think it is of interest to note that, according to that report, the value of the work done by the men in the camps during those four years amounted to $18,213,091.

Relief and Agricultural Distress
Materials, of course, go into that figure, at the price that was paid for them, and labour is accounted for at the going rates; but that is the value of the work of various descriptions which this country has received as a result of the work of those men who were charged with 'being a lazy set of people who never did any work. It is, I think, perfectly right that publicity should be given to that figure, and I think I had better put on Hansard the items which go to make up that total:
Airways, $2,471,698.
Air stations, $2,318,294.
Barracks, $1,474,438.
Clearing of land, $229,632.
Forestry, $1,319,971.
Fortifications and historic sites, $738,518.
Highways, $4,677,173.
Municipal and provincial airports, $175,107.
Rifle ranges, $464,736.
Training camps, $4,343,524.
That makes the total of $18,213,091 which I have already mentioned. That is the work accomplished by men who were cared for at the taxpayers' expense during a time of economic stress, who were sheltered, fed, clothed and medically attended, and many of them, as I know perfectly well, were only too glad to give a certain amount of work in return for what they received. Perhaps the minister will be good enough to take an opportunity to make the two sets of figures fit.


Mr. A. A. HEAPS (Winnipeg North):: Mr. Speaker, we have been in session now since the latter part of January, and with the exception of a couple of weeks at the Easter recess we have been on duty continuously. I am trying to sum up the results of our efforts during the time we have been in session. It is no wonder when one goes out from our deliberations here into the country among the people who are interested in our activities, that one finds them amazed . at the little we have accomplished during the last three and a half months.
We find that unemployment is on the increase in our larger industrial areas; that it is becoming an acute problem, more acute now certainly than it was a year ago, and when we ask the Minister of Labour (Mr. Rogers) for a statement of government policy we are met with practically no reply at all. We were told, for instance, during the previous discussion on this relief measure that we must wait for an announcement of policy until the supplementary estimates are before the house. I would have thought, Mr Speaker, in view of the all-importance of the question of unemployment, that when the
minister was introducing the measure dealing with unemployment and unemployment relief we might have had a statement of policy from the Minister of Labour himself, instead of waiting until the Minister of Finance had brought down his supplementary estimates. But I realize very well how little in the way of policy the government have. In fact, when the supplementary estimates are brought down within the next few weeks it will simply be a case of additional capital expenditures being appropriated to meet an emergency situation. As I have often stated on the floor of the house, no form of capital expenditure is in itself a solution of the problem of unemployment. If capital expenditures could have solved the unemployment problem, certainly it would have been solved in the United States where they have spent billions upon billions of dollars in attempting to deal with the problem. To me, sir, any form of capital expenditure for this purpose is similar to pumping oxygen into a very sick patient. To put into the economic structure of this country more money for capital expenditures will have an effect just so long as the money is in circulation, and the moment the new capital ceases to function we shall revert to the same state of unemployment that we had prior to the pumping of the money into our economic structure.
I would have thought that, having had this problem on our hands for a period of at least eight years, and after realizing, as the Minister of Labour must, that it had not yielded to treatment during that time, that is, to the different forms of capital expenditure and the different forms of relief we have tried, the government would have attempted something new in dealing with the situation. I know the government have great faith in the expansion of trade, and we are all anxious to see trade developed with other countries. I am in favour of trade agreements and of reducing tariffs, but I realize more and more as the years go by that a reduction of our tariffs and the creation of more trade agreements between ourselves and other parts of the world are in themselves no solution of the problems of the day. We are attempting now to effect another trade agreement between the United States and ourselves, but does it not seem absurd on the face of it to expect that because we effect a trade agreement with the United States, which has a more serious unemployment than we have, we are going to improve materially conditions in Canada? Trade agreements, in fact, while they might expand trade in one direction, very often have the effect

Relief and Agricultural Distress
of strangling trade in other directions, and it often happens that the result of trade agreements which are effected is merely to create, new channels of trade without creating imuch additional trade; in other words, the sum total of benefits created is not very much.
As I said a moment ago, we are now in the second half of the session of parliament; perhaps we shall not sit as long as we have already done, and I think we should at least have a definite statement of policy from the government as to what they intend doing about the unemployment situation. We have in this country to-day at least 400,000 men and women who are out of work, and I am just wondering what hope this session of parliament is going to give to this vast number of men and women who are out of work, and who are looking to parliament for the solution of their problems and difficulties. There is nothing we have done during the past three months to give one ray of hope to this vast number of unemployed in this dominion, and is it any wonder that they are beginning to look on us with a certain mark of indifference, and some with a good deal of skepticism as to whether we really mean business in our attempts to solve this particular problem?
Wherever I go these days the same question is put to me:	What is parliament doing
to meet the problems confronting us in the dominion at the present time? And what answer can I give? There is only one answer, and that is that we are doing very little; that we are continuing to go along in exactly the same way as we have done during the past eight years. I put it to the hon. Minister of Labour, a student of economics, which is a form of science:	If, after eight years
the very serious problem of unemployment has not yielded to the treatment we have been giving it, is it not the logical thing, is it not the scientific thing, that we should seek to apply new remedies to meet existing conditions? Yet there are no new remedies; there is nothing new. -We are continuing for the ensuing year with exactly the same kind of thing we have had in effect for the last seven or eight years. In 1930 we passed a bill dealing with public works and the giving of unemployment relief in the way of food, clothing and shelter. Now, eight years after we had our first serious problem of unemployment to cope with, we are dealing with it in exactly the same way. There is nothing scientific; I do not think there is anything really Liberal, about that method of dealing with unemployment. I had hoped that this

year, when we met in January, faced with a falling volume of trade, the government would have presented some other means of dealing with the situation.
The present government have been rather fortunate. They came into power on the crest of a wave of trade expansion. When they went out of office in 1930, trade was on the decline. The moment contraction again sets in, we are faced with the same problem which confronted us in 1930, but with no means provided by the government, at any rate no means that they have brought before the house, in the way of an attempt to do something effective to meet the situation. How ineffective the house seems to be, particularly at this session! For the past three or four days we have been listening to a discussion on the reduction of the tariff upon implements of farm production. I am favourable to such a reduction. But does it not seem incongruous to have Liberal members pleading with a Liberal government to put a Liberal plank into effect by way of legislation? It should not require three or four days' discussion in the house to convince the government of the necessity of putting their own platform into effect. It could have been done in the first session of this parliament-


Charles Avery Dunning: And it was.


Abraham Albert Heaps: -if the government had
wanted to do so. But of course we had a lengthy inquiry by one of our committees, and then several days' discussion a year after the report was presented. Probably, when the next budget comes down or when the last budget before the next election is presented, we may find a little relief to the farmer by way of reduction in the tariff on farm implements. What I am more interested in is to make this parliament an instrument of some benefit and value to the great masses of our people. When I look at this session I find it is one of the most barren we have had in the history of this chamber. From the end of January to the present time we have not passed anything that can really be called legislation. As regards the present bill, it is not really new legislation, it is merely continuing legislation which we have had for the past seven or eight years. The other legislation which we were promised at the beginning of the session is likely to go into the discard; I refer particularly to the matter of unemployment insurance. So we have now been in session for approximately three and a half months; if we are asked what we have done in that time we can only say that nothing has been done, and as a person put

Relief and Agricultural Distress
it to me the other night, we have done it as effectively as any one knows how it can be done.
My plea to the government at this time is to face the situation in the serious way in which I expect a government to deal with so grave a question. Otherwise, when the session is over, what shall we be able to show? Money again allotted for unemployment and farm relief. As I have repeated until I am tired of saying it, I do not want to see our hundreds of thousands of unemployed kept on relief; I would far sooner put them in a position where they could earn their livelihood and retain their self-respect. It may be that a limited amount of funds will be put into the deferred estimates for public relief work. I am anxious to alleviate unemployment to the fullest extent we possibly can; but may I again point out that no form of public works is in itself any more than a palliative, and very often only a poor one at that. I would plead with the minister, with all the strength and earnestness of which I am capable, to devise some further ways and means of dealing with unemployment, dealing with it as effectively as they are trying to do in other parts of the world. To the south of us the president, in spite of drawbacks and handicaps, is at least making efforts to deal with this recurring question. Although he has spent billions of dollars, he has also taken other means of coping with the problem. But here we sit still. Week by week we sit idly by. Month after month goes by, but we accomplish so little and give so little encouragement to the unemployed. Now that we are on the third reading of this bill, I trust that before the session closes we shall have some announcement from the minister on behalf of the government that they are going to take means entirely different from those adopted in the past in order to cope with the present problem which has been with us in an acute form for the last eight years.


Mr. E. E. PERLEY (Qu'Appelle):: I agree with a great deal that has been said by the hon. member who has just taken his seat We have been here for nearly four months, and people are beginning to wonder what we are doing in Ottawa. This bill could easily have been introduced early in February. I think we should have had some definite statement with respect to what projects the government proposes to undertake under this legislation. Speaking to the bill the other day in committee, I made one or two suggestions which I thought were worthy of consideration, and I asked the Minister of Agriculture (Mr. Gardiner) to make a statement with respect to them. Speaking of clause 4, which gives power to the government-


James Garfield Gardiner: Mr. Speaker, on a point of order, the hon. gentleman has made three speeches on this question. One of them-


Hugh Alexander Stewart: This is the third reading.


James Garfield Gardiner: One was made at the proper time to deal with this matter, when the bill was before the house. One was made the other night, when I raised objection. Now he is going to proceed to make another one on a matter which has nothing to do with this particular question.


Hugh Alexander Stewart: It is a different stage.


Ernest Edward Perley: I see no point of order in that statement. The hon. gentleman generally transgresses a little himself by getting a little out of order, but we have not objected to that. However, I shall come to the point. In this bill the government is provided with power to relieve agricultural distress in the west. I hold in my hand a copy of the Regina Leader-Post, just at hand, in which it is stated that the premier of Saskatchewan announces a two million dollar plan for summer-fallow. Speaking at Frobisher, he announced:

a $2,000,000 government financed summer-fallow program to follow up on the heels of the spring seed and feed distribution.


James Garfield Gardiner: The hon. member is making a statement with regard to the distribution of seed in Saskatchewan. It has nothing at all to do with this bill. Appropriations for a summer-fallowing program in Saskatchewan have nothing at all to do with the measure now before the house. As I have said, the hon. member has already made three speeches on this matter, one at the proper time and two at times when the rules of the house prevented him from making a speech. But my objection is that he asks me to make a reply, at a time when under the rules of the house I have no right to make a reply.


Ernest Edward Perley: Well, I shall put it in this way, that under this act there is power for the minister to make arrangements with a government to relieve agricultural distress. The premier of Saskatchewan has announced a program of that kind. That program could not be announced unless some arrangements had been made with this government, for the finances of that province will not permit a two million dollar expenditure on summer-fallow or anything else without the approval of this government. I submit, therefore, if an arrangement of that kind has already been

Relief and Agricultural Distress
made, that we should have a statement from the minister which might come under any of the provisions of this bill. It is a very bold statement, particularly at this time. I quote:
Depending upon the date of the election, the summer-fallow program would have to be financed either before or after the election, the premier continued. "If it is after the election," the premier continued, "ask yourself who can provide aid for you better, a government that has maintained the province's credit or one that contends that maintaining credit doesn't matter."
There is no question, in view of this statement, that some arrangement has been made between the two governments with respect to assisting farmers with their summer-fallow. It is right that they should be assisted, but we should have a statement now on the third reading of the bill as to what arrangement has been made in that respect with the province of Saskatchewan.


Norman McLeod Rogers: I have no desire or intention to detain the third reading of the bill.


Ernest Edward Perley: We should have a statement from the minister with respect to that matter.


James Garfield Gardiner: It has nothing to do with the bill.


Ernest Edward Perley: Where do they get the power?


James Garfield Gardiner: I am as anxious as the hon. member to have the house get on with the business, 'but what he has said has nothing to do with the particular business before the house.
Hon. NORMAN McL. ROGERS (Minister of Labour): I listened with some amazement to the observations made by the hon. member for Winnipeg North (Mr. Heaps). He said in effect that there was no hope, in respect of unemployment, in the policy of trade expansion; that there was no hope in the adoption of relief works, and that he was not satisfied with the provisions for direct relief. In other words, he said in effect that the problem of unemployment is insoluble, and then he complained that no solution had been found.


Abraham Albert Heaps: That is the minister's inference.


Norman McLeod Rogers: As I said the other night, the hon. member must be aware that unemployment exists throughout the entire world at this time and always has existed to some degree. As a matter of fact, in other countries, in Great Britain for instance, despite great industrial activity in the past year, there has

been an increase in unemployment of over 200,000; and in the great country to the south of us there has been a far more conspicuous increase in unemployment; for recent figures that have been given show that there has been an increase from seven and a half to twelve millions-and that despite the adoption of certain measures which in his first breath my hon. friend condemned, and in his last breath suggested that we might very well imitate.


Abraham Albert Heaps: I did not say that. What I had in mind was the bill which is now being discussed in congress dealing with hours and wages.


Norman McLeod Rogers: My hon. friend at the beginning said that there was no virtue or merit whatever in these policies that have been adopted in the United States, and then he complained that this government had not put into effect policies similar to those that had been carried out by the Roosevelt administration.


Abraham Albert Heaps: I did not say that.


Norman McLeod Rogers: The fact is that when we contemplate conditions here at the present time, in the light of the fact that a large portion of our agricultural area has been out of production for five years, we have every reason for confidence instead of despair. I say to my hon. friend in all kindness that the group to which he belongs was born in depression and nourished in despair. My hon. friend has not been willing to admit that there has been a distinct improvement from time to time. I have given the house on various occasions evidence of improvement in large sections of the country. In the maritime provinces in the past two years, unemployment, so far as it has affected relief, has been reduced 75 per cent; in the two central provinces the number of those on relief has been reduced between 35 and 40 per cent; in British Columbia there has been a reduction of 35 per cent. Only in the western provinces where climatic disturbances have had their effect, putting a large area out of production, has there been the persistent condition in an aggravated form that causes concern to my hon. friend. And let me assure him that he is not alone in that concern. Certainly this government, since it came to office, has not shown any indifference towards that problem.
My hon. friend says that we have not found a solution. Can he point to a single country that has found a solution except on the basis of forced labour, regimentation, and the enlisting of men in armies, and does he favour such methods?

Relief and Agricultural Distress


Abraham Albert Heaps: They are attempting to do something.


Norman McLeod Rogers: Does my hon. friend favour that type of remedy?


Abraham Albert Heaps: I would favour this government doing what they are doing in New Zealand.


Norman McLeod Rogers: There is no comparison
between this country and New Zealand. My hon. friend is going far afield. He began with a country in which the conditions are similar to ours, the United States, and now he is going to New Zealand. The truth of the matter is that we have not at any time shown any lack of interest or desire to deal with the problem. We have proceeded not on one line, but on several lines. We have tried to profit by the experience of our predecessors and have endeavoured to branch out along some lines of our own. We did not, as some hon. members have suggested, believe that foreign markets had disappeared for all time. We had the courage of our faith and we went out to find foreign markets; and the Prime Minister on Armistice day found a great market to the south that had not been enjoyed under treaty by this countiy since 1866. What is more, we believe that this market will be extended in time to come. We have gone in other directions as well and have found markets which my hon. friends said were beyond resurrection. We have found those markets and we have the faith that we can proceed along that line constructively and successfully.
As for relief works, I have Stated on many occasions that relief works as such are not more than a palliative; there is no difference between my hon. friend and myself in that regard. We have, however, tried to concentrate expenditures in directions where there will be an increase in collateral and ultimate employment, and we believe that we should make expenditures in that direction where possible. The hon. gentleman comes from the great city of Winnipeg, and he knows that as a result of assistance given by this government and by the preceding administration there has been established there a modern sewage disposal plant which surely was of benefit to that community, and of temporary benefit to thousands of unemployed in Winnipeg. We have, through assistance given in connection with highways, opened up new areas and given encouragement to the mining industry, to the tourist trade, and to forestry; and in these directions, surely, our expenditures have not been wasteful. They have
provided immediate employment, and also assisted towards greater ultimate employment.
We have also dealt with relief settlement on a moderate scale, and here again my hon. friend was the first to say that in the direction of rural rehabilitation we should proceed gradually and surely, because in the experience of some of the provinces we have found that to take families from the city and place them on the land tended to make their condition worse rather than improve it. We have, however, proceeded in that direction in association with certain provinces, and in some cases we have made marked progress in rural reestablishment.
We have also initiated plans for training the youth of Canada for reestablishment in industry. When that vote was before this house last year it was said to be an experimental vote. We wished to find our way, and we still wish to proceed cautiously, but surely. I think my hon. friend would not suggest for a moment that moving in that direction is against the interests of this country or of the unemployed young people who have not been able to find positions for themselves in recent years. Surely, if my hon. friend examines the estimates of last year, as he will in due course examine the estimates of this year, he will find that we have not proceeded along one line only, with any thought that in any one policy is to be found a solution for unemployment. That would be contrary to the experience of all other countries. But we have proceeded along a number of lines, trying to improve the situation in several directions at the same time, and we believe that our policies have had due effect.
I am just reminded of what has been done under the home improvement plan, also the Dominion Housing Act with its altered regulations; some $30,000,000 worth of construction has been stimulated under that legislation. Is that not a movement in the right direction, and does it not show the wisdom of government seeking when necessary to stimulate the operations of private industry to give employment in this country?
These are the directions along which this government has moved. If our progress has not been spectacular, at least it has been sustained. I have already given indications at various times of the improvement which has taken place despite the fact that in this great agricultural country there has been a large area out of production. I am not prepared to give a final answer as to our power to deal with unemployment until our agricultural provinces are restored to something

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approaching their normal production. We all hope that conditions in the west will permit a return now to normal production. If they do, I am sure the benefit will be reflected not merely in the cities of western Canada but also in those of central Canada.
I wish to keep my promise to be brief in what I say at this time, but I should like to refer to a statement made by the hon. member for Yale (Mr. Stirling). I am sure he will acquit me of any desire to misrepresent in the figures presented to the house on a former occasion. As a matter of fact, I have before me now the figures I gave at that time, and I am certain that the difference between us is in regard to what shall be included in administration.


Grote Stirling: Exactly; that was the
reason for my question.


Norman McLeod Rogers: My figures cover all the
administrative staff, including the outside and field administration; the entire cost of administration of relief camps. My hon. friend's figures I have no doubt referred to the more restricted administrative staff. But I would remind him that when I was making the comparison it was in order to point out that the actual costs to the dominion government of administering relief had been decreased in the aggregate. The comparison was with the unemployment relief branch of the Department of Labour, and there, of course, one deals with both the inside and outside staff.


Grote Stirling: If I may interrupt, I
would be grateful if the minister would look into the matter. I gave the figures contained in the final report of the work covered by the relief camps, and I would say that obviously they would include all the administrative work undertaken on behalf of that scheme.


Norman McLeod Rogers: I shall be very glad to
look into it, and make whatever correction is necessary when the estimates are before the house. I merely point out at this time that the figures I gave were given to me as covering the whole administrative staff.
The leader of the opposition (Mr. Bennett) is not in his place at the moment, and I gather that there will be ample opportunity later to deal with the matter which he raised. I accept gladly his statement that had he been in his place the other night when I directed attention to the error in his previous reference to the president of the Liberal association of Kingston as having been an associate of the Frid Construction Company, he would have made the correction immediately that information 
came to his notice. But I repeat that statements of that kind, which the leader of the opposition himself admitted were made on the basis of faulty recollection, ought not to be made at all. I think it is not unreasonable to put the matter in that way. This is not the first time that sort of thing has occurred. I took immediate occasion to find out if there was any basis for the statement that the president of the Kingston Liberal association was a member of the firm which had the contract at Fort Henry. The whole purpose of the leader of the opposition was to suggest that there was something sinister and corrupt in that relationship.


Hugh Alexander Stewart: I do not think my hon. friend is stating accurately the position taken by the leader of the opposition, either on the former occasion or as he stated it to-night. What he said was that the gravamen of his charge was that political influence was being used in the administration of work for the relief of unemployment.


Norman McLeod Rogers: I accept that statement fully, but in that case the leader of the opposition should keep to the gravamen of his charge. Surely it was not necessary, in order to support his charge, to make a statement of this kind upon the basis of recollection. The statement was entirely inaccurate. As regards the positions to which the leader of the opposition referred in the statement that followed, they are not positions in relief work of any kind; they are positions which occurred in the normal operation of departmental services in the city of Kingston, and I believe were filled in the same manner as in other years. I have no desire to detain the house further with this discussion. The leader of the opposition said he proposes to refer to the matter again, and when he does so I shall be glad to discuss it fully.
Motion agreed to and bill read the third time and passed.



FARMERS' CREDITORS ARRANGEMENT ACT


[Stage Direction]
The house resumed from Friday, March 18, consideration in committee of Bill No. 25, to amend the Farmers' Creditors Arrangement Act, 1934-Mr. Dunning-Mr. Sanderson in the chair.
Hon. CHARLES A. DUNNING (Minister of Finance):	Since this bill was last before
the committee I thought it would serve the convenience of hon. members better if the

Farmers' Creditors Act
amendments which arose as a result of the discussion on the former occasion, and which have been printed in the Votes and Proceedings, were incorporated in a reprinted bill. That has been done; on every file will now be found the bill reprinted as proposed to be amended in the committee, following consideration of all the suggestions made by hon. members of the committee as to how the measure might be improved. We might proceed with the reprinted bill, as none of the sections of the original bill was carried, but all were allowed to stand for further consideration.
On section 1-Interpretation.
Charles Avery Dunning: The change in section 1 arises out of the suggestions made in committee. It was suggested that paragraph (d) as drafted in the original bill should be further amended to include agreements for sale and assignments of such agreements in connection with which privity of contract was lacking. It will be remembered that section 1 as originally devised was intended to provide for cases where absence of privity of contract had hitherto debarred consideration by boards of review of contracts in connection with cases coming before them. The one suggestion which came from members of the committee and which seemed to find general acceptance was that the principle should be extended to include agreements of sale, and this is provided for in the section as amended.


Hugh Alexander Stewart: I think there are some objectionable features in the amendment. As the minister has stated, the original measure as drafted and as interpreted by judges and those to whom it was referred was held not to include a person who had acquired property subject to encumbrance. The whole basis of the act is the insolvency of the farmer and the arrangement of his debts. The decision went on the basis that there was no privity of contract; that there was no debt existing between a person who had purchased a farm subject to mortgage, and the holder of that mortgage. That principle is absolutely sound. The holder of that mortgage could not sue the party who had purchased the farm subject to mortgage. There was no action against him directly, because there was no covenant between the parties. All that could be done was to foreclose the mortgage. There was no liability whatsoever on the purchaser in respect of the mortgage. And no matter what that purchaser might be worth; no matter what other property he might have, or no
matter what other assets he might have- there might be money in the bank, or an indication of solvency in many respects- the holder of that mortgage had no remedy whatever before the act was passed. The whole intention of the act was to enable the party indebted to the other to have a compromise of his debts. It seems to me that it is extending the act far beyond its original seoipe and intention and, as I pointed out before, it is introducing further complications and further difficulties at a time when the difficulties ought to be contracted. It seems to me we are entering upon another field upon which we should not enter at all.


Charles Avery Dunning: The remarks of the hon. member revert to the discussion which took place previously with respect to the principle involved. I do not think I can add anything to what was said on that occasion. Certainly at the present time there are about 3,000 cases of farmers which cannot be dealt with by boards of review, because of the absence of privity of contract. I gathered it to be the sense of the house that the greatest good for the greatest number would be served by refusing further to allow 'the lack of privity of contract to prevent the board from considering the actual case. I have not any doubt that, headed as each board is by a judge of the high court, the circumstances involved with respect to the original vendor and the original purchaser will, of course, be fully considered. I hesitate to propose anything which would deprive anyone of any right; but, after all, this is bankruptcy legislation, and we must never lose sight of that fact. I therefore believe it to be the sense of the committee that the section pass.


[Stage Direction]
Section agreed to.
Frederick George Sanderson: Clause 2, "Proposal
filed prior to commencement of this act."


Charles Avery Dunning: Section 2 of the bill, relating to the estates of deceased farmers, contains only two changes; only two changes have been made since the original bill was before the committee. One change is the insertion of the words "occurring on or after the 3rd day of July, 1934," after the word "farmer" in the first line, as a result of which the benefits under the amendment will be applicable only to the estates of farmers who died after the original act was passed. It is thought well not to extend the privilege beyond the coming into force of the original act. In every other such case the amendment stands exactly as when it appeared before the committee on the previous occasion, and
Farmers' Creditors Act

provides that the estates of deceased farmers may go before a receiver under the Farmers' Creditors Arrangement Act, and later before a board of review, suggesting an arrangement or composition upon the conditions set out in subsection 2. That subsection reads:
The court, upon being satisfied that a member of the family of the decedent resides and will continue to reside upon the farm of the decedent and intends and is able to operate the same may, ex parte, upon such terms and conditions as the court deems fit, by order, grant such application.
When the bill was before the committee previously, the suggestion was made by the hon. member for Rosthern and, I believe, also by the leader of the opposition, that the proceedings should be ex parte, in order to make them as inexpensive as possible upon the debtor. But it will be noticed that the principle of the act is maintained, namely the principle of enabling the farmer to continue on the farm. If a member of the family of a deceased farmer demonstrates to the satisfaction of the court his or her intention or ability to remain upon and to operate the farm, then the executors of the estate of the farmer have the same rights, under the Farmers' Creditors Arrangement Act, as the farmer would have had had he continued to live.


Hugh Alexander Stewart: Is subsection 2 retroactive? Does it in effect open up all these cases which have been dealt with, and enable a case dealt with on the basis of the existing legislation to be reviewed by process of filing a new application?


Charles Avery Dunning: Yes.


Hugh Alexander Stewart: Surely that is going to result in endless confusion. Do I understand that to be the proposition the minister makes?


Charles Avery Dunning: The proposition is that if any farmer who died since July 3, 1934, had made a proposal under the act which had not finally been disposed of at the time of his death, his heirs may continue the proposal. That is one situation. Then, secondly, if at the date of his death he was unable to meet his liabilities as they became due, in such case the legal representative of the family may apply. In answer to my hon. friend, it does contemplate that in cases where the board of review, because of the state of the law, has been compelled to say, "No; the farmer is dead and we cannot proceed," the application will be entertained. That is what it means.


Hugh Alexander Stewart: I was discussing more
particularly subsection 2 of section 1, which has not been passed, surely.


Charles Avery Dunning: Oh, yes; section 1 is
passed.


Hugh Alexander Stewart: It was not passed, as I
understand it. Subsection 2 was not read and was not passed; certainly not.


Charles Avery Dunning: I do not want to hurry
matters, but I was under the impression that section 1 had passed. If my hon. friend wants to revert to subsection 2 of section 1, I shall not object.


Mr. ROWE (Dufferin-Simcoe):: There was a misunderstanding there. Only subsection 1 passed, I think.


Hugh Alexander Stewart: Subsection 2 did not
pass at all.


Frederick George Sanderson: I called clause 1 and
clause 1 was carried. Then I called clause 2, and we are now on clause 2, "Deceased farmers."


Hugh Alexander Stewart: If that is your interpretation of it, Mr. Chairman, we shall have to ask you to read what you propose to pass, because you read paragraph (d) and stopped when you called it, and paragraph (d) has nothing whatever to do with the matter under subsection 2 of section 1. It is not a clause at all; it is section 1.


Charles Avery Dunning: Perhaps I may facilitate matters, though I think the Chairman proceeded in the normal way in considering the clauses of a bill. I think it is for the committee to indicate to the chair if they desire to have the subsections of all sections dealt with separately. This session I do not think that has been done very frequently. However, I have no wish to limit discussion, and if it is your wish, sir, I am quite content to revert to section 1 for the purpose of considering what my hon. friend has to say with respect to subsection 2 of that clause.


Hugh Alexander Stewart: And also subsections
3 and 4.


Charles Avery Dunning: Does my hon. friend desire that the committee carry each subsection of each section?


Hugh Alexander Stewart: Certainly. I think that
is the usual way.


Charles Avery Dunning: It is rather unusual, but I shall not object, Mr. Chairman.


Frederick George Sanderson: Very well; the committee will revert to section 1, subsection 2.

Farmers' Creditors Act
On section 1, subsection 2-Proposal filed prior to commencement of this act.


Hugh Alexander Stewart: It was on this subsection that I was asking the minister if the effect will be to throw open for review all those cases that have been dealt with under the legislation as it has existed.


Charles Avery Dunning: Yes.


Hugh Alexander Stewart: No matter what has
happened in the meantime you go back and review all those cases where there has not been this privity of contract? Relations may have been entirely changed; the mortgage may have been foreclosed. I ask the minister what he would do in a case of this kind, and I know several of them: The receiver and the court before which the matter came held, properly enough under the existing legislation, that there being no privity of contract the farmer was not entitled to the relief, and the mortgagee went on and foreclosed his mortgage, entered into possession and possibly ' sold the property. What is to be done in a case of that kind?


Charles Avery Dunning: Subsection 4.


Hugh Alexander Stewart: Subsection 4 states:
"Where the title has been extinguished"; but supposing it 'has not been extinguished; supposing the proceedings are not terminated?


Charles Avery Dunning: If the proceedings are on the way, it is just the same as any other proceedings; certainly the farmer can apply.


Hugh Alexander Stewart: And what is to happen to the mortgagee who has incurred costs in the meantime and has pursued his remedies under the act, gone into possession and rented the farm?


Charles Avery Dunning: The board will take all those factors into account. We cannot make a judicial decision in this committee as to what would happen in a particular case. We can only provide adequate and fair judicial machinery to take into account the circumstances of each individual case.
I would remind my hon. friend that I did not create this legislation; I inherited it. My hon. friend had a very great deal more to do with its inception than I had. All these exceptional cases must have been in the minds of those who framed the act, with the best motives in the world, and how did they solve them? They did it as far as possible by setting up a tribunal which would exercise judgment in the circumstances of the individual cases. In all these amendments I am endeavouring to follow that principle fully,
and to apply to cases where privity of contract up to the present has barred consideration by the board the same principles that have applied in all other cases. That has been the object, and I think the draughtsmen have carried it out very well. But if any member of this committee asks me what will happen in this or that kind of case, I am afraid I can give only the answer I would give if I were asked what would happen in court under certain circumstances. I would simply say that the judge would have to assess the various factors entering into the matter, size them up and give his decision. I submit that here we cannot enter into the judicial aspects of the cases which may come before the boards.


Hugh Alexander Stewart: There is no direction or provision as to what the judge may do or as to what the procedure shall be. The Minister of Finance says I had a great deal to do with the passing of this act. That is so, but as he knows very well it was only intended to be temporary legislation. It was intended just to tide the farmer over an emergency and here, after four years, we are expanding it.


Charles Avery Dunning: Not quite four years, is it?


Hugh Alexander Stewart: It was passed in 1934, I think, and we are now in 1938. I have been endeavouring to convince the minister that instead of expanding it he should wipe it out, according to the original intention and purpose of the act. We are told that conditions are improved and that everything is so much better. When I point out to the minister that the only debts which can be taken into consideration are those that were in existence at the time the act was passed, and that four years have gone by since then, surely there is not the same reason for continuing the act that there was for initiating the act. The debts that existed in 1934 must have been dealt with in the main in some way by this time, and to expand the act now and to introduce all these added complications is, I submit, contrary to the original intention and purpose. It is going to end in confusion and create complications.
As has been pointed out, in the operation of the act in Ontario the hardship now is not so much upon the farmer as upon the party who holds a farm mortgage. About eighty per cent of these are farmers who have loaned money to other farmers, neighbours who have loaned to neighbours, persons who have sold their farms and taken back mortgages. The hardship is upon them, and that hardship is just as great as that of the farmer. It seems
Farmers' Creditors Act

to me that the farmers cannot complain, after a lapse of four years, if legislation of this kind should, at least, not be expanded. It should be repealed. All I wish to urge is that in Ontario, in any case, the minister, as I believe he has taken power under this act, will see that it is repealed, and I suggest that the first day of July would be a suitable date for that repeal. I proposed to introduce a bill for that purpose. If the minister could only give me the assurance, which I am sure he will not, that this is his intention in connection with Ontario, I would not quarrel or quibble about some of the provisions that go in the direction of expanding the operation of the act, and talcing it, as I think, beyond its original intention and scope, with further difficulties and complications and a greater measure of hardship, after this lapse of time, than the minister is going to relieve.


Charles Avery Dunning: My hon. friend always treats me with such courtesy that I hesitate to differ with him, at least in any acrimonious way. It is difficult for me to add anything to what was said in the discussion on the second reading and in the committee proceedings before on this bill. The point which my hon. friend now raises is one, I submit, which was settled by the house when it adopted the second reading of the bill. There was no doubt, as a result of the full discussion, what the will of the house generally was as to the principles contained in this amending measure. May I point out in that connection that I was very frank with the house and said quite plainly that, as a result of the discussion in previous sessions, I was quite certain I could not get through the house the amendments which were regarded as necessary by the representatives of some of the provinces unless I could also incorporate in the bill a provision which would permit of the termination of the operation of the act in some provinces. That provision is in the bill. I know it is a lot to ask of my hon. friend; but with respect to when the termination will take place in this province or that, I am afraid that, hard though it may be, he will have to trust the government. I know that is all but impossible for him to do; 'but I think he knows my views on the matter and that I do not desire to keep the act in operation in any province in which it is clear it is doing more harm than good.
My hon. friend and a number of others have undertaken to demonstrate in connection with various provinces that the act is now doing more harm than good. I am prepared to consider such representations at any time and will give fair consideration to

them in any recommendations I make to my colleagues in the government with regard to putting into force the section withdrawing the provisions of the act from operation in any particular province. I desire to make quite clear, however, that the government believes there are several provinces in which this act continues to perform at the present time, a necessary service for the farmers, and in which under no consideration at the present time would we consider withdrawing its operation. On the other hand, there are provinces in which the evidence accumulates that the act is doing the farmer more harm than good. In such cases we are prepared to act on the powers which are contained in a section which is not yet before the committee but which was very thoroughly discussed on a former occasion.


Mr. GLEN:: I would draw the minister's
attention to the last paragraph of subsection 4, which says:
The provisions of the two next preceding subsections of this section shall not apply in any case where by an order or judgment of a court of competent jurisdiction the title of any farmer to any lands or chattels has been extinguished prior to the commencement of this act.
Does that mean prior to the commencement of the act of 1934, or to these amendments?


Charles Avery Dunning: The amendments. That
was to meet the point made by my hon. friend.


Hugh Alexander Stewart: If we are considering
subsections 2, 3, and 4 together, as they are more or less interlocked, I suggest to the minister that there ought to be a provision that this relief should be upon such terms as some court of competent jurisdiction might impose. Subsection 4 reads:
The provisions of the two next preceding subsections of this section shall not apply in any case where by an order or judgment of a court of competent jurisdiction the title of any farmer to any lands or chattels has been extinguished prior to the commencement of this act.
That means that if the mortgagee has foreclosed and extinguished the title, that is the end of it; but suppose he is in the process of doing that and has incurred legitimate costs; what is to be done about that? Should there not be some provision, as to the power or authority of the court or some competent body to say that it should be upon such terms as may appear reasonable for the protection of the mortgagee? Unless the party seeking relief were asked to go before a judge and make his application-and the

Farmers' Creditors Act
application might be granted1 upon such terms as the judge might impose-it seems to me it would be imposing an additional hardship upon the mortgagee who may have incurred $100 or $150 of legitimate expenses. What is to happen? His title is not completely extinguished. Is he to add those costs to the mortgage, or what is to happen?


Charles Avery Dunning: It really does not make much difference because if the farmer is in such shape that he cannot pay the existing mortgage, he cannot pay the added costs. It seems to me that would be part of the question which would automatically be before the board of review in any case. The mortgagee would come there and say: "My mortgage is so much, and in addition I have commenced foreclosure proceedings which have cost me so much." But the question before the board of review is: How much can this farm be made to pay? And, of course, all of the claim would be taken into consideration, and the board would have to decide the issue, according to the terms of the act, upon the capacity of the farm and the farmer to pay. So it seems to me adequately covered now.


Hugh Alexander Stewart: I am concerned with the jurisdiction of the board to take into consideration anything of that kind.
' Mr. DUNNING: There is no question as to the jurisdiction of the board of review to consider that.


Ernest Edward Perley: There would be many
farmers in the western provinces who would find themselves in the position of being in default, if you wish to term it that, under the proposals that were made prior to the coming into force of this act because, through no fault of their own, they have not been able to live up to the arrangement then made.


Charles Avery Dunning: That point will arise on another section.


Ernest Edward Perley: There is a later clause dealing with that?


Charles Avery Dunning: Yes.


Mr. ANDERSON:: I understand, Mr. Chairman, that we have not yet passed subsection 2 of section 1, and I have something to say in regard to that subsection. It refers to the case where a proposal has been made but where, because of the absence of privity of contract, nothing can be done by the board of review or the judge. The proposed subsection allows the farmer in that instance to proceed to open up the case. The difficulties that were pointed out by the hon. member
for Leeds are extensive, and it seems to me that the interests of the individual creditor should not be interfered with in this light manner. The moment the board of review passes on that and says it has no jurisdiction to deal with it because there is no privity of contract, under our present law the secured creditor is out so far as the board of review is concerned. If there is no provision in provincial law that prevents him from taking action to foreclose or other action that will give him possession of the property and enable him to sell it if he wants to, he has the right to proceed, but passing this law will expose a new purchaser under the foreclosure proceedings, or the man himself who has obtained the foreclosure, to an injustice. That is, he will be face to face with an opening up of those proceedings. Assuming that the man who has foreclosed his mortgage has sold it to an innocent purchaser, how is the latter going to be protected under this bill? You cannot protect him. An injustice arises.


Charles Avery Dunning: Under subsection 4.


Alexander James Anderson: Personally I am absolutely opposed to this legislation, and I would gladly vote for a bill which would rescind this law so far as Ontario is concerned.. The Minister of Finance has said it 'has done more injustice in Ontario than any good it has done.


Charles Avery Dunning: I did not say that.


Alexander James Anderson: The minister shakes his head.


Charles Avery Dunning: I did not say just that.


Alexander James Anderson: I have not particulars before me now-but I have communicated with the Minister of Finance in regard to it- of the case of an Ontario investor holding a mortgage -in Manitoba. It is a most unjust case. It is not necessary for me to repeat the details at this moment because the minister is aware of the facts. In that case debts were incurred not in connection with the debtor's farm but in connection with some other business he was carrying on; he went to the board of review, and this innocent investor in Ontario, who had invested his life savings in Manitoba, in a farm regarded as one of the finest in that province, has had not only his revenue but the value of his security reduced. I know of another case in Ontario which is even worse than that. I am satisfied that I can properly refer to the county of Perth, from which the chairman of this committee comes. In that
270S
Farmers' Creditors Act

county there is great opposition to the operation of this act; I have heard it expressed by some of the chairman's own electors, and I have no doubt he can name a number of cases of the type to which I have referred. This will create an injustice as against persons who may acquire rights under foreclosure or otherwise, when the matter has been disposed of by a court of review. If this goes through, there will be no protection to such people. It says in the subsection that where the application has been filed but has not been dealt with because of the absence of privity of contract, then the man may renew his application. But in the meantime conditions may have arisen which make it an absolute injustice to allow the board of review or a court to open the matter up after that time. Surely there must be finality about it at some time, and that finality must not be such as to create an injustice. The hon. member for Leeds was trying to impress that upon the Minister of Finance, and I agree with the hon. member that we should not pass legislation which has that effect.


Mr. THOMPSON:: I wish to register my opposition to this bill. I am pleased that the minister has included in it a provision for a province to be withheld or withdrawn from it. As far as Ontario is concerned, this legislation has outlived its usefulness, if it ever had any. I believe it has done more harm than good. I know of instances of people who were paying up their interest until this act was passed; then they stopped, and when interest had accumulated for a few years they applied and had the interest thrown off. I know of one farmer who retired and came into the town. He had about 125,000 invested in land mortgages, and last year there was not fifty dollars paid to him to live on. All the mortgagors had applied to the board, and he could not collect; that stopped all proceedings and left the man high and dry. It was never intended that this act should be permanently on the statute books, and I may say this, that I never wTas in favour of it. I thought it caused an interference with legitimate contracts with which no government should interfere.


Charles Avery Dunning: The hon. member did not object very strongly at the time.


Thomas Alfred Thompson: The measure was passed unanimously because, I think, the house was making an honest endeavour to assist the farmer. But I must say frankly that I never looked favourably upon the bill. Now that debtors have had four years to make their
[Mr. Anderson.!
adjustments they have been allowed plenty of time, and I do not think an act like this should be continued. It has destroyed the farmers' credit. No one will take a mortgage on a farm to-day because he is afraid of this legislation being invoked to rob him of his equity in the farm. No matter what may be said about it, it is class legislation of a most vicious kind, and I should like to see it repealed so far as Ontario is concerned.
Section 1 agreed to.
On section 2-Deceased farmers.


Charles Avery Dunning: I have already explained that, Mr. Chairman.


Frederick George Sanderson: Shall clause 2 carry?


Charles Avery Dunning: It had better be taken
subsection by subsection.


Frederick George Sanderson: Shall subsection 1
carry?


Hugh Alexander Stewart: Oh, no, Mr. Chairman,
this is worse than the other:
6A. (1) In the event of the death of a farmer occurring on or after the third day of July, 1934 who
(a) has made a proposal under this act which has not been finally disposed of at the date of his death, or
(b)	was at the date of his death unable to met his liabilities as they became due,
the legal representative of the decedent may apply to the court-
Does this mean that it applies only to a case where a proposal was made?


Charles Avery Dunning: No.


Hugh Alexander Stewart: Or is it extending it
further and enabling the legal representative to apply to the court (i) for an order to continue proceedings under the proposal filed, or (ii) for leave to make and file a proposal on behalf of the estate of the decedent, as the case may be?	Here is a case of a
man who, we will say, died on July 4, 1934. His estate has been going along in the meantime. He was not entitled to come in under the Farmers' Creditors Arrangement Act as it existed, because it did not apply to the estate of a deceased person. Now the legal representative comes in after the lapse of nearly four years, and what has he a right to do? He has a right to file a proposition on behalf of the estate of the deceased. Just imagine the confusion that is to result from doing that at this stage, and in respect of a debt that existed only in 1934! I cannot imagine anything more calculated to result in confusion. in tying everything up and in creating

Farmers' Creditors Act
injustices and complications which I do not think can be solved under this act with any of the machinery that is created.
Subsection 1 agreed to.
On subsection 2-Order of the court; and subsection 3-Proposal to be proceeded with.


Hugh Alexander Stewart: This is to be an ex parte application.
The court, upon being satisfied that a member of the family of the decedent resides and will continue to reside upon the farm of the decedent and intends and is able to operate the same may, ex parte, upon such terms and conditions as the court deems fit, by order, grant such application.
(3)	Upon any such order being made, the legal representative of the decedent shall be entitled to proceed with a proposal filed or to be filed in the like manner and with the like results as the decedent might have done if death had not ensued, and the provisions of this act shall in the case of such proposal apply in all respects as in the case of any other proposal made under this act.
Ex parte he may apply to a judge for leave to file a proposal, and the judge decides upon what terms and conditions he will grant the order. " Legal representative " means an executor, administrator, or other personal representative or person, according to the law of that part of Canada to which the context extends. In connection with the ex parte application, I think he ought to give notice to some person.


Charles Avery Dunning: The ex parte provision was inserted at the suggestion of the hon. member for Rosthern and concurred in by the leader of the opposition. When the matter was last before the committee it was thought that if we were to have such proceedings it would be better for everyone that they should be ex parte in order that the expenses might foe reduced to the minimum for the family of the deceased farmer.


Hugh Alexander Stewart: What about the creditors?
Subsections 2 and 3 agreed to.
Subsection 4 agreed to.


[Stage Direction]
Section agreed to.
On section 3-Stay of proceedings.
Hugh Alexander Stewart: What is the effect of this amendment?


Charles Avery Dunning: The effect is in the last lines. The only amendment is an addition of the last lines:
Provided, however, that the stay of proceedings herein provided shall only be effective until the date of the final disposition of the proposal.
It is merely clarifying.


Hugh Alexander Stewart: I should have thought it would foe clear without that.


[Stage Direction]
Section agreed to.
On section 4

Board of review.
Hugh Alexander Stewart: How many provinces have now more than one board of review?


Charles Avery Dunning: None.


Hugh Alexander Stewart: There is just one board of review in every province.


Charles Avery Dunning: Yes.


Hugh Alexander Stewart: I should have thought that there was jurisdiction to appoint more than one, because the Interpretation Act says that the singular includes the plural.


Charles Avery Dunning: The Department of Justice does not agree with my hon. friend.


Hugh Alexander Stewart: How many cases are pending in the different provinces?


Charles Avery Dunning: Requests not set for hearing, as of March 31, are:
Prince Edward Island	 7
Nova Scotia	 29
New Brunswick	 76
Quebec	 494
Ontario	 1,167
Manitoba	 121
Saskatchewan	 1,088
Alberta	 899
British Columbia	 10
That is, a total of 3,891 requests not yet set for hearing in all the provinces.


Grote Stirling: What proportion of these will reach the board of review?


Charles Avery Dunning: Every one of these will reach the board of review.


Mr. SENN:: How many appeals that have not yet been heard will reach the board of review?


Charles Avery Dunning: That is the number.


[Stage Direction]
Section agreed to.
On section 5-No new proposal after a certain date.
Mr. BERTRAND (Prescott):: Before this section carries, I wish to say a few words on behalf of the farmers of the most easterly part of Ontario. I see that the operation of the act has been more or less broadened in sections 1 and 2, and frankly our farmers do not want this act so broadened. I did not say anything on those sections because it might suit other parts of the country, but in our district it is now very difficult for farmers to borrow money from banks or private individuals owing to the operation of the Farmers'



Farmers' Creditors Act
Creditors Arrangement Act in the past. We claim that the act no longer gives the benefits which it was intended to afford the debtor, and it has made it almost impossible to obtain mortgages on farms, in the last few years and particularly in the last few months. Confidence is more or less gone because the secured creditor cannot realize security on a loan on a farm, so that a real hardship has been caused to creditors who were dependent upon incomes from farm mortgages. Old people whose savings were in the form of farm loans or mortgages must now in many instances ask for old age pensions. Farmers of integrity in our district are really opposed to the act. Many resolutions have been passed to that effect. Farmers' sons are forced off the land, and have to find a living somewhere else, and they deserve some credit. Speaking for the section of the country I represent, I can say that some worthy cases have not yet gone to the board of review, and therefore a certain lapse of time should be allowed by the government in order to give such people an opportunity to make an application. But this period should not be interminable. I absolutely agree with the hon. member for Leeds, and would recommend to the Minister of Finance that between now and the first of July is an ample period in which to receive such applications. After that date no applications should be received for reductions in farm debts under this act in Ontario.


Alexander James Anderson: I have great pleasure in supporting the remarks made by the hon. member who has just spoken. It is left with the governor in council to determine the date after which no action shall be taken under the act. In my opinion enough wrong and injustice has already been done in Ontario to justify the minister in fixing the first day of July or, if this house should rise before that date, in deciding that the act should become operative in regard to this matter as soon as assented to by the governor general. I am altogether opposed to the act. If I had my way I would rescind the whole act as far as Ontario was concerned, and there would be less injustice done to the farmers and to the investors of Ontario than the benefit to be obtained by those 1,100 who have made application under it. In Ontario it is only the unprogressive and inefficient and-yes, dishonest-farmers who are asking relief under this act.


Some hon. MEMBERS:: Oh, oh.


Hugh Alexander Stewart: At the present time.


Alexander James Anderson: It is not resorted to by the progressive, scientific, efficient and honest farmers.


Elie-Oscar Bertrand: A moment ago I made a plea to have this law amended so that it would not apply after July 1, but I do not want to be associated with the expression of the hon. member for High Park (Mr. Anderson) who states that some farmers seek dishonestly to take advantage of the act.


Mr. FAIR:: May I ask the hon. member for High Park whether he confines that remark to the farmers of Ontario, or applies it to the farmers of Canada generally?


Alexander James Anderson: I am speaking of Ontario, and I do not think I am very far out. The act is not needed and not wanted by a very large majority in Ontario. It may be needed in certain other provinces, but if the western provinces had been fortunate in the last eight years in having as fair a crop as Ontario has had we would never have heard of it from them. There are many in western Canada who are not taking advantage of 'this act, because they dislike to appear in a role which has the appearance of dishonesty. There are many in the western provinces taking advantage of that act, just as in Ontario, simply because of their own inefficiency and dishonesty.


Elie-Oscar Bertrand: I again
protest against the suggestion of dishonesty as applied to any farmer in my section of the country.


Robert Fair: I would remind the hon. member that farmers of the west found it necessary to do what they did because of the dishonesty of some of those with whom they had been dealing, and are still dealing to-day.


Mr. NEILL:: I hope it will be remembered that the opportunities of this act were largely relied upon by the Minister of Mines and Resources (Mr. Crerar) when he was putting through the amendment to the Soldier Settlement Act and some of us were complaining that the extension of the soldiers' bonus which he provided did not go nearly far enough. It will be recalled that we wanted it as it was before; but what was given was a very limited amount, and time and again when we asked him what the settlers would do in a certain event he said they could get relief or assistance under the Farmers' Creditors Arrangement Act. I think the minister will admit that he

dwelt very largely on that, and I think the Minister of Finance (Mr. Dunning) himself was kind enough to say in answer to a question I asked, that he would weigh very carefully the question of discontinuing the act in any particular province. I ask him to be kind enough to renew that promise in view of the suggestions made that the act is not needed in Ontario; but in British Columbia I submit it is. So I hope he will be very careful before he takes that step as regards British Columbia.


Charles Avery Dunning: To recommend to my
colleagues action under this section is a responsibility which will be far from pleasant as far as I am concerned, because I am quite sure, in view of the violent differences of view with respect to this act on both sides and in all provinces, that I shall receive a great deal of abuse no matter which course may be adopted. I assure the hon. member for Comox-Alberni (Mr. Neill) that I shall bear in mind also that he is a pretty efficient protester in regard to anything which he thinks is not fair to his province, and that I shall incur his wrath if in any recommendation I fail to take into account the views which he has expressed. Of course one will have to weigh very carefully all the evidence and representations before making such a recommendation. I am not pleased to have to put before the house a provision of this sort, Ro minister who has any experience likes to be charged with such responsibility as this places upon him. He would much prefer to have parliament assume the responsibility and either put the act out or keep it in. But this appears to be the only method whereby we can conserve such advantages as may exist to the agriculturists of some sections, and at the same time get rid of the disadvantages which others allege have flowed from the operation of the act in other sections. I can only say that I shall try to discharge that very difficult task to the best of my ability.


Thomas Alfred Thompson: Would the minister
state whether he intends to make this a permanent law in this country or not?


Charles Avery Dunning: My hon. friend is an
old parliamentarian; he knows that ministers do not make laws; parliament makes laws. In view of the expressions of opinion that have been given respecting this measure, I certainly do not regard it as a fixture in the statute books of this country.


Hugh Alexander Stewart: I do not think it will
be allowed to remain a fixture. The minister will recall that when the act was introduced provision was made for the introduction of it
,1952-172}
Victoria Day
in different parts of Canada by proclamation at different times. It was realized that conditions were different in different provinces and different sections; that its provisions might be very much more effective in one part of the dominion than in others, and that it might be desirable to have it in force in one province and not in another. Another matter that has caused difficulty is the administration of the act. It is a difficult act to administer.


Charles Avery Dunning: Very.


Hugh Alexander Stewart: And the officials do not follow the same course in all the provinces.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Tuesday, May 10, 1938