1939-02-23

Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That Messieurs Barber, Bertrand (Prescott), Fafard, Fraser, Goulet, Gray, Hill, Landeryou, Maclnnis, MacMillan, Maephail, Moore, O'Neill, Pinard, Purdy, Rheaume, Roberge, Spence, Taylor (Norfolk) and Tustin be appointed to assist his Honour the Speaker in the direction of the restaurant as far as the interests of the Commons are concerned, and to act as members of a joint committee of both houses qh the restaurant.


[Stage Direction]
Motion agreed to.
i Mr. Graydon.]


[Stage Direction]
Mr. MAXIME RAYMOND (Beauharnois-Laprairie) moved for leave to introduce Bill No. 31, to amend the Companies Act, 1934.
Some hon. MEMBERS:: Explain.


Mr. RAYMOND:: Mr. Speaker, last year the royal commission appointed to investigate the textile industry in Canada made its report, which was tabled in the house during the session. The report shows that textile manufacturers, while continually complaining of insufficient tariff protection, have for a number of years enjoyed the advantage of customs duties. This tariff protection is a privilege secured by them from parliament upon representations that their workers would benefit by increased employment and better wages. Unfortunately, the facts revealed at the inquiry show that these companies, far from fulfilling the obligations entailed in the privileges granted to them, have taken advantage of these privileges to make exorbitant profits and distribute scandalous dividends and bonuses to their shareholders, while paying workers less than living wages. The object of this bill is to put an end to such abuses and to come to the aid of the worker, by enabling the Secretary of State to obtain information regarding the operations and management of industrial enterprises enjoying tariff protection, and to exercise some control over their profits and their dividend payments; in brief, to see that they carry out their obligations towards their employees and the public.
Motion agreed to and bill read the first time. BANK ACT



REDUCTION OF RATE OF INTEREST OR DISCOUNT FROM SEVEN TO FIVE PER CENT

[Stage Direction]
Mr. P. J. ROWE (Athabaska) moved for leave to introduce Bill No. 32, to amend the Bank Act.
Some hon. MEMBERS:: Explain.


Mr. ROWE (Athabaska):: The amendment, Mr. Speaker, is designed to reduce from seven to five per cent the rate of interest or discount permitted to be charged by banks. With the general reduction of interest rates on government and municipal bonds, and the reduced rate of interest on deposits at present paid by the banks, there should be a corresponding reduction by the banks in the interest rate charged to borrowers.
Motion agreed to and bill read the first time.

Questions



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. PERLEY:: 1.	Did the Justice department or any other branch or department of the government during the years of 1935 to 1938, purchase photographic equipment for the royal mounted police in Regina, or for any part of Saskatchewan?
2.	If so: (a) from whom was the equipment purchased; (b) what was the nature of the equipment; (c) through what dealer was it purchased, and (d) what, was the price paid?


Mr. LAPOINTE (Quebec East):: This has to be answered by many departments.


CADETS IN CANADA, BY PROVINCES
Mr. MALLETTE:: How many cadets are there in each of the nine provinces of the dominion?


Mr. MACKENZIE (Vancouver):: As at 31st August, 1938: Prince Edward Island, 986; Nova Scotia, 1,496; New Brunswick, 1,381; Quebec, 42,290; Ontario, 22,288; Manitoba, 1,578; Saskatchewan, 1,004; Alberta, 1,104; British Columbia, 1,036.
Canada's trade commissioner in Germany Mr. FLEMING:
1.	Has the government of Canada any representative in Germany, acting as a trade commissioner?
2.	If so, has this trade commissioner tried to dispose of Canada's surplus farm products in Germany ?


Mr. EULER:: 1.	The Canadian Government trade commissioner in Berlin.
2.	Yes.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. CLARKE (Rosedale):: 1.	What expense has been incurred by the dominion government in the last three years for sculpturing, carving, or other ornamentation, both inside and outside the centre block of the parliament buildings?
2.	What are the names of all persons engaged on this work?
3.	What was the domicile of each such person at the time of his engagement for such work?
4.	How long has each of such persons been resident in Canada?


DEPARTMENT OF TRANSPORT-MARINE SERVICES ON GREAT LAKES, CANALS AND RIVERS
Mr. MARSH:: 1. What is the_ total cost of all marine service steamships, including lightships, etc., used 
on the great lakes, canals and rivers, by the Department of Transport?
2. What was the annual cost to maintain the above mentioned ships, as well as all other aids to navigation, for the years 1920 to 1938, inclusive?


WELLAND CANAL-COST AND REVENUES
Mr. MARSH:: 1.	What was the total cost of Welland canal until date of official opening, including total cost of all necessary property in connection with this undertaking?
2.	What is the cost of wages and operating expenses, including all electric power, paint, repairs, bridges, dredging, etc., each year, from date of official opening until present time?
3.	What is the interest to date on bonds or moneys necessary for the building of the canal?
4.	What is the total revenue derived from use of canal to date?


CIVIL SERVICE EXAMINATION FOR TORONTO MAIL PORTERS
[Stage Direction]
Mr. MULOCIv:
1.	On what date was the last examination held by the civil service commission in the city of Toronto for mail porters?
2.	How many persons tried this examination?
3.	How many were successful?
4.	How many of those who were successful on this examination have been taken on- and received employment as mail porters in this district ?
5.	How many successful candidates on this civil service examination have not received employment ?
6.	Has the civil service commission invited
applications for a further examination for mail porters in this area?	.
7.	If so, will the present list be abolished, and on what date?
CIVIL SERVICE EXAMINATION FOR TORONTO LETTER CARRIERS *
Mr. MULOCK:: 1.	On what date was the last examination held by the civil service commission in the city of Toronto for letter carriers?
2.	How many persons tried this examination?
3.	How many were successful?
4.	How many of those who were successful on this examination have been taken on and received employment as letter carriers in this district?
5.	How many successful candidates on this civil service examination have not received employment?
6.	Has the civil service commission invited applications for a further examination for letter carriers in this area?
7.	If so, will the present eligible list be abolished, and on what date?



NATIONAL HEALTH


[Stage Direction]
On the orders of the day:
Mr. C. E. JOHNSTON (Bow River):: I wish to direct to the Prime Minister (Mr. National Health

Mackenzie King) a question of which I have already given notice. On December 19, 1938, the city clerk of Calgary, Mr. J. M. Miller, directed a letter to the Prime Minister as follows:
Right Hon. W. L. Mackenzie King,
Prime Minister of Canada,
Ottawa, Canada.
Dear Sir:-
The special health committee of the council of the city of Calgary, in meeting recently, gave consideration to a report from the city s Medical Officer of Health, Dr. Hill, wherein it \tas stated that infant mortality in the city of Calgary, as elsewhere in the Dominion of Canada, was overly heavy due to the fact that expectant mothers were not being given any financial assistance either by the dominion, provincial or municipal governments. Dr. Hill believed, and so stated in his report, that the situation in this regard could be considerably improved upon if an expectant mother was assured some financial assistance during the period of her confinement.
The council adopted the recommendation of the special health committee, that this matter be directed to the attention of the senior governments, with a request that the same receive early and favourable consideration.
May I ask the Prime Minister what action, if any, has been taken in this matter?


William Lyon Mackenzie King: I am sorry I am not in a position to answer the question at the moment, but I imagine my colleague, the Minister of Pensions and National Health (Mr. Power) will be able to do so.


Hon. C. G. POWER (Minister of Pensions and National Health):: So far as I was able to catch the question, with the noise that is going on in the chamber, I take it to be a request by the city council of Calgary that the federal government look after the hospitalization and medical care of certain citizens of that city. In reply I may say that under the British North America Act, section
Assumed
value
Carrots	
87	lb.	crate	(1.25)Beans	
35	lb.	hamper	(1.00)Beets	
76	lb.	crate	( .90)Celery	
71	lb.	crate	(1.25)
92, the hospitalization of the citizens of any province is entirely under the control of the province. The federal government has control only over quarantine hospitals.



TRADE AGREEMENTS


[Stage Direction]
The house resumed from Wednesday, February 22, consideration of the motion of Mr. Mackenzie King that the house go into committee on the following proposed resolution:
That it is expedient that parliament do approve of the trade agreement entered into at Washington on the 17th day of November, 1938, between Canada and the United States of America, and that this house do approve of the same, subject to the legislation required in order to give effect to the provisions thereof.
Mr. GORDON GRAYDON (Peel):: When the house rose last evening I was discussing the advanced valuations in connection with vegetable imports into Canada, and with particular reference to the shortened periods to which those advanced valuations now apply under the new treaty. Perhaps I should add that not only were the periods shortened under this agreement but the amount by which the valuation may be advanced was at the same time reduced. I take a memorandum prepared by the Canadian Horticultural Council as my basis for giving four examples to show how the progressive lessening of tariff protection for vegetables has worked out during three periods in the last few years. First of all I take the period under the Bennett administration; secondly the period under the 1935 agreement; and thirdly, the period under this last agreement which has been entered into. I want to put on Hansard these four examples of the differences in protection:
	Under	Under
Under	1935	1938Bennett	agreement	agreement2.73	1.65	.881.43	.95	.671.97	1.01	.932.13	.83	.74
These, however, must be regarded as maximum total duties which only exist for a short period each year. For the balance of the year only the general tariff protection remains.
In the Dunning budget of 1930 the plight of the vegetable growers was recognized and a general tariff protection of thirty per cent was provided, but that was not regarded as sufficient at the time and in addition to the thirty per cent the then Minister of 
Finance (Mr. Dunning) applied for the first time minimum seasonal duties on imports into Canada. Up to the 1935 agreement the minimum seasonal tariff remained, and was supplemented by Mr. Bennett's advanced valuations in order to give further protection; but in 1936 the policy of progressive lessening in protection commenced. Let us see what has happened in the meantime to suggest to the government that we should have less protection for this kind of farm produce.

Canada-United States Trade Agreement
Since 1930 many conditions have changed, but all the conditions that have changed would call for a tightening and a raising of the tariff rather than a lessening of it. There developed in the meantime a much improved system of refrigerator transportation, which permits of fruits and vegetables from the United States arriving here in almost as good condition as when they left the field. In addition there has been an increase of nearly forty-five per cent in the production of fresh vegetables in the United States, and at the same time a reduction in the unit value of such commodities in the domestic market there. We must also take into consideration the numerous bonuses and subsidies given by the United States government on these and other farm products. Added to all these changed conditions, in the last eight years there has been a most comprehensive program of advertising of American fresh fruits and vegetables, not only in the United States but extending over here also.
The vegetable growing industry in Canada to-day is in a most vulnerable position, perhaps the most vulnerable that it has ever occupied. I need only point out one thing by way of evidence-I do not want to overstate the case, and of course if I do there are those who will pass judgment upon it. In a press release of November 21, 1938, by the executive of the Ontario Vegetable Growers' Association, meeting in Toronto, they said:
The trade agreement, with its serious reductions in both tariff and seasonal protection, will make it impossible to produce vegetables in Ontario on a commercial basis.
In the county I represent, in addition to the other types of vegetables, we grow potatoes. It is well therefore to make mention of the position of that branch of agriculture under this new agreement.
Before the agreement went into effect Canada imposed a tariff of 75 cents a hundredweight against United States potatoes the year round. Under this agreement potatoes come in from August 1 to June 14, ten and a half months of the year, free, and for the rest of the year the duty is cut in half. But the concessions by the United States to our potato growers are not so sweeping. Prior to this agreement our duty and theirs were the same, namely, 75 cents a hundredweight. They gave us a reduction of half, to 37i cents a hundredinvoiced
at
.75
1.25
2.00
weight for nine months, and for the other three months they cut off only 15 cents. But, as with cattle and milk, the inevitable quota crops up, although there is no quota upon the importation into Canada of United States potatoes.
As has been pointed out many times by those who are perhaps in a better position to do it than I am, the vegetable growing industry of this country is very much underestimated. If there is any branch of agriculture that is in real need of adequate statistics at present, it is the vegetable growing industry. Figures of the bureau of statistics would lead one to believe that only a small percentage of our agricultural production comes from this branch of agriculture. But it is the considered opinion of most people who know that in the vegetable growing industry in Canada to-day there is an annual production value of between 8150.000,000 and 8200,000,000. If the government had known the true extent of this industry I believe that its protection would not have been jeopardised as it has been. Let us have a true picture of the vegetable growing industry in this country. If necessary we might divert some of the funds voted for the Department of Agriculture each year to an effort to provide an adequate picture of its extent and value.
I leave the vegetable growers for the moment and come to an important part of our horticultural industry, namely, fruit growing. By treatment similar to that given to the vegetable growers in Canada, the fruit grower has also suffered. In addition to the removal of the three per cent excise tax on imports from the United States, there has been a progressive reduction in the duties. The agreement of 1935 reduced our general tariff from 25 per cent to 15 per cent, and now this agreement reduces it again to 10 per cent. In addition, the "added values" have been reduced, and moreover the time during which those "added values" are to be applied has also been diminished.
I should like to read into the record a brief statement showing exactly how this progressively decreased protection works. I take again a memorandum of the Canadian Council of Horticulture as a basis for my statement:
Amount of duty
Under	Under
Under	1935	1938
Bennett	agreement agreement
.81	.62	.441.00	.77	.681.65	.92	.78
Cherries, 11 lb. case.. ..
Pears, 50 lb. box	
Strawberries, 33 lb. crate
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Canada-United, States Trade Agreement
As in the case of vegetables these must be regarded as maximum total duties which only exist for a restricted period each year. For the rest of the year the only protection is the general tariff.
But we went further than that, because this agreement was linked up with the agreement between the United Kingdom and the United States. Under the empire trade agreements the apple grower in Canada obtained a sheltered market in the United Kingdom, to the extent, using our own currency, of about $1.08 a hundredweight. That is, the United States grower in shipping his apples into the United Kingdom market had to jump a hurdle of $1.08 before he could compete on equal terms with the apple grower in Canada. Following that change there was a great revival of business among the apple growers of Canada. It put a great many of them on their feet. But under this new agreement the protection in that sheltered market has been cut from SI .08 to 72 cents a hundredweight.
I am not able to agree on all points with the Minister of National Revenue (Mr. Usley), although I know that in many matters his judgment is good. But the fruit growers I represent are not quite so complacently satisfied with the terms of the agreement as those in the minister's constituency are said to be. I can only suppose that his engaging personality and convincing power of argument must have been in evidence to induce his growers to take that view. In any event most of our people feel that this reduction to 72 cents is sufficient to allow the United States apple grower to jump the fence and compete with us in England.
I have nothing further to say in that regard, except to make one plea on behalf of the fruit and vegetable men at this time: that with all these changes in protective tariffs something will have to be done internally for this branch of agriculture. I say that most seriously. In the meantime, until we have an opportunity to restore some of these tariffs, I suggest that we do as they did in Ontario some years ago, namely, launch, with some kind of government assistance, in cooperation with the growers themselves, an "eat home grown fruit and vegetables" campaign among the housewives of Canada. I am sure the housewife is not always aware of the fact that when she buys carrots from the States while our products are available, she is interfering with the livelihood of some who are her Canadian friends in the vegetable and fruit growing districts. We should advertise and popularize our home grown fruit and vegetable products, because for deliciousness and
	.
flavour there is nothing to equal them on the other side of the line or anywhere else in the world.
I want to give this instance, in closing. One of my friends in the county of Peel wanted to exchange a box of apples which he had grown for a crate of oranges which a friend of his had grown in the state of Florida. When he went to ship the box of apples, he found that it cost him $4.14 to ship it to Homestead, Florida. When the man in Florida shipped .the oranges back in the same box it cost only $3 to land that box in the county of Peel. I made inquiries and I received this explanation from the Canadian National Railways: You can ship a crate of oranges from Florida to Toronto for somewhere around $3, but this is due entirely to the fact that the United States has a special rate in effect from Florida to Canada to encourage the shipment of Florida oranges. In other words, it is just another subsidy.
I draw that to the attention of the house for the purpose of showing that we as Canadians must wake up. If we are going to protect our own growers we must do something other than lessen tariff protection while providing nothing in compensation by way of subsidization or organized assistance. That in short, Mr. Speaker, is the case of the fruit and vegetable growers in Canada, and I cannot over-emphasize the probable effect of these new arrangements upon that industry and those engaged in it.
In conclusion may I repeat that Canadians should await the practical results of this new agreement before rising to the heights of hilarity over its advantages. Common sense, if nothing else, dictates this course. Our job in this house is to legislate towards a better and a more prosperous Canada. In pointing out some of the obvious weaknesses in this pact we as members of his majesty's loyal opposition have, according to the best British parliamentary traditions, discharged our obligation to the people of the dominion. The final responsibility rests with the government.


Mr. W. G. CLARK (York-Sunbury):: Mr. Speaker, the trade treaty with the United States means a great deal to the province of New Brunswick, as well, of course, as to the other provinces of this dominion.
New Brunswick is one province which was not entirely carried away by the 1911 loyalty cry, because it returned in the election of that year a majority of supporters of the Right Hon. Sir Wilfrid Laurier. Expressions of regret have been heard ever since that many were influenced by the political issue then made of loyalty to the British empire, because after the election it was clearly realized that

Canada-United States Trade Agreement
it was only a political cry, and that the reciprocity proposals, had they not been defeated by that cry, would have been of great economic benefit to the maritime provinces.
The leader of the opposition (Mr. Manion), speaking in the house on Friday on this trade agreement, made certain statements about the 1935 general election returns, rather implying that the Liberal government elected was not representative of the people. But an examination of the 1935 election returns, by constituencies, shows that there were elected, by clear majorities of the votes cast, 90 Liberals and only 5 Conservatives; 9 Social Credit, one Cooperative Commonwealth Federation, and one independent Conservative. Thus there were more than five times as many Liberals elected by clear majority votes than all the other parties put together, indicating that the Liberal government does well represent the voters.
The geographical situation of New Brunswick makes it a great convenience to trade with the United States, and the present trade treaty by which the United States gives reductions on potatoes, lumber, horses, cattle, maple products, blueberries and furs is a decided benefit and will result in very greatly increased trade during this year.
Reading the address of the hon. member for Royal (Mr. Brooks) I note that he states, at page 345 of Hansard:
It is generally realized that in New Brunswick conditions were never worse than they are at the present time.
And referring to the 1935 treaty with the United States he makes this statement, at page 344 of Hansard:
The right hon. the Prime Minister (Mr. Mackenzie King) said in effect that the people of Canada were blessed by the results of the 1935 treaty.
Again, on page 344, he says:
I simply want to say that as far as the primary producers of the maritime provinces are concerned, the statement made by the Prime Minister is not borne out by the facts.
But the hon. member has not given the facts. He refers to apples and states that the province of New Brunswick shipped about 48,523 barrels in 1936 to British empire markets, and that the 1937 shipments totalled 25,744 barrels. Having some knowledge of apple production in New Brunswick I noted at once that these figures were evidently about twenty-five times overstated and therefore entirely misleading.


Mr. BROOKS:: On a question of privilege, Mr. Speaker, I wish to say that the statement I made was taken from a report of the bureau of statistics and given as sent to me
from that department. I consider it as correct a statement as that made by the hon. member for York-Sunbury.


William George Clark: I shall be glad to give the house the correct apple crop figures as supplied by the New Brunswick department of agriculture, and prepared under the direction of the provincial horticulturist.
As a matter of fact, 1936 was a poor apple production year for New Brunswick, there being only 29,104 barrels marketed, and of these, 20,147 ban-els were sold within the province and 8,957 outside, mostly in Quebec province. So it is very wrong to give the idea that there were 48,523 barrels sold from New Brunswick in British empire markets in 1936. The correct figures for 1937 are as follows: The crop increased to 49,616 barrels, of which 14,548 barrels were sold outside the province, again largely in Quebec province. It will thus be seen that the.facts are very different from what the hon. member purported to show. New Brunswick does not export apples to any great extent. Potatoes are New Brunswick's great export crop; Nova Scotia exports large quantities of apples.
While I have great personal esteem for the hon. member for Royal I have wondered why he should give figures which are at least twenty-five times overstated. Evidently it was done for political motives, due to the statement which had been made that the hon. member is equal to twenty-five other men. The hon. member for Greenwood (Mr. Massey) visited New Brunswick, and in paying tribute to the hon. member for Royal he said, as reported in the press of June 6, 1938, that the hon. member for Royal was equal to all the twenty-five members from the maritime provinces who were seated on the government side of the house. The further statement was made that he had been the only hon. member to stand up for New Brunswick. Of course this is political stuff, and no doubt it secured some votes for the hon. member for Greenwood at the Ottawa Conservative convention. It is unfortunate however to have the hon. member for Royal seeing figures twenty-five times their actual size.
While potatoes are the chief crop in New Brunswick, and while we do not export many apples, yet that portion of the St. John river valley in New Brunswick is highly suited to apple raising, and as a result the number of orchards is increasing. I should like to refute the statement of the hon. member for Royal that conditions were never worse in New Brunswick than they are at the present time. I have know-ledge of business conditions throughout that province and I am pleased to report that 1937 was one of the best years we
1234	COMMONS
Canada-United. States Trade Agreement
have known. There was some recession in 1938, but even in that year business was better than in most other years. Much is expected in the coming summer through increased trade with the United States.
To show the increase in the exports of certain commodities from New Brunswick to
the United States I should like to place on record a table giving the figures for the fiscal years 1935 and 1938. I have taken these years because 1935 was the year which immediately preceded the former United States treaty; and the 1938 figures serve to show the material increases brought about by the 1935 treaty.
Exports to the United States through ports in the province of New Brunswick for the fiscal years 1935 and 1938
Item	Unit
Blueberries	pounds
Dairy cattle	number
Planks, boards and flooring	
Fiscal	United States	
year	Quantity	V alue1935	195,291	$ 12,8311938	1,553,003	67,9091935	174	7,6781938	951	62,4281935	20,982,000	483,2511938	45,449,000	1,252,978
It will be noted that there were over five times as many dairy cattle exported in 1938 as in 1935. Not only that, but there was an increase in value during that period to the extent of almost fifty per cent per head. With further reductions in the new agreement I look forward to a still greater increase in the export of these and other New Brunswick products.
Trade makes for friendships between individuals and nations. Let us then continue to pursue the path of greater trade which will give work to our people, lasting peace and prosperity.


Mr. M. J. COLDWELL (Rosetown-Big-gar):: Mr. Speaker, I am rising to support the treaty. I believe treaties of this description are to be welcomed at the present time because they tend to bring about better international relations. I do not believe, as is so often contended in the house, that they offer any immediate relief to the domestic problems that confront this nation. Our immediate problems are of such a nature that international treaties of this type will not cure the ills from which the country suffers. Nevertheless I believe they are to be supported because they tend to improve the relationships between ourselves and other countries which are parties to these treaties.
Unfortunately national self-sufficiency is becoming more pronounced all across the world. Recent events in Europe show that the totalitarian states with that kind of philosophy are gaining great strength. Their domination of eastern and southern Europe in my opinion means still further restrictions in world trade. When he discussed the treaty in the house recently the Prime Minister (Mr. Mackenzie King) made the statement that he hoped the treaty would make for peace. I think perhaps he drew an over
[Mr. W. G. Clark.)
optimistic picture of what might be done in that regard. All I can say, as I said at the outset, is that I am supporting the treaty because I hope that something of that nature may in part at least be achieved. One thing the treaty does is this: it draws into closer cooperation the three great English-speaking democracies. When I speak of the three democracies I am thinking of the United States, Great Britain herself, and the democracies which comprise the British dominions. Those three divisions are drawn more closely together by an agreement of this description, and I believe that that is all to the good.
Moreover may I point out that closely associated with Great Britain to-day in the struggle for the preservation of democratic institutions is the old republic of France. Anything which can tend to bring these peoples more closely together at the present time may have the effect of preventing the outbreak of a serious and disastrous war. While the treaty is only a step in that direction I believe we ought to support it for this reason, if on no other grounds.
I do not propose to analyse at length the various proposals in the treaty. This has been done in the house quite extensively during the last few days. I think that almost everything that could be said pro and con about the treaty's definite proposals has been said already. However, there are other factors to which, particularly as one representing a western constituency, I should like to direct some attention.
First of all, in the consummation of this treaty once again the west was called upon to relinquish something which seemed at least to have superficial advantage. I know it has been argued that little advantage was derived from the wheat preference, but I contend it did give us some advantage. As I said

Canada-United, States Trade Agreement
during a previous debate, I happened to be in the United States of America when the treaty was signed. I noticed that the middle western American newspapers were very much pleased with having at last got rid of the six cent preference. If, with the limited market we now have, that tends to encourage the use of more United States wheat by British mills, then it will have some effect upon our market. There should have been included in the treaty some compensating factors which we do not find there, and to that I shall allude in a few moments.
As a westerner I would also draw attention to the cattle quota. When this treaty was signed there was a widespread or perhaps almost general belief that, as in the case of the former treaty, the quota of 60,000 head of cattle per quarter was a Canadian quota. We have been told in recent days that it is not a Canadian quota. The nation which could grab off immediately the largest percentage of that quota would be in an advantageous position. In reply to a question asked the other day by the hon. member for Haldi-mand (Mr. Senn), the Minister of Agriculture (Mr. Gardiner) stated that the quota for the first three months of this year had been exhausted in January. He stated that during that month Canada had exported 30,240 animals to the United States, and Mexico 24,760 animals. Because of a lack of appreciation of this fact, there was a severe drop in the price of cattle on the Canadian market immediately the situation was known. It seems to me that if the government of Canada is going to agree to the adoption of quota systems for farm produce being exported abroad, such quotas should be safeguarded so that they will actually work in the interests of the Canadian farmer. In this particular instance, while the quota was of some advantage for a few weeks, the sudden shutting off of exports with two more months of the quarter still to go created a serious factor in the stock market situation in this dominion.


Mr. STEWART:: The live stock market.


Major James William Coldwell: The uneven market
which we have had during the past few weeks should be rectified at once if at all possible by the Department of Trade and Commerce and the government of this country.
This treaty is distinctly disappointing in certain other respects when considered from the point of view of a western member. Three years ago the question of the high price of farm implements was raised and a very thorough and exhaustive inquiry was .made into the matter by a special committee of the house. An excellent report was presented to
parliament containing certain recommendations and stating specifically and categorically that the prices of farm implements were too high, especially in comparison with the prices which the farmer obtained for his produce. When the budget was under discussion last June I believe that the western members of all shades of opinion hoped and indeed believed that when this trade treaty was signed we would find something in it which would reduce the high cost of farm implements. Something was done with regard to cream separators, but otherwise there was relatively little. Once again I draw to the attention of this house the fact that farmers both east and west have to buy the things they use in a highly protected market, whereas they have to sell the bulk of their commodities in the unprotected markets of the world. Consequently we believe we have a case for special consideration by this government or any government which occupies the seats of power.
May I say to the Liberal members of this house that in 1919 the Liberal party adopted a definite program and policy in regard to these matters. After all these years relatively little has been done to implement that policy and program.


Mr. EULER:: Does the hon. member not think it is a fairly drastic step to reduce the duty on farm implements from 25 to per cent?


Major James William Coldwell: Yes, but may I point out to the minister that in spite of the reduction which has been made, the prices of farm implements have steadily risen.


William Daum Euler: If it went down still further, they would rise still higher?


Major James William Coldwell: The government has within its power the ability to do something to regulate this price level.


William Daum Euler: Fix prices?


Major James William Coldwell: Yes, fix prices, if that were the only solution. May I point out that because of the protection which has been given in the past to farm implement companies, as was shown by the report of the farm implement committee, one company, the International Harvester Company, controls sixty per cent of the agricultural implement business. It has been shown over and over again, not only with respect to the agricultural implement industry but with respect to the oil and other industries, that where one company in a field controls the majority of business, then that company has a monopoly and can set the price level practically for all other companies.
1236	COMMONS
Canada-United. States Trade Agreement
The point of view that I am expressing is not only the point of view of a member associated with this particular group; I submit it is also the point of view of many Liberals in western Canada. For example, I have in my hand a copy of the Regina Leader-Post of February 15 which contains a report with reference to a resolution introduced into the Saskatchewan legislature by Mr. J. A. Gregory, the Liberal member for The Battlefords. I may be wrong, but I believe Mr. Gregory is the deputy speaker. This report reads:
Ringing challenge for a return to that sturdy Liberalism upon which the party was founded and strong denunciation of many eastern Liberals as merely adjuncts of the privileged classes of eastern industrialists was sounded in the legislature Tuesday by J. A. Gregory (Liberal, The Battlefords).
This is an opinion expressed not by a member of the group to which I belong, but by an influential Liberal member in the legislature of Saskatchewan.
In my opinion this house is spending a great deal of time in this debate in concentrating upon a discussion of foreign trade and foreign markets, when as a matter of fact we have a great potential consumptive market at home. Many hundreds of thousands of Canadian citizens in this dominion at the present time lack the ordinary necessities of life, without considering the amenities, and it seems to me that we should be concentrating upon improving the conditions in Canada so that we might find a larger consumptive market within this dominion at the present time. Many of our people could consume more butter and more meat, for an example, if they could buy those commodities, and to my mind this house ought to be considering ways and means of increasing that consumptive power. As hon. members realize, I believe, this cannot be done by the issue of relief, although the standards of relief should be raised; or by the issue, as our social credit friends suggest, of dividends; but I do believe that there are essential public works which could be used to build up a better Canada and at the same time distribute purchasing power so that our people could buy the commodities which at the moment we are trying in vain to export. That would give the added advantage of paying wages, instead of relief from which we get nothing at all.
Of course I realize that we must trade, because there are some things we cannot produce which we must get from abroad, and to get those things from abroad we must export something in payment of them. To-day nations are placing quotas and embargoes

against trade from without. So that whether we like it or not, some form of planned commerce between nations is in the making, and even this treaty is symptomatic of that fact. For here, written into a treaty to which Canada is a party, you have quotas for primary produce going into the United States and into Great Britain.
Now what can we do? The hon. member for Huron North (Mr. Deachman), whose speeches I always appreciate because they contain a wealth of information and of detail, would say that we have got to get free trade, or at least much freer trade. But to my mind the competitive system under which old-fashioned free trade might have flourished has gone. The competitive system both internally and externally has broken down. Internally great corporations and monopolies occupy the field of industry and of distribution, and in the world to-day both great international monopolies and self-sufficient nationalisms are being built with great rapidity.
The house has a right 'to ask what the Cooperative Commonwealth Federation would suggest in the face of this situation in regard to external trade. May I quote from our own platform and explanation of that program? We urge in the realm of external trade that we-
-set up import and export boards to encourage and regulate external trade and remove the burden of the tariff.
Let me read also our explanatory note:
Opponents of planning try to infer that this would lead to national self sufficiency. On the contrary, the more intelligent our economic relationships become, the more it will be realized that a nation, like an individual, is foolish to try to produce something expensively which can be made elsewhere more efficiently and economically. High tariffs are but walls against our income which help to build those great monopolies that oppress us. Trade ought to be an intelligent exchange of goods and services.
But the necessities of capitalist production make this impossible. For capitalism never distributes among the producers a sufficient amount of purchasing power to enable them to purchase the goods produced. Hence each nation tries to export more and more surplus goods and import less and less from abroad. High tariffs, national self-sufficiency and a struggle for the few remaining markets follow. This leads to threats of war and, finally, to war itself.
And this concluding paragraph:
The C.C.F. proposes that our international trade shall be planned intelligently so that the nation itself, through its import and export boards, shall arrange for the exchange of goods it can produce economically for those it needs and which others can produce more advantageously. Not until capitalism is banished from the earth can the ideal of universal free

Canada-United States Trade Agreement
trade be realized. Under a Cooperative Commonwealth policy Canada can improve its external trade, remove the burdensome tariff exactions and expand the home market. This would bring great benefits to producer and consumer alike.
That, I believe, is a fair summary of the position of this group in relation to trade and commerce; and may I say it is a realistic approach. Moreover, unless democracy plans to increase the abundance and distribute that abundance, I am afraid that the people will turn to some other form of government or to some other system. And I, believing as I do that our democratic institutions offer still the best vehicle for social and economic improvement, desire to see something done which will strengthen our democratic institutions and democratic ideals among our people. For youth, hundreds of thousands of them, and the unemployed-altogether over a million of them, on relief-will not wait; indeed they cannot wait until, even if it were possible, we could establish universal free trade or attain universal trade agreements. As I said at the outset, let us make such agreements when we can, but let us suffer no illusions that such agreements are -going to bring to o-ur people the immediate relief which is so necessary. For trade treaties are not a universal panacea, and very largely, may I say, because they are not universal; nor are -they likely to become universal. They will not cure, let me emphasize, our own immediate problems, of unemployment and of poverty. In December, I noticed, we had 407,000 persons registered as unemployed and upwards of a million individual citizens on relief; while workers' wages, another factor in the consumptive field, averaged in industry last year only 116 a week. And this, may I say to my hon. friends opposite, after many years of Liberal administration and Liberal policy.
My purpose in rising this afternoon is to ask members on all sides of the house if they do not think it is high time that this parliament and those who comprise it should face the realities of the present situation. For surely democracy is on trial. Let me repeat, unless our democratic institutions can be made to work to provide our people with opportunities of employment, with opportunities of sharing in the abundance which the resources of the country and the machinery of production make possible for us, then surely they will turn to some other form. Indeed there are threats from many quarters to-day. All across the country one can find what one might term incipient fascism as well as fascism of the blatantly European type; and then we have the growing propaganda for a so-called national government, a national government which, in my opinion, if formed, would be formed of those who desire solely to protect the vested interests in the country rather than the interests of the great masses of the people. To my mind, if these paths were followed they would simply be some more of those blind alleys up which we have been running from time to time.
There is no universal panacea that will immediately solve these problems for us. Our problems in my opinion have to be solved in the light of ultimate aims, step by step. We have got to build the path by which we shall go forward; and because I believe that this treaty is, if only a feeble step, at any rate a step in the right direction, I am supporting it on these grounds. I believe that democracy is quite capable not only of producing abundance but of distributing that abundance to the people of this country. To my mind these times constitute a challenge to every one of us and I should like to see this trade treaty disposed of as quickly as possible now that it has been discussed fairly thoroughly, so that we might proceed with the consideration of those weighty domestic problems that confront us at this moment. And so I support the treaty, though without any illusions that it is going to solve the grave problems that we face in Canada to-day.


Hugh Alexander Stewart: I have
listened with a good deal of interest to the speech of the hon. member for Rosetown-Biggar (Mr. Coldwell), who has just taken his seat. He always delivers an interesting address. He started out by stating that he was going to vote for the approval of this trade agreement, and he gave as the reason that it would promote international peace and goodwill. Well, when we come to consider the parties interested in this three-cornered arrangement, Canada, the United States and Great Britain, and take into account the harmonious and friendly relations that have existed for a long period of years, one wonders if anything can be added which will improve those relations. To me, this is just so much gilding and glitter that has been placed upon this agreement.
Then the hon. gentleman proceeds to relate a number of objections which he has to the agreement, and it appears to me they are very real and very serious ones. In fact, if I were a judge and were compelled to decide, after listening to his arguments in support of the treaty and those he advanced against it, I should have to decide that his arguments against it were very much stronger than those in favour of it.
I propose to deal briefly with two or three matters in connection with this agreement.
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Let me refer to two statements appearing in Hansard, both made by the Prime Minister (Mr. Mackenzie King). On page 55 you Will find the statement by the right hon. gentleman, that in dealing with this treaty we should consider the sequence of events; and in a sketchy way he reviews the events over a period of years leading up to the making of this agreement. Then there is another statement on page 56 which I desire to read, because I think it is important that we should deal with it. On page 56 the right hon. gentleman says:
May I say at once to my hon. friend that when we discuss trade matters we are almost certain to differ diametrically because wre view matters in an entirely different light. I believe the way to help to improve economic conditions, employment and the like is to encourage trade and to obtain as much in the way of trade as we possibly can. My hon. friend opposite^ believes in the policy of economic nationalism.
In considering the first of these statements as to the sequence of events, I think it is only fair to review the conditions between 1920 and 1930. Those were years of expanding world trade, years in which the trade of Canada expanded in common with the rest of the world and we enjoyed the advantages and the benefits of that world trade. We must not forget that at all times our prosperity is bound up with world prosperity and that conditions arising outside Canada influence conditions in our own country, a fact which sometimes our friends opposite seem to have overlooked in dealing with the conditions between 1930 and 1935.
At the end of 1929 and the beginning of 1930 the markets of the United States were practically closed to Canada because of the increases in the tariff on two occasions by the United States. The world depression had set in. Trade had become disorganized. There was financial chaos, exchange was dislocated, unemployment in Canada was becoming serious. It was more serious than was realized at the time; we were without accurate statistics on the subject. Following this there was dumping of manufactured goods from the United States into Canada without any reference to costs of production, with resulting disorganization of industry and increased unemployment. It is perfectly clear that something had to be done. The steps that were taken between 1930 and 1935 were, I think, the only ones that could have been taken in the circumstances.
An emergency tariff was introduced with the object of lessening unemployment and preventing this ruthless dumping of foreign products in the Canadian market. Concurrently with the raising of duties for this pur-
pose there was an understanding and agreement with the manufacturers of Canada that the prices of their products to the consumer would not be increased. That agreement was respected. There was one case where perhaps it was not, and the penalty immediately followed ; their increased protection was removed. The fulfilment of the agreement not to raise prices was strikingly exemplified in the agricultural implement industry; during all those years the prices were not raised. But following 1935, when the duties were reduced by this government, the prices of agricultural implements increased.
The objects of the emergency tariff were in a measure realized. And in dealing with this it must not be forgotten that there were many reductions in the tariff before 1935. Go back to the budget speeches and you will find a long list of items upon which tariffs were reduced over that period.
It must also be borne in mind that during that time Canada retained her share of the world's trade. There was only so much trade to be done in the world; it had shrunk by about sixty per cent.
Another step was taken in the meeting of the empire economic conference in Ottawa in 1932. I have here a report of the proceedings of that conference. I propose to read a number of extracts showing the position taken by the then prime minister of Canada and the prime minister of Great Britain.
On page 69 appears the following statement by the Right Hon. R. B. Bennett, then prime minister of Canada, chairman of the conference :
What do we hope for from this conference? The answer is, I think, from all of us, greater markets within the empire. This is the answer from all of us undoubtedly, if we are persuaded, as I am, that greater empire markets mean as well greater world markets. For to us in Canada closer empire economic association does not mean in any sense world dissociation. The trading potentialities of this empire are great. But even one-quarter of the human race cannot profitably shut itself off from contact with the rest of the world.
When we reach an agreement by which our products pass more freely from one empire country to another, we drive clear channels through the stagnant pools dammed up by the world upheaval, and naturally we will carry past the boundaries of the empire and to its benefit, establish once more again throughout the world that commerce which is its very life blood. The British people in their vigour, industry, and experience have nothing to fear from foreign competition when they are united in that economic association which is now possible. When from this conference that results, we will welcome fair and friendly competition. In our own interest we will welcome it.

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And at page 70 we find another statement:
I have said before, and I do not desire to minimize the fact, that Canada must have greater export markets for its natural products. No country can live unto itself in this complex age, and with our relatively small population, with our vast and varied natural resources, with our immense exportable surplus in natural products, we perhaps above all other countries must be assured of other markets than our own. And I confidently believe that the people of the United Kingdom will not hesitate to support our proposal, knowing on their part that it will mean increased prosperity to many of their basic industries, and through them increased prosperity to all classes in the land.
Right Hon. Stanley Baldwin, prime minister of Great Britain, speaking on the same occasion, said, as reported on page 72:
Looking at the situation from another aspect, the trend to-day is towards larger units. International trade is so hampered by barriers of all kinds that a strong opinion is developing in favour of groups, not necessarily political m character, but offering to members economic advantages in the mutual opening of markets. No one suggests that complete free trade within the empire is possible. Considerations of revenue and of past policy stand in the way. But equally there can be no doubt that more constant comunications and more complete information about imperial market requirements would, if properly focussed, present governments with opportunities of securing trade with other countries of the empire, and of making commercial arrangements with other groups of nations such as could hardly be reached if each government acted alone.
What then should be the first aim of this conference? It. should be to clear out the channels of trade among ourselves. For that purpose we need not measure too closely or too exactly the relative value of preferences given and received. If we all approach the problem with a view to seeing how much each can contribute to the common stock without detriment to our own national interests, we shall not need to concern ourselves with the relative advantages obtained by each, since we shall know that an increase in the purchasing power of any member of the empire must show itself m increased imperial trade, and the prosperity of each will add to the prosperity of all.
The present universal depression makes the extension and improvement of imperial trade a matter of urgent importance to all parts of the empire. The extension and greater activity of empire trade is the most hopeful means of stimulating demand in the world markets and of restoring a sound level of wholesale commodity prices.
Let us look, Mr. Speaker, at the results of that conference. Eleven agreements were negotiated-United Kingdom-Australia; United Kingdom-Union of South Africa; United Kingdom-New Zealand; United Kingdom-India; United Kingdom-Newfoundland; United Kingdom-Southern Rhodesia; United Kingdom-Canada; Canada-Irish Free State; Canada-Union of South Africa; Canada-Southern Rhodesia and Union of South Africa-Irish Free State. These agreements, all making in the
direction of expansion of trade, were opposed by the present Prime Minister and all those associated with him, with the exception of one hon. member, the member for the constituency now called Digby-Annapolis-Kings (Mr. Ilsley). In speaking the other day he said he had a very intelligent constituency. He must have. As I say, he was the only one on that side who supported that agreement. His electors were intelligent enough to realize its advantages, and now he says they are still intelligent and are prepared to recognize the reduction of the advantages. He is to be congratulated on having a constituency of that kind.
These agreements were negotiated, and I do not think any member of this house or anyone outside of it will deny that they were of great advantage to the agricultural producers of Canada and to the trade of Canada and the empire generally. Time has fully demonstrated the results.
Following that, the attitude of the United States changed. To a certain extent it softened towards Canada, fortunately, and presented us with the opportunity of expanding our trade in their direction. This opportunity was embraced by the then government, and I propose to read from the white paper to which the Prime Minister referred in his address, entitled The Trade Negotiations between Canada and the United States, 1934 and 1935, which may be found quoted in full in Hansard of 1936, at page 56. This is the letter from the Canadian minister at Washington to the Secretary of State of the United States. It is dated November 14, 1934:
Sir,-
The government of Canada for many months have been giving careful consideration to the means whereby the exchange of commodities between Canada and the United States might be increased, and I have been instructed to present a statement of their views for the information of the government of the United States. The government of Canada believe that the time has come for definite action and that the declared desire of both governments to improve conditions of trade between the two [DOT] countries should now be carried into effect by the negotiation of a comprehensive trade agreement.
You will recall that when the Prime Minister of Canada visited Washington in April, 1933, at the invitation of the president of the United States, the development of trade between the two countries was sympathetically discussed. On April 29, 1933, Mr. Roosevelt and Mr. Bennett issued a joint statement at the end of their conversations, which concluded as follows:
"We have also discussed the problems peculiar to the United States and Canada. We have agreed to begin a search for means to increase the exchange of commodities between our two countries, and thereby promote not only economic betterment on the North American continent, but also the general improvement of world conditions."
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At that time it was expected that at an early date the president would be vested with special powers to enter into agreements looking toward an increase in the exchange of commodities between the United States and other countries. Since Mr. Bennett's visit, informal discussions have been carried on, and several methods of improving trade relations between the two countries have been suggested and examined.	*
In the past eighteen months the governments of the United States and Canada have repeatedly manifested their determination to increase international trade, by declarations of policy and by the conclusion of bilateral trade agreements.
Within that period of time Canada has made trade agreements with several European countries.
The policy of the government of Canada with respect to trade relations with the United States was again stated by the Prime Minister of Canada speaking in the House of Commons on February 19, 1934. Mr. Bennett on that occasion referred to the fact that the governments of the United States and Canada had agreed to begin a search for means to increase the exchange of commodities between the two countries and thereby promote not only economic betterment on the North American continent, but also a general improvement of world conditions, and indicated that the policy of the government was to continue their efforts to that end.
Then follow details as to how this may be accomplished. Then, on page 5 of the white paper there is a sentence which may be quoted at this time:
It is hardly necessary to stress the importance to both the United States and Canada of their mutual trade. For many years each country has provided the other with either its largest or its second largest foreign market.


William Daum Euler: May I ask my hon. friend a question? Does he think the sentence he has last quoted is consistent with the statement made the other day by the hon. leader of the opposition (Mr. Manion), when he referred to the United States market as being such an uncertain market as to be hardly worth dealing with?


Hugh Alexander Stewart: I think they are quite consistent. I do not think there is any inconsistency between them. The statement I have just quoted simply recites the fact that over a period of years there has been a large exchange of commodities between the two countries.


William Daum Euler: Not so uncertain a market then.


Hugh Alexander Stewart: Well, I think it was very uncertain in 1930, when they were all closed against us.


William Daum Euler: But he refers in the letter to the fact that there has been a very large exchange of commodities.


Hugh Alexander Stewart: Yes, over a long period of years there was, but conditions between 1930 and 1934 were not quite the same as they had been before.


William Daum Euler: That is true.


Hugh Alexander Stewart: The letter goes on:
But no useful purpose can be served by calculating the relative shares retained by each country in a total world trade that for four years has been steadily shrinking, until in 1933 it fell in value to approximately one-third of the level of 1929. If peace and prosperity are to be established on an enduring basis, it is essential to increase the absolute volume of world trade. No better beginning can be made than by taking steps to increase without delay the volume of trade between two countries which offer the most notable opportunity.
I am quoting this, Mr. Speaker, for the definite purpose of answering the charge that my leader and his party are economic nationalists. This shows clearly that definite and positive steps were taken by the Conservative government to extend the trade of Canada rather than to restrict it, and to place it on a perfectly sound basis, and any statement to the effect that the government of 1930 to 1935 or this party are economic nationalists and not looking for trade is false to the record. It is made without regard to the record, and without a due sense of responsibility, and lacks the essential element of truth. That is all I have to say in that connection. The letter goes on:
Attention has been directed to the trade agreements between Canada and the other members of the British commonwealth of nations signed in Ottawa in 1932. In some quarters the statement has been made that these agreements render difficult the negotiations of a comprehensive and effective trade agreement between Canada and the United States. An examination of the facts will demonstrate conclusively that such is not the case. The agreements concluded at Ottawa in 1932 have been of immense importance in increasing the trade between the several nations of the British commonwealth. The market of the United Kingdom in particular has been a most valuable outlet for Canadian products. In return for the market thus assured Canada has continued and enlarged the preferences which had been accorded the United Kingdom since 1897. The Ottawa agreements do not, however, preclude and in fact have not precluded the signatories from offering extensive and valuable tariff concessions to other countries, and it may be stated positively that the government of Canada is free to enter into an agrement with the United States covering a wade range of products.
The government of Canada is prepared to join the. government of the United States in a declaration that their common objective is the attainment of the freest possible exchange of natural products between the two countries. It is recognized that this objective cannot be attained in the immediate future, as important interests in both countries would be disturbed unduly by the sudden removal of existing tariffs

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on all natural products. The government of Canada would therefore favour, as the first step, the reductions included in the proposals set out in the next paragraph, to be succeeded by progressive mutual reductions in the duties on natural products, leading to the attainment of the declared objective.
I have not time to quote further, but I do suggest to hon. members of this house who seem to have some idea that we did not want to trade with anybody, that they read this letter in full as it is found in Hansard. Would it not be strange if all the appreciation of the value of foreign trade were wrapped up in the knowledge of those who are on the other side of the house? Why, Mr. Speaker, over a period of years there has been a common policy in this country, a common desire to promote trade. There has been the establishment of the Department of Trade and Commerce and the sending of trade commissioners all over the world, under all governments. So I think, sir, the record shows that it would be fairer and more honest for everybody to admit that both parties in Canada have desired an extension of trade. They may differ as to the methods, or as to how it is to be accomplished.


An hon. MEMBER:: They do.


Hugh Alexander Stewart: Yes, they do; and I shall point out where I believe the difference lies.
I wish, however, to clear up the point I am trying to make, that there is no evidence whatever that Canada desired to build a wall around herself, or that she wished to neglect any opportunity to trade wherever she could make a fair and reasonable trade agreement.
Not only was this communication sent, but negotiations were undertaken and followed up. And may I point out the date? The letter was sent at the end of 1934. The reply of the Secretary of State was m December of that year. Congress met shortly after and did not rise until August of 1935. The dominion election took place in October, 1935. The President of the United States was so busily engaged with congress that he did not have much time to consider these matters. Between August of 1935 and the date of the election there was not much time left, but negotiations had progressed so far that within a very short time after the election the present Prime Minister (Mr. Mackenzie King) was able to complete an agreement, the foundation of which had been laid.


William Daum Euler: I do not like to interrupt the hon. member but my impression always has been-and I am quite sure I am correct ,-that the former prime minister, Mr. Bennett, and the members of his party always contended that the reason the trade agreement was not consummated was that we could not get one which was fair to Canada, and that we were asked to give too much for what they were willing to give in return. But the hon. member now suggests it was merely because Mr. Roosevelt was too busy to proceed with the business until the time it was accepted by this government.


Hugh Alexander Stewart: The record is that
congress did not rise until August, and that the election in Canada took place in October. What my hon. friend says is perfectly true;
I do not dispute that at all.


William Daum Euler: We seem to differ as to the reasons.


Hugh Alexander Stewart: The present Prime Minister was so anxious to have some kind of trade agreement that he rushed down to Washington and closed it-and I think they were waiting for him. They saw him coming. I think he signed and adopted an agreement he was not justified in adopting, in the interests of Canada, and an agreement that the former government would not have signed. But I am pointing out that there was very little time for the completion of the negotiations.


William Daum Euler: I thought my hon. friend
gave that as a reason.


Hugh Alexander Stewart: No, I had not completed the reasons. As I said, shortly after that time the agreement was signed. The Minister of Trade and Commerce (Mr. Euler) says there is a difference between the two parties in the view of trade.


William Daum Euler: I did not say that.


Hugh Alexander Stewart: Well, I understood him to say that there was a difference between us in our views in connection with trade.


William Daum Euler: My hon. friend attributed
that to the Prime Minister.


Hugh Alexander Stewart: I attribute it to the minister in the interruption he made a few moments ago.	.	,


William Daum Euler: No, no; if I may interrupt: My hon. friend gave as a reason why his government did not conclude the agreement the fact that the President of the United States was too busy.


Hugh Alexander Stewart: No, but prior to that you said there was a difference.


William Daum Euler: I made no such statement.


Hugh Alexander Stewart: Very well.


William Daum Euler: Perhaps there is a difference- but I made no such statement.
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Hugh Alexander Stewart: I think my hon. friend will agree there is a difference.


William Daum Euler: I will not object to the hon. member saying that.


Hugh Alexander Stewart: I think he assented to that. I said I would point out in a few moments what the difference was.


William Daum Euler: You attributed that to the Prime Minister.


Hugh Alexander Stewart: My view of the difference between this party and that of the Minister of Trade and Commerce, as respects foreign trade, is this: To them the hills of foreign trade look green. The far-away hills look green, and they are inclined to emphasize, even to over-emphasize, the value of foreign trade, at the expense of the home market. We fully appreciate the value of foreign trade, but we also appreciate the value of the home market. After all, I believe with few exceptions it is the best market we have; it takes the greatest amount of our products. The British market is the next best.


William Daum Euler: The states buy slightly more from us.


Hugh Alexander Stewart: It does not follow that because they buy more they are the better market.
Let us now discuss briefly the results of the last agreement. In doing so I should like to refer particularly to the budget speech of the Minister of Finance (Mr. Dunning) delivered on June 16, 1938, not as it is reported in
Hansard but as it appears in a pamphlet, a copy of which I have in my hand. In his speech the minister reviewed the trade of Canada, in which he placed the total trade in the year 1937 at $1,792,109,521 and that of 1938, at $1,946,793,413, an increase of $154,683,892.
Then follows this interesting paragraph.:
An understanding of the course of our foreign trade during the past year and of its effect on the Canadian economy, however, must involve an analysis of the changing composition of our export trade as well as of changes occurring throughout the year in the direction of that trade. For instance, if we are to make a fair comparison of our exports during the last two years to particular countries, it is necessary to exclude gold movements, changes in the direction of which are not primarily related to trade considerations. For this reason, in the tables which I now present showing comparative figures for the last two years of the trade of Canada with the United Kingdom and other commonwealth countries, and with the United States, the figures given do not include gold of any kind but relates solely to other merchandise transactions.
Then follows a table showing the trade of Canada with the commonwealth, with respect to merchandise, all gold being excluded. In that table he shows the total value of exports to the commonwealth in 1937, as $495,031,940 and in 1938 as $516,520,463, an increase of $21,488,523. The total trade with the commonwealth, as shown in the table, indicates an increase of $56,495,719 in 1938 over that of 1937.
Then follows an analysis of the trade of Canada with the United States, and again all gold is excluded. The figures are as follows:
Trade of Canada with the United States (Merchandise-all gold excluded)
Fiscal vear ended March 31,1937 March 31,1938
Imports from the United States	
$393,720,662	$487,328,980Exports to the United States	
364,354,990	343,250,669Total trade with the United States	
$758,075,652	$830,579,649
Increase ( + ) Decrease ( -) +93,608.318 -21,104,321
+ 72,503,997
From these tables it will be noted that the United Kingdom purchased from us during the last fiscal year goods to the value of $407,-
798,000.	This is slightly in excess of 41 per cent of our total exports of merchandise, excluding gold. Exports to other commonwealth countries showed an appreciable improvement, the increase being 23 per cent, and the total volume $108,700,000. . Commonwealth countries as a whole, including the United Kingdom, took approximately 52 per cent of our total merchandise exports. Imports from all commonwealth countries increased during the past fiscal year by over 17 per cent, accounting for about 29 per cent of our total purchases from abroad. From the United Kingdom alone our purchases were $15,000,000 greater than in the previous year and amounted to $145,000,000. With the United States our total merchandise trade, 
again excluding gold movements, amounted to $830,600,000, as compared with $758,100,000 for the preceding fiscal year. Total exports to that country fell 6 per cent below the figure for the previous year to a total of $343,300,000, while imports at $487,300,000 showed an increase of nearly 24 per cent.
Exports falling off 6 per cent; imports increasing 24 per cent.
I should like to follow this up with a reference to a speech made in 1938 by the hon. member for St. Lawrence-St. George (Mr. Cahan). On page 4170 of Hansard of that year he is reported as follows:
The paramount value and importance to Canada of sheltered markets in the United

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Kingdom are made clearly apparent by the trade returns cited by the minister. For the fiscal year ended March 31, 1937. our exports to the United Kingdom were $406,825,443 and our imports $129,507,885 in value. For the fiscal year ended March 31, 1938, our exports for the United Kingdom were $407,797,610 and our imports $144,978,493. Our aggregate export and import trade with the United Kingdom in the two years ended March 31, 1937, and March 31, 1938, were:
Exports	$814,623,053
Imports	 274,486,387
Excess of Canada's exports.. $540,136,666
And again:
^Surely a profitable trade with the United Kingdom to that extent should not be sacrificed by reason of any emotional or hysterical appeals for the improvement of our political relations with the neighbouring republic, as a basis for the establishment of peace throughout the world.
During the same two years, exclusive of gold, Canada's export and import trade with the United States was as follows:
Exports	$707,605,659
Imports	 881,049,642
Excess of Canada's imports.. $173,433,983
So in those two years, exclusive of gold, our trade with the United States showed a balance in favour of that country amounting to $173,433,983. as compared with a balance in favour of Canada in its dealings with the United Kingdom, for the same two years, of $540,136,666.
I have not the time to quote all the figures given by my hon. friend, but he goes more fully into detail in his speech.
I think it will be admitted that it is desirable that wherever possible we should have a favourable balance of trade. It has been stated in this house that we have favourable trade balances with all countries except Italy and the United States.


William Daum Euler: There are some other small
ones.


Hugh Alexander Stewart: Perhaps that is right. If there is any country in the world with which wre might reasonably expect to have a favourable trade balance it is the United States. It is a country of 130,000.000 and we are 13,000,-
000.


Mr. MANION:: About 12,000,000.


Hugh Alexander Stewart: Let us make it 13,000,000 for good measure, ten to one.


William Daum Euler: How does it work out with
Great Britain?


Hugh Alexander Stewart: Never mind; we have
a favourable trade balance with Great Britain, which has a much smaller population, about one-third of that of the United States. I submit it is not unreasonable to expect that we should have a favourable trade balance
with the United States, but the figures show that in connection with the agreement negotiated in 1935 the reverse was true, the balance being heavily against us.
I should like to discuss briefly the agreement now before the house. Let us look at the conditions under which we entered into this agreement in 1935. I am sorry I did not enlarge upon the trade figures because they are very illuminating. When the budget comes down or when we are in committee on this matter perhaps we will expand the record a little.


Mr. DEPUTY SPEAKER:: I regret to
inform the hon. member for Leeds (Mr. Stewart) that he has spoken for forty minutes.


Hugh Alexander Stewart: I need only a few minutes to complete my remarks.


William Daum Euler: Go ahead.


Hugh Alexander Stewart: When we entered into
the agreement of 1935 we were handicapped in that the average rate of duty on Canadian goods going into the United States was 41-5 per cent, while the average rate on United States goods coming into Canada was 27-4 per cent.


William Daum Euler: Does that include free goods?


Hugh Alexander Stewart: Those are the figures
quoted by the hon. member for St. Lawrenee-St. George in his speech, and when he quotes anything it is pretty accurate.


Mr. CAHAN:: It is more than 40 per cent.


William Daum Euler: Did my hon. friend include
free goods?


Charles Hazlitt Cahan: Their average rate on the dutiable goods is over 40 per cent.


Hugh Alexander Stewart: The hon. member has
applied the same basis to both countries. What are the powers of the president? He can reduce existing duties only by fifty per cent. He cannot put anything on the free list which was not on the free list, and he cannot put anything on the dutiable list which was not on the dutiable list. That country held hearings before which the interests affected appeared. There is always advantage to a large unit when dealing with a smaller one. Here we had a unit of 130,000 -000 people dealing with one of 13,000,000 people. I have heard a member of the present government say that the United States was the most striking example of the benefits of free trade, a country with a population at that time of 120,000.000 people trading freely among themselves. There is something in it. They have a variety of resources, a variety of pro-
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duction and a huge home market. But I think he overlooked the fact that while that was true, they also had the additional advantage of the highest protective wall of any country in the world. They had it going and coming. Our position was not as favourable in the same ratio. We had a low tariff. We applied no quotas against them, while they adopted quotas against us. We made no provision to hear the parties affected by reductions in the tariff, and we started out with an unfavourable trade balance.
We had only one small advantage, the preference in the British market. Let us look at where we stand now. Under the agreement now before the house we have to some extent lost the benefit of that preference, something which for years we made desperate efforts to obtain. We have lost some of that which we found to be of permanent value. We have an unfavourable balance of trade which is likely to be increased by further reductions of duties. The rates against many of our commodities going into the United States are higher than the rates on the same commodities coming into Canada. The reductions provided for in the United Kingdom-United States agreement will probably enable the manufacturers in the United States to export direct to the United Kingdom instead of continuing to maintain the branch factories which they established in Canada in order to take advantage of the British preference. If that occurs, there will be an increase in unemployment in industry in Canada because of the closing of plants and the increase in imports to follow.
We will lose some revenue because of the wiping out of the excise tax. Apparently it will have to be wiped out on everything. This would seem to be an inevitable consequence which possibly was not anticipated. Our railways and ports will lose traffic. We shall have an opportunity of discussing this in committee and of bringing out the advantages and disadvantages of the agreement. There are some advantages. With the necessary information before us we shall be able to arrive at conclusions, but as I see it now, with all the information that is available, the advantages in favour of the United States far outweigh any advantages or benefits to Canada by any concession under this agreement.


Mr. THOMAS REID (New Westminster):: Mr. Speaker, in rising to speak in support of the new trade treaty, the motion for which is now before the house, I should like, before referring to the new trade agreement, to deal particularly with some of the statements made by the leader of the opposition (Mr. Manion), whom I am pleased to see in his place, and who spoke on Friday last.

I want at the outset to agree with his comment that the agreements were far too important to gloss over. At the beginning of his speech, however, he placed on record some figures pertaining to the last election, and stated that he did'not know what they meant. Perhaps I may be pardoned if I draw my own inferences, although I know it is against the rules to do so; but I feel sure.that the leader of the opposition did not place those figures on the record merely to take up time. I believe he mentioned that the Liberal party was in power with a minority vote of the people of Canada. He nods his head; I understood him correctly then. In rebuttal I would say that I do not think the leader of the opposition would advocate the casting of all ballots into one barrel or hat and the distributing of them pro rata throughout the country. There are some, I know, who believe in proportional representation and the single transferable vote. According, however, to the record of what has taken place in this country-I refer particularly to the provincial elections in Alberta in 1926 and 1930-the single transferable vote and proportional representation did not give any fairer, in fact, did not give as good a representation, in the provincial legislature as does the present system of plurality votes. Let me quote the figures.
In 1926, 68,896 votes were cast for the United Farmers of Alberta, and they got 42 seats; 36,692 were cast for the Liberals, who got five seats, and 26,197 were cast for Conservatives, with no seats.


Frederick George Sanderson: I regret to interrupt the hon. member who has the floor, but I am inclined to think he is out of order.


Thomas Reid: With all due deference, the attention of the leader of the opposition should have been drawn to that on Friday last when he placed those figures on the record. I believe that under the rules of the house I am entitled to controvert those figures, and I am using these figures by way of reply.


Robert James Manion: If you have no objection, Mr. Deputy Speaker, I have not. As a matter of fact, if I may just interrupt, what happened was that the Prime Minister (Mr. Mackenzie King) had boasted a bit of the winning of by-elections and of Liberal victories, and I was giving a few figures which threw a different light on the results. I did not take very long at it.


Thomas Reid: I think I can show to the leader of the opposition and to the house another set of figures,-


Mr. SPENCE:: What is the difference, anyway?

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Thomas Reid: -relating to the present membership, which I think is more accurate than the figures he quoted. I want to continue with them because I think they should be on the record.
In the Alberta election of 1926, there were 5,163 votes for Labour, with three elected representatives, and 252 for Liberal-Progressives, who of course did not elect any member. The same condition existed in Alberta at the 1930 election. With 23,000 votes, the Independents got only three seats;
34.000	votes elected eight Liberals, and with
70.000	votes the United Farmers got 34 seats. I believe that disproves any argument that proportional representation is any fairer form of representation than the present system.
I would ask the leader of the opposition also to note this. In the present house, ninety Liberals were elected with majority and ninety-nine with minority votes in their own constituencies. But on the left of you, Mr. Speaker, only five of the thirty-seven Conservative members are sitting with a majority vote in their own constituencies. Of the Cooperative Commonwealth Federation members, one only is sitting with a majority vote.


Mr. HEAPS:: Did my hon. friend have a majority in his constituency?


Thomas Reid: No, and neither did my hon. friend; and I think my majority was just as big as his.


Abraham Albert Heaps: Nothing near it.


Thomas Reid: The Social Credit party are the only group with a majority of members elected by majorities in their respective constituencies. I know my hon. friend from Winnipeg North (Mr. Heaps) does not like this, but he must just sit and take it.


Abraham Albert Heaps: My hon. friend will never have the majority which I get.


Thomas Reid: Mr. Speaker, I appeal to you. I am willing to argue with the hon. gentleman at any time, but I have only forty minutes.


An hon. MEMBER:: Oh, let us get on with the business.


Frederick George Sanderson: Order.


Thomas Reid: As I was saying, the Social Credit group, with seventeen members, are the only ones who have more than half their number elected by majority vote. Ten were thus elected, and seven by majority votes. Both independent members were elected by minorities, and likewise the' leader of the social reconstructionists. I believe that this is a truer picture of the situation in the house
than merely to say that if you count all the votes throughout Canada and distribute them equally you will find that just so many voted for the Liberals although the Liberals have so many more seats.
The leader of the opposition, referring to the market of Great Britain, stated that Great Britain collected three times as much customs duties as we did in Canada. Why should she not, when her trade is six times that of Canada? Last year imports to Great Britain were of the value of over five billion dollars, while the value of her exports was under three billion dollars, her total trade being $8,120,749,966. Her per capita imports were $114 as against $71 in the case of Canada. It is no great argument for protection to say that Britain collects three times the customs duties that are collected by Canada when her trade is exactly six times that of this country.
Speaking about imports, the leader of the opposition remarked that there are certain kinds of products which we cannot produce, such as tea, coffee, rubber, cotton, and even some wool. He went on to say that he did not know why this country cannot produce all her requirements of wool. That is very easily understood by those who know anything at all about farming. The wool grown in Canada is rather coarse, on account of climate conditions, and no very fine cloth can be made from it. In Australia and New Zealand, where the farmers have large flocks of sheep, the sheep are kept primarily for wool production, and it is a well known fact that the finest wool in the world comes from those two countries.


An hon. MEMBER:: And from Alberta.


Thomas Reid: We must import a certain
quantity of wool if we are to make or use the finest grades of cloth.


Robert James Manion: We should be raising about five times as many sheep as we are raising.


Thomas Reid: But it would not make our wool any better or finer.


Robert James Manion: That is disputed, too.


Thomas Reid: Well, a demonstration was
. held down in the Chateau Laurier. I attended it, and the qualities of wool grown in this country as compared to those of the Australian sheep were fully explained to members.
The leader of the opposition also dealt with a plank of the Conservative platform. I am going to read part of it because it is very interesting:
To provide a diversified economic life which will serve to retain Canada's sons and daughters within our own boundaries.
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That is very laudable, but it is merely just a platitude; it does not mean a thing as far as the Conservative party is concerned. I looked up the records after the hon. member had made his speech. I found that from 1926 to 1930, 210,578 Canadians returned from the United States to this country, compared with only 62,432 who returned between 1931 and 1935. As regards those wlm left this country permanently to take up residence in Great Britain, between 1926 and 1930 some 66,000 left this country, whereas between 1931 and 1935, 77,352 departed to take up permanent residence in the old land. Any policy that -the Conservative party might put into effect to retain our Canadians would have to be different from any that they have put into effect in the past, because, according to the figures, the policy of hon. gentlemen opposite has not been successful. One of the grave problems confronting British Columbia is the oriental question, and I noted that during the ten years of Conservative administration, 1912 to 1921, 36,314 orientals came into British Columbia, whereas from 1922 to 1931, only a little over 4,000 came in.


An hon. MEMBER:: What has that to do with the trade treaty?


Thomas Reid: I do not know how often I must ask hon. gentlemen opposite to be good enough to listen. I am replying to statements made by the leader of the opposition. He is quiet, but those behind him seem to think they have to come to his rescue.
Some mention was made about the loss that would be suffered by the apple growers. Time will not permit me to deal fully with that question. If the preference, however, under the agreements of 1932 were designed to increase the trade of the apple growers of this country, it is noticeable that it did not, for the trade dropped off after 1934. The total shipments of apples from Canada to Great Britain in 1933-34 were 8,755,000 bushels; in 1934-35, 5,582,000 bushels; in 1935-36, 6,496,000 bushels; and in 1936-37,
3.888.000	bushels. Last year the quantity shipped was 6,180,000 bushels. That shows, to me at least, that some other factors than the mere preference must be considered.
The leader of the opposition was a little unfair in what he said with regard to milk. He ridiculed the present quota of 3,000,000 gallons. He called it a mere speck. I wonder how many members have looked up the shipments of milk to the United States in the past eight or nine years? In mentioning milk the leader of the opposition took good care not to refer to Canadian shipments of cream.

In 1930 we shipped over 2,000,000 gallons of cream valued at more than $4,500,000; and in 1930 we shipped over 3,000,000 gallons of milk, which brought $699,199 to Canadian exporters. Since that time and after the Conservative party came into office shipments of cream and milk steadily diminished, until in 1935 exactly eight gallons of cream and none of milk were exported. That is quite interesting. But I would suggest that in the remarks of the leader of the opposition some mention might have been made of cream, because cream does get a preference under the new trade agreement, and the duty on milk has been reduced to 3J cents a gallon, the quota being 3,000,000 gallons. But taking first the quota of cream, and thinking of that quota in terms of milk, hon. members will find that it is equivalent to over 17,000,000 gallons of milk; and that added to the 3,000,000 gallons of milk which will be allowed into the United States under the agreement, will mean an available market in that country for over
20,000,000 gallons of milk.
I come now to something that particularly affects British Columbia, namely, shipments of lumber. Lumber is one of the great industries of that province, and what is contained in any agreement is of especial importance to the lumber trade. Let me read two statements made by prominent lumbermen of British Columbia when the treaty was announced. The first is by Mr. Robson, president of the British Columbia Lumber and Shingle Manufacturers' Association. He said:
The British Columbia lumber industry is extremely pleased by the conclusions that have been reached in this long-drawn-out and difficult, triangular trade agreement.
Our industry recognized all along that some sacrifices would have to be made to make it possible for the two great English-speaking nations to get closer together, and we feel that our government representatives have protected our interests in an admirable way, considering the many traders, producers and consumers who are entitled to serious consideration.
We are confident that what losses have occurred in some directions wdll be fully compensated for in the broader relations and that our industry will continue to be a real factor in the world lumber and shingle trade. We desire to sincerely thank all who have contributed to the successful conclusion of a very difficult task.
That was the statement of the president of the British Columbia Lumber and Shingle Manufacturers' Association comprising every lumber and shingle concern in that province. Then we have the statement of the past president:
J. H. McDonald of New Westminster, former president of the British Columbia Lumber and Shingle Manufacturers' Association, and a leader

Canada-United Stales Trade Agreement
in its trade extension work, welcomes the triangular agreement and thinks it must be regarded as generally satisfactory.
If any potential trade with Britain is lost through the United States gaining some entry there it will doubtless be made up by our better chances in the United States market. The removal of the United States quota on Douglas fir and hemlock is a distinct gain also.
The agreement to do away with the necessity of marking all lumber going from Canada is one of the finest things the trade could have obtained. He also welcomes the increased United States quota for British Columbia shingles as a promise of better conditions in the shingle industry.
One of the most important factors with respect to the lumber industry is the removal of the Marking Act. I wonder how many members realize the significance of this to the lumber industry of British Columbia. If the Marking Act of the United States passed against Canadian lumber last year had been kept in effect, it would have meant that no Canadian lumber would have been sold in Washington. Oregon and other states. Not only so, but even lumber that might have entered that market would have gone in at a greatly added cost to the lumber manufacturer. Consider, first of all, the shipment of mouldings, fine small lumber for house interiors. Those exporting that would have to employ extra, labour to stamp every single piece, and it was estimated that this would cost at least $20 a carload extra for this class of lumber. Apart from that, I doubt whether, if that requirement had been imposed, we would have sold any lumber in the United States.
We are aware of the intense nationalism prevailing in some quarters in the United States, which are demanding that the American people use nothing but United States lumber and other articles. If an agitation of that kind were set going in the United States, what trade unions or other bodies would have been willing to use lumber stamped as Canadian lumber? It is generally conceded, and I do not think any hon. member would deny, that the removal of the markings requirement has been one of the splendid things done under that agreement on behalf of the lumber industry of British Columbia, even if nothing else had been done.
In passing, might I place on record some figures regarding shipments of lumber to the United States. I want, however, to be fair; no one would deny that the British market is of some importance to us. But bear in mind that British Columbia has been shipping only the cream of its lumber cut to Great Britain. Between 15 and 20 per cent 71492-79
only of a tree is clear No. 1 lumber, and this is what has been going to the old country. The rest of the tree, some 70 or 80 per cent, is of inferior grade, for which a market must be found. That market was principally in the United States, and of course in better times we had a wonderful market for it on the Canadian prairies and locally in British Columbia. Great Britain takes little if any of that inferior grade of lumber. It is interesting to note that in shipping the very cream of our lumber to Great Britain the manufacturers got less than for the poorer grades shipped to the United States. Here are the figures. For planks and boards shipped to Great Britain last year-and for other years one finds the comparison the same-the prices received worked out at $13 per thousand feet, whereas $15 per thousand was obtained for the inferior grades shipped to the United States. For hemlock the figures are the same. But if one takes the total average price of all shipments of wood, including squares, planks and boards, we find that shipments to Great Britain last year brought us $22 per thousand as against $26 per thousand on shipments from British Columbia to the United States. Last year the United States took $168,990,160 worth of our lumber products, that is all products of the forest, including lumber, pulp and paper. Great Britain took S45.354,428 worth. This means that the United States took 60 per cent of our forest products as against IS per cent taken by Great Britain. I am not minimizing the value of the British market, but I place these figures before the house to show the importance of the United States market for our lumber and forest products.
The leader of the opposition made special reference to doors, and I wish to deal with that for a moment. He said, speaking about some gentleman who had called to see him:
He says that the door industry in British Columbia began in 1933, after we obtained the preference on doors in the British market. I will read the data he gave me just as I jotted it down. Until 1933 Canada had no wooden door export business at all. In 1933, the year when the British empire trade agreements were negotiated, we exported 50,000 doors, and that number increased to about 1,000,000 doors in 1938. In looking over the figures I found that our exports went to 1,681,000 doors in 1936, when business was a little better, or nearly
2,000,000 doors in that year, and then with the drop in business generally the figure came down to about 1,000,000 doors in 1938.
In reply to that statement I would point out that doors wrere not bound in the Ottawa agreements at all. Lumber was, and so were apples and other articles, but not wooden doors. In the old country they have what is called an import duties advisory committee,


Mr. J. A. MARSHALL (Camrose):: 
James Alexander Marshall: Mr. Speaker, when the house rose at six o'clock I was endeavouring to show that we should concentrate more on the consuming public in the dominion and less on the producer. The Prime Minister (Mr. Mackenzie King) talks about economic nationalism; he seems to have added a new string to his violin and has been playing this string a good deal during the present session. I wish he would define the term "economic nationalism," so that we would know exactly what he meant. Am I an economic nationalist if I advocate a policy which has for its main objective the welfare and the happiness of the people of our own country; if I say that we should feed our own people first, and change the internal economy of this country so that people can get all the clothes they wish to wear; if I say that we should not export any lumber until the people have decent homes to live in; if I should say that we should keep our potatoes, milk, fish, pork, beef and bacon in Canada, and change the money mechanism to enable Canadians to get these things in abundance; and that then, if we still have a surplus after doing all these things, we should look around the world, see what nation or nations require our goods, and exchange those goods for the commodities which we require? Am I to be considered an economic nationalist if I advocate such a policy as that? Then the Prime Minister can put my name down as one who embraces that philosophy.
It is evident, however, that the Prime Minister has not been following the trend of events in Great Britain. They have there a new minister of agriculture, Sir Reginald Dorman-Smith. On February 1 of this year he made his first public speech as minister of agriculture, in the House of Commons at Westminster. This is what he said:
Action must be swift and direct to produce that expansion of food production from our own soil which I think is necessary. I know of no more important task than of ensuring that in all circumstances there should be adequate supplies of food for our population in times of emergency.
This new and splendid conception of a million men sent back to the land and half a
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billion dollars' increase in agricultural .production has been accepted, acknowledged and launched in the parliament of Great Britain. His statement to parliament on that occasion was greeted with loud and prolonged cheers from the biggest house that has ever debated a private member's motion in the present parliament.
Does the' Prime Minister of this country realize the significance of the step which is now being taken by Great Britain? That step in my opinion smacks of economic nationalism, and sounds very much out of harmony with the expression of opinion from the Prime Minister when he said:
We cannot, like some other countries, pursue a policy of producing all that we consume and consuming all that we produce.
I say to the Prime Minister, kindly, let us try it just for once and see how the people react to the experiment.
In conclusion, Mr. Speaker, realizing full well that this pact will do nothing more than provide Liberals and Conservatives with an opportunity to argue with each other over tariffs, whether they be high tariffs, low tariffs or what have you; realizing that it will do nothing more than divert another huge stream of dividends into the pockets of big business manipulators; realizing too that the Liberal party can pass this pact whether we like it or not, let us end this discussion, wash our hands as quickly as possible of the pact and get down to the pressing needs of the people, which in my opinion will not be relieved in any great measure by this agreement. Let us tackle unemployment, debt and taxation, and that greatest bugbear of all politicians, the railway problem. Let me assure hon. members that I am willing at any time to sit down with any man or any group of men in an honest endeavour to find a solution of these perplexing problems. Let us try to find a solution of these problems. On the other hand, if the government feels that this trade will cure all our ills, let us clear off our desks, go home, and wait and see.
Scientific engineering has changed our whole economic trend of life. These engineers have conferred upon us untold blessings, but at the same time they have multiplied our problems. If we solicited their help instead of invoking the aid of so-called experts who still live in the reflected glory of Sir Wilfrid Laurier and Sir John A. Macdonald, we would soon get ourselves out of this soriy mess in which we find ourselves to-day; for truly it is a sorry mess. If we did less talking for Hansard and more real work for Canada, we would soon accomplish that which we were sent here to do. When the gong sounds in the next federal
fMr. Marshall.]
election battle, and the nominated candidates stand on platforms extolling the virtues of their own party and magnifying the vices of their opponents, the average Canadian citizen will judge the candidates and their parties, not On the methods used but rather on the results that are obtained.


Mr. H. R. FLEMING (Humboldt):: Mr. Speaker, the only issue in this debate is whether this is a good trade treaty or not. We are not discussing whether a trade treaty between Canada and the United States or between the United States and Great Britain should have been negotiated. Those treaties have already been made. On this side of the house we evidently believe that this is a good trade treaty. The opposition, however, seem to think.it is not. I believe that reasonable people will agree with the leader of the opposition (Mr. Manion) when he says that time, and time alone, will tell.
Even as a doctor, I would not care to predict the sex of a child before it was bom, and I am sure that the leader of the opposition would not, but there are certain things I can predict from heredity. I can be certain, if a child is the offspring of certain lines of white people, it will be white, but I cannot tell what its actions will be when it grows up. Some of its actions may be good and some of its actions may be bad. That is the old Mendelian theory.
The heredity of this child is good. I like its colour, and I think we should give it a chance to prove its usefulness before we judge its character. Because of the eugenics of the mating I have high hopes for this child.
There is a story told of an astrologer who had offended one of the great French kings, and who was about to be beheaded. The French king called him and asked him to predict the date of his death upon the guillotine. The astrologer replied, "Four days before your majesty's death." Needless to say he still kept his head.
The opposition seems to be forecasting a somewhat similar fate for his majesty's Canadian government. Unfortunately in the past we have done something to justify this prediction. We tried to strike a death blow at Toryism by providing for a reduction in tariffs, and about four months afterwards we were "guillotined" from power. Sir Wilfrid Laurier negotiated a trade treaty, and the people did not have an opportunity to find out whether it was good or bad before there was an election. The Dunning budgpt was brought down in 1930, and once again, before the people could find out whether it was good, bad or indifferent, the Liberal party went to the country and were driven from office. Even

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the Minister of Finance (Mr. Dunning), who fathered that budget, met personal defeat in the capital city of Saskatchewan. For some weeks now, there has been a persistent rumour in the highways and byways and everywhere else that the Liberal government of to-day will go to the country this year. Of course, I shall have nothing to say about that question; that is the prerogative of the Prime Minister (Mr. Mackenzie King) alone. If I did have any say in the matter, however, I would say that I can see no rhyme or reason why this Liberal government, should go to the country this year. As the Prime Minister has pointed out, we have won all l lie by-elections east and west with the exception of one in Ontario.


James Alexander Marshall: And one in Alberta.


Harry Raymond Fleming: Oh, that is a long time ago. In my opinion this is a good treaty, and I am so sincere in that belief that I want to see it proved. Should an appeal be made to the people of Canada to return us to power on the prediction that what we have done will prove to be right, or should we appeal to them when we can point to the results of the treaty? What would have been the effects of the reciprocity treaty that was fought so bitterly in 1911, no one can say with surety. I do not intend to thresh old straw over again, but the hon. member for St. Lawrence-St. George (Mr. Cahan) the other night went back to "No truck or trade with the Yankees". He said we were at the parting of the ways; though he may not have used these words, he implied that Canada would become nine states of the American union; that annexation was in sight, and he brought forward again all the bugbears that we heard in the election cry of 1911.
I remember as a young man attending college at Kingston, and the first public meeting I ever went to was in 1911. During that year we had debates at college on the reciprocity issue and we wrote essays on reciprocal trade treaties. We thought they were a splendid thing. In fact, in the junior matriculation examinations of 1911 one of the questions on the paper was to write an essay on reciprocity. About that particular time there came to the city of Kingston a man known then as the Hon. Mr. Foster, who was heralded to speak on reciprocity. As I remember, a number of us from high school attended that meeting. We were standing at the back of the hall, and I recall vividly-because he was a splendid orator-that with all his oratorical skill, pointing to the end of the hall, he said: "Young men, this may be the first vote that you will cast; but before you
do anything, before you act on anything I may say, I would ask you to go to-morrow morning to Macdonald park and there gaze upon the statue of the great Sir John A. Macdonald. For forty years he represented this historic city of Kingston. Read on that monument the inscription: 'As for myself alone, my course is clear. A British subject I was born, a British subject I will die.' "
Well, Mr. Speaker, we wondered what he meant. We wondered whether he implied some test of our loyalty and devotion to king and country. At any rate that was the impression which was left by this great orator who spoke to us on reciprocity. The same old straw is being threshed over now, and the hon. member for St. Lawrence-St. George is trying to live over again those old, unhappy, far-off days, and those battles of long ago. He was trying a few nights ago to fight them over. In his old age he has become so vicious and so venomous. Look how venomous he has become against the Prime Minister of the country, how venomous he became a few days ago against the Minister of National Defence.
One of the chief cries of the Tories has always been that we are severing our ties with the mother country; but now, with the present trade arrangement, I do not see how they can say very much about this, because the mother country has also made a trade treaty with the United States. For many reasons it is a brimming measure of satisfaction to us to know that Great Britain has found a basis of economic cooperation with our great neighbouring republic, that great democracy to the south of us. In spite of the tendency of the leader of the opposition to scoff, I believe that this is one of the longest steps toward world stability and peace since the great war. My hon. friend the leader of the opposition was scornful of the idea that this trade agreement would promote better relations or that (ariff barriers had in any way interfered with our friendly relationship or with our mutual prosperity. He said we had had friendly relations with the great United States of America since 1812. I am sorry that he is not in his seat at the present moment, but I should like to draw his attention to those unhappy days from 1866 to 1870. That is one period in Canadian history which he evidently missed.	[DOT]
Let me quote from the hon. gentleman's book, his literary masterpiece, Life is an Adventure. In that book the leader of the opposition says at page 266:
Conditions generally were somewhat depressed through 1924 and 1925, and the tariff question became a very prominent one in the discussions in and out of parliament. The United States rather short-sightedly kept raising its tariffs
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against Canadian production, particularly against the products of our farms, in face of the fact that Canada's ten million people were purchasing from the United States about two dollars' worth of goods for every dollar's worth that the hundred and twenty million Americans were purchasing from Canada. It was an exceedingly unwise attitude on the part of the American people, as Canada was their best customer among all the trading nations, purchasing annually from them hundreds of millions of dollars' worth of goods, yet year by year facing the antagonistic actions of American protectionists who forced through congress bill after bill prohibiting the import of Canadian farm products. It was the beginning of that economic nationalism which has since grown to such ridiculous proportions all over the world that world trade has been almost completely strangled. But in 1924 and 1925 it particularly affected the relations between Canada and the United States, giving rise to exceedingly antagonistic feelings on the part of the Canadians toward their neighbours. _
No more effective answer could be given to what the hon. leader of the opposition now tries to make us believe he believes. This is widely different from the view he expressed in this house when he spoke on this trade treaty. I am inclined to favour the opinion expressed in his literary masterpiece, Life is an Adventure, because at that time he did not have his weather eye on the election winds.
Tariffs-tariffs-tariffs-we have argued them until the subject is threadbare. Soon we shall have to discard this political cloak and strike out in some other direction. Yet give a man a little independence and the truth will out. "Economic nationalism which has since grown to such ridiculous proportions all over the world that world trade has been almost completely strangled." So said my authority, that distinguished soldier, parliamentarian and author, the leader of the opposition.
What is the actual tariff situation in relation to Canada? When Sir Wilfrid Laurier came into power in 1896, the average ad valorem rate on dutiable imports was, in round figures, 30 per cent. It was gradually reduced until in 1911 it was 25-9 per cent. Reciprocity would have cut this in half. After 1911 it began to mount again, although there was a considerable drop in 1917 under union government. When the Liberals came into power in 1921, it again dropped and remained fairly constant until the Tories came into power in 1930. Then up it went sky-high. Since the present government came into power, it has gradually declined. But the point is that over a protracted period we have drastically reduced tariffs. In fact, in 1938 the ad valorem duty averaged 23-9 per cent, compared with 23-8 per cent in 1917. The point I wish to make is that the Liberal party worked for three or four or five years in
{Mr. Fleming.]
order to get the tariff down to where it was when they went out of power, and then when we go to the country and tell the people that we have reduced the tariff, is it any wonder that even if they do not think we are deliberate prevaricators, at least they think we are a little careless about the truth? We work and get the tariff down but by the time we have it back to where it was when we left office the people do not realize what we had to do.
There are certain things omitted from this tariff cut that I should like to have seen in it. I was pleased this afternoon to hear the hon. member for Rosetown-Biggar (Mr. Coldwell); what he said seemed to me real Liberalism. That is the Liberalism we should be preaching in western Canada. I have continually stressed the fact that prices of farm implements and gasoline are far too high, and I see no mention of them in the trade treaty. The Minister of Agriculture (Mr. Gardiner), who is not in his seat to-night, has told us that there are international combines and that we should smash them. Well, I say to the government that if we cannot smash those international combines and reduce prices of farm implements and the price of gasoline, the government may possibly be smashed. Some way must be found to deal with these problems.
I was pleased to hear the other day the answer to a question as to certain agreements that we have in connection with our trade relations with Germany. The Minister of National Revenue (Mr. Usley) told us that we have certain trade treaties. Since that time I have discussed the matter with the Minister of Trade and Commerce (Mr. Euler), and I find that on October 22, 1936, a provisional trade agreement was made between Canada and Germany, and that we have increased our sales of goods to Germany from $3,000,000 in 1936 to $18,000,000 in 1938.
How individual items will work out, no one can tell, but I trust that the results of the treaty will be beneficial to the Canadian people. As to the principles underlying this treaty I have every confidence that it is as the hon. member for Rosetown-Biggar said this afternoon, a step in the right direction. I hope and wish and pray that it will develop into a dog-trot race to prosperity.
At the present time we are faced with an armament race. If the situation could be boiled down to a single reason, that reason is antagonisms aroused by protective systems, national isolationism, economic self-sufficiency, resulting in international hatreds. Nations have entrenched themselves in tariff dug-outs and thrown round themselves a wall of

Canada-United States Trade Agreement
bristling steel. On the other hand, freer commercial intercourse promotes mutual knowledge and trust. I was glad to hear the Minister of Trade and Commerce the other day state that when he went to the League of Nations and they sat round a common council table and got better acquainted with one another, they were able to discuss their problems in a much more satisfactory way.
All the world contributes to our breakfast table, to our comforts and the convenience and fullness of our lives. Civilization is based upon cooperation; if we refuse to do our part in this wholesome development, this natural way of living, we are contributing to darkness and distrust, and fundamentally are not only anti-social, but anti-Canadian. Our opponents base their arguments on self-interest, or protection. The only logical conclusion is that if we are not going to trade with others, we trade with ourselves only. I can do no better than adopt the language used by the hon. member for Huron North (Mr. Deachman) some time ago when he said that the channels of trade can be deepened and broadened only by deepening and widening the channels of goodwill.
Canada is a country which recognizes that her destiny as a great nation is to be fulfilled not behind impenetrable tariff walls, which not only shut in but shut out, but rather under a policy that will remove tariff barriers, unfetter trade and provide reasonable facilities for the inflow and outflow of goods and for the dispersal over the seven seas of the surplus which providence has so unstintingly bestowed upon us. Would they have us destroy our position as the fifth trading nation of the world? Would they have us use only such things as are indigenous to or produced in Canada? Carry their argument to its ultimate conclusion and you see what a muddle and mess we should get into. We do not want war; we do not want economic conflict; we want a decent chance to produce the things we can produce and exchange the surplus for other goods. If I am a wheat farmer I am not obliged to believe that I must eat only bread and wear a skirt made of straw in order to enjoy an economic utopia. We can participate in economic appeasement without its indicating a back-stroke against self-government or domestic economic advancement. Indeed, internationalism on one hand and national self-government on the other are the very essence of democracy.
Even if the Tories did succeed in their object of excluding foreign goods which would compete with our domestic production; even if we achieved complete control of our domestic market, there is no reason to believe that
this would increase distribution so that the Canadian people could enjoy the full output of Canadian industry. In fact, all the experience we have had of such a situation, when isolationism was throttling trade, showed that this pious hope was doomed to complete disillusionment. As a matter of fact, a few years ago we called it depression. Let me ask these questions: Was Canada less able to produce in the depression period? Had our domestic customers disappeared? Had Canada's resources in some inexplicable way become depleted? Was there no man power available? Had somebody destroyed our factories? If our domestic market is the economic paradise, why did we not simply exploit it and grow fat?
Someone will promptly say: "Oh. well, we did not have any money." I am not going to enter now into any monetary argument because I understood the Minister of Finance to say that there was a proper time and place for that, and that was when the barons of the Bank of Canada would appear before the banking and commerce committee. But if you conceive of money as gold, we are as rich as almost any nation in the world. If you conceive of it in terms of goods and services, we have the physical ability to produce the goods and the people willing to furnish the services.
Almost since time immemorial the two great parties in this country have 'been arguing tariffs, and evidently there is something to be said on both sides or the argument would not have continued so long. I am not one of those who believe that my opponents are complete fools. But the great difficulty that I see is that tariffs give primary benefit, and, in many instances, the sole benefit, to the big interests. The tariff has become a tax which differentiates between the masses and the classes. I say this because I believe we cannot struggle along indefinitely on a system predicated on benefit to the few. I cannot see the masses suffering forever the sight of the goods they need being destroyed so that a few people may grow rich in money power.
What will be the solution? As the leader of the opposition said, time, and time alone, will tell. But as a member coming from the wind swept prairies of western Canada, I say to the Liberal government sitting here for the fourth session of this parliament, that if they do not do something for the people of western Canada by reducing the price of farm implements and the price of gasoline and increasing the price of primary products, there will be such a revolt when the government goes to the country-


Mr. SPEAKER:: The hon. member has exhausted his time.
71492 -80

1256	COMMONS
Canada-United States Trade Agreement


Mr. H. J. BARBER (Fraser Valley):: Mr. Speaker, someone has likened this trade agreement to a horse trade. We have made the trade, but we have not got our horses home yet.
The last speaker (Mr. Fleming) has said that time will tell. There was such a lot of ballyhoo attached to the launching of this trade treaty that people are now beginning to think that it is not what it was represented to be. But; now they are told-have patience -it is going to take time to work it out. We were told the same thing in 1935, what great benefits were going to come from the treaty of that year, and how expanding trade was going to solve all our problems. According to the Prime Minister (Mr. Mackenzie King), at that time it was going to solve our great problem of unemployment, stimulate industry, and give more business to our railways, which would be in a much better position because of the trade treaty. But we find, on looking over the country, we have unemployment just as bad as ever, we still have our railway deficits with us, and our industries still languish. I wish that some hon. member opposite, before this debate is concluded, would tell us exactly what benefits we have derived from the treaty of 1935. We know pretty well how it has worked out. Apparently it failed to put people to work, nor did it create any more business for our railways. According to trade returns which have been put on Hansard during this debate, the United States is the party that has benefited most from that treaty. Canadian industries have not flourished because of it; in fact, many of them are in a worse position than in 1935.
This trade treaty differs in that it is a triangular arrangement. The Prime Minister, for political effect, has represented this triangular trade arrangement as an international peace move signifying especially a rapprochement between Great Britain and the United States. This has tended to ward off criticism or even examination of the actual terms of the trade bargain. But I think the impression which the Prime Minister sought to give was exploded by my leader (Mr. Manion), who referred to denials from both London and Washington that the trade deal had any relation whatsoever to international politics. It was considered by Washington and London as entirely an economic bargain, and I think that is how we should look at it in this country. It is not a political bargain but an economic bargain entirely, and as Canadians we must consider it from that point of view.
The discussion of this matter, to my mind, involves two questions: First, is it desirable

to have freer trade relations with the United States? Second, are the terms of the agreement as a whole beneficial to Canada?
On the first point, the desire for freer trade relations with our neighbours to the south, I think I can safely say that we are all in absolute accord.
As to the second we are not in accord. The Prime Minister and his followers apparently regard the terms of this trade agreement as highly satisfactory; but many of us on this side of the house, after having given the agreement careful study, believe that, on the whole, while this or that particular item might be beneficial to us, it is not in the best interests of Canada.
My first criticism is the same as was directed against the trade treaty of 1935, against quotas being applied to this country. We have given to the United States, a country of 125000,000 people, everything we had to give, without any restrictions as to quotas. But they are not prepared to give this country the same treatment. Surely it cannot be considered an even deal if we, with a population of 11,000.000 people, must accept quota restrictions on many items of vital concern to us. There is a quota against our shingles, a quota against our cattle, a quota on cream, a quota on milk, and a quota on potatoes. We find we are under a handicap from the very beginning, therefore, in making a fair trade arrangement with the United States.
As has already been pointed out in this debate, the maximum tariff reduction which the president is authorized to make of his own initiative was 50 per cent of the existing rate. The United States tariff is a Republican tariff, the highest tariff in the history of the United States, and even with a 50 per cent reduction it is higher than the Underwood tariff, under w'hich we had free entry into the markets of the United States for a large number of our products.
Second, the powers of the president were restricted as to the duration of the agreement; it was limited to a three-year term.
But the United States did not stop there. They declared, further, that before any bargain of any kind was made with any other country it was essential that the citizens of the United States should be accorded an opportunity of appearing before a tariff board. They had the privilege of filing briefs or presenting arguments concerning any proposal. No such opportunity was given the people of this country. The people of the United States had that advantage over us.
In my opinion this trade arrangement will be most harmful to many Canadian producers. But then the Prime Minister reminded us that the consumer is to benefit. He recited a

Canada-United States Trade Agreement
long list of benefits that would accrue to the consumer; fresh fruit and vegetables, canned vegetables, many types of fish, whisky, cigarettes, and some lines of clothing would come in at reduced rates. What benefit will this be to the consumer, if he has not the money to purchase these commodities, or if he has not a job? That is the question we must consider.
Naturally the next question is: What is the price we are going to pay? What concessions are we called upon to make? That is the question we must ask ourselves at this time. We are giving up some valuable British preferences, preferences we had in the greatest market of the world. We are giving up much of the practical advantage of the Ottawa agreements. British Columbia is one province that knows the value of those agreements. The 10 per cent preference on lumber gave our province a tremendous market in the old land. Our apple growers know the value of the dollar per hundredweight on Canadian apples. Then, we had the wheat preferences, valuable in itself, and especially valuable in the development of Canadian ports.
We are sharing the preference on fruit and lumber, and we are giving up the wheat preference. The United States apparently considers these concessions of real value to them. Let me quote from comments respecting the United States-United Kingdom agreement, as issued from the Department of Commerce at Washington. This is the United States viewpoint, in regard to grains:
One of the most important concessions is the removal of the duty on wheat, which has been equivalent to about six cents per bushel. This has tended to divert trade to Canada and Australia. The United States formerly sold great quantities of wheat to the United Kingdom and with normal crops in the future and the restoration of free entry it should again be able to sell large quantities. Also-
Listen to this-
-as a removal of the preference, it should be possible for American ports and transportation interests to regain their lost business in the transhipment of Canadian wheat to the United Kingdom.
Take the business away from Canadian ports. Then, in regard to fruit, this is the United States viewpoint:
The United Kingdom has long been the most important foreign outlet for American apples. Formerly this country-
The United States.
-was the dominant supplier of British imports, but since 1932 duty margins against American apples have shifted some of the trade to British empire countries which enjoy free entry; the duty is reduced by one-third by the agreement. This concession should help the American apple export trade to regain a substantial portion of 71492-80S
its share of the British market displaced through the former duty.
Those preferences were real. They meant markets for Canadian producers. They meant employment for Canadians. They meant dollars in the pockets of Canadians, and purchasing power flowing through Canadian business houses.
What are we getting in return? We are told we are getting some concessions in the United States market for our lumber, regarded by some of some importance, but with which I shall deal a little later on. We are to get concessions for some of our cattle, some of our milk, some of our cream and some of our potatoes. In introducing the resolution the other day the Prime Minister made the following statement:
British Columbia will be greatly benefited by the concessions with respect to forest products.
Let me say that those of us coming from British Columbia are most anxious that the timber industry of our province should be benefited, not injured, by the agreement. I can safely say the timber industry in our province is our most valuable industry. Under normal conditions we have two hundred mills operating, representing a total investment of close to $100,000,000. The whole economic life of British Columbia is bound up in the welfare of the timber industry. When the lumber markets are active, general prosperity prevails. Depressed conditions are usually traceable to a slump in forest products. It is estimated that at least 75 per cent of the business in the coastal area of the province depends basically on the revenue derived from wood and its derivatives.
The empire agreements, so bitterly opposed by hon. members opposite, have been the most important single contribution to the development of off-shore business during the past seven years. The United Kingdom, which bought less than 100,000,000 feet a year prior to the trade agreement, has in recent years been absorbing more than 600,000,000 feet. The total water-borne exports to different parts of the empire have crossed the billion dollar mark. Unfortunately 1938 has not been such a happy year for the industry. It is true there was a greater shipment of lumber to the United Kingdom; yet the returns were not commensurate with the cost of production, with the result that the year was one of the worst the industry has ever had. And this is one time where under the agreement I should think something should be done-and was expected to be done-to improve this industry. [DOT]


William Daum Euler: May I ask a question?
1258	'	COMMONS
Canada-United. States Trade Agreement


Harry James Barber: Yes.


William Daum Euler: Would the hon. member not attach some importance or credence to the statement of lumber people in British Columbia that they are well satisfied with the terms of the agreement?


Harry James Barber: I may deal with that in a few moments. What are these concessions which were stressed by the Prime Minister? What are the concessions which particularly benefit the lumber industry of British Columbia?
First, we have the removal of the quota. I am sure that was never reached under the present charge of $2 per 1.000 feet on our lumber entering the United States. Then, there is the removal of the marking regulation. We have heard a great deal about that. It was one of the nuisance regulations placed in effect last fall. The removal of that is beneficial to the industry. In return the industry gives to the United States a portion of its preference on the United Kingdom market. That affects about one-sixth of its present business with the United Kingdom. So at the immediate stage of the trade agreement the lumber industry of British Columbia has received no concessions, with the exception of the removal of the marking regulation, whereas on the other hand, it has given a valuable concession to the United States. If that stage is reached in the trade agreement where the excise tax of $1.50 is removed, then the position of the industry will be much stronger. As the government knows, that of course is a matter which is up to congress.


William Daum Euler: It gets concessions in the United States market.


Harry James Barber: What our lumber industry Wants to-day in addition to water-borne traffic, is a better rail market-all of which would be possible if the United States market were opened to us.
I admit, and we all agree, that the red shingle industry has been benefited by the increased quota. But in order that we may see how bright the picture is, may I refer to another wood product to which reference was made this afternoon, namely the manufacture of fir doors. The manufacture of fir doors for the United Kingdom market has developed into an extremely valuable industry in British Columbia. This industry started in 1933, as a result of preferences obtained in the United Kingdom market on account of the 10 per cent preference which was given in 1932 to empire countries. That preference was strengthened in 1935 by an increase in
rMr. Euler.l
the British preference to 2s. 6d. Under this three way arrangement the United Kingdom duty on these doors has been reduced from 2s. 6d. each to Is. 6d., or from 61 h cents to 371 cents per door, dividing our preference with the manufacturers of the United States.
At this point may I quote from a statement issued by the board of commerce at Washington. This comment, found at page 40, has reference to wood and wood products:
The duty was first imposed in March, 1932, at the rate of 10 per cent ad valorem, and was successively raised until it became 2s. 6d. per door (or 20 per cent whichever is the greater) at the beginning of February, 1935. These successive increases, which were intended primarily as a protection for the domestic door manufacturing industry, have had the effect of practically eliminating importation from the United States and diverting this trade to Canada.
The United States managed to maintain its trade with the United Kingdom fairly well through 1934, but with the final duty increased to 2s. 6d. per door early in 1935, and the building up of the industry in Canada (imports from which continued to be free of,duty) the American trade declined precipitously, until in the first half of 1938 the United Kingdom imported only 1.950 American doors, valued at about $3,500. representing only one-fifth of one per cent by both quantity and value, of the total British door imports. Conversely, imports of Canadian doors have risen from one-fifth of one per cent of the total, by number, in 1932 to 80 per cent of the total in the first half of 1938. The actual number imported from Canada rose to a high of 1,771,251 in 1936, and has since declined somewhat, but the Canadian share of the British market lias continued to increase, the imports from Canada having declined less, quantitatively, in 1937 and 1938 than the total imports from all countries.
The curtailing of and the sacrifices made by that industry will mean so many more people out of work. We cannot expect anything else when the preference is handed over. Briefly, these are the wonderful concessions to the forest products industry of which the Prime Minister boasted.
Now I ask: What about the farmer? What is there in tl is trade arrangement that will help the agricultural industry, an industry that has been struggling under depressed conditions for the last few years? Will it relieve the butter situation in Canada? Will it move the 15.000.000 pounds of surplus butter? Not a chance. We may be able to sell a few gallons of milk and cream if we can get over the United States tariff of 6^ cents a gallon against milk and 2SfV cents a gallon against cream when we are within our quota, and 56t% cents a gallon when we are over our quota. The quota is just about enough to take care of the production of one county in Ontario. I am sure the dairymen of British Columbia will not be excited over that concession.

Canada-United. States Trade Agreement
The agreement contains a provision to permit live pigs to enter from the United States [DOT]under a duty of one cent a pound. The duty against fresh pork is H cents a pound.
Then there is the quota against cattle about which we have heard so much. We are told this has been increased from 156.000 to 225,000, but we have discovered only lately that nearly half of this quota is being filled by Mexico. Previously Canada had the whole quota to herself, so that the actual effect is that the quota lo-day is less than previously.
Then there is the question of eggs. The duty on United States eggr entering this country has been reduced to five cents per dozen. I can assure the government there will be no cackling or crowing in the poultry yards of. British Columbia when eggs from the sunny south start pouring into that province during the winter months. Here is another hard pressed industry that is being called upon to make a sacrifice for the cause of peace in the world.
Next is the potato industry. Potatoes enter this country from June 15 to July 31 by paying a duty of 371 cents per 100 pounds, while they are allowed to enter free for the balance of the year. Canadian potatoes entering the United States are under a quota, and the United States tariff ranges from 371 to 75 cents per 100 hundred pounds. That practically destroys the market for early potatoes in this country. I should like to quote a letter received from the British Columbia Potato Growers' Association, and signed by the secretary, in which he gives their opinion as to what will happen under this agreement. The letter reads:
With reference to the provisions and regulations of the new Canada and United States trade agreement, we would like to point out that as far as the province of British Columbia is concerned, it seriously affects our early potato deal. On account of the proximity and climatic advantages of the state of California, the early
Vegetables
Asparagus, crate 15 lbs	
Beans (green), hamper 35 lbs
Cabbage, crate 85 lbs	
Carrots, crate 87 lbs	
Cauliflower, crate 40 lbs....
Celery, crate 71 lbs	
Cucumbers, hamper 55 lbs...
Lettuce, crate 76 lbs	
Onions, per 100 lbs	
Rhubarb, box 46 lbs	
Spinach, bushel 22 lbs	
Tomatoes, lug 34 lbs	
potato deal in British Columbia will be wiped out, especially as far as the coast is concerned.
As far as the second early and late varieties are concerned, the growers are of the opinion that if there is going to be any trade either way, the tariff should be countervailing or entirely wiped out.
We realize that in this agreement, sacrifices are made on both sides, but we consider it very unfair and too great a sacrifice on the potato growers, especially in British Columbia, where a great surplus has been produced over the past number of years, and which we have in the last three years been endeavouring to control through marketing boards.
We notice that potatoes entering the United States have an all year round duty, but although the tariff is on a sliding schedule, there are a great many provisoes protecting the American potato producer against a dump market; while we have a very short stated period, namely, June 15 to July 31 inclusive, with very little protection and no provisoes and the dates named, June 15 to July 31, are of absolutely no value to our coast growers.
This is another band of producers called upon to pay a price. As was stated the other evening by my colleague from British Columbia, the fresh fruit and vegetable growers have been dealt another blow by the Liberal party. The attitude of the Liberal party toward this industry is too well known to need my reviewing it at this time. This is a very important industry, from the' point of view not only of revenue but of employment. They have always been reasonable in their requests; all they ask is an opportunity to market their products in the Canadian market. They must have protection against the dumping of foreign fruits and vegetables during the seasons when their products are ready for the market. They are not concerned about the tariff that applies during other months in the year. One criticism that was made last season was that the application of the seasonal tariff was considerably delayed. This government has gradually reduced the protection offered during what is termed the "inseason" period. I have prepared a table showing these reductions, which I shall read. These reductions are as follows:
Protection
In-season	In-season	In-seasonperiod. 1935	period. 1936	period,1939$1.23	$ .89	$ .751.43	.95	.67-22.41	1.10	.83-82.73	1.65	.88-42.06	1.04	.76-82.13	.83	.74-12.54	1.81	1.23-51.90	.88	.79-61.50	1.08	.951.50	.88	.56-6.494	.31	.041.65	.68	.511260	COMMONS
Canada-United, States Trade Agreement
The in-season period has been completely removed from spinach and tomatoes and reduced on the other items. The same applies
Strawberries, crate 33 lbs... . Raspberries and logans	
Plums and prunes, crate 26 lbs.
Cherries, case 11 lbs. Pears, box 50 lbs.. . Peaches, case 22 lbs.
to fruits, of which I will list a few; with the in-season reduction in weeks:
Protection in-season period			Reduction in-season period
1935	1936	1939	in weeks$1.65	$ .92 $	.78-3	8 to 61.32	.77	.59	8 to 6.51	.34	.31-6	plums 11 to 10.81	.62	.43-8	prunes 9 to 8 8 to 71.00	.76	.67-5	22 to 15.651	.42	.38	10 to 9
Speaking the other evening, the Minister of National Revenue (Mr. Ilsley) used some percentages. Let me give some. The reduction in "in season" protection since 1935 ranges from 45 per cent to 92 per cent on fresh vegetables, and on fresh fruits the reduction is from 24 per cent to 67 per cent.
Some of our friends, particularly members from the prairie provinces, will suggest that, for instance, $1.65 on a crate of berries is a high tariff.' They naturally add this sum to the market value and assume that the people are going to have to pay that much more for the fruit. That is not the case. I can illustrate my statement by reference to onions. It will be noticed that in 1935 the protection on onions was $1.50 per 100 pounds, a cent and a half a pound, or $30 a ton; and I can assure hon. members that in that year onions from British Columbia sold on the market in Winnipeg at from $15 to $20 a ton. They could not have reached the Winnipeg market had it not been for the protection, which might be considered high, but the people of Winnipeg did not pay' any more for their onions than if they had had to depend upon the United States market.
Some benefits may be derived from this agreement, but it is my opinion, after very careful study, that it will not go very far towards correcting the conditions which exist in this country to-day. It will not go very far towards eliminating relief and unemployment as we now have them. As I say, I cannot see that the agreement will be of great benefit to Canada. I have arrived at that conclusion after studying it, not from a political point of view, as the Prime Minister (Mr. Mackenzie King) has done, but from the viewpoint of a business transaction in the interests of the people of Canada.


Mr. J. E. J. PATTERSON (Victoria-Car-leton):: 
James Edward Jack Patterson: The crop this year
was 59,600.000 bushels.


Alfred Johnson Brooks: We could hardly have
sent them 38,049,000 bushels in 1936.


James Edward Jack Patterson: We would have had
the opportunity at any rate.
The leader of the opposition said the other day that one county in New Brunswick could fill the quota. In the years in which the annual crop was lower than 350,000,000 bushels we would have had an unlimited market for our potatoes.
The total quantities under the 350,000,000 bushels in these five years amounted to 120,933,000 bushels, or a yearly average, for the past ten years, of 12,093,000 bushels. With a short rail haul and lower cost of production we can successfully compete with our neighbours in, Maine.


Alfred Johnson Brooks: Where did the hon. gentleman get his figures?


James Edward Jack Patterson: From the tariff department in Ottawa.	*
The hon. member for Lanark (Mr. Thompson), speaking on this resolution the other evening, is reported on page 1196 of Hansard as having said:
The duty on exports to the United States has been reduced from 45 cents per 100 pounds to 374 cents-not a very material reduction. But here is the joker: it is good for only nine months. For three months-December, January and February-the exporter must pay 60 cents per 100 pounds.
While it is true that, for the present Canadian seed potatoes are entitled to the maximum reduction of 374 cents per 100 pounds only during the period March 1 to November 30, it is believed that, as a result of negotiations now in progress between the United States and Cuba, Canadian potatoes will, from March 1, 1939, be entitled to the low

rate during all months of the year up to a quota of 1,500,000 bushels per annum.
Under this treaty United States potatoes are allowed free entry into Canada except for the period from June 15 to July 31. It has been stated by some who are opposing this treaty that this will allow the United States to flood our markets. I am not one who entertains this view, for the reason that the price in Canada is nearly always lower than in the United States. From 1925 to 1938 there is not a single year that the average Canadian retail price has been higher than the average United States retail price, and this is borne out by the following figures which I have secured from the bureau of
statistics:	Average	Average
	Canadian	United States
	retail price	retail price
Year	per bushel	per bushel1925.. ..	.. $1 09	$2 161926.. ..	. . 2 02	2 941927.. ..	.. 1 53	2 281928.. ..	. . 1 27	1 621929.. ..	. . 1 38	1 921930.. ..	. . 1 66	2 161931.. ..	.. 89	1 441932.. ..	.. 68	1 021933.. ..	. . 92	1 381934.. ..	. . 90	1 381935.. ..	. . 77	1 141936.. ..	1 24	1 921937.. ..	.. 1 15	1 681938.. ..	.. 85	1 26I do not	believe our United	States neighbours will ship potatoes into Canada only to get a lower price than they command on the other side.
Canada's imports of potatoes come almost wholly from the United States and Bermuda. The United States supplies about 90 per cent of these imports. These are nearly all table potatoes, as less than 5 per cent of our imports in 1937 and 1938 were certified seed. Our largest imports of United States potatoes are during the months of June and July, and it is during this period that by the terms of this treaty we are protected by a duty of 374 cents per 100 pounds. To substantiate this statement I give the following figures:
Imports of table potatoes Percentage of from United States	fiscal year's
During	imports from
12 months	During	United Statesending	June	shipped during
March 31 and July June and July
100 lbs.	100 lbs.	per cent1931. .	406.480	327,230	801932..	190.830	153.920	811933..	107,470	93,670	871934..	96,480	73,430	761935..	113,920	94,230	831936..	104,700	73.320	701937..	119,570	75.600	631938..	146,750	113,490	71*160,775	*125,610	*78
Average imports during eight years.

Canada-United States Trade Agreement
June and July are the months in which we have protection, so that only 20 per cent comes in during the remaining ten months. Again, there is no doubt that a considerable portion of these imports were of a quality below the standard set for Canada grade 1. Imports of potatoes of a grade lower than Canada grade 1 have been prohibited since February 1, 1939, and this will tend to reduce the quantity of future imports.
The potato growers have also received concessions by a reduction in the duty on spraying materials. The cost of spraying is a considerable part of the cost of raising potatoes, and the reduction from 15 per cent to 7i per cent is of considerable importance to us. Potato growers during the past few years have gone into the raising of hogs. Cull potatoes mixed with grain are used for feed. Through government assistance and cooperative marketing the production of hogs has increased 50 per cent. A reduction by this treaty in the duty on fresh pork entering the United States from 2i cents to U cents a pound, coupled with a reduction in the Canadian duty on feed corn from 20 cents to 10 cents a bushel is also of considerable value.
The potato growers of Maine feel that we have made a good bargain. I live only a few miles from the border, and visit there frequently. Prominent potato brokers in Maine have told me that they have been "crucified" and "sold down the river." Governor Barrows charged that the tariff concessions discriminated against them, and Senator Frazier of North Dakota said he was "satisfied the new trade pacts will be of no advantage to farmers." In any trade agreement the parties to the contract, in order to secure concessions, must give concessions. Coming from New Brunswick, I believe that we have received worth while concessions, even more than we had hoped to receive. In addition to potatoes we received valuable concessions on lumber and fish, but the discussion of these I shall leave to other members from the maritimes who are more familiar with them.
Taking the agreement as a whole, Canada received concessions on 202 items of the United States tariff. In 1937 the value of Canadian exports under these items amounted to $327,505,484, compared with total exports to the United States of $394,240,823, or 83 per cent of Canada's sales to the United States. Dutiable goods to the value of $156,232,137 were exported to the United States in 1937. This agreement contains concessions on 170 dutiable items covering exports to the United States in 1937 of $124,825,174, or 80 per cent of the exports of dutiable goods.
In conclusion, I quote from the December issue of Canadian Business:
Fishermen in the maritime provinces would not believe those who assured them they would get worth while concessions on cod and haddock. Potato growers in New Brunswick and Prince Edward Island smiled when they were told easier access with larger quotas would be given them.
The maritime provinces, with all tlieir misgivings, got much more than they expected.
Even more incredulous were the lumber operators. They were a downcast lot of men up to the day the new agreement was published. They would not believe anything could be done for them. The virtual embargo against their products, through the marking regulation, imposed by act of congress had during the two months of its operation-September and October -drastically cut their exports, and they could not believe President Roosevelt, especially in view of the congressional election results, would meddle with a congressional law.
But overnight their dismay was dispelled. The marking regulation is rescinded, and to top it all the quotas on British Columbia 6t and hemlock are extended, also the valuable quota on red cedar shingles is enlarged, so night has become a sunny day for the lumber people whose exports have become a big factor in Canada's external trade.
I should like to read one paragraph from a letter of Mr. W. B. Greeley, secretary-manager of the West Coast Lumbermen's Association, dated at Seattle, November 19, 1938:
It is still more incomprehensible that the American government should remove the quota on Canadian fir and hemlock; should waive the requirement for marking imported lumber; and should remove the present shingle quota pending action by congress on a shingle tariff. Canada has simply driven another good bargain preying upon the free trade proclivities of the administration. I am very greatly disappointed by this outcome of our efforts.
I am convinced, Mr. Speaker, that there is no constituency in the maritimes that will benefit so much from this treaty as will Victoria-Carleton. Being within easy access of the large markets in Boston, New York and other large United States centres, and being able to produce finest quality potatoes at less cost than our Aroostook county neighbours, we shall be able to compete with them successfully in these large markets. I am also convinced that if the farmers of Victoria-Carleton had their choice, whether to accept the 1935 agreement or the one of 1938, they would unhesitatingly choose the present one, and I, as their representative, propose to vote for the adoption of the resolution.


Mr. E. E. PERLEY (Qu'Appelle):: Mr. Speaker, earlier this evening we heard from the hon. member for Humboldt (Mr. Fleming), a fellow-member from Saskatchewan. I was interested in listening to him because I ex-
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pected he would try to point out how this treaty would benefit his constituency and the electors whom he represents. But he did not offer one really constructive argument in favour of the treaty. He indulged in flights of oratory, and I wish to congratulate him upon his ability in that respect. Then he told us one or two things. He referred to this treaty as a baby born unto this government. I think possibly it had two parents, one of them being the United States government and the other this government, but which was father and which was mother I do not care. But the hon. member, being a doctor, might have told us. Speaking figuratively, in medical terms. I would say that this baby was conceived in iniquity, born in depression, and that it will die in disgrace of its parents.
One other thing the hon. member told us, and that was that he does not want an election this year. Then in one of his flights of oratory he threatened this government that if they did not smash the implement combine^-I suppose he was referring to the combine in prices-the people would smash this government. I would ask him to recall the bold statement that was made by the Minister of Agriculture (Mr. Gardiner) during last session, I think it was, in which he threatened the implement companies as to what would happen if they did not do such and such a thing. But nothing happened. Now we have the threat of the hon. member for Humboldt to-night. I might tell the house that following the threats of the Minister of Agriculture against the implement industry, the province of Saskatchewan has now inaugurated an inquiry similar to those which took place in this house in 1937 and 1938. They have the same counsel, and I trust they will get more out of that inquiry than we did in this parliament. The whole speech of the hon. member was an admission of failure on the part of this government.
This trade agreement, Mr. Speaker, is far-reaching in its effects. It may change the whole fiscal policy of Canada, and it should be very carefully considered from the point of view of how it will affect the whole of Canada.
But first I should like to recall that the 1935 trade treaty with the United States was made after the Prime Minister (Mr. Mackenzie King) had paid a visit to Washington and stayed overnight with President Roosevelt, after which he returned and the agreement was signed. But that treaty did not improve conditions in Canada, as we had been led, during the discussion in the house, to believe it would. If one reviews the trade figures of exports and imports for the first
(Mr. Perley.)
ten months of last year, compared with the corresponding months of 1937, one will find that there was a decrease in both exports and imports, and we were heading for an adverse trade balance, which would be detrimental to this country. That treaty did not do what we had been led to expect it would.
The present treaty has been conceived a little differently. The Prime Minister has told us that negotiations were carried on from February last to November 17 last, when the treaty was signed. I asked, what was the cause of the delay? I am credibly informed that the delegates from the United Kingdom and from Canada had to wait for weeks at a time, while the United States delegates consulted with representatives of American industry of all kinds whose business was likely to be affected by the agreements. Why was not Canadian industry consulted in the same manner and given the same consideration? I would ask this government to explain why the live stock industry of Canada was not consulted and given an apportunity of saying whether it was in favour of Mexico enjoying a portion of the quota we have on cattle. Why were not the wheat growers of western Canada, and the pools and the grain exchange consulted with respect to our six cent preference on wheat in the British market? I think that would have been only fair.
The Prime Minister dealt at great length, in introducing this resolution, on the gesture of goodwill that the treaty implied, and the good effect it would have on peace, harmony and unity. But I know, Mr. Speaker, what is in the minds of the western producers, and when they come to consider this treaty from that point of view they will look upon that argument as just so much eyewash. I believe the west is the hardest hit, if I may use that term, of any part of Canada by this agreement. When we have had good relations with the United States for the last forty or fifty years, or more, to suggest that now, after we have made many concessions to the United States, there will be any more harmony or unity between our two countries-well, I do not think the farmer of western Canada will swallow that.
I desire to consider this trade agreement, first, from the point of view of the price we pay for the proposed wider markets we are to have, and, second, from the point of view of how it will affect our domestic market.
Let me say at the outset that naturally a great majority of the people in the west are inclined to favour lower tariffs, and would receive with pleasure any reduction which would mean a lower price on the goods we have to purchase. But I believe the western

Canada-United States Trade Agreement
producer is fair to the extent that he does not desire any benefit at the expense of his fellow Canadian. That is the way in which we are prepared to view the question. I believe in these matters of trade and commerce, and industry, we in western Canada are fairer than we are given credit for. That, however, is the way we feel at this time.
In the past three years we have had some experience in Ihese tariff matters. For instance, we know that during the Bennett regime the duty on implements was increased. It will be recalled that a deal was made with the manufacturers* They signed on the dotted line that they would not increase the price if they got protection, and we saw lower prices. But when this government took office, two reductions in tariffs took place, reducing the rate from 25 per cent to 7J per cent, and we have seen three major increases in prices. The proof of the pudding is in the eating.
When the hon. member for Huron North (Mr. Deachman) speaks-and he is the only free trader in the house, I believe-he always keeps away from any article of vital importance. He does not refer to those articles in every-day and practical use in western Canada. His reference the other night to dates was so ridiculous that it was not funny. Certainly no great importance could be attached to the comparisons he made respecting items which would affect our trade.
When introducing the resolution, the Prime Minister referred to concessions which would be of benefit to western Canada. He said that concessions affecting the prairies were received on cattle, swine, poultry, fish, lumber and feed. Saskatchewan produces only a small quantity of lumber, but may I say that there is a concession respecting white spruce which I am pleased to see. It may help that industry in the northern parts of Saskatchewan and Alberta. We may be a little selfish, but we know the effect may be that of increasing the price to the farmer who is to-day in a position to make repairs to his buildings, or to build new ones. In certain parts of the province buildings are in a bad state of repair. If the cost of repairing is increased, the change will, of course, not be received favourably.
May I say a word with respect to fish. The fishing industry can be developed in Saskatchewan. There are fresh water lakes teeming with fish in the northern part of the province. I am informed, in a letter I received the other day, that at the present time thousands of pounds of fish are piled up on the shores, and there is no outlet for the catch. I suggest that the government would do well to take this matter into consideration and to see that some outlet is provided, even if the federal government has to go to the extent of taking up the matter with the provincial government. The- fishermen are in straitened circumstances.
The treaty may offer some benefits to the poultry producers; I shall not take time to go into that matter. I regret, however, that we are losing our position in the British market. I recall that in 1932 a trial shipment from Saskatchewan, or one which was made up principally from that province, was received faiourably on the British market.
I should have liked to see that market developed.
It is scarcely necessary for me to repeat some of the arguments which have already been made with respect to cattle. The agreement is not satisfactory in its manner of operation in this connection. The fact that Mexico shares in the quota makes the whole market very uncertain.


William Daum Euler: It did before.


Ernest Edward Perley: Well, I will say this, that there was not one farmer out of a hundred in western Canada-yes, I will say even that there was not more than one member in twenty-five in this house-who knew the quota was to be shared with Mexico. The word never was used. It came like a bolt from the blue to the farmers out west when they learned only recently that Mexico was to share in the quota. One man in my constituency wrote me a letter before the statement was made by the Minister of Agriculture in reply to the question by the hon. member for Haldimand (Mr. Senn). The letter in question was from a shipper in my constituency whose shipment had arrived at Winnipeg the morning the announcement was made that the quota had been filled. The price was down from one and a half to two cents, and he lost about $500 on the car of cattle. Certainly that man will not forget what the quota has meant to the cattle industry. If I had time I could place on record letters I have received from other shippers who had been advised to withhold their cattle because the quota had been filled.
The duty is now at three cents, and will remain there until April 1, at which time there will be a further opportunity to fill the quota. No doubt at that time there will be a rush from both Mexico and Canada. There can be no doubt that we were not properly informed with respect to that part of the agreement. I would say further that in connection with cattle the Minister of Agriculture should direct his attention to the cattle industry in Saskatchewan. In 1937-38, as a
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result of the policy adopted by the government in providing relief feed and fodder for cattle, we were dealt a blow. Rules and regulations were set up whereby in certain areas a farmer could not retain more than four female animals. That factor has worked to the detriment of our farmers, and is a blow from which we shall not readily recover in many years. It takes quite a while to produce a steer; in fact, it takes three years to produce one fit for shipment. The west could not supply the quantity it could have supplied in normal times, even if we had the whole quota of 225,000 head to work on. I may say, however, that in normal times prior to the depression and the drought conditions which have affected the prairie provinces, in Saskatchewan alone we could have supplied one-half of the quota, as it stands to-day, Mexico having its share.
From what we have been able to learn, after watching operations in the first month of the first quarter, Canada will supply only three-quarters of one per cent of the total slaughter in the United States in one year. That certainly is not a very great amount.
Let me now say a word with respect to the important question of wheat. I shall try to deal with three or four matters in particular which affect the people in the west, and shall leave other matters in connection with industry to hon. members from eastern Canada. Under the 1932 agreements we enjoyed a preference of six cents in the British market. That was a preference in a sheltered market of 40,000,000 people. It is claimed by some hon. members supporting the government that this preference was never of any great value to us. On that point, however, I prefer to take the views of United States authorities who, after consultation with their growers, saw fit, the day following the signing of the agreement, to issue this press release:
Wheat: The granting of duty-free treatment for wheat by the United Kingdom should prove of marked value to American -wheat growers and the American wheat export trade. The import duty on non-empire wheat has been at the rate of 2 shillings per 480 pounds since November 17, 1932. A duty of this size (about six cents per bushel) applicable to wheat from some countries and not others often is sufficient to divert the trade. . . .
The United Kingdom is the leading wheat import market of the world. Formerly about a fourth of the total American wheat exports were regularly shipped to the United Kingdom. Under the influence of the world economic depression and the establishment of an import duty in 1932 (with empire wheat remaining duty-free), imports of American wheat into the United Kingdom dropped from 39,267,000 bushels in 1930 (20 T per cent of total wheat imports) to only 9.000 bushels in 1933 (less than 0-05 per cent of the total), while imports [Mr. Perley.l
from empire sources for the corresponding years rose from 79,234,000 bushels (40-5 per cent of total wheat imports) to 140,459,000 bushels (67-0 per cent of the total).
Owing to the droughts of 1934 and 1936, the United States was not in a position to supply its normal share of the United Kingdom wheat market requirements, even had there been no tariff on American wheat. In 1937, however, with a normal wheat crop, the United States supplied 6,485,000 bushels of wheat to the United Kingdom, representing 3-6 per cent of total wheat imports of the United Kingdom for that year. In view of the large wheat surplus this year in the United States and the probability that the United States will continue to be on a wheat export basis in the future, the removal of the competitive disadvantage which confronted our wheat in the United Kingdom should facilitate recovery of a larger share of that market.
Then, in connection with oatmeal, rolled and flaked oats, they say this:
The reduction to 5s. (a reduction of one-third) from the present duty of 7s. 6d. per hundredweight on these products should help to restore a substantial part of the former American share in the United Kingdom market for oatmeal.


Mr. CRERAR:: What is my hon. friend
reading from?


Ernest Edward Perley: It is a press release by
the Department of Commerce, Washington, dated November 18, following the signing of the agreement on November 17. I would prefer to take that rather than the statements which have been quoted here. According to that statement, the United Kingdom was receiving only 9.000 bushels from the United States, but immediately following the signing of these treaties, the United States got busy and sold 20,000,000 bushels in January alone. That was the first sale they made.
I have under my hand a report stating that they sold 5,000,000 bushels later on. The language used here is interesting. They say, " Here is another substantial portion of the self-imposed wheat export quota of
100.000.	000 bushels." I have not heard any member of the government explain why that term is used, but we may get an explanation later on. However, they did sell an additional
5.000.	000 bushels and price was no consideration. They sold at a very low price, and I am informed that the British authorities were a little upset about the matter. This sale had the effect of really breaking the market. Not only did they have the six cent advantage, but they went a little lower and broke the price by two cents.


William Daum Euler: Does the hon. member not *
know that just before, the British government bought some 25,000,0000 bushels of wheat from Roumania?

Canada-United States Trade Agreement


Ernest Edward Perley: I suppose that country
knew the treaty was likely to come into force, and they tried to make a sale. Roumania, Argentina and Russia will all be offering wheat. In effect, they will be dumping on the market. The British authorities are subsidizing their domestic producers, and every time the price is forced down a cent because of supplies thrown on the market, it means another cent to be taken out of the treasury for the domestic producer.


William Daum Euler: They bought wheat so that
they could sell some goods of their own, a quite natural procedure.


Ernest Edward Perley: We will see how much
goods we sell. I would ask for an explanation of that "self-imposed" statement. It would seem the United States have subsidized 100,000,000 bushels. I should like to know why we did not get some concession in the United States market when we gave them that concession. We might have been able to export a little grain to the United States, but their duty remains at 42 cents a bushel, compared with our duty of 12 cents a bushel. There is a reduction on feed
Calendar	Canada	Australiayears	Per cent	Per cent1924	. .. 33-0	9-31925	16-81926	. .. 37-1	9-51927.. .'	13-41928	. .. 39-6	9-91929	. .. 24-3	11-51930	. .. 25-0	12-11931	19-51932	. .. 44-4	22-81933	26-11934	21-11935	. .. 36-4	17-51936	2311937	. .. 35-4	231
grain, when not used for food purposes. I have an inquiry which will appear on the order paper to-morrow with respect to certain imports into Canada from the United States, in connection with which the Minister of Trade and Commerce (Mr. Euler) will probably be getting some information.
I should like to give a picture of Canada's position in the empire market over a period of years. I have here a statement which with the permission of the house, I should like to place on Hansard. It contains a compilation of figures covering the period 1924 to 1937, showing the imports into the United Kingdom market. The statement is as follows:
The following table shows for the calendar years 1924-37 the percentage of total United Kingdom wheat imports supplied by Canada, Australia, the United States and Argentina, together with the percentage of total imports supplied by all empire countries and all foreign countries. The percentages have been calculated from the imports shown by the United Kingdom trade returns, and it might be pointed out that in the earlier years the imports from the United States included some Canadian wheat shipped via United States ports, while imports from Canada included some United State? wheat shipped via St. Lawrence ports.
United States Per cent	Argen- tina Per cent	Total British countries Per cent	Total foreign countries Per cent25-8	20-5	51-0	49-027-4	12-3	55-1	44-932-4	12-4	49-4	50-632-3	17'6	47-1	52-922-8	23-6	51-0	49-019-9	40-6	36-0	64-020-1	14-5	40-5	59-59-4	17-4	42-6	57-44-4	19-5	67-2	32-80-0	22-0	67-0	3300-0	34-2	56-1	43-90-6	22-5	54-1	45-90-0	0-9	83-7	16-33-6	16-0	65-4	34-6
This statement shows that in the last fourteen year period we have averaged 35J per cent, and in one year, 1936, we went as high as 57-4 per cent. This shows that the United Kingdom have been consistently taking our wheat. .


Thomas Alexander Crerar: Those figures are for wheat?


Ernest Edward Perley: For wheat. In the last seven years the United States percentage has averaged only 2^ per cent, with nothing at all for three of those years. We have occupied a consistent position in that market. I have another table here showing the exports from Canada to all countries for the same period. I should like to place this on the record for the information of hon. members
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Frederick George Sanderson: With the unanimous consent of the house.


Ernest Edward Perley: This covers the same fourteen year period and it is a very interesting statement.


William Daum Euler: What is it about?


Ernest Edward Perley: It is from the bureau of statistics.


William Daum Euler: With regard to wheat only?


Ernest Edward Perley: With regard to wheat only. The statement is as follows:
Exports from Canada by Years-Crop Years August 1 to July 31
	Wheat	Wheat and flour
Year	bushels	bushels1923-24	. .. 292,425.153	346.521,5601924-25	. . . 146.958.158	192,721,7691925-26	. . . 275.557.078	324,592.0211920-27	. .. 251.265,788	292.880.9961927-28	. .. 288.507,390	332.963.2831928-29	. . . 354.424.099	407.564.1861929-30	. .. 155,766,106	186,267,2101930-31	. .. 228.536.403	258,693 8831931-32	. . . 182.803.382	207,029.5521932-33	264.304.3271933-34	. .. 170,234.013	194.779.8711934-35	. . . 144,374,910	165.751.3041935-30	. . . 232,019 649	254.424.77519.30-37	. . . 174.858.160	195.223.6531937-38	. .. 76,713,595	92.957,049
Imports of Wheat, Oats, Barley, Flaxseed, Rye, and Corn into the United Kingdom for the calendar years 1925 to 1937
Wheat	Oats	Barley	Flaxseed	Bye	Corn1925	.. .. 180,794,465	27,557,650	36,818,566	13,619,123	1,080,390	55,170,8271926	.. .. 179,677,923	25,166,405	26,997,851	14,433,S07	618,885	63,567,4901927	.. .. 206.146,855	19,458,504	38,310.397	14,118,127	646.750	83.855.8731928	.... 193,344.612	24,531,507	30,276.234	13,934.288	344.781	66.031.7341929	.... 208,632,476	22,827,916	27,949.459	11.376.591	259.997	69.817.1691930	.... 195,579,507	31,820.396	35,485.274	8,932,016	192.465	68.329.2911931	.... 222,913,890	28,834,118	35,988,003	13,526,229	215,346	106.522.5001932	.. .. 197,188,613	21.318,884	23.749,335	14,492,726	85.036	105.491,8331933	.. .. 209,766,214	18,511.857	37,298,403	9,837,007	187,394	102.609.6651934	.... 191,567,240	10.575.147	36,112.016	7,361.122	179.127	122.699.8041935	.... 188.956,152	11,705,998	39,894,S60	10,276,360	242,510	118,911,3731936	.. .. 188,177.541	7.119,047	42,687.440	10,907,437	240.542	146.585.8541937	. . .. 180,849,243	3,974,839	42,448.601	11,441,273	315,342	143,520.6231938	.. .. 189,745,765	5,180,979	46,345,300	Not available	115.256,360
Exports of Wheat from Canada to the United States and the United Kingdom, during
the	crop years 1924-25 to	1937-38
Crop year ending	Exports of wheat to	
July 31	United Kingdom	United States
	Bushels	Bushels
1924-25..	.. 115,774,595	3,171.4261925-26..	.. 198,402,001	10,464,0411926-27..	.. 185,345,710	7,624.5661927-28..	.. 201,732,699	8,432,3301928-29..	.. 209,571,743	10,060,2391929-30..	.. 105,007,552	7.306,1661930-31..	.. 135,117,943	8,087,5781931-32..	.. 101,564,154	4,473,2931932-33..	.. 156,461,736	304,9761933-34..	.. 114.858,191	218,8141934-35..	.. 100,688,352	15,076,0981935-36..	.. 162,920,206	29,078,7231936-37..	.. 124,368,897	14.868,3521937-38..	.. 55,443,863	1,802,502
Exports of Wheat from the United States to all Countries and to the United Kingdom Calendar Years 1925 to 1938
	Total	Exports to United
Calendar year	exports	Kingdom
	bushels	bushels
1925	
86,526	17,0101926	138,275	37,8971927	168,307	42,5801928	
96.290	14,2221929	
90.130	21,7721930	
87.774	23,1131931	
80.311	13,9961932	
54,879	5,4601933	
7.983	671934	
10.970	1,2891935	1936	1971937	(a)1938	
(a)	(a)Note: (a)	Statistics not yet available.	

Canada-United States Trade Agreement
These figures show 1hat our position has been fairly consistent. I have another statement showing shipments to the United Kingdom alone, as follows:
Export Shipments of Canadian Grain from Canadian and United States Ports during the Crop Years 1927-28 to 1937-38
Canadian United States ports	ports
1927-	28	
204,517,294	95,866,1171928-	29	
254,400,822	112,860,4021929-	30	
97,476,917	58,172,2521930-	31	
150.470,272	76.880.2241931-	32	
174.849.547	34,986,2001932-	33	
211.261.115	29,239,1251933-	34	
134,549,349	*26,938,0001934-	35	
110,983,781	*22.027.0001935-	30	
163.407,572	28,770,8271936-	37	
130.247,604	23.873.6061937-	38	
82,459,269	14,368,787
*Wheat only. The United States government discontinued compiling the detailed record of the exports of Canadian grain via United States ports. Only wheat is shown and the figures are approximations.
These figures show that we have shared in their market consistently, especially when considered on a percentage basis. I should like to take the time to quote figures showing imports into the United Kingdom from all countries during the last twenty years, but briefly they show that the United Kingdom imports have been consistent, the decrease in the last few years being less than five per cent. These figures show that the United Kingdom has been a stable market for our wheat. We all recognize that wheat is practically Canada's life-blood, and the finding of a market for this commodity is an allimportant problem.
In order to show the seriousness of the present situation, I should like to recite what I consider to be a most amazing situation with respect to wheat. We are in a period at the present time as regards marketing and prices which is comparable with only one other period since world markets for wheat came into being. The period I refer to is the three years from 1930 to 1933. I am not going to take time to quote all the figures in this connection, which I have from the statistics issued by the Food Research Institute of the United States, but I will abbreviate them a little. The situation in 1933 was that the world's carry-over of wheat was the greatest ever known prior to that date. Excluding Russia and China, it had reached
1,132,000,000 bushels. In the crop year 193233 prices of wheat for export dropped to the lowest point, absolutely and relatively, ever recorded in the world's wheat markets since those markets existed. I would like hon. members to realize that situation. We had the highest carry-over and we had the lowest
prices. On the other hand, during the same period. 1932-33, to consumers in the importing countries prices were very high. To-day we have a similar amazing situation. Reports from the institute I mentioned show, the markets for 1938 and 1939 are exactly as I have recited in respect of the period, 1930 to 1933. In eight European countries, namely Belgium, Denmark, France, Germany, Italy, the Netherlands, Switzerland and Sweden, the consumption of wheat in the last three years is averaged at 959,000.000 bushels a year. In other words, they have slightly increased their consumption during this period. Their domestic price, which is a subsidized one. is very high. I might figure it out in this way. In these eight countries that I have mentioned, taking the period 1909 to 1914 as giving the base index of 100, we find, in comparing prices in these countries, that the indices for recent years are as follows:
Index
Period	number
1930	to	1931	
1051931	to	1932	
1201932	to	1933	
1131937	to	1938	
115
These, of course, take into account subsidized prices ranging from $1.47 to nearly $2. in some instances, in these countries. On the other side of the picture consider Canada and the United States. Taking 1909 to 1914 as furnishing the base index figure of 100, we have at the present time a price averaging only 58 to 60 by comparison with the previous period. This shows that the importing countries are consuming more than the average and that the price is above the average, while exporting countries are producing more and are exporting less, at a lower price. I think we shall all agree that these figures show a critical and amazing situation. Now that I have quoted those figures, who on the government side will dare to argue that the six cent preference in the British market was not of great value in this amazing world situation? No wonder, I say, that the grain merchants of the world state that the policy pursued by this government, through the wheat board of whose operations they were in control, has created a buyer's paradise. I may be able to refer in more detail to this position upon a future occasion. Grain merchants have also made this statement, that the present government is not trying to resist price decline; they are not doing what the Bennett government did from 1930 to 1935 under McFarland's operations, when they persistently resisted price decline, and not only that, were successful in stabilizing prices. True enough, the Bennett government made great accumu-
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lations of wheat prior to 1935, but they did this country a service when they stabilized the price; and after they accumulated a surplus the present government sold it, according to a statement tabled yesterday by the minister, at a profit of $24,000,000.


William Daum Euler: And my hon. friends plainly violated the Wheat Board Act by not offering wheat for sale.


Ernest Edward Perley: They offered wheat consistently according to the judgment of the board. The first board was only in operation a month or so; when the government changed and the Murray board was put in, it was a fire sale that they undertook for this government. They could not sell it fast enough to take a loss, and they had to take a profit.


William Daum Euler: Pure luck!


Ernest Edward Perley: Well, it is a good job we had the luck. The Minister of Agriculture, speaking the other night, I think on the address, stated that the foregoing of the preference that we enjoyed had nothing to do with the diversion of wheat from Canadian ports to United States ports. I would prefer to take the opinion of the United States state department as given in a press release. I shall quote briefly what they said with respect to shipments through Canadian and United States ports.
The concession of free entry for American wheat should benefit also the American transportation and port business. In order to obtain the benefits of the United Kingdom preference, Canadian wheat, which formerly moved in large quantities through American ports has under the preference been shipped principally to the United Kingdom direct from Canadian ports. In view of this concession, American port and transportation interests will be in a position to reenter the transshipment business.
Again I prefer to take that statement as to how it affects the shipments.
I should like to recall another interesting matter. Taking a million bushels of wheat from Fort William or Port Arthur, shipping it in Canadian bottoms down the lakes through Canadian elevators, unloading and reloading, shipping it down the St. Lawrence to Canadian terminals, then on through Canadian channels to Saint John and Halifax and out to Europe-all these operations involve a cost of ten cents a bushel. It is estimated that this operation means, for Canadian shipping interests, elevator interests, payments of harbour and port fees, and labour, one hundred thousand dollars, and more than half of that is represented by labour. Consider what that means to Canadian industry, labour and shipping; consider what it means in loss to them when we forego that advantage. I

have heard over the radio, as I suppose all hon. members have, "The Shadow Knows." I say, the farmer knows and you cannot tell the farmer of western Canada that when his grain is directed through Canadian ports it does not mean something to him in the end, when 50 per cent of the cost is labour; for that means that Canadian labour will be fed with our bacon, pork and butter and cheese.


William Daum Euler: I am sorry to interrupt my hon. friend, but may I ask him whether he knows that as much as fifty million bushels of grain of various kinds have come through Canadian ports, consigned to the United States?


Ernest Edward Perley: From Canadian ports to United States ports?


William Daum Euler: Through Canadian ports to United States destinations.


Ernest Edward Perley: Yes, that is fine. My answer to that is this, that there are international interests in this grain business, the Big Three, which the minister should know something about. They are considered by the grain interests and the producers of western Canada to be the greatest chiselers in the market; until you eliminate them, ruination is written on the map. These men direct Canadian grain through United States ports, where they can chisel on rates, harbour fees and everything; that is what they are doing. The Minister of Transport (Mr. Howe) could tell us a story about it if he were in the house to-night. You cannot tell the western farmer that we are not gaining anything while our grain is going through Canadian ports.
Western farmers are interested in the dairy business to quite a considerable extent. As I must hurry, I cannot take as much time as I should like to do on this phase of the agreement. The constituency of Qu'Appelle could supply about four times the amount of milk that is provided for in this quota, and it would be only one-fifth of a pint of milk and one-tenth of a pint of cream to each American once a year; that is not very much.
I am leaving to members from other parts of Canada the discussion of the effects of this treaty upon industry. They can set out their case. But from what I have learned with respect to vegetables, fruits and other commodities of that kind, I think there is very little in this agreement for us. We appreciate the fact that the main market is the domestic one. When we consider that 95 per cent of all our primary products, apart from wheat, are consumed in Canada, surely we must realize the importance of maintaining our

Canada-United States Trade Agreement
position in the domestic market. The farmers of the west realize that. They know that if they can supply foodstuffs to workmen in the
constituency of Waterloo, engaged in the manufacture of machinery for western Canada, that is better than importing products from Japan or from the south, because those workmen are eating Canadian butter, cheese, pork and so on.
The position we take in western Canada is this. We want to be fair. We do not want any advantages at the expense of any one Canadian. But I should like this government to show us-I have not been able to get it from any of the arguments that have been put forward-whereby this treaty will mean a single job more to any Canadian. The people of Canada are demanding something worth while, but the government have not shown that one young Canadian will get a job through this treaty.


Frederick George Sanderson: I regret to
interrupt the hon. gentleman, but his time has expired.


Ernest Edward Perley: I have been interrupted
once or twice and I should like to finish.


Frederick George Sanderson: With the
unanimous consent of the house.


Ernest Edward Perley: There is nothing in this
treaty that will encourage any young farmer in the west to remain on the land, get married and establish a home. To my mind these treaties are dangerous. They make for competition in the marketing of some of our primary products, and while there may be a few advantages, the disadvantages materially outweigh them.
In conclusion, I should like to quote an opinion expressed by the President of the United States, who is a pretty good authority. Speaking to the American Farm Bureau at Chicago, he said:
Agriculture, far from being crucified by this agreement, as some have told you, actually gains from it. We export more agriculture products to Canada than we have imported from her. We shall continue to do so, for the very simple reason that the United States with its larger area of agricultural land, its more varied climate and its vastly greater population produces far more of most agricultural products, including animal products, vegetables and fruits, than does Canada. In the case of the few reductions that have been made, quota limitations are set on the amount that may be brought in at the lower rates.
On the other side of the picture we believe, and most unbiased men believe, that the general increase in our trade with Canada, including the exports of our factories, will so add to the purchasing power of hundreds of thousands of wage earners that they will be able to spend far more than they do to-day for the products of our own farms, our own forests and our own fisheries. Greater trade is merely another word
for more production and more employment. The proof of this particular pudding is in the eating: the best way to judge the new accord is to observe how it works out.
Mr. VITAL MALLETTE (Jacques Cartier)
(Translation): Mr. Speaker, the house is discussing to-night the resolution introduced by the right hon. the Prime Minister (Mr. Mackenzie King) which appears on page 8 of today's order paper, under No. 15, and reads as follows:
That it is expedient that parliament do approve of the trade agreement entered into at Washington on the 17th day of November.' 1938. between Canada and the United States of America, and that this house do approve of the same, subject to the legislation required in order to give effect to the provisions thereof.
As this resolution deals with the principle of the treaty rather than with the treaty itself,
I shall restrict myself to a discussion of its general principles, leaving the pleasant and interesting task of reviewing its details to the time when the treaty itself will be submitted to the house after the passing of the present resolution.
I shall be telling nothing new to my hon. colleagues when I proclaim that the Liberal doctrine, the policy of the Liberal party of Canada, has always been to seek the improvement of Canada's trade with the whole world.
Being a producing nation-more accurately, an over-producing one-we must naturally find markets for our surplus production of all kinds. The country therefore finds itself in the same position as an ordinary manufacturer who produces more goods than his regular customers can absorb. Such a manufacturer would naturally seek new markets. He would increase his advertising and extend his field of action. Therein lies the very reason for our commercial agreement with the United States.
There used to be advocates of absolute free trade, but ever since the free movement of goods from one country to another has been impeded by customs duties, quotas and restrictions of all kinds, the theory of absolute free trade has undergone substantial modification.
All Liberal administrations have been in favour of better commercial relations with the United States. They have attempted negotiations on many occasions. Those of 1910 and 1911 were on the point of working out satisfactorily for the people of Canada who believed in that sort of policy, but at the general elections of 1911, conducted by the Liberal party on the issue of reciprocity with the United States, the Nationalist opponents of the Laurier government directed a violent campaign against that government on the question of a Canadian navy. The
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Canada-United States Trade Agreement
Tories of the time were clever enough to take advantage of the diversion caused by the Nationalist element in the province of Quebec.
The battle-cry of the Tories throughout that election campaign was "No truck or trade with the Yankees," This slogan, which they have kept to the present day, is worth about as much as their other one-"King and chaos."
The Laurier government was not exactly overthrown on account of the opposition of the Canadian people to greater trade relations with the United States; but on account of a conjunction of circumstances which brought about the union of two different groups opposed to the Laurier government for two different reasons, a union which nevertheless resulted in the defeat of the government.
I have often heard expressions of regret about that incident which had an unfortunate effect on the commercial development of Canada. But the Tories had taken such a firm stand during the electoral campaign that they were forced, when they took power, to stick to their word and the dream of better trade relations with the United States vanished for a long time.
It goes without saying that the Canadian people wanted better relations. I could hardly find a better proof of it than the fact that the Bennett government, the most markedly Tory government which we have had for a long time, entered into negotiations with the United States to that end.
A few days before the election of 1935, I think. Right Hon. Mr. Bennett admitted that, if he were returned to power, his government would sign a trade agreement with the United States. That is proof enough of the desire of the Canadian people to broaden and tighten their trade relations with the United States.
The Bennett government had apparently done much work to that end, since the present government was able to sign the agreement with the United States just a few weeks after taking over the administration of the country.
Of course, such a view is not unanimously held by our friends of the Tory party, because quite a number of them would like to build a kind of Chinese tariff wall around Canada, a kind of magic wall which would let Canadian goods out, but would not let in goods from any other country.
That is an absolutely illogical view, because after all trade cannot be but an exchange of goods, and, although use is made of money for statistical purposes, the whole process ends in the sending of goods from one country to others and vice versa.

One of the speakers for the Tories asserted the other day his desire to maintain the standard of living of our workers. In order to achieve that purpose, he wanted to protect them from foreign competition. Well, the fiercest opponents of the present resolution would admit that the standard of living of our neighbours to the south is comparable to that of any other nation in the world. Therefore, such an argument has not much worth. Our political opponents are always speaking about protecting our producers. We share that sentiment. We wish to protect our producers in every branch and we also wish to protect the consumers in every branch, because if there is a forgotten man in the political program of the Tories it is the consumer. The Liberal doctrine, representing the happy medium, takes into account the consumer as well as the producer, for if the consumer has no money to pay for his purchases there will be nothing for the producer.
Only yesterday, one of the opposition speakers complained of the lowering of a 40 per cent duty.
Can it be, Mr. Speaker, that there are Canadian industries which cannot meet United States competition without a tariff protection of 40 per cent? Are those the industries which the Tory party wishes to protect? The people will have their say in the matter the next time they go to the polls.
It will perhaps be useful to hear what a few experts think of the new trade agreement. Speaking on the address in reply to the speech from the throne I quoted the opinions, all favourable to the treaty, of the presidents of the Bank of Montreal, of La. Banque Cana-dienne Nationale and of La Banque Provin-ciale. Let us see now what the president of the Bank of Nova Scotia thinks of it. I quote from the Ottawa Journal of January 27, 1939:
(Text)
The importance of the new trade agreements
Canada's ability to take advantage of what further recovery may occur to the south of the border will no doubt be increased by the second Canada-United States trade agreement, which was recently concluded in Washington, together with the associated agreement between the United States and Great Britain. The Canada-United States treaty increases the concessions made by both countries under the agreement of three years ago, and is broadened to include tariff reductions on a large number of items which were not covered in the earlier arrangement. Canada secured a variety of new concessions, the most important of which were on products of the farm and of the fisheries.
There can be no doubt that the three-cornered trade agreement between the United States, Great Britain and Canada was the greatest achievement in reducing trade barriers since the onset of the depression. Unlike many

Canada-United States Trade Agreement
previous treaties, the method of giving preferential treatment through raising tariffs against other countries was not utilized. Every change in the tariff schedules of the three nations, and there were a great many of them, represented a reduction. And through the provision of most favoured nation treatment all these reductions were automatically extended to other countries. While admittedly the new arrangements have resulted in some weakening in the preferential system of the Ottawa agreements, they should do much to encourage trade between the empire and other members of the sterling "bloc" on the one hand and the United States on the other.
That is what the president of the Bank of Nova Scotia said. Then I turned to the annual report of the Dominion Bank and read with great care what the president had to say, and also the general manager. And, believe it or not, there was not a single reference to the treaty. They must be satisfied with it, or at least have no fear of it; they did not even refer to it.
Then the Banque Canadienne-Nationale- and this is something which came in just this morning-say in their monthly letter for February, 1939:
Ee nouveau traite de commerce avec la Republique voisine, qui abaisse les droits ou elargit les contingentements relatifs & un grand nombre de nos produits dont la vente est en regression, aura sur notre commerce d'exporta-tion une influence stimulante dont les effets se revelent deja.
I am inclined to think that some hon. members may not read my speech in the translation to-morrow, so I shall translate this myself right away. They say that the new commercial treaty with the neighbouring republic which lowers the customs duties and increases quotas on a large number of our products of which the sale at the moment is diminishing, will have upon our export trade a stimulating influence of which the effects are already revealing themselves.
I have quoted banks. Let us now hear what labour, the other member of the family, has to say about this treaty. This is from the memorandum presented to this government by the All-Canadian Congress of Labour on January 6, 1939, published in the January issue of the Canadian Unionist:
Canada's tariff policy.
The congress joins with the government and the people of Canada in the hope_ that the trade treaties negotiated with the United States and Great Britain will be mutually advantageous. It is recognized that any arrangements for the extension of trade between the nations involve adjustments within the nations themselves, but so long as the general welfare of the people is the primary consideration, it is felt that the producers and industries concerned should endeavour to cooperate in the effort to increase the exchange of goods and services. In its relationships with other nations, however, the congress believes that trade considerations should not be permitted to influence
the government where the fundamental issue of the maintenance of democracy may be involved.
So there you have both capital and labour in favour of this treaty. If I were to seek other backing for my argument I would quote the hon. member for London, the leader of the opposition (Mr. Manion). Many hon. members have quoted his book, Life is an Adventure. I do not own a copy of the book, because the price is out of reach of the proletariat, of which I am a member. But I thought I could borrow it from the parliamentary library, and on February 9 of this year I put in my request for a copy of the book. I was tofd that, although the library owns eight copies, none was available for me at the moment. I should not underline the words "for me." because there were others waiting for the book. It should please the hon. gentleman and his editor to know that at the present moment, although the parliamentary library owns eight copies of the book, there is a waiting list of hon. members wanting to get it.


Abraham Albert Heaps: And that is only the parliamentary library!


Joseph Léon Vital Mallette: Yes. The three members ahead of me should have their names on Hansard, because my request dates back to February 9. They are the hon. member for Pontiac (Mr. McDonald), the hon. member for Lotbiniere (Mr. Francoeur), and the hon. member for Simcoe East (Mr. McLean). I could not get the book to quote from it, but thank the Lord that in the speech of the hon. gentleman on February 17, as reported in Hansard of that date at page 1047, appear a couple of paragraphs which are extremely encouraging to those of us who think we should have closer relations with the United States. I quote from the speech of the hon leader of the opposition:
There are twTo chief reasons why Canada must trade with other countries. In the first place we have a huge area, a small population and rich resources, out of which we produce large quantities of raw materials which must be exported. We do not consume all of them ourselves. That, in the first place, compels us to trade with other countries. Secondly, we are a debtor nation.
And further:	[DOT]
In addition to all that, there is a third reason why we must trade. There are certain kinds of products which we cannot produce-tea, coffee, rubber, cotton and even, apparently, wool, though we should, to my mind, be able to produce sufficient wool; I have said that in the house many times. We do not produce oranges-
There are plenty in Ontario:
-and other citrus fruits, and so on. So we are compelled to trade.
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Canada-United, States Trade Agreement
So the hon. gentleman advances three good reasons in support of our contention, and I think I am in very good company in quoting him in this instance because I have a high regard for his political sagacity.
We hear so much about our trade with the United States; what is its importance anyway? I have gone to the Canada Year Book, English edition, 1938, and I have extracted a string of figures which I will inflict on the house, if they insist, but I would gladly put
them on Hansard, Mr. Speaker, if I am permitted to do so.


Walter Edward Foster: The hon. gentleman cannot put them on Hansard unless he reads them, except with the unanimous consent of the house. Do I understand that the hon. member has unanimous consent?


Some hon. MEMBERS:: Carried.


Joseph Léon Vital Mallette: Thank you, Mr. Speaker, because it would have taken me ten minutes to read them. They are as follows:
Canada's Trade with the United States and Other Foreign Countries
Fiscal year	Imports	Percentage of total trade	Exports (Canadian)	Percentage of total trade1886	.. $ 42,818.651	44-6	$ 34.284,490	44-11896	50-8	37.789,481	34-41906	. . 169,256,452	59-6	83.546.306	35-51914	. . 396.302,138	64-0	103.372.825	37-91921	.. 856.176.820	69-0	542,322.967	45-61922	.. 515.958,196	690	292.588.643	39-51926	65-6	480.199,723	36-41929	. . 808.012.229	68-6	504.101.604	36-81930	.. 847,442.037	67-9	515.049.703	40-064-5	349.660.503	43-71932	60-8	257.770.100	42-91933	.. 232.548.055	57-2	107.424.723	37-454-9	220.072 810	33 058-1	304.721.354	40-356-8	300.302.420	42-41937	.. 393.720.662	58-6	435.014.544	410
Aggregate External Merchandise Trade of Canada
Fiscal	Aggregate
year	external trade
1886	
1896	
1906	
1914	
1921		
1922		
1926	
1929		
1930		
1931		
1932		
1933		
1934		
1935		
1936		; "
1937

There is only one more item, another argument in support of our contention which appeared in La Presse of November 19, 1938, two days after November 17, when the treaty was signed. It says:
" We may now expect our small fruits to be exported to the United States." says J. H. Lavoie, director of the provincial service of horticulture in the province of Quebec.
That is very nice coming from the government of Quebec, and there would have been many more in favour of the treaty had the government of that province entertained towards this government a more Christian attitude. But that was the only encouragement we got from that source.

A great deal of fun has been poked at the Prime Minister's use of the word "appeasement" in connection with this trade treaty; but hon. gentlemen who are not too busy might look up the Gazette, published in Montreal. a very good newspaper which has this headline on its front page in this morning's issue, "Chamberlain hopes to weld peace by trade." I admit that the old gentleman with the umbrella, may not always score one hundred per cent, but he makes a terribly good showing. Speaking at Blackburn, England, he is reported to have made this statement, which I will put on Hansard for the benefit of my Tory friends and other unbelievers :
It may well be that this approach by way of trade in which we have a common interest may turn out to be the best and quickest way of bringing about a better understanding between our two countries.
A great many statistics have been put on Hansard in this debate. I have been guilty of putting a few on myself. There is much to be said for statistics, but perhaps I may be permitted to tell a little anecdote which undoubtedly members of the house will appreciate.
A few years ago, in a moment of patriotic fervour, I joined the Montreal Canadian club. I have paid my fee every year since, and I am still a member in good standing.

Canada-United, States Trade Agreement
With me it became almost a part of my religion to attend the Canadian club luncheon at the Windsor hotel, on Peel street, Montreal, nearly every Monday, the day of their weekly luncheon, and 1 remember that on one occasion the guest was Mr. Philip Kerr, who I think now adorns the House of Lords in England as Lord Lothian. At the beginning of his speech-I do not want to shock the ears of any member-he said that in his opinion there were three kinds of lies, and he enumerated them as follows: Lies, damned lies, and statistics. 1 want to say, Mr. Speaker, that those are my views too.
The King government has therefore, in negotiating a broader trade agreement with the United States, once more upheld the true interests of Canada, thereby achieving a diplomatic and commercial success for which the country will be grateful.


Mr. D. G. ROSS (St. Paul's):: Mr. Speaker, the Minister of Trade and Commerce (Mr. Euler) in the course of his remarks disposed, almost in an aside, of the importance of the concessions that are being granted by this trade treaty to thirty-eight other nations. The Minister of National Revenue (Mr. Ilsley) said that the six per cent preference on wheat which Canada enjoyed in the British market is a matter of minor imp~rtance, and he also said that the lowering of the import duty on apples entering Great Britain was going to prevent the over-production of apples in Great Britain. I should like to know what we care, to any great extent at all events, about the over-production of apples there. The same argument holds good, I might say, with respect to industry in this country. The sweeping reduction under the treaties will certainly not produce over-production in a great many industries in Canada. In fact, in some places they will be closed up. It will certainly increase unemployment, and will simply mean the crucifixion of some industries.
The speeches of ministers and a great many hon. members opposite concluded with an impassioned appeal to the workers f Canada for what seems to me to be the supreme sacrifice; and all these appeals were made on the grounds of economic appeasement. In fact, so far as I can learn, no one on the government side of the house has said very much yet about employment or unemployment. This world appeasement plea has received its full share of praise. Each speaker in turn has taken a crack at the little, tiny, penny cake of soap, to put some more froth in the old hogshead.
One of the most important points is the effect of the treaty on the industrial worker. Will it give one more man in the country a
job? The Prime Minister (Mr. Mackenzie King) has told us that we have been requested by Great Britain to make these concessions. I do not see how the people of Canada can properly judge the merits or demerits of the treaty until they know what concessions we were asked to make. In justice to hon. members and to the country the correspondence with respect to that phase of the matter should be made public. In his statements the Prime Minister has said that we have gone no farther in making these sweeping reductions in our tariffs and in making the sacrifice of our preference in the British market than has been absolutely necessary to bring about the consummation of the treaties-at least, that is the impression he has left on the Canadian people.


William Lyon Mackenzie King: May I draw
my hon. friend's attention to the dispatch from the Secretary of State for the Dominions, in London, which was sent to me at Washington. in which the Secretary of State says on behalf of the British government that the agreement could not have been made except for the sacrifices that the dominions- or at least the concessions which the dominions were prepared to make in this matter.


Douglas Gooderham Ross: I did not know that had been put on record. But the fact remains the impression has gone abroad, as I said before, that all the sacrifices and all the sweeping reductions had to be made in order that these treaties might be consummated.
I do not think the Prime Minister had any need to go farther than accede to the request of the British government with respect to what it was necessary to grant in the making of these treaties, and I feel strongly on that point. I feel, too, that ample compensation should have been given to us for any sacrifices we had to make in the British market. In this connection may I quote from the London Weekly Times of November 25, 1937:
A difficulty throughout has been that the concessions desired by the United States in the British market involve some sacrifice of the advantages hitherto enjoyed by the dominions, which, as Mr. Lyons explained on Monday in an important statement to the press, cannot be expected to acquiesce unless they can be assured of adequate compensation in other directions.
That was the principle of compensation as demonstrated by Mr. Lyons. Then the article continues:
In his statement Mr. Lyons was careful to make it plain that an Anglo-American trade agreement did not involve the surrender of the principle of imperial preference. Great Britain is not being asked to abandon her system of reciprocal preferential trade within the British commonwealth, which has had such welcome
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effects in promoting recovery in all the British countries, any more than America is being asked to abandon her system of high protection, to which, in the opinion of most Americans, she owes her unparalleled industrial development. All that is being sought is some modification in the application of these principles which, without jeopardizing any important British or American interest, will facilitate an increase in the trade between the two countries to their mutual advantage.
It is there recognized that the reciprocal preference on trade within the British commonwealth of nations has had a welcome effect in promoting recovery in all British countries, and it is pointed out that the treaty sought between Great Britain and the United States was to promote trade between those two countries. Only some modifications, without jeopardizing any interests, were needed.
The example and the results of the empire trade agreements concluded by the Conservative government in 1932 were before them. Those treaties were debated in the house for five or six weeks, and were very much maligned by the Liberal opposition of that day, which voted against them. We certainly must now give credit to the Prime Minister and to the Conservative government which held office in 1932. Those were the treaties which had such welcome effects in promoting recovery in all British countries, and which resulted in the conclusion of the United Kingdom-United States treaty of today. The United States wanted to get in on it, and they did.
What did the empire treaties mean? I quote from the London Times of November 24, 1938:
Foreign trade in the British markets not only had not suffered but had actually increased since the Ottawa conference.
And again:
Simultaneously with the Anglo-American agreement an agreement was signed between Canada and the United States revising the agreement of 1935 to meet the new situation. Other dominions did not attempt to negotiate parallel agreements, but were consulted at every turn....
The other dominions did not make parallel agreements; they did not have to. Neither did we.
What sacrifices did we make? I will mention only a few, but no doubt more and more will be found as time goes on. By losing the preference in (he British market we have shared our apple market, our wheat market, our pork market, our lard market, and the markets for several other commodities, meaning a loss of millions of dollars to our producers, our railways, our steamships and our ports. It means unem-

ployment for our producers, our railway workers, our dock workers and our sailors. The advantage to our steamships by way of preference simply meant that before a ship coming from a United States port could unload a cargo of wheat in Great Britain it had to pay $12,000. That duty has been removed and they do not need to pay it any more. A duty of six cents a bushel means $12,000 on a 6,000 ton load. There will be less incentive for our produce to be handled by Canadian railroads, Canadian steamships, Canadian elevators and Canadian ports. If the sacrifice is to be made, what compensation is being given for the sacrifice?
Apparently this sacrifice was not sufficient. The government is faking off the three per cent excise tax on the items covered by the agreement. Our industrial workers are to be sacrificed to that extent. Why did we have to reduce the tariff further on these items? Why were our vegetable growers sacrificed? Why are we to lose from $14,000,000 to $18000,000 in excise tax? We are told that this is a reduction in taxation, but there is only one way whereby you can reduce taxation- by reducing expenditures. That $18,000,000 will have to be made up in some way, Canada does not receive a single advantage for the advantages she has given. On the other hand, she shares with nineteen other nations which come under the most favoured nation clause the advantages that she has in the United States market. The London Times Weekly has this to say:
The Canadian government are being subjected to much pressure from various industrial interests to denounce the present trade treaties *with Germany and Japan, writes our Ottawa correspondent.
Even before the trade agreement -with the United States was signed the textile manufacturers in Canada were finding themselves at a serious disadvantage in coping with competition which was buttressed by export subsidies and unfair leverage of a state-controlled economic organization.
On motion of Mr. Ross (St. Paul's) the debate was adjourned.



PRIVILEGE-MR. TURGEON DENIAL OP REPORT IN OTTAWA JOURNAL RESPECTING CAUCUS OF FEBRUARY 23

Mr. TURGEON:: Mr. Speaker, I rise to a question of privilege. I have in my hand a copy of this evening's Ottawa Journal, which states:
Liberals study $100,000,000 program of work.
Bren gun and budget are considered at caucus.
A $100,000,000 works program, the Bren gun inquiry by the public accounts committee, the budget, and the radio licence fee were under-

Privilege-Mr. Turgeon
stood to have occupied the attention of Liberal members of the House of Commons and the Senate to-day at their party caucus.
The government's supporters evinced keen interest in the works program which will be presented to parliament next month.
I am speaking as deputy government whip. I was present during every second of today's caucus, and I want to say that the report in the Journal is exactly 100 per cent false. We did not talk about the works program in any shape or form whatever; we made no reference to the public accounts committee, and the Bren gun inquiry was not mentioned. The Bren gun debate which took place in the house was mentioned in so far as compliments were paid to some of the Liberal members who had taken part in the debate, but in no other manner. There was no mention whatever of the radio licence fee. I rise to state that the article is exactly 100 per cent false and is not an account in any way of what took place to-day.


Mr. HANSELL:: I think we need a press act.	.
On motion of Mr. Mackenzie King the house adjourned at 10.58 p.m.
Friday, February 24, 1939