1939-01-25

[Stage Direction]
On the orders of the day:
Mr. J. G. ROSS (Moose Jaw):: I should like to ask the Minister of National Revenue (Mr. 
Usley) whether it is the intention of the government to introduce this session a bill to amend and consolidate the Customs Act.


Hon. J. L. ILSLEY (Minister of National Revenue):: The committee that has been working on a new Customs Act has not yet completed its work, and under the circumstances all I can say is that I hope to be able to introduce it later in the session.



VALIDITY OF QUEBEC STATUTE


[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: In view of the disturbing situation in Montreal, arising out of the threatened eviction of citizens from their homes for alleged holding of political opinions, will the government reconsider its decision and refer the constitutionality of the "padlock law" to the Supreme Court of Canada?


Right Hon. ERNEST LAPOINTE (Minister of Justice):: No.



GOVERNOR GENERAL'S SPEECH


[Stage Direction]
The house resumed from Tuesday, January 24, consideration of the motion of Mr. J. E. Matthews for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the proposed amendment thereto of Mr. Manion, and the amendment to the amendment of Mr. Woods-worth.
Hon. W. D. EULER (Minister of Trade and Commerce):: Mr. Speaker, may I first of all join with those who have already spoken in the debate in complimenting the mover (Mr. Matthews) and the seconder (Mr. Chevrier) of the address. In my rather lengthy experience in the house I cannot recall any occasion on which the subject-matter and the manner of presentation were excelled in the speeches of those who proposed and seconded the motion.
I might also congratulate again my hon. friend the leader of the opposition (Mr. Manion) upon taking his seat as leader of his party. I say that with particular pleasure because of the fact that he and I entered parliament at the same time in the same year, after the elections of 1917. While at times we did not agree, and perhaps the same thing will be true in the future, our relations were always very cordial indeed, and I trust they may so continue.

The Address-Mr. Euler
I should also like to express my very sincere regret that my colleague, my personal friend and my deskmate, has found it advisable on account of health to withdraw from the office of postmaster general. I should like to welcome my new colleague, the Postmaster General (Mr. McLarty). I can assure him that I surrender vexy willingly, and with a degree of gratitude which perhaps he will appreciate a little more fully as the days go by, the responsibilities and duties of the office of acting postmaster general.
I have no intention of discussing at length the matters which are mentioned in the speech from the throne. Indeed I propose to confine my observations very largely to matters of trade, to discuss particularly the principles underlying trade agreements in general, and more especially the principles which underlie the trade agreement which has just been concluded with the United States. Perhaps it may be possible for me to give some information which the house has not now, although I do not propose to discuss the agreement in detail-that may very well be left to a later occasion. But I may be able to remove some misconceptions and to answer some criticisms which have been made in the house.
My hon. friend the leader of the opposition has said that it is quite impossible at this time to judge of the merits of the agreement, that only time will tell. I think he is quite right in that statement. At the same time I am sui'prised, in view of his having said that, that he should then proceed to criticize rather fully the agreement itself.
It is quite possible, in reading the speeches made by hon. members on the other side, to read into them-although perhaps not so much into the speech of the leader of the opposition-a very decided antagonism to the making of commercial agreements with other countries, especially such agreements as contain what is known as the most favoured nation clause. If we accept that view we might as well abandon the idea of export trade. Yet when we consider the United States, with which we made the most recent agreement, we should realize that our exports to that country are greater than they are to any other country in the world, not excluding even Great Britain. Last year our exports to the United States were some $5,000,000 greater than they were to Great Britain.
It ought to be unnecessary-and I make these observations only because of criticisms that have been made and antagonisms that have been displayed-to discuss the vital importance to Canada of finding export markets.
In a country like Canada, which has tremendous surplusses of products such as wheat, of which we consume only one-quarter of the normal crop; with our dairy products; our forest products, which employ literally thousands of people; our mines, which employ tens of thousands; and with our many other products, it becomes absolutely necessary, if we cannot consume these commodities in full ourselves, that we should find markets in other countries. Some people fear the results of permitting goods to come into Canada from other countries, more particularly such products as are manufactured in Canada; but surely it should be realized that to the extent to which we can dispose of our surplusses in foreign markets, not being able to consume them ourselves, precisely to that extent do the producers of such commodities in Canada obtain buying power to buy again the products of our factories. We have, therefore, not a vicious circle, but a happy circle which I think governments have a duty to maintain as far as possible.
This, of course, implies that if we are to sell our goods in other countries we must also buy in those countries. It would be an ideal situation if it were possible for us to make our trade agreements in such a way as to allow the importation of only such commodities as we cannot produce oui-sclves, or produce to advantage, and perhaps to sell to other countries the commodities which they cannot produce, or produce advantageously to themselves. But desirable as that would be, it is not always possible, as hon. members know very well. In these days trade agreements are absolutely essential. We all know that more particularly in recent years, when the coxmtries of Europe, having the fear of war in their minds, are trying to make themselves self-sufficient and self-supporting within their own borders, it is almost impossible, by reason of their tariffs, quotas, and exchange control, to enter into those markets unless we make special arrangements with those countries. If we did not make these special arrangements with them we should find ourselves discriminated against in favour of such countries as are prepared to enter into such trade agreements.
After all, these trade agreements of ours have been pretty successful. I know that criticism may and does come fi-om the other side that in the last year or so business has begun to fall, has been reduced. I am not going to enter into the reasons for that because they are fairly well known to everyone. I do say, however, that our trade agreements have been pretty successful. Canada to-day is still the fourth exporting nation of the world, her exports being exceeded by only
30S
The Address-Mr. Euler

three other countries-Great Britain, the United States and Germany. There is really only one country in the world with which we have what is usually called an unfavourable trade balance, and that country is the United States, which sold us last year about $78,000,000 more than it bought from us. But if we take into consideration the amount of money that flows into Canada by reason of the tourist business, I believe it could be shown to the satisfaction of every reasonable person that even with that country we have a favourable trade balance of $75,000,000 or $100,000,000.
It will be of interest to the house to know -many hon. members may know it now- that while we have had a shrinkage in our exports and imports, we nevertheless, in the year ended in December last, sold $956,000,000 worth of goods and imported $677,000,000 worth. So that we have a favourable world balance of trade of $280,000,000. With regard to the balance of trade and the disparity that exists between our purchases and sales, so far as the United States are concerned, I should like to make a good-natured reference to the argument advanced the other day by the leader of the opposition (Mr. Manion). I will read from Hansard because I made at the time an interjection with which he did not agree: He said:
In the last twelve months ending in November, 1938, we bought from the United States $40 worth per capita-it may be a little more or a little less, $39 or $41. How much did they buy from us? They bought $3.50 worth per head of population.
Mr. Euler:	That is not a fair comparison.
Mr. Manion:	Why not? What is wrong
with it? I do not see anything unfair about it. I can see no reason why one Canadian should buy eleven times as much as an American buys from Canada. But that is precisely what happens when my hon. friends opposite deal with the United States.
An hon. Member:	One rabbit, one horse.
Mr. Manion:	We get the rabbit and they
get the horse. We buy eleven times as much per capita as the United States people buy from us. I cannot see anything unfair in the comparison. I submit that it is perfectly fair.
It is a poor rule that does not work both ways. The Americans can say: Each Cana-
Country
United Kingdom	
Australia	
Union of South Africa.. ..
New Zealand	
Belgium	
France	
Germany	
Italy	
Japan	
Netherlands	
Sweden	
The United States	
fMr. Euler. 1
dian sells us $33 worth of goods a year, yet each American sells to Canada only $3.50 worth. One statement is just as true and just as misleading as the other. Of course, the basis of comparison is absolutely wrong, or rather a change is made in the comparison when he makes the statement. If you want to put it on a per capita basis, then I contend that the leader of the opposition should say: Each Canadian buys $40 worth of goods from the United States and each Canadian sells $33 worth of goods to the United States. Or, if you want to reverse it, you can say: Each American buys so many dollars' worth and each American sells so many dollars' worth. Taking it on the per capita basis, if you like, you take what each Canadian buys and what each Canadian sells, and what each American buys and what each American sells. Or, taking it on the basis of the countries themselves, you can say: Canada as a whole buys so many dollars' worth of goods and the United States as a whole buys so many dollars' worth. If anything can be made out of this comparison, which I contend is fair, well and good. The Canadian buys $40 worth from the United States and sells $33 worth.
If you want to carry the comparison to the point of absurdity, I would refer to what my hon. friend said, that each Canadian buys eleven times as much goods from the United States as each American buys from us. The only inference that one can draw from that statement is that the Americans ought to buy eleven times as much from us as they do now. What would happen if they did? They now buy from us $350,000,000 worth. Multiply that by eleven, and they ought to buy nearly $4,000,000,000 worth. On the other hand, the American could calculate in exactly the same way and say that Canada ought to buy nearly $4,000,000,000 worth of goods from the United States. I am afraid that even if we applied the principles of the social credit party, we should not have enough money to pay for the overwhelming mass of goods that would come in.
It will be of interest to give the exports to and the imports from the most important countries in 1938:
Balance
Exports	Imports	( + ) or (-)	$339,711,086	$119,268,179	+ $220,442,907	32,ys2,U5i	9,043,630	+	23.938,42115,546,087	1,991,295	+	13,555.39216,370,857	4.561,824	+	11,809.0339,658,745	6,180,793	+	3.477.9529,152,226	6.104.841	+	3,047.38518.166.228	9,930.450	+	8.235,7721,745,343	2,631.434	886,09121,092.215	4,642,762	+	16,449,45310,267,088	3,755.896	+	6,511,1925,411,427	2,114.030	+	3.297,397345,911,915	424.754.818	78,842,903
The Address-Mr. Euler
There are just two countries with which we have an unfavourable balance-Italy and the United States. With Italy our trade is very, very small. But our trade with all the world for the calendar year 1938 left us a favourable balance of some S280,000,000.
I should like hon. members to appreciate the fact that our trade with practically all countries of the world shows a favourable balance. I think it has been suggested that we ought to abolish some of our trade agreements with foreign countries. If they should say to us, "We are buying more from you than you are buying from us; we are going to stop buying from you and buy from countries which will buy more from us than you do," that would be a very serious situation for the producers of Canada. If I may use the word used the other day by an hon. member from Toronto I would postulate that if we can keep a favourable trade balance with all the world, we ought to be pretty well satisfied.


Mr. LAWSON:: Would my hon. friend
permit a question? Do the figures he gave include exports of gold from Canada?


William Daum Euler: To the United States, yes.


James Earl Lawson: The United States only, or in all trade figures?


William Daum Euler: I do not think we export gold to any extent to any other country than the United States. And I see no objection, although some persons may object, to including the exports of commodity gold, because, after all, the production of that gold gives employment to a great deal of labour.


Mr. MANION:: Is it not true that we have always had what my hon. friend speaks of as a favourable balance of trade, at any rate in the last twenty-five or thirty years?


William Daum Euler: No. I am sure that during the time of a previous Conservative administration the balance was against us.


Robert James Manion: I do not think so.


William Daum Euler: I have not the figures before me; my hon. friend may correct me later if he desires. I still contend that if Canada can maintain a favourable world balance we ought to be well satisfied.
Much has been said in the press and in this house about the effect of the most favoured nation clause in these agreements. Particularly has it been said that the inclusion of the most favoured nation clause in the Canada-United States trade agreement is going to benefit particularly such countries as Italy, Japan and Germany. I believe that the
public of Canada has been somewhat impressed by that idea, for reasons into which I need not enter at the moment.
May I first explain the meaning of the most favoured nation arrangement? To put it very simply it means this, that when we enter into a mutual most favoured nation arrangement with another country, then we must give to all other countries with which we have most favoured nation arrangements any concessions that we give to the country with which we make the agreement. They on the other hand must treat us in the same way. For instance, under the United Kingdom-United States agreement in which the most favoured nation clause applies, we receive automatically all the concessions which the United States gives to Great Britain. That is one advantage which immediately flows out of what we may call this three-cornered arrangement between the three countries. As a matter of fact, in regard to 400 items on which the United States gives concessions to Great Britain, Canada gets the full benefit of those concessions. Canada has most favoured nation agreements with some thirty-two other countries. That, of course, does not include the agreements we have with the different commonwealths of the British empire; those are definitely excluded always from the operation of most favoured nation agreements which we may make with foreign countries. The United States has some fifty-six agreements containing the most favoured nation clause. I say with considerable confidence that the more the most favoured nation agreements are extended, the more we remove obstacles to international trade, and that surely is advisable.


Mr. CAHAN:: And the more we create domestic unemployment, in many instances.


William Daum Euler: Well, my hon. friend may make that argument, but I think he will find considerable difficulty in supporting it.
I have shown that, generally speaking, our trade balances with other countries are favourable. What if we cancelled those most favoured nation agreements? We should immediately be placed in the position of losing a good part of our export trade, which, as I have said, is in our favour practically all over the world. Take for example Japan, though some persons will deny that it is an advantage with regard to Japan. We will say, for example, that although our trade with Japan is favourable to the extent that they buy from us about four dollars' worth for every dollar's worth we buy from them, we decided, for reasons which might seem sufficient to the members of this house, to cancel our most favoured nation arrangement with
The Address-Mr. Euler

them. What would they do? Naturally, of course, they would cancel their arrangement with us as well. We sell large quantities of wood pulp to Japan; that is a very good source of revenue to our producers and to the country. They would immediately cancel that trade, and I presume they would buy their wood pulp from Scandinavia. Then if our producers of pulp wood desired to get that concession back undoubtedly we would have to -make certain concessions to Japan in return, and we would only disrupt business in the meantime. That example might be cited right across the board, if I might use that term. Some countries will benefit slightly from our agreement with the United States; Sweden, for example, Belgium and Switzerland. But with those countries we have favourable balances of trade, and in addition they are great buyers of Canadian wheat and potential buyers of still larger quantities.
The charge has been made, I repeat; largely in the press though it has been made in the house and perhaps will be made again, that by the agreement we have made with the United States we are conferring great benefits upon Italy, Japan and Germany. Let me show how the principle underlying the United States trade agreement reduces to a minimum the possibility of that occurring, and here for a moment I should like to explain the principle under which we considered the items in connection with which we gave concessions to the United States and those upon which they gave us concessions. It is the principle of what is called the chief supplier. That is, as these items were studied they were considered from the point of view that the country asking for a concession on any item must be the chief supplier of that commodity; and if it was not already the chief supplier it would not receive any concession. The idea, of course, was that it was not desired to give a concession to one country, in this instance the United States, on some item of which some other country was the chief supplier. That would be giving the other country still greater advantages. The purpose of the agreement was that when we made a concession we gave it to the country with which we were making "the agreement, and not to some other country, and thus depriving ourselves of a bargaining power which we might very well want later on if we made an agreement with that other country. The United States adopted the same principle. We might have asked, and we did ask, for concessions on certain commodities. They would not give them to us because they stated that they would simply benefit some other country more than they would benefit Canada. We had to be the chief supplier.

Each item was very, very carefully scanned. In my few public addresses while the agreement was being negotiated I said I was confident that no legitimate Canadian industry would be injured by the making of this agreement. I still believe that to be true. There may be isolated instances here and there where there may be some dissatisfaction, but taking it by and large I believe that no Canadian industry, manufacturing or otherwise, has been seriously injured by this agreement. And right here I should like to pay a compliment, if I may, to the three officials of the Canadian government who were instrumental in examining the terms of the agreement. I refer to Mr. Wilgress, of the Department of Trade and Commerce; Mr. McKinnon of the Department of Finance and Mr. Robertson of the Department of External Affairs. During the course of his speech my hon. friend the leader of the opposition said some bungling had occurred in connection with the excise tax. I hope his remarks were not directed to these three gentlemen.


Robert James Manion: No, I was directing them to the ministry.


William Daum Euler: I am very glad to hear that, because whatever censure may be due the ministry I am sure it would not apply with regard to any charges that might be made against these three gentlemen.


Robert James Manion: I entirely agree with my hon. friend.


William Daum Euler: This country was exceedingly fortunate in having in its employ these three men wdth a knowledge, I believe, of all the circumstances, of the tariff, of all the implications that enter into the making of an agreement of this kind and an understanding of what may result from it that I believe it would be very difficult to equal in any other country.
Japan can receive very little benefit from this agreement. That, perhaps, may be examined by hon. gentlemen more in detail. Some may say that they receive benefits from certain concessions made in connection with cotton textiles, but the agreement is so framed that the United States gets a concession on cotton textiles concerning only the higher priced range of goods, which Japan does not make in any quantity. So I say with considerable assurance that Japan will receive very little benefit. So far as Italy is concerned, our trade with that country is almost infinitesimal, and Italy will receive very little benefit. With regard to Germany-and I think perhaps most of the criticism has been directed against us with regard to that coun-

The Address-Mr. Euler
try-Germany cannot receive a great deal of benefit as far as this agreement is concerned. I have made a pretty close examination; this matter was carefully considered when the agreement was being drawn up, and there are only two items under which that country may benefit to some extent. Those items are specialized machinery and a certain kind of acid, neither of which commodity is produced in Canada. Perhaps I might refer to the trade agreement between Canada and Germany, negotiated some two years ago. In 1935 Germany bought from us only about three and a half million dollars' worth of goods. Last year she bought from us nearly eighteen million dollars' worth, while we bought from Germany only a little more than half that amount of goods. That may not be satisfactory to my hon. friends, but after all that is the situation as the result of our making a trade agreement with that country.
I should like the house to bear this in mind. If there should be any prejudice with regard to doing business with Germany, in the agreement with that country we have a saving clause under which the agreement may be terminated upon two months' notice. So the danger there cannot be very great. More than that, in our agreement with the United States there is what I might also call a saving clause. Article XIV of that agreement is as follows:
The government of each country reserves the right to withdraw or to modify the concession granted on any article under this agreement, or to impose quantitative regulations on the importation of any such article if, as the result of the extension of such concession to other foreign countries, such countries obtain I he major benefit of the concession, and if in* consequence imports of the article concerned increase to such an extent as to threaten serious injury to domestic producers:-
That would be the producers in Canada.
-Provided, that before any action authorized by the foregoing reservation is taken, the government proposing to take such action shall give notice in writing to the other government of its intention to do so, and shall afford such other government an opportunity within thirty days after receipt of such notice to consult with it in respect of the proposed action.
I contend that this provides a safeguard which makes it certain that if any other country gets a greater benefit from concessions granted the United States, we can deal with the matter by having that concession withdrawn.
I think hon. members are apt to forget that, after all, this clause which is known as the most favoured nation clause is reciprocal in its effects; that while we give certain concessions it follows that we also receive concessions. That is the whole purpose of the clause.


Robert James Manion: Not at the same time, is that not right? That is true if they happen to be making a trade treaty. But at the present time while the concessions we give to the United States go to other countries we get no concessions in return.


William Daum Euler: Yes, but if the United States has a most favoured nation agreement with some other country, the United States must give us the same concessions.


Charles Hazlitt Cahan: But not the other country.


William Daum Euler: It is a mutual arrangement.


Charles Hazlitt Cahan: The other country is not bound to reciprocate.


William Daum Euler: It must, if it has a most favoured nation agreement with us, give us all the concessions it gives to others.
The criticism has been made that we have given up some preference in the British market, the preferences obtained under the Ottawa agreements of 1932 and continued, or perhaps enlarged, in the agreement of 1936. We did give a concession, if you like to call it that, on wheat. We agreed to the withdrawal of the six-cent preference. Australia, which perhaps is just as much concerned as we are, also agreed to the withdrawal of that preference. My colleague the Minister of Agriculture (Mr. Gardiner) dealt with the matter the other day, and I think showed conclusively that the preference was never regarded as of much benefit to Canada.


Some hon. MEMBERS:: Oh, oh.


Charles Hazlitt Cahan: I think that is not the general belief throughout Canada.


William Daum Euler: Well, opinions may differ with regard to that; I suppose opinions always have differed. But I will say that the people most concerned, the farmers of western Canada, have made no complaint because the preference has been dropped.


Mr. ROWE (Dufferin-Simcoe):: They should not this year.


William Daum Euler: So long as Great Britain cannot absorb all the wheat produced in the British dominions-and in a period of ten years they took an average of only 200,000,000 bushels a year, whereas the Dominion of Canada, Australia and India exported 300,000,000-just so long as the condition exists, and so long as we have competition in foreign markets, just that long will the preference be of no great value. I might give an opinion from the United States with
The Address-Mr. Euler

regard to the matter. .A few days ago I read this from the Journal-American'.
There seems little chance that we shall be able to take advantage of the wheat tariff reduction until some year when the British dominions are unable to supply British demand.
I think it will be a long time before the British dominions will not be able to supply the demands of Great Britain.
Another reason why the six-cent preference was not of great value-and this has not been mentioned-is that, as hon. members know, the United States has been granting a subsidy to its producers of wheat, to its millers and flour exporters.'


William Earl Rowe: So has
Canada.


William Daum Euler: I do not make this observation in criticism, but may I point out that a country like the United States, which does not hesitate to spend millions, perhaps even billions of dollars in conserving the interests of its producers and farmers, might easily overcome a matter of six cents a bushel by giving subsidies to its exporters. After all, in the final analysis, the position of the Canadian wheat farmer or wheat producer is made reasonably secure through the fact that he produces the best wheat in the world.
Something has been said in regard to ports; the statement is made that through abolition of the preference Canadian ports are going to lose business. In the original agreement framed in 1932 there was no clause which stated, or made it obligatory, for Canadian wheat to go through Canadian ports. Most of it did, it is true; but some Canadian wheat did go through United States ports.


Charles Hazlitt Cahan: To secure the preference of six cents it had to go through Canadian ports.


William Daum Euler: No, the hon. member is quite wrong. It went through on a through bill of lading, and was admitted under the six-cent preference, though the quantity was not large.


Charles Hazlitt Cahan: That was the effect of the ruling, anyway.


William Daum Euler: Perhaps it might be just as well to remind hon. members that in former days, when the United States had wheat for export, a good deal of United States wheat went through Canadian ports.
We made some cencessions on lumber?- yes. But we also received concessions on lumber. In my conversations with the lumbermen of British Columbia, who are as much affected as any group in any other part of the country, I was assured-and the assurance came after

the treaty was made-that they were well satisfied. I was assured that the British Columbia lumber producer is much better satisfied with an alternative market in the United States, or an extension of that market, than he would be in having recourse only to one market, good as it may be, in Great Britain. In years gone by, during a period when Great Britain was undertaking an extensive housing program, the lumbermen of Canada sold large quantities of lumber to Great Britain. That program however has somewhat slackened. I believe the British Columbia lumber producer is quite satisfied -he says to us that he is-to have an extended market, while he gives up something of the market in Great Britain. I do not believe what he is yielding is very serious. I know that the lumbermen approve of the agreement.
Something has been said with regard to apples. Hon. members from Nova Scotia may answer in this respect better than I can. There is a reduction to three shillings per barrel, but despite the reduction there still remains a preference of ninety cents per barrel, which works out at about 30 per cent ad valorem. In any case I believe there is very little complaint from the apple producers. The British government is quite satisfied that the interests of the British apple growers are sufficiently protected by the duty of three shillings per barrel. There is this further point which has been brought to my notice, and it seems reasonable, that to the extent to which the tariff on apples to Great Britain is raised, just to that extent is there encouragement for the growing of apples in Great Britain which would provide greater competition than if the tariff were a little lower, permitting the entry of Canadian apples to that country.


Mr. SPEAKER:: Order.


William Daum Euler: I shall try to finish very
soon. Canada receives extremely valuable concessions in fish, cattle, lumber, potatoes and some manufactured articles. I was going to say something with regard to potatoes, but time does not permit. Something has been said respecting boots and shoes, but I shall not have time, to go into the matter. Perhaps I should say-


Charles Hazlitt Cahan: The hon. member will have days on which to speak of the treaty.


William Daum Euler: There are only one or two matters about which I should like to speak at the moment. A few days ago the hon. member for Broadview (Mr. Church) stated that if at the end of three years the United States should cancel the treaty, and another

The Address-Mr. Euler
government were to take office in the United States, we should lose our preference. But there is a provision under which our preferences are only suspended, and if the agreement between Great Britain and the United States is renounced or terminated we receive our preferences back.


Charles Hazlitt Cahan: Is that a separate agreement with Great Britain?


William Daum Euler: It is in the agreement itself.


Charles Hazlitt Cahan: Which agreement?


William Daum Euler: Our preference is suspended
only until such time as the treaty between the United States and Great Britain may be terminated.


Charles Hazlitt Cahan: Is that stated in any British agreement, in black and white?


William Daum Euler: It is in the exchange of
notes between Canada and the United Kingdom. The leader of the opposition has stated further that the withdrawal of these preferences has sounded the death-knell of the British preference. My submission is that it is just the contrary. The agreement reaffirms the principle of the British preference. and the United States is admitting that principle. May I read an excerpt from the United Kingdom-United States trade agreement:
Nothing in the agreement shall entitle the United States of America to claim the benefit of any treatment, preference or privilege which may at any time be in force exclusively between territories under the sovereignty of His Majesty the King or under his majesty's protection or suzerainty.
Nothing shall interfere with that. The United States now willingly admits that it is proper for a special agreement with respect to preferences to exist between the various dominions and Great Britain, without there being any necessity of granting those concessions to any other country with which she may have a most favoured nation arrangement.


Charles Hazlitt Cahan: Where is that said?-because they have made every pernicious effort to destroy the preference.


William Daum Euler: If the hon. member wishes
to read the agreement between the United States and Great Britain he will find it right there in black and white. It establishes very firmly the principle of the British preference, recognized now by the United States, as by an}' other countries with which we have agreements.
I would say in conclusion that no other agreement ever made by Canada with any other country has ever received so little criticism or so much approval. We have had favourable comments from such papers as the London Free Press, the Hamilton Spectator, the Montreal Gazette, the Montreal Star, Saturday Night and the Financial Post. I do not think any of my hon. friends will say that any of these publications are particularly friendly to this government. Actually we have had favourable comment from no less a person than the Hon. Howard Ferguson, who gave the trade agreement his blessing. If we have had some criticism here, there has also been criticism in the United States. Makers of cheese, producers of dairy products. those engaged in the fishing industry, producers of shingles and lumber-all these claim that they have been sold down the river. Sheep and cattle producers, farmers, potato growers, the American Federation of Labour and the Mining Journal all complain bitterly that the United States has received the worst of the bargain. When complaints are heard on both sides, it is perhaps fair to assume that the agreement is fair to both sides. I should like to give just one more quotation which I think will be almost conclusive. I read from the columns of the Vancouver Province:
Hon. H. H. Stevens, M.P., who framed the trade agreements of 1932, described consummation of a trade treaty between Great Britain and the United States as "of paramount importance at this time" and believed that "Canada was justified in making some concessions to that end."	*
While making it clear he would reserve detailed criticism of the agreements, he declared "it is impossible to overestimate the importance" of the Anglo-American agreement.
"As far as Canada is concerned, if we can assist in that major thing by making some concessions, I think we are justified in doing it," he said.
Apart from its effects on specific industries, he explained, the triangular treaties "will probably make a greater contribution toward a stimulation of trade between empire countries and the United States and even the rest of the world than anything else at this time could have done."
"Taking it as a whole," he added, "the treaties will lead to an improvement of trade relations between Canada and the United States."
I believe that this agreement will prove to be a good one, good for Canada and good for the United States. That is as it should be between friendly neighbours. A mutually beneficial agreement is the only kind that can be of real and permanent value, and I have every confidence that this agreement is of that kind.


Hon. H. H. STEVENS (Kootenay East):: Mr. Speaker, let my first word be an expression of pride and pleasure at being associated with my hon. friend the leader of the opposi-
The Address-Mr. Stevens

tion (Mr. Manion) in the task which he has assumed and in the efforts which he will make to serve his country in the position he now holds. This will renew years of close companionship and friendship with him which I have always treasured very dearly. To certain hon. gentlemen opposite who have expressed some curiosity about the move that I have made during this session I have no hesitancy in saying that I look forward with a good deal of pleasant anticipation to our times together when I shall be a loyal supporter of my hon. friend, the leader of the opposition. Let me say one further word. His approach to the various social and economic problems of Canada and to other such problems generally has always given due weight to the human equation. It is that element in him which appeals to me very strongly.
During the debates on the speech from the throne and the budget an opportunity is given to hon. members of the House of Commons as representatives of the people to discuss the country's conditions generally and to present to parliament the views of their constituents or, as they may view it, the needs of the country. In the present speech from the throne, as is proper, we have the government's proposals to meet immediate needs and a review of the record. That is customary, and this speech from the throne is no different in that respect from any of its predecessors. But I looked in vain for any indication that the government had an adequate appreciation of the real conditions prevailing in this dominion.
It is useless to dilate on the privations of our grandfathers. I prefer to consider the problems facing my sons and daughters. I am perturbed, as are undoubtedly other hon. members, about the future of my children and of countless thousands of young people throughout Canada. I prefer to consider the future of my children and my grandchildren rather than to consider what my grandfather may have done or not done in Penzance, whence he came. The reference to Penzance may suggest certain sinister thoughts to every hon. member who has read the romance of that famous port. I am not concerned very much to-day with whether the press-gangs of those days were onerous and burdensome; I am not concerned with the fact that the administration of the customs in that period really inspired a miniature revolution in the hearts of my forebears; what I am at present concerned about is the welfare and the plight of the children of this day.
I ask: What is there in the speech from the throne for the young farmer? I am not exaggerating when I say that thousands have been driven from their farms because of the
lMr. Stevens.]
poverty of their parents. You can meet them every day. What is there here for the young worker? There are 500,000 of them, perhaps not all registered. Let us stop this piffling talk about whether they are on the register or off the register. What hon. members know is that there is an army of unemployed willing workers. What has this speech from the throne to offer to them?


Mr. MacNICOL:: Nothing.


Henry Herbert Stevens: What has it to offer for the tens of thousands-again I do not exaggerate-of young high school students who have just left school? These young people are looking hopelessly about, trying to find out where they are to go. What about the young graduates from our universities? What about our young engineers, of whom there must be hundreds? I have met many of them. What about our young lawyers? What about our young doctors and other professional men? These men are to be found in the bread lines and in our camps. They are scattered throughout the country by the thousands, not knowing where to turn. What is there in the speech from the throne for them? What is there in it for the merchants? Yes, what is there in it for capital? My right hon. friend (Mr. Mackenzie King) gave quite a lengthy dissertation about capital. He spoke of the difficulty of directing it from time to time and the various influences that affect it.
There came into my hands the other day the vital statistics. I read them just casually, but may I say that there was in them an item which I think is enough to perturb us. It will be recalled that while typhoid, smallpox, scarlet fever, diphtheria and such diseases have been, in years past, perhaps the chief sources of epidemics and deaths in this country, all are under control; I believe medical men will bear me out in that statement. I shall state the figures briefly, and then I shall have a point to make. Deaths for the second quarter of last year were as follows: Typhoid, 39; smallpox, nil; measles, 62; scarlet fever, 41; whooping cough, 128; diphtheria, 73; influenza, 544; infantile paralysis, as to which there has been a great deal of alarm, 11; tuberculosis, which we are getting under control, 1,651; cancer, 2,908. But deaths from diseases of the heart numbered 6,814. What is one of the main contributing causes of deaths from diseases of the heart? I do not believe I shall be challenged if I say: worry, fear, anxiety. When I saw these statistics I paused for a moment.


An hon. MEMBER:: That is a far-fetched argument.

The Address-Mr. Stevens


Henry Herbert Stevens: I know that some of my hon. friends laugh.


Walter Edward Foster: Order.


Henry Herbert Stevens: When I read these statistics I paused for a moment and there came to my mind instance after instance of young business men whom I knew who have dropped off at their prime through heart disease. If hon. members read the news press from day to day they will see that fact plainly evidenced. I refer to it for this reason, that the casualties among business executives are totally disproportionate to their numbers compared with the casualties among other people in the country, and this indicates that leaders in business to-day are, through worry, vexation and anxiety, being subjected to an unusual strain. What is wrong? The impossibility of planning for the future; instability in business; anxiety about taxation. These are economic problems which ought to be engaging the attention of parliament. These are problems which are causing a great deal of difficulty in the country to-day. The imperative need is, in my opinion, closer cooperation between government and business in Canada.
The other day the Minister of Labour (Mr. Rogers) referred to the necessity of private business bestirring itself to assist in the reduction of unemployment. I am not disposed to quarrel with him, but what I say to him is that industry is looking for a lead from Ottawa and is not getting it. I ask, what is there in the speech from the throne to encourage the harassed business man, the young man or woman, the unemployed worker, or the stricken farmer? There is nothing in the speech but more commissions, more constitutional platitudes and more evasions, with a total absence of leadership.
Our problems are economic. Certain of them are vital-too low a price to the farmer, disproportionate rates of wages to the worker. I need not dwell on that. One worker is getting $1.75 an hour; another is working under almost sweatshop conditions. There is a disequilibrium of reward both to workers and to farmers, in fact to those engaged in active production work; low purchasing power; inequitable distribution of wealth. These are some of the internal domestic problems which ought to be engaging the attention of parliament, to the exclusion, in my opinion, of all else. They are vital to our people. It is not a question of the economic nationalism which the Prime Minister is constantly talking about; it is a question of national economics, which is a vastly different matter.
By the way, the Prime Minister made reference to the speech from the throne under three heads. I shall not attempt to follow
him under those headings except very briefly as to two of them and at somewhat greater length with regard to the third.
We may take the Prime Minister's speech as the interpretation of the views of members of the Liberal party in the house as to the speech from the throne and the policies of the government.
Let me refer very briefly to defence. Probably we shall discuss it later, and I have just one short reference to make to it at this time. We are going to spend $50,000,000. We are to have a purchasing commission. My first word is this: The purchasing commission ought to be a non-partisan commission under the control of the Minister of Finance (Mr. Dunning). I suggest that this point should be considered before the proposal is brought before the House of Commons. My next inquiry in this connection is whether, as we are going to purchase munitions and equipment and a great deal of new machinery will be required, it is the policy of the government-I ask the question so that they may consider it-that a substantial portion of this machinery will be bought outside Canada. If so, I shall criticize such a policy very severely, because if you are going to spend fifty million dollars on defence it ought to be spent so as to stimulate and build up as far as possible industry in this country. I invite the Prime Minister's consideration of this thought, that we have workshops, factories, skilled engineers and skilled workmen, as I am authoritatively advised, capable of producing any machine which may be required for the purposes I have indicated. Give them the specifications, and we have the shops that can produce those machines. Do not let us go outside Canada, buy these machines elsewhere and bring them in. If we are going to spend money on defence, let us utilize that money to the fullest possible extent for the stimulation of industry in our own country.
I turn now to the trade agreements, because the Prime Minister and his colleagues have placed this matter at the forefront of their policies. I believe the Prime Minister will not criticize me if I put it in this way: He says we have a number of perplexing problems in Canada, but a solution of those problems can be found in the expansion of Canada's external trade. In the speech from the throne the Prime Minister placed in the mouth of his excellency the following words:
The agreements constitute a constructive contribution toward a betterment of world conditions and-
And.
*-advantages to Canadian producers and consumers.
The Address-Mr. Stevens

I shall reserve most of my comments on this subject until the agreement resolution is before us, but there are a few observations I would like to make now.
In the first place, the Minister of Trade and Commerce (Mr. Euler) said a few moments ago that Conservatives were opposed to the making of any trade agreements.


William Daum Euler: I did not say that definitely, no.


Henry Herbert Stevens: The minister can correct me if I am wrong, but I took his words down.


William Daum Euler: I do not remember precisely my words, but I have reason to believe, from the remarks made by hon. members on the other side of the house, that they were not particularly friendly to agreements made with foreign countries. I think so still.


Henry Herbert Stevens: My hon. friend has modified his words considerably. However, we shall take his statement. What he suggests is not the case. The Conservative party, during all my association with it, has been quite willing to make agreements with foreign countries, but it believes in making agreements that will not be damaging to Canadian industry and Canadian interests. Before I am through with this part of my speech I hope to show briefly wherein I think there is a danger of some damage being done to Canada by these agreements.
My hon. friend quoted a news dispatch. In that interview I was very careful to say that I had not seen the agreements; I had seen only the news dispatches.


William Daum Euler: Was the quotation correct?


Henry Herbert Stevens: Oh, quite. I am not disputing the quotation. This is what I said then and I say now: Any action on the part of Canada that will tend to bring Great Britain and the United States together is desirable; but, as I shall seek to show, the question is this: Have we paid too big a price? That is the question which I shall submit in a moment.
The Prime Minister refers to economic nationalism, which, he says leads to war. There is nothing new about that. There is nothing new about economic nationalism. There was economic nationalism in 1923 when Italy took about thirty items of our exports to that country and imposed upon them inhibitions, prohibitions and high tariffs. They raised the tariff on our wheat to 87 cents, and they also raised the tariff on hams, bacon, honey and all down the line. In short, they started what was economic nationalism, and the same was done by Germany, and to a certain extent by France and by nearly every other

country in the world-that is, in western civilization. And why did they do it? It was because of fear and anxiety, fear engendered by their experience during the war.
The point I wish to make, however, is that it is not a new thing. It has prevailed for fifteen years, and if the Prime Minister suggests that this is something new which he has discovered and which he is going to take some part in eliminating, then I think it is a pretty weak position for him to assume. These conditions are in existence to-day; they are a reality, an ugly fact which we might as well recognize. The thing we have to do is to endeavour to meet these conditions step by step, nation by nation.
My hon. friend (Mr. Euler) a few moments ago argued that there was no danger in the most favoured nation treatment clauses. I think I am reflecting the opinion of some members of the government when I say that they are very much perturbed about this policy. I know that when I was minister some years ago one of the things that gave me serious concern was the most favoured nation clause. What I sought to do, although I left office some years ago, was to find some means of making specific bilateral agreements rather than most favoured nation agreements such as we have. In so far as the advantages given to most favoured nations, thirty-two of them, are concerned, Canada gets nothing in return, and it is well for us to keep that fact clearly in mind. In other words, we give them access to our market, an advantage in our market, for which we get no return; and what is more we have parted with a substantial part of our bargaining power.
It is in the results of international trade disturbance that the basis of the Prime Minister's policy is found. Is it not possible that international trade disturbance ensues from internal distress and the efforts to correct it? For instance there are quotas, embargoes, barter, bonusing, shipping control, all of which have been brought into force in recent years because of internal distress in other countries. Let me say in warning to the Prime Minister that there are serious conditions developing in Canada. There is internal distress, and interna! distress may be distinctly aggravated by action taken pursuant to this treaty, particularly in the extension of the most favoured nation treatment clause.
I submit that what we need is a recasting of the whole trade policy of Canada. We should boldly face the issue of most favoured nation treatment. There has been too much tinkering with the tariff in recent years, too much interference. The Minister of National

The Address-Mr. Stevens
Revenue (Mr. Ilsley) knows that when the importer to-day orders an article from abroad he cannot tell until that article is in the examining warehouse exactly where it will be classified, whether as before it will be under item 521 or 397 or anywhere else.


James Lorimer Ilsley: That applies to a fraction
of one per cent.


Henry Herbert Stevens: Fraction, nothing. I
showed a year or two ago that some 1,400 rulings had been made in less than a year, and I venture to say that in the past year over 1,000 were made. I have not had time to review them, although I have a deep pile of them.


James Lorimer Ilsley: They added to the certainty, not the uncertainty, of the importer.


Henry Herbert Stevens: No, they added to uncertainty. Importers tell me they have difficulty in telling where an article will be classified. What we need in Canada is less dislocation of trade through the instability of the tariff, and a revised, simplified and stabilized tariff. That is what we want here, so that both importers and those engaged in industry will know precisely where they are. The Prime Minister laughs.


Mr. MACKENZIE KING:: No, I am not laughing.


Henry Herbert Stevens: Does the Prime Minister
know to-day the effect of the withdrawal of the three per cent excise tax under this agreement? I venture to say he does not, nor does any other minister know what effect the withdrawal of that three per cent excise tax, in connection with three or four hundred items mentioned in the agreement, will have on other items not mentioned therein. I venture the prediction that the Minister of Finance (Mr. Dunning) and his staff will be considering shortly whether they will not wipe it out altogether. The minister laughs. It has become so complex and involved, however, that I suggest there is only one solution, and that is to wipe it out.


Mr. MacLEAN (Prince):: It should have never been put on.


Henry Herbert Stevens: Let me now turn to one or two other considerations. When this agreement was made did the government consider the fact that we were a debtor country and that Great Britain and the United States were two creditor countries? The Minister of Trade and Commerce (Mr. Euler) a moment ago gave the trade between Great Britain and Canada and indicated a favourable balance of $190,000,000 or thereabouts.


William Daum Euler: It was $220,000,000.


Henry Herbert Stevens: He forgot, however, that we owe Great Britain interest on moneys borrowed from them, and in shipping services, representing roughly $200,000,000 a year. He forgets that for the last fifty years-and I challenge contradiction-the adverse balance of trade between Canada and the United States, plus our interest payments to them, has amounted annually to upwards of $300,000,000. That has been the average over that period, and how has that been paid? It has been paid by what we see on the order paper. On the order paper is a resolution wherein the Minister of Finance is asking for $750,000,000, part of which is to go for renewals and part of it to meet obligations of government. We have paid the United States for the last fifty years, with very few exceptions if any, an average of around $300,000,000 a year by increasing the American mortgage on Canada.


Mr. DUNNING:: No.


Henry Herbert Stevens: Absolutely. There is one exception and it is this. Certain payments from London to New York have reduced that, and that payment from London is not, as the minister intimated a moment ago, equal to the favourable balance of trade, because from that must be taken the interest we owe to London. That there is a favourable balance with other countries, and that it has been paid to New York, there is no question; but the net result I venture to say would be upwards of $150,000,000 a year.


Charles Avery Dunning: Will my friend permit me just to correct that? Canada has had a favourable balance of international payments for each of the last two or three years if not more.


Henry Herbert Stevens: I cannot accept that,
because I have gone into these things very carefully. I put on Hansard a few years ago- it never was done before and I have never seen it done since-an analysis of Canada's international balances. You have to take into consideration insurance premiums paid abroad, which are substantial, about $20,000,000 to the United States; shipping services with Great Britain, which amount to about $75,000,000-no one knows exactly, because there are no exact statistics. We have to pay various other things, including tourist balances, favourable one way and adverse the other. All these things have to be taken into consideration, and there are no precise statistics, only estimates. But what we do know is that we have borrowed from the United States $4,500,000,000; that is our indebtedness to the United States, upon which we pay interest and dividends at
The Address-Mr. Stevens

around five per cent per annum. It means an annual payment of at least $225,000,000 in interest. And how are we paying it? Chiefly by extending our borrowings in the United States. There is no question about it.


Charles Avery Dunning: The fact is that we are reducing our indebtedness there.


Henry Herbert Stevens: We are not reducing it.


Charles Avery Dunning: Yes, we are. .


Henry Herbert Stevens: The minister cannot get away with that with me, because I have gone through it upside down and inside out.


William Daum Euler: And the hon. gentleman is still upside down.


Henry Herbert Stevens: My time is going and I am being diverted from my argument. But the fact that we may pay off a loan in the United States now and then and transfer it to the domestic market does not alter the main statistical basis of my argument. It may vary a little, one year up and another down, but I am speaking by and large.
In 1925 I warned the Prime Minister that if the policy which we were following then, which is the policy he is following to-day, were persisted in, sooner or later we would be bankrupt. I am suggesting to the Prime Minister that if he will consult with any statistician, any economist or any group of them, as to the debt of Canada, public, private and corporate, he will be impressed with the fact that Canada has almost reached the limit of her capacity to bear debt. That is the point we have to consider. We have undeveloped resources, I know; we have been exploiting them for the last twenty-five years, but the fact is that in regard to its capacity to pay interest on debt, public, corporate and personal, Canada is at the saturation point. Some parts of Canada are beyond that point, and say so; other parts which are richer have not quite reached it.
The Minister of Agriculture and the Minister of Trade and Commerce referred to the six-eent preference on wheat. The Minister of Agriculture said:
. . . the six-eent preference has not benefited the wheat growers of the western or any other part of Canada.
And, he said, we were asked by the British government to surrender this as a concession. Let us see what the United States government think about it-not some United States journal, but the United States government. This is what they say on page 6 of their publication:
One of the most important concessions is the removal of the duty on wheat, which has been
(Mr. Stevens.]
equivalent to about six cents per bushel. This has tended to divert trade to Canada and Australia.
The question I ask is, did we make a sacrifice or did we not? The Minister of Agriculture says, no, we made no sacrifice, because it did not mean anything. The Prime Minister says we made a notable contribution. Which is right?
Then I find the Minister of Agriculture saying this in regard to Canadian ports:
. . . the removal of the six-eent preference has very little, if anything whatsoever, to do with the amount of wheat that is to be shipped through the maritime ports.
Again the United States government differs from the minister in that respect. They say:
Also, as a result of the removal of the preference, it should be possible for American port and transportation interests to regain their lost business in the transhipment of Canadian wheat to the United Kingdom.
That is what the United States government say. Did Canada make a sacrifice? Did she make a notable contribution? Then I ask, was it necessary, or is the price too great? The Minister of Agriculture, in answer to such a contention as I am making, gave figures of the exports from all the ports in Canada. But he did not give the exports through Saint John and Halifax, which are the two ports affected. He read a long list, disregarding the drought in the west and the fact that there had been small crops for a few years; then he said that following 1932 there was a diminution, and now there is an increase in exports; which do the farmers of the west want? The facts are that we did build up exports through Saint John and Halifax; we did have a preference in the British market; the United States knew we had that advantage and asked for the concession; the minister himself said that we were asked by the British government to release them, and did release them. Was the price too much to pay?
It is a most serious thing, and one is naturally inclined to ask: What is the objective? What is the justification? The Prime Minister says, world appeasement. I wonder which is likely to contribute more to the betterment of world conditions, an economically emaciated Canada, or a strong, virile, imPr'5 r'n-.iHa? Which? One associated with the motherland and the British commonwealth of nations, or one in no man's land, whither we seem to be drifting? Which, I ask, is more likely to contribute to world appeasement? One thing the Prime Minister has lost sight of is the fact that internally Canada has widespread distress. He has lost sight of that in his obsession about participating in this world appeasement. I am not suggesting for a

The Address-Mr. Stevens
moment that we should aggravate the international situation; indeed we should do all we can to help it, but we should do it only after looking after internal conditions in Canada.
The Prime Minister referred to Gresham's law. I was very much amused at this, because he has frequently brought Gresham's law into discussions here. Gresham's law is a simple declaration of a condition existing years ago, a century or more. The sovereign at one time had the right to issue currency, and it was always metal coinage. When he got hard up and in financial straits he would adulterate the coinage and so make some money. So Gresham's law declares that whenever a sovereign does that, the debased currency drives the good currency off the market. But that is out of date; it is outmoded. What happens to-day? What about managed currency? Managed currency as we now have it circumvents that and achieves the same ends as the old sovereigns sought to achieve in that crude way. The international economic conference in 1933 declared that note issues were to be considered as on a sound basis if they were protected with twenty-five per cent reserves of gold.


Charles Avery Dunning: Not less than twenty-five per cent.


Henry Herbert Stevens: Yes. That is simply a modern method by which governments achieve the results attained by those harassed sovereigns under the crude conditions of their day.
But the Prime Minister says there is another law to which he is very much attached, and that is the law of competing standards. I listened in vain, however, for him to apply to his policy the principle of the law of competing standards. He went on with a long dissertation on armaments, but he did not refer to the law of competing standards to any greater extent. The law of competing standards, Mr. Speaker, is that a country with a low standard of living will drive a country with a high standard of living out of the trading world. That is what it means, but again science, skill, progress and efficiency circumvented that law. These economic laws are not immutable, like the law of gravity; they are laws of man, and it is possible for them to be circumvented. So through skill, efficiency and science nations learned how to circumvent that law. During the last decade of the last century and the early part of this century we saw the United States and Germany surging ahead of the whole world because they had efficiency; and although the standard of living in the United States particularly was . high, that country was able to compete with low standard countries because she had more
efficient machinery. But what is the situation to-day? Japan, one of the most noted countries in regard to low standards of living, adopted American methods. So now we have an evasion similar to the evasion of the Gresham law; and Japan, having adopted modern methods, is successfully competing in the world market against the United States and other countries.
The Prime Minister has nailed to his mast the law of competing standards and the law of supply and demand. I can see little Canada, with her ten million people, with the law of competing standards and the law of supply and demand nailed to the masthead of the ship of state about which the Prime Minister talks, and that ship sailing forth to meet the world armada in connection with trade, with my right hon. friend on the bridge, at the helm.


An hon. MEMBER:: He will not leave it.


Henry Herbert Stevens: Someone says he will not leave it, that that is where his place is.


Charles Avery Dunning: He will stay there.


Henry Herbert Stevens: My hon. friend says he will stay there, though the old ship of state be floundering; though the rats be swarming; though the cargo be shifting; though the crew be mutinying because of poor food or lack of clothing; though the officers of the ship, whom I see before me, be quarrelling among themselves. There may be a conspiracy-


Walter Edward Foster: Order. The hon. member has exhausted his time.


Some hon. MEMBERS:: Go on.


Walter Edward Foster: The hon. gentleman may continue with the unanimous consent of the house.


William Lyon Mackenzie King: Please do not stop at that point.


Henry Herbert Stevens: No; that would be too bad. I say the officers have discovered a conspiracy, but will the captain make an inspection? Oh, no; his place is at the helm. I want to say to the Prime Minister that his place is not at the helm. To carry out the simile, it is his place to go over his ship and see what are the conditions; to see whether the crew is being properly fed and cared for; to see whether his passengers are being reasonably looked after; to see whether his ship has sprung any leaks, because heaven knows there are some pretty serious leaks in the old ship just now.


Mr. FRASER:: You should know. You scuttled one ship.


Some hon. MEMBERS:: Oh, oh.
The Address-Mr. Stevens


Henry Herbert Stevens: Unfortunately I did not catch that joke, but probably I will hear about it later.
I had intended to discuss the question of unemployment, but my time is up. I should like to conclude with just one or two words, and hon. gentlemen might do me the courtesy of allowing me to finish what I have to say.


Walter Edward Foster: Order.


Henry Herbert Stevens: I was going to say that I would conclude with a brief reference that I hope may impress upon the Prime Minister and the government the fact that there are great problems facing this country to-day and that our people are looking to Ottawa for leadership. The right hon. gentleman may disregard all that is said from this side of the house, but I would ask him to ponder the speech of the hon. member for Humboldt (Mr. Fleming); the last paragraph of the address of the young member for Stormont (Mr. Chevrier), who seconded the address, and the speech of the hon. member for Huron North (Mr. Deachman), together with several other speeches that have been made by his own followers. These hon. gentlemen, after many flattering allusions to the government, sought to impress upon them the seriousness of the situation in their own districts. I ask the right hon. gentleman to ponder these words and to give consideration to the situation in Canada. We have the railway problem; we have dominion and provincial .rapprochement, which calls for leadership at this time. To-day we have nothing in Canada but discord, more so than at any other time since confederation. The Prime Minister came into office with a large majority, with eight provinces behind him, and what has he to-day?


William Lyon Mackenzie King: A bigger
majority.


Henry Herbert Stevens: He has his majority
simply because of the matter of the constitution, but he has discord in the country and he has not that friendship among the provinces which he had when he came to office. Effective unemployment and relief readjustments are needed. Economic advance and security; strong government, with the emphasis on administration and not on legislation-these are some of the problems that he should meet. Truly, sir, the country is torn with fear and hatred, discord and greed. The task of parliament and the duty of the government is to banish these ghouls of despair and to give leadership that will replace hatred with tolerance; to banish fear and inspire courage; to bring stability and

cooperation where now there is discord and restore the rule of justice so that greed no longer shall control the lives of men in our country.


Mr. VICTOR QUELCH (Acadia):: First of all, Mr. Speaker, I should like to take this opportunity of congratulating the group to my right, the Cooperative Commonwealth Federation, on their amendment, which is as follows:
We are of the opinion that these conditions can be remedied only by the effective control of financial institutions and monopolistic enterprises which are exploiting the Canadian people.
I can assure that group that they will receive our wholehearted support in regard to this amendment.


Walter Edward Foster: Order. There is too much noise in the chamber. I would ask hon. gentlemen to keep order. I can hardly hear the hon. member who is speaking.


Victor Quelch: I should like also to congratulate my hon. friends to my right on their apparent change of front in regard to this question. You will remember, sir, that back in 1936 the hon. member for Rosetown-Biggar (Mr. Coldwell) introduced a motion calling for the nationalization of our banking institutions. At that time we stressed the fact that we did not feel that ownership was a matter of paramount importance; but we did feel that it was absolutely essential to take whatever action might be necessary to obtain absolute and effective control of financial policy. Hon. members will notice that this motion stresses the necessity of obtaining effective control. No reference whatsoever is made to public ownership, and therefore, in conformity with the stand we have taken in the house and outside, we intend to support the amendment to the amendment.
In passing, perhaps I should congratulate the hon. member for Athabaska (Mr. Rowe), because we feel he may possibly have been instrumental in bringing about this change in front. We have listened with a certain amount of apprehension and a great deal of regret to the addresses attacking a guaranteed price for wheat in western Canada which have been made inside and outside the house by hon. members representing eastern Canada. The very people who make these attacks will talk glibly about the need for tightening the bonds of confederation and for a better spirit of unity in Canada. Yet in connection with this matter they adopt an attitude which appears to me to be one of extreme selfishness, inasmuch as they take the stand that the farmers of western Canada should be prepared to sell on the open market

The Address-Mr. Quelch
at world market prices, at a time when the people of eastern Canada are benefiting through the operations of a protective tariff, a tariff which operates greatly to the disadvantage of western Canada.
Such an attitude is bound to weaken the bonds of confederation. It is bound to bring about disunity in Canada, and I believe it is to a great extent responsible for observations regarding secession which are continually heard in western Canada. That part of Canada bitterly resents this form of exploitation. In the past the cry seemed to be that the west could pay more, and apparently the slogan of "soak the west" was adopted. That has been evidenced by higher interest rates, higher freight rates and higher sales prices. It used to be a common occurrence to pick up a periodical and see the prices of certain articles listed at certain amounts, and then below one would find the notation that west of the great lakes the price would be so much higher. That difference in price was generally considerably more than just the difference in freight rates. In the past the attitude has been th.at the farmers of western Canada must be prepared to sell on the open market and, at the same time, to pay highly protected and restricted prices for practically everything they buy.
We hear a great deal about the benefits of the so-called open market system, and for a few moments I should like to speak on the subject. The open market system is generally referred to as the free marketing system, based upon a theory which was prevalent during the middle of the last century, that free competition would bring about a just equilibrium between the prices of goods in various industries, and that goods create a demand for goods.
Could we say that the system has operated to bring about those results? Has it had those results, so far as the farmers are concerned? Has it brought about a just equilibrium as between the prices of goods the farmer sells .'id the prices of goods he buys? If that has not been the case, then we cannot say that the system has operated as a free marketing system. I believe the main reason for the failure of the present system to operate in that way lies in the fact that industries have organized into trusts, combines and cartels for the purpose of maintaining, controlling and fixing prices. Trade unions have fought a reduction in wages, in the face of falling prices for commodities that they produce. And may I point out that I am not criticizing trade unions for that action. It was absolutely essential, if the workers were going to be able to maintain a decent standard of living.
Governments have raised tariffs at the behest of industry, in order to maintain higher price levels. The result of all this has been that the farmer has had to pay a highly protected price and at the same time has had to sell on an open and unrestricted market.
As an example of the extent to which industries have controlled production in order to maintain higher price levels I should like to quote from a memorandum submitted by Mr. J. T. Hull, on behalf of the Manitoba cooperative conference to the royal grain inquiry. I quote this from page 5:
In January, 1935, the secretary of the United States Department of Agriculture submitted to the United States senate a document prepared by Gardiner C. Means of Columbia university, entitled "Industrial Prices and their Inflexibility." The following table taken from this document shows the relation between price level and production for certain industries from 1929 to the spring of 1933:
Permanent Permanent
	drop in	drop in
	prices	production
Agricultural 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
Hon. members will notice from the table that where there is free competition a decreased demand results in a greatly reduced price, with only a very slight drop in production. For example, in connection with agricultural commodities it will be noted that the permanent drop in prices stood at 63, whereas the permanent drop in production stood at only 6. Under the protective system the decreased demand results in a large drop in production and only a very small drop in price. We note that in connection with agricultural implements the permanent drop in price was only 6 per cent, but the permanent drop in production was 80 per cent. In other words, the greater the control of production, the less the fall in price.
Of course the only sane solution is to increase the effective demand by increasing the amount of money in the hands of consumers. But that argument will not hold where the production of any commodity is in excess of the actual physical demand throughout the world. We hear a great deal as to whether or not the farmer has a right to demand a price equal to the cost of production, and for a few moments I shall deal with that subject. Some hon. members have stressed the fact that the farmers of western Canada do not

The Address-Mr. Quelch

want to be subsidized. They say they do not want a guaranteed price. On several occasions the hon. member for Moose Jaw (Mr. Ross) and the hon. member for Huron North (Mr. Deachman) both members of the Liberal party and supporting the government in power, have stressed that fact. But would anyone suggest for a moment that there is any likelihood, any probability or even possibility that action will be taken whereby the people of Canada will be able to buy at world market prices. That being so, and as there is no likelihood or possibility that such action will be taken, I maintain that the farmers of western Canada have every right and justification for demanding a price equalling cost of production.
Then, another point: Even though it were made possible for the farmer to buy at world market prices, if the debts he has incurred through working under this unfair system are ever going to be paid, he will have to secure a price not only equal to cost of production, but one which offers a fair profit. I say that, because accumulated debts of the past are not included in cost of production. The only way they can ever be paid is by the farmer being able to get a fair profit.
If on the other hand we are going to allow prices to fall, the farming industry will become bankrupt and it will be only a question of time before we shall have to retrace the ground already covered by the Farmers' Creditors Arrangement Act,
On several occasions, speaking outside the house, the Minister of Mines and Resources (Mr. Crerar) has stressed the fact that the farmers have no right to demand a guaranteed price, where that price is in excess of the world market level. The reason he gives is that it would be placing a burden upon the taxpayer, and that the farmers have no right to expect the taxpayers to assume that burden. It seemed strange to me that a man who has been so closely connected with the west, and who has taken that stand, should not have also taken the stand that the manufacturers or industrialists of Canada have no right to expect that the burden of the tariff under which they benefit will be assumed by the Canadian people. On the one hand we hear that the farmers have no right to demand a price equal to the cost of production, because it will increase the taxpayers' burden, but there is no mention of or reference to the manufacturers. I shall deal with the matter again later on.
I am sure the Minister of Finance (Mr. Dunning) is far too much interested in attempting to balance the budget to be willing to give up the revenue derived from the

tariff. At this point I should like to say that there can be no credit given to a minister of finance who balances the budget upon the misery of the people. The balancing of a budget is only a means to an end, and that end must be the bettering of conditions in Canada. If by balancing the budget we increase the misery of the people and bring about greater poverty, then I say there can be no credit to a minister of finance or to the department he represents. Therefore I say as there is little likelihood in the near future that the farmers will be able to buy at world prices; that trade unions will agree to wages falling in line with agricultural returns, or that the debts incurred by these industries will be cancelled. I maintain that the farmers have every right to demand a price equal to the cost of production, plus a fair profit.
There is another side to this argument upon which I should like to touch, the one raised by the Minister of Mines and Resources (Mr. Crerar). Have the people of Canada any right to protest against the demand of the farmers for a fixed price equal to the cost of production? Let us examine that argument. To grow a crop of wheat costs money and it results in payments being made to various industries and various individuals. Payments must be made to machine companies, insurance companies, merchants, railways, bankers and other organizations and individuals. The payments distributed in the process of raising wheat represent incomes to these various individuals and organizations and the aggregate of those payments represents the farmer's cost of production. Therefore, in demanding a price equal to the cost of production the farmers are only taking back from society that which they have distributed already. In other words, when a farmer produces at below the cost of production, he is subsidizing society to that extent.
I am not suggesting that a guaranteed minimum price is a solution to the problem of marketing wheat or to the problems faced by any other primary industry, but it is an essential step that will have to be taken until that problem has been dealt with adequately.
I am satisfied that in the future governments will have to assume far greater control over production and distribution than they have in the past. Dealing specifically with wheat, by increasing production in excess of the actual effective demand, even in excess of the actual physical demand of the world, we are really lessening the value of our markets. To-day the surplus of wheat is used as an excuse or as a reason, whatever word you want to use, for forcing prices down.

The Address-Mr. Quelch
Would it be desirable for the exporting nations to take steps to reduce production to where it would only meet current demand? I think we are all agreed that such action would be very dangerous from the point of view of the importing nations. Should a serious world drought occur, the importing nations might find themselves in danger of actual famine. However, as long as the surplus is used as a reason for forcing prices down, this appears to be the only logical step the producers can take. For this reason, if for no other, I think the importing nations should be prepared to pay a fairly moderate minimum price in the face of actual surpluses of wheat.
We find that to-day four nations contribute approximately 86 per cent of the world's imports of wheat. These countries are Australia, Argentina, the United States and Canada. Unquestionably these four dominate the wheat situation. I urge that Canada take the initiative in calling a conference of these four nations for the purpose of making a thorough investigation into the whole question of a fair economic price for wheat, taking into consideration the cost of production and other contributing factors. Both inside and outside the house the Minister of Agriculture (Mr. Gardiner) has taken the stand that this matter is more the responsibility of the United States than of Canada. The reason he gave for this contention is the fact that the United States have increased their acreage by some 15,000,000 acres. At an estimated rate of production of twenty bushels per acre, this represents a surplus of some 300,000,000 bushels. However, I would point out that the United States has taken steps to place only 100,000,000 bushels upon the export market.
Rather than try to place the responsibility for this problem upon the shoulders of the United States, I think we should admit that the problem is of greater concern to Canada. Over a period of ten years the United States has exported an average of only 9-5 per cent of her total production, whereas over a similar period Canada has exported approximately 61-8 per cent of her production. If the four countries I have mentioned could get together and could come to an agreement as to what a fair price would be and what steps might be taken to control production, then an international conference might be called at which all the cards could be laid upon the table face up and an attempt made to bring about an agreement whereby this minimum price would be guaranteed. If this international conference should fail; if the importing nations should refuse to recognize 71492-21J
the justification for such a demand, then I think the exporting nations would be justified; in taking the steps necessary to remove the-surplus wheat from the world. I do not suggest that this should be done by the destruction of the wheat; it could be done by the proper control of production and marketing.
I realize that restrictions on production are opposed on various grounds. The main opposition is based upon the ground that a-, reduction in acreage means a loss of wealth,, and also that it would be impossible to enforce a reduction in acreage on an equitable basis. I shall deal with the first contention. That statement is nonsense when you are dealing with a country that is on an export basis because you cannot assess the value of a country's wealth by quantity alone. You must take into consideration its exchange value. As an example I would refer hon. members to what happened in 1932 and 1937. In 1932 we exported three times as much wheat as we did in 1937; yet we received 822,000,000 more in 1937 than we did in 1932.
As far as the second point is concerned, I would oppose the blanket reduction in acreage because I have yet to hear of a plan whereby that can be brought about on an equitable basis. On the other hand, I would advocate an aggressive policy of taking marginal lands out of production. This type of land aggravates our problem. In exceptionally good, years it will produce a certain amount of wheat which helps to swell the surplus. In poor and dry years practically no wheat is produced on this type of land, and this at a time when production would in all probability be useful. Once this land had been taken out of wheat production it could, in some instances, be irrigated and used for the production of sugar beets and forage crops. If, on the other hand, it was not suitable for irrigation, or if at this time the land is not needed for purposes of production, it could be sown down to grass and preserved for a future emergency. Then in years to come, if that land was needed for grazing or hay purposes, it would be in a good condition to supply the needs of the country. Evidence to-day proves overwhelmingly that the problem of a fair market price will never be solved permanently until steps are taken to cooperate with other major exporting nations in exercising control over the production and the sale of wheat. This, I believe, would require a compulsory wheat board, and I am satisfied that the majority of farmers in western Canada to-day would support the idea of a compulsory board. I say that in spite of anything which may be contained in the Turgeon commission report.
The Address-Mr. Quelch

That report takes the stand that there are some farmers in Canada who are opposed to a compulsory board and for that reason, we would not be justified in putting it into operation. Of course that is nonsense, because you meet the same objection towards all legislation; you never get a unanimous decision on any question. You must put into operation the legislation which is of the greatest benefit to the greatest number of people.
I believe that the report of the royal grain inquiry commission was a great disappointment to all progressive farmers. I think it must be condemned for adopting a weak, timid and grovelling attitude. It stresses time after time that nothing must be done which might possibly indispose importing nations towards us. In other words, we must go down on our knees and beg importing nations to take our wheat at any price. There is one paragraph to which I take special exception; it will be found on page 158, and it reads as follows:
If ever again circumstances should induce the government of Canada to intervene in wheat marketing by paying the producer a price in excess of world prices, no attempt should be made to enforce that excessive price overseas, that is, to pass the burden of our relief to the producer on to the overseas buyer. Be will not accept the burden. And in the long run all attempts to pass it on, by withholding supplies or otherwise, will prove detrimental to the producers themselves, because it will again indispose buyers towards Canadian wheat.
I would comment that, when we are trying to procure a fair minimum, moderate price based upon cost of production, by no stretch of the imagination can that price be termed an excessive one. On the contrary, when we sell to a foreign nation at a price considerably below cost of production, we are to a certain degree subsidizing that nation and asking the producers of the goods so sold to bear the burden of that relief. In so far as indisposing buyers towards us, so long as cooperative action is taken by the four major nations to procure a moderate price there should be little or no danger in that regard.
As a matter of fact the necessity of the control of production is recognized by the European grain trade and, seeing that the Turgeon report stresses so many times the fact that we must do nothing to indispose the grain buyers of Europe towards us, I should like to quote from a circular from the grain trade to be found on page six of the Farm and Ranch Review. I quote as follows:
In a trade circular issued by Messrs. Weil Hermanos & Co., of Rotterdam, Holland, it is pointed out that subsidies are now paid to export wheat producers in fourteen countries. It comments as follow's:
{Mr. Quelch.]
" from the above it appears that no exporting country can export a bushel of wheat without some sort of subsidy. There is no country in the world, either in the exporting or importing countries, which can produce wheat at a price arrived at in free competition without government assistance. The importing countries do not wish to have imports of foreign wheat at low' prices. In other words, there is nobody in the whole world who has any interest in low prices at all, and yet prices are low, very low. All this seems stark lunacy!
If this system should be continued, there must arrive a point sooner or later when it will break dow'n, when a complete chaos w'ill reign in the world of wheat. There will be a regular wheat war raging, a war which certainly will not contribute to create an atmosphere favourable to a better feeling all around the world.
What is the use of such a mad race to get as much as possible of the share of exports when the total is strictly limited, and w'hen the lowering of prices can only increase the total of w'heat consumption by the relatively small amount used for stock feeding?
We believe, therefore, that this state of affairs cannot continue, and that some sort of general agreement amongst the various exporting countries will be reached, although we quite realize that a similar agreement broke down a few years ago, and we also quite see the danger of such an agreement to free trading in the world.
Such an agreement may not be a permanent measure but only temporary until the present time of overproduction or underconsumption will be over . . . fixing of such an export quota will alone be sufficient to bring the price up again to such a level that subsidies will become unnecessary. . . .
After all, there are far more serious consequences behind the wheat crisis than just the fall in wheat prices alone; we need only remember that in 1929 the general world crisis was preceded, and in the opinion of many, was originally caused by the agricultural crisis."
This article by the grain trade stresses the fact that the present policy is one of stark lunacy. It states that some sort of general agreement among the various exporting nations will have to be reached. That is stated in spite of the fact that the Turgeon commission report holds that such action would indispose the grain trade towards us. It also states that the fixing of an export quota alone will be sufficient to bring the price up again to such a level that subsidies will be unnecessary. I have quoted this article to show that the timid attitude of the Turgeon commission report does not necessarily represent the attitude of the European grain trade.
Another approach to this problem is that of stimulating the home market through chem-urgics, that is by applying science to work in industry so as to use more edible and nonedible farm products. Great strides have been made in this direction in the United States by the Farm Chemurgics Council

The Address-Mr. McAvity
Incorporated. I recognize that a great deal of work has already been done in this regard in Canada through the research council, but I believe that the federal government might well give added financial assistance in order that everything possible shall be done to increase their activities.
But in this regard I should like to sound a word of warning. If such action displaces the materials that we are importing at the present time, it will still further restrict the market for our exports. If, on the other hand, it means utilizing farm products in addition to present imports, it means an increase in the aggregate of our manufactures. In either case the result would be lack of markets for goods produced by such action. Therefore once again we are met with the same old problem, one that we have stressed time and again in this house, that if we are going to be able to increase the general well-being of the Canadian people to the full capacity of the country to supply it, we shall have to increase the purchasing power of the people; that is, we shall have to issue the money that is necessary to convert the great physical demands of the people into an effective demand against the production of the country.
Briefly to summarize my suggestions, I would advocate:
1.	That Canada should take the initiative in calling an international conference for the purpose of controlling production and stabilizing prices.
2.	That every possible assistance be given by the federal government for the purpose of stimulating the home market for agricultural products through chemurgics; recognizing, of course, that such action will increase the wealth of the country and therefore necessitate that steps be taken to increase the effective demands of the people of Canada against this new wealth.
3.	That until steps have been taken to solve the present problem, the government should maintain a minimum price based upon the cost of production plus fair remuneration.
I have addressed my remarks chiefly to the problem of wheat, because that is probably the main agricultural problem. On the other hand, I feel that all farmers and all primary producers are justified in demanding a guaranteed price for their products. So far as the Burden that may be created by such action is concerned, we feel there would be no difficulty; providing this government would institute the program which, before the election, it pledged itself to carry out, namely, to make currency and credit available in terms of public need. We shall be dealing more fully with that side of the picture at a later date.


Mr. A. G. McAVITY (St. John-Albert):: I wish to add my tribute of congratulations to the mover (Mr. Matthews) and the seconder (Mr. Chevrier) of the address. I wish also to express the delight we in the loyalist city of Saint John feel at the prospect of a visit from their Majesties the King and Queen. We are soriy that they are not scheduled for a longer stay with us, but you may depend upon it, Mr. Speaker, that the mayor of our loyalist city will prepare for them a hearty welcome. From all parts of the constituency of St. John-Albert the people will turn out to see their majesties either at Saint John or at Moncton, and those who are now children will hand on to their children's children the story of the big day when the king and queen came to visit us in New Brunswick.
To-morrow night at Saint John the Right Hon. R. B. Bennett will be tendered a banquet on the occasion of his departure for the new home in which he has elected to spend his remaining years, his home in England. The right hon. gentleman is a native son of Albert county, and I am sure I should be recreant to my duty if I failed to tender to him on this occasion our best wishes for his success and health and happiness. We believe he will take his place with Beaverbrook and other native sons.
I am going to deal first with the question of unemployment. The Minister of Agriculture (Mr. Gardiner) referred to the hard times of the 1890's, but he neglected to remind the house that Tory policies were in effect until 1896 when Sir Wilfrid Laurier came into power and the hard times disappeared. It will be perhaps of interest to the house to recall how the city of Saint John at that time set about solving its own problem of unemployment by developing a great port. Grants in aid and other forms of federal assistance were not then available. I believe I can best picture 'to the house the conditions at that time by quoting from an article written by Mr. Ian Sclanders, one of the most promising of the young journalists of the maritime provinces. Referring to those hard times in the nineties he wrote the following in a souvenir booklet which was published in Saint John in 1935 on the occasion of the late king's silver jubilee:
There is unemployment in St. John. The city council has instructed the board of works to ascertain what can best be done to provide work for the jobless. The city's economic structure is being buffeted first from one side, then from the other, in the changing condition of the middle 90's. In the midst of this St. John has one bright hope. St. John decides to become a great national port. The transportation interests had adopted Portland, Maine, as Canada's winter port. Long trains of Canadian
The Address

Mr. McAvity



The Address-Mr. McAvity
May I suggest that this board be headed by the strongest dictator that can be found. I should like to see a man there who would shoot at sunrise all profiteers. I served for two years on the imperial munitions board, and it was a surprise to me to discover of some men that although they would proudly send their sons to fight, or in some cases go themselves, when it comes to the business of supplying war materials the firmly ingrained commercial instinct prevails. The men who serve on this board should be fireproof, nonmagnetic, and impervious to oil and moisture. It seems to me that the scope of the board should be wider than the purchase of munitions. In Germany in 1914 manufacturers did not assemble in Berlin to see what was the most profitable way in which their efforts and resources might be applied. Immediately on the outbreak of war an ordnance or stores officer stepped into each factory and took charge. Mechanics and other key men were not allowed to go to the front. Plans were produced showing the article to be manufactured, and army inspectors with master gauges were in attendance, so that with little delay and no confusion each factory was commandeered to set to work on its allotted task. The proposed purchase system should include all supplies, not only munitions, but clothing, transport and all things vitally* necessarv.
I was superintendent of production on the imperial munitions board which sat in Ottawa from 1915 to 1917, and it may interest the house to know that although no private manufacturers had any knowledge of shell manufacture in 1914, this country in 1917 was producing so many shells that we received orders from, the ministry of munitions to slow down and to divert our activities to other lines. Before we curtailed production we were shipping 56 per cent of all the 18-pounder shrapnel used by all British armies, about 40 per cent of the 4*5 howitzer shells and about 25 per cent of the 6-inch, 8-inch and 9-2 calibre.
I am glad to note that the Canada-West Indies trade agreement will be given consideration. This treaty means much to the people of New Brunswick. Each year the banana boats come to our port with from
20,000	to 30,000 tons of bananas. A clause in the treaty gives a preference of 50 cents a bunch on bananas provided they are brought into Canada via a Canadian port. As a result we have been receiving bananas by the boatload and shipping them out by the trainload. This was all new business brought into being by the Canada-West Indies trade agreement made in 192S by the Mackenzie King government. It is a business which continues during the summer months, providing a very

welcome payroll for dock workers during the slack season. This year the harbours board installed heating facilities and frostproofed additional sheds, which I hope is an indication that the West Indies trade agreement will be renewed.
This week, on my suggestion, a clause was inserted in a lease made by the harbours board for the largest weir in Saint John harbour, which provides that the lessee must pay forty cents per hundred for all gas-pereaux offered by other harbour fishermen. This arrangement was made when the Minister of Transport (Mr. Howe) and the Minister of Fisheries (Mr. Michaud) were in Saint John last September, and it was not my fault that the sale was delayed, causing inconvenience to the fishermen in ordering their twine. I am sure the arrangement will prove of real benefit to all the fishermen of Saint John harbour and will not curtail the export of gaspereaux annually to the West Indies.
On motion of Mr. McNiven the debate was adjourned.



MAIN ESTIMATES, 1939-40

[Stage Direction]
A message from His Excellency the Governor General transmitting estimates for the financial year ending March 31, 1940, was presented by Hon. Charles A. Dunning (Minister of Finance) and read by Mr. Speaker to the house.
On motion of Mr. Lapointe (Quebec East) the house adjourned at 5.55 pan.
Thursday, January 26, 1939