Mr. OLIVER:

Following the argument

of the minister when he set out the reasons for the present lack of shipping facilities, I remember that he laid considerable stress on the fact that on the outbreak of war the mercantile marine of Germany and Austria was automatically eliminated from the

carrying traffic of the world, that is, all except such portion as was under seizure in British ports which, I presume, was turned to use in due course. Since then, some of that shipping which was interned in the ports of Portugal has been dealt with in the same way, and I think Italy has done the same with enemy shipping interned in her ports. I do not know what proportion of the total mercantile marine of the two central empires was comprised in that which was interned in the ports of Great Britain and her Allies, but it must have been a considerable percentage of the total, so that that part is not now out of commission by reason of the war. That part of the mercantile marine of the two central empires that remained in their own ports or is interned in neutral ports, of course, is out of commission; but on the other hand the traffic business of the two central empires, of the Turkish empire and, in large measure, of the Russian empire is also out of commission. Therefore, the loss in shipping facilities to the Allied and neutral nations is not nearly as great by reason of the war as the case as presented by the minister would indicate, because, whilst we have lost the shipping, the business is not there to be done by that shipping owing to the blockade. I emphasize this phase of the case for the purpose of establishing what appears to me to be the most serious and deplorable feature of the present condition of trans-Atlantic traffic, and that is that, having given full credit for all the legitimate reasons arising out of the war as an influence in increasing ocean freight rate's, I am compelled to the conclusion that the great reason is the fact that the owners of shipping on the Atlantic ocean have taken advantage of the necessities of the world as it stands to-day and are so using the power that is in their hands as to create and constitute a menace to the Allied powers and to civilization at large. In my opinion, the owners of shipping on the Atlantic, to say nothing about any other part of the world, are to-day in the strongest and the most conscienceless combine that the world has ever seen, especially when all the circumstances are taken into consideration. When we are discussing this question, it is worth while to realize that the conditions that we face are not altogether natural, but artificial, and, being artificial, permit of drastic treatment that would not be in order were the conditions as to ocean rates the natural result of the general world conditions arising out of the war. I will admit that there is a certain percentage of reason for the increase in freight rates; but, taking everything that the minister has said at its full value, I still cannot admit that that constitutes a sufficient reason for the increase in ocean freight rates on the short haul between Canada and Great Britain of three, four, five, six, eight or ten hundred per cent that has taken place since the war began. The increase is out of all proportion to the change of conditions. A great part of the cost pf ocean transport is the wages of men employed and the cost of the support of those men. Sailors' wages have increased, and the cost of living has increased. But the wages have not increased more than one hundred per cent-I doubt that they have increased fifty per cent-and the cost of living has not increased more than one hundred per cent; yet we are face to face with an increase of from eight hundred to a thousand per cent, and for this, for my part, I can find no justification.

That brings me to this point: that while I am not favourably disposed towards the minister's suggestion of a future policy of subsidized shipbuilding in Canada, I am of the belief that present conditions are such that if Canada, as a part of the great alliance, and the Mother Country are not to be absolutely strangled in this war by reason of the rapacity of owners of -shipping on the Atlantic, some drastic and immediate measures will have to be taken- -to supply the mutual needs of Canada and Great Britain. Dp to the beginning of the war, there had never been a complete shipping combine; there had been partial combines, limited combines; but in the period -since the beginning of the war, in effect the whole shipping business of the Atlantic has become a combine, and it i-s merely a question of how much these people can get without regard to -the service that they render, knowing that the absolute necessities of the case, life or death for the whole country on either side of the Atlantic, depends upon their say-so. They have their hands on the throat of civilization and they are strangling it to death. The minister was at some pains to explain that the producer did not pay the freight; he was strongly of the opinion that the consumer pays the freight. But whichever pays the freight, the allied world is carrying that additional load. The shipping people are taking it out of the allied world beyond what would be fair and just under all the circumstances, and are stupendously increasing the burden which has to be carried, without proper

justification. I do not wish to argue at any great length the point of who pays the freight, because it- is not material to the argument I iam making; but my impression is that, the circumstances being as they are, it is the 'Canadian producer who pays that freight. One reason why I believe that is this. When the freight was lower and when the price of grain at Liverpool was not so high as at present, the Canadian producer received a higher price for his wheat; but since that time in 1914, the price in Liverpool has increased but the price in Canada has gone down, while the cost of transport across the ocean has gone up. It seems to me there is no question that, had the cost of transport across the ocean remained the same, we in Canada would have received the benefit of that increase in the price of wheat in Great Britain. But whether we lose or whether the consumer loses, we know that we are stupendously handicapped in this terrible struggle by reason of the fact that freight rates across the ocean have been so greatly increased.

The minister asked the House, and asked the Opposition, to give their best opinion as to what should be done under these circumstances. I do not know that that, under our system of government, is exactly the business of the party of the Opposition. Having become seized of the existence of a certain condition, it is the business of the Government to find means to meet that condition. If our discussion were to run along that line, I should be compelled to follow in some degree the argument of my hon. friend from St. John (Mr. Pugsley) and to say that, had the responsibility rested on this side of the House, notice would have been taken at an earlier day of the conditions as they then existed, and due preparation would have been made to meet these conditions as they now exist. My hon. friend will see that we do not get anywhere when we begin to argue in that way, becauSe that is not a matter that is capable of proof, either one way or the other. But we can, I think, reach this agreement, that the condition that exists could have been measurably met, or, at any rate, it would have been right and proper to take steps to meet it when it began to arise or when it became evident that it would arise. That, however, is not what I want to say.

What I want to say is this, that we in Canada, as well as the people of the United Kingdom, are faced by a terrible crisis, as I am given to understand the situation to

be, in regard to the cost of transport and the facilities for transport from this side of the Atlantic to the other.We are faced with a crisis which willhave to be met without delay. While Iwould not wish to be considered for a

moment as agreeing to a permanent policy of subsidized shipbuilding such as my hon. friend suggested to-day, I would say that in view of the crisis which we are facing I would be prepared to support the Government in almost any measure they saw fit to take, if it was feasible, in order to meet that condition of affairs and to give transportation across the ocean with assurance as to accommodation being available at reasonable rates. War conditions being as they are, I do not think that we are well advised in making calculations as to what may take place after the war. My impression is that the conditions to-day are such that the best thought of the allied nations, this Dominion included, should be brought to bear upon the single object of winning the war. If and when we win the war, we shall be in a position to lay our plans and take consideration of the future, but until the war is won the first essential is that it shall be won, and won under circumstances that will leave no question as to the result or as to the winning. I know that many great minds in Canada have given much thought to what we will do after the war. I repeat that in so far as these ideas draw us away from the concentration of our best minds upon the winning of the war, to that extent they are not really to our benefit. We had better put these things aside for the present and concentrate our thought and attention on winning dhe war.

Mr. J. H. SINCLAIR (Guysborough):

I

had intended before the Speaker left the Chair to say a few words on this question, but I was called out' of the House, and perhaps this would be as good a time as any to express briefly my views on the subject. I was pleased to hear that the minister had decided to take some action on this very important question. It is not a new question in this House. I have had the honour of sitting in this House for twelve years and I do not think that a single session., has passed without a discussion on shipbuilding. Although the subject has been looked at' from all angles it is apparent that up to the present time no decision has been reached.

It is not a party question, and I trust that it will not become a party question.

It is purely a business nuestion, and I see no reason why both sides of the House should not deal with it as such and endeavour to reach some conclusion. Coming from the province of Nova Scotia, I take a special interest in this matter. We look back upon the time when our province was a great shipbuilding province. It is not a great while ago since we were able to boast that no country in the world, not even Great Britain, had as many tons of shipping to its credit per head of population as the little province of Nova Scotia. We lost that proud position, and we began to lose it very shortly after 1867. You will remember that soon after Confederation a high tariff was introduced into Canada in place oX the old 10 per cent tariff that we used to have in Nova Scotia. One of the reasons, according to my view, why we were driven out of the business of shipbuilding was because this high tariff increased the price of production. It cost more to build the ship, and when she was launched she had to compete with the whole world; she had to compete with the ships built on the Clyde, and on the Humber, and elsewhere in Great Britain where everything is cheap and where they have made such great progress in this industry. Another reason was the change from wooden to iron ships. In those days we built wooden ships successfully, but when the change took place from wood to iron and tnen from iron to steel, we had our own difficulties to meet. Our people who had money in the shipbuilding business took their money out and invested in the industries which promised large returns under the national policy, but many of them were disappointed and lost their money. The question now arises: can we get back to a workable system; can we get again the old supremacy on the sea that we have lost? Every Nova Scotian is ambitious in that direction. We like to look upon ourselves as a maritime people, sweeping the seas and carrying cargoes from far-off countries. That has been the tradition of the province in the past, and it has not yet died out. I am sure that in the province from which I come any steps that can be taken to waken the shipbuilding industry will be welcomed. I am sorry that the Minister of Trade and Commerce has not seen fit to come to us with some kind of a clean cut proposal from the Government, which if we thought was genuine, we could look upon seriously and give our views on. But if it is only

talk, if it is only a discussion which is not intended to end in anything, there is little use in our taking very much interest in it. We have had so many of these illusory suggestions in the past that we would like to feel that this time the minister is leading us to a bona fide movement with regard to this matter. We are not able to forget that in 1909 the Minister of Trade and Commerce made a great speech in this House in which he drew a delightful picture of what was to happen in the years to come when we should embark on naval construction in this country and when the construction of mercantile ships would follow. We believed him at that time; we thought that his forecast was correct, and he was able to win the assent of both sides of the House, 'but for the last six or seven years the minister has been busy trying to explain away the position that he took on that particular occasion. If there is one man in Canada who is responsible for our failure in that matter it is the Minister of Trade and Commerce himself. I am sorry to have to say that, but we must speak the truth on matters of this kind.

Sir GEORGE FOSTER:

Speak the truth as we see it.

Mr. SINCLAIR:

I am glad, however, if he is going to turn over a new leaf; if he *is going to make a sincere and honest effort to blaze the trail for the country in regard to this important matter. We would all be very pleased if the picture drawn for us by the Minister of Trade and Commerce could he realized, and I quite agree with my hon. friend (Mr. Turriff) 'that the question has become so urgent that it demands immediate attention from the Government. I do not agree that it is an the Atlantic alone that this trouble exists. The high rates prevail not only in the North Atlantic, but in the Pacific, in the South Atlantic, and all over the world. The ship owners cam secure just as profitable trade in carrying cargoes from the Argentine to the Mediterranean as from Halifax to Liverpool. The peculiarity about the ocean shipping business is that the ship owner has the whole world for his market; he is asking only for the market . price. When there is a cargo to be carried it is put up in the exchanges in the big cities like London and New York, and the ship owner who undertakes to carry that cargo for the lowest figure will get it, and bidders are there from all over the world.

Wherever the cargoes are owners of vessels in that pant of the world are represented at the exchanges in London, or wherever the business is done, and the cargoes are carried at the market price. I do not think that any one can substantiate the theory put forward by my hon. friend (Mr. Olivet) that there is a combine.

Sir GEORGE FOSTER:

Hear, hear.

Mr. SINCLAIR:

I do not think there is any combine. The world's shipping trade is too large a business -for a combine to be formed. The whole world is interested.

Mr. W. F. MACLEAN:

Is there not a North Atlantic combine?

Mr. SINCLAIR:

I do not think so.

Mr. MACLEAN:

I think there is.

Mr. SINCLAIR:

At least I do not know of any. I never heard of any.

Mr. MACLEAN:

The Canadian Pacific Railway is in it for one.

Air. SINCLAIR:

I do not see what advantage it would be to have a combine in the north Atlantic. There was, a few years ago, a shipping company in New York that was said to be endeavouring to combine all the shipping of the country; but that fell down, and at the present time I do not think there is any large company that controls the rates in any way. If there is I am not aware of it; but perhaps my hon. friend has better information. If he could enlighten us on that matter, I should be interested. There is in the whole world about 50,000,000 tons of shipping and the British Empire owns about

20.000. 000 tons of that shipping. I am now talking of gross tonnage. The next largest owner is Germany. Germany 'has over

5.000. 000 tone, and the United States also has over 5,000,000 tons, a very large part of which is coasting tonnage. Of course, the whole German tonnage is now tied up. The United States has very little deep sea tonnage. In Canada we have quite a respectable tonnage, but in Canada, under our system, we count everything in the tonnage, the little boats that ply on the lakes, the scows, and all these small craft.

Mr. GRAHAM:

We have big boats on the lakes.

Mr. SINCLAIR.: Yes, but they are all put in the one list, and they form the tonnage of Canada, which is about 700,000 tons or perhaps a little more. Very little

of that is ocean tonnage. We have some ocean tonnage, and while the 'minister was speaking on that point I thought of interrupting him to make a suggestion. He said there was nothing the Government could do to affect the rates. I felt like suggesting that they could have done what the Government of- Great Britain did which commandeered the tonnage that they required for war purposes and for commercial purposes, and forced the owners of that tonnage to turn- in and work for them, and the owners are now carrying cargoes for the British Government at about one-third what they could get in the market if they were free to go and work for the ordinary merchant. That is to say, the British Government give on tramp vessels' about 12 shillings per ton per month, whereas an owner can earn from 35 shillings to perhaps 40 shillings a month in the market if he was free from the requisition of the British Government. The British Government in that way have controlled the rate of a certain amount of the tonnage of Great Britain, I think about 33 per cent, according to the last statement I saw. The Canadian Government could have done the same thing. They could have commandeered all the boats that are registered in Canada and turned them into the Canadian service, to do the work of Canada at a reasonable rate. The way the British Government arrived at their rate was by taking an average of the profits of three years prior to the war and making a certain allowance for the increased cost of manning the ship and the increased insurance. They fixed a rate on that basis, and the traffic on all commandeered vessels is controlled by that rate.

Mr. BROJDER:

Do not the English Government run all risk of the vessel being lost?

Mr. SINCLAIR:

Yes, in a sense. The ships are all insured under a system which the English Government, have organized with certain companies in London, and they pay the insurance so that if a ship is sunk by a submarine or lost in any way the owner gets the value of his ship. They also make some provision for the increased cost of the running of the ship, so that it works out fairly well for the owner, while the British Government have the advantage of getting their work done at a fair and reasonable rate. My hon. friend could have done that,

but lie failed to do so. He also, as I understand, allowed the British Government to commandeer Canadian ships, which I do not think should have been permitted by the Canadian Government. Ships registered in Canada should be under the control of 'the Canadian Government, and if any commandeering or requisitioning is to- be done it should toe done by our own Government. We are loyal to Great Britain; we are willing to help in this great struggle, and we are helping; we are sending our best to the other side, regardless of money, regardless of life; we are willing to do our full share in winning the war. At the same time, we do not expect the British Government to come here and order us to send our men overseas; we want to send them voluntarily. We have free government in this country, and I should expect our Government to take the stand in regard to this matter of commandeering ships that an independent, free Government should take, and to say: No, if any requisitioning or commandeering of Canadian ships is to toe done we will do it ourselves, and if it is necessary to turn our ships over to the British authorities in order to help in the war we will do it, but we will control every shi^ that is under Canadian register. That is the position the Canadian Government should have taken.

I said a moment ago that we had not been able, during a great many years, to make any progress worth while in the building of ships, and I attributed that to two reasons. One of those reasons has disappeared. We have now in this country a greal, steel industry. We are able to produce steel in large quantities. We have rolling mills in which we can roll steel to produce the ships. We have a large number of skilled men who are able to do the work. We have all those things in Canada now that we did not have twenty years ago. But we still have high protection; that stays with us, iand in my view we shall not be able to compete with free trade Great Britain in ship building unless something is done -to assist the Canadians who embark in this business. Take France, for example. The people of France have an extensive coast line, and they have always been very anxious to toe the owners of a mercantile marine. No

Government has done more than the French Government in that direction. They have paid large bounties, they even paid so much, a mile for the voyage that the ship makes on the

ocean, in order to induce the French people to embark in shipbuilding. They have spent vast sums of money, but they have had no special success in France. They do not own to-day much more than about 2,000,000 tons of shipping out of

50,000,000 tons that are owned by the maritime nations throughout the world. Two million tons i>s all they have been able to put on the water with all the protection that they have given in France. What is the reason? The reason is that France is a highly protective country, and everything is so expensive that they cannot build a ship, launch her and compete with the rest of the world in that business. Hon. gentlemen must not think that it is all easy sailing in the shipping .business. Before the w.ar ship owners were having a very hard time of it, and many of them had to go under. In -many cases they did not make more than 5 per cent on their money, and their property was disappearing or becoming less valuable year by year. That is what happened during all the years of hard times before this spurt came on. 1^ you .are going to embark in the shipping business you must be prepared for a dull spell as well as for a profitable time, and in order to do that you have to build your ships with as little capital as possible, because you have to pay dividends on every dollar that you put into it. If it is going to cost the Canadian more to build the ships than the Englishman, or the Scotchman, 'he must get that money from some source, and that is the question the Government have to settle.

The scheme they have in the United States, and which was put forward by the Minister of Trade and Commerce to-day, does not seem to be a practical one. No capitalist will want to embark in partnership with the Government. I understood him to say that under that scheme, which is proposed before the United States Congress to-day, the Government would provide the largest part of the capital, that the Government would require to own the controlling interest in the capital that would be put into the ships, and that they would invite private enterprise to go in with them. I venture to say that capitalists, or those engaged in private enterprise, will not embark in business with the Government. The experience of the United States is like our own. The Government have not been successful in managing commercial matters. I fear they will not be successful in this

and I do not think that the scheme will be found 'workable.

The last proposition made by the minister strikes me, without having had much time to consider it, as more likely to be of some use. I hope he will follow it up and work it out if he can. There is great activity in the United States at the present time in the matter of shipbuilding. The United States own about 5,000,000 tons of shipping already. They have, within a year, reduced their tariff. They have made it easier to embark in the shipbuilding business. They have never paid any bounty, but they have opened the registry in the United States to foreign shipping, which, is of great value,

Sir GEORGE FOSTER:

For seven years.

Mr. SINCLAIR:

For seven years. Any

man who chooses can go abroad, buy a ship, bring her to the United States, register her under the American flag and sail her as an American ship. He could not do that until recently. That has increased the tonnage of the United States largely during the last year or two. From the last statistics I have seen, and which are contained in the Report of the Department of Commerce for the present month of April, it appears that there are 360 vessels on the stocks of the United States of an aggregate tonnage of 1,067,856. You can see that there is great activity in the United States in reference to the question of shipbuilding, and I am inclined to think that if the United States reduce their tariff and become practically a free trade country she would very soon become a rival of Great Britain on the seas. She was a rival of Great Britain away back about the middle of the last century, before she adopted high protection as her policy.

Sir GEORGE FOSTER:

This new tonnage is almost entirely coastal.

Mr. SINCLAIR:

Mr. W. H. BENNETT (East Simcoe):

I wish to make a few remarks on the question now under consideration, namely, assistance by the Government in some manner or other towards shipbuilding in Canada. I assume that any assistance given would be equally applicable to ships on the Great Lakes as on the Atlantic and Pacific coasts. It is to be regrettaed that a large quantity of our Northwest grain has gone through to Buffalo in the past. I saw it stated in to-day's papers that the hon. member for St. John-had alleged that some 80 per cent of our grain for export had gone through Buffalo while the Minister of Public Works stated that it was somewhere around 50 per cent. Speaking for myself, I heard the statement frequently made last fall that about 75 per cent of our Northwest grain for export went through Buffalo; indeed so great was the quantity that went through that port that at the close of the year there was no less a quantity than 30,000,000 bushels of export

grain lying at Buffalo in vessels which were waiting to take their turn at the elevators.

At the outset I want to point out the great disadvantage under which Canadian registered vessels labour on the Great Lakes. Contrast the position of two vessels, one owned by an American and registered in the United States, and the other owned by a Canadian and registered in Canada. With the New Year the large American freighter, or any American freighter as far as that is concerned, lying at some point near Buffalo is loaded with coal for either Duluth or Port Arthur. The Canadian vessel has the same privilege of taking coal up, but after the first run of coal is through, and after the grain at the head of the lakes either at Duluth, Port Arthur or Fort William has been carried east, a lull comes in the trade for the Canadian vessel. The American vessel is pressed into the ore carrying trade, and any man who ever stood at Detroit or Windsor and saw that wonderful procession of huge freighters passing, by, all bearing the American flag, must have been impressed with the enormous ore carrying trade these American boats do. The Canadian vessel is debarred from that trade because all the ore that is carried from the North is taken from the Missanabie range or from some point on Lake Michigan, aud it would be a contravention of the coasting laws for a Canadian vessel to engage in that trade. There are, it is true, some iron industries on the lakes, the one at Hamilton, for instance, requires a certain amount of iron ore, and the iron ore it uses is in the main carried by Canadian vessels, but while the Hamilton concern is relatively a large one, yet the quantity/ of ore it uses during the whole season can be supplied by two or three vessels. The result is-and I have frequently seen this-that at Midland, Goderich, and other lake towns, Canadian vessels are tied up during the summer months while American vessels are carrying ore. That of course is a great handicap on the Canadian lake shipping.

Another point to be remembered is that the growth of the Canadian vessel in carrying capacity has been comparatively small. While I do hot profess to give the exact figures, I think I am well within the mark when I say that to every vessel of Canadian registry on the Great Lakes there are in .all probability forty ox fifty American vessels, and the American vessels are also of much greater tonnage. The experience has been such that no man will invest his

to contemplate it within the next fifty years. What does that bring us to? In the first place, you must have a large vessel to carry grain on the Upper Lakes if you are going to make money-and unless that vessel can make money no man will invest in it. And in the next place that vessel cannot be taken out of the Upper Lakes in winter, it must lie lifeless, and, instead of a money-maker, it will be a money-loser. What are we going to do about it? Are we going to let the Americans carry the balance of the grain and make it an even one hundred per cent to Buffalo? They have the advantage of taking it out in the winter months by way of Philadelphia, New York, or other points along the coast, while we are driven to bring it to some point on Georgian bay and carry it out by way of the Grand Trunk tp Portland or by the other line to Halifax or St. John-and we all know how we are handicapped on account of the great mileage to Halifax, St. John, or Portland. We must have vessels on the lakes if we want to control the trade; and so I was pleased to hear the minister say that he hopes to see that done." My bon. friend from Guys-borough (Mr. Sinclair) spoke of the question of steel production in relation to shipbuilding in Canada. I assume that in Sydney, with their enormous production, and probably also in Hamilton, if vessel building on a large scale were guaranteed in this country, they might go into the manufacture of shipping plates. But the manufacture for the few vessels building to-day in Canada would be the height of absurdity; no people with capital wouid invest in it, I understand that this business of rolling plates is a very variable business, so variable indeed that I have known Harland & Wolff, the great British shipbuilders, to carry over through Midland shipping plates rolled in Chicago and then take them to England for use in building ships. That, I assume, was when shipbuilding in Britain was very brisk, so that they could make a profit even paying freight for that long distance. So far there has not been a large amount of ship construction in Canada. I venture the statement that only one kind of vessel will be built in Canada for the future, and that will be the large vessel that cannot possibly pass through the Canadian canals and go out to sea, and, as it will be tied up during the winter months, it will be greatly handicapped. The Canadian vessel is

handicapped in every way you look at her. Take, for instance, the question of coal. It is true large quantities of coal are taken up to the head of the lakes at Port Arthur and Fort William, for I assume that all the coal going as w.ar west as Winnipeg is carried to the head of the lakes by vessel. The Canadian vessel has no monopoly of that trade, for it is no contravention of the coasting law to carry that freight from Cleveland or some other point on Lake Erie to a Canadian port. Then, at a point called Byng Inlet, a little north of Parry Sound, on Georgian bay, the Canadian Pacific handle an enormous quantity of coal. They have splendid appliances for handling it, and they carry it from Byng Inlet to Fort William .and from Fort William back towards Toronto. That is American coal and consequently the carriage of it is not restricted to Canadian vessels. These are handicaps that will always be faced by Canadian vessels. With the hope that shipbuilding in Canada may be promoted, I trust that at an early day the ' Government may be pleased to enact legislation along the lines suggested by the Minister of Trade and Commerce, I will not refer to the other phases of it and to the advantage to the country that they would bring. But I do believe that the payment of the difference between what the vessel would cost if constructed in Great Britain and what it would cost if constructed in Canada would have a good effect, and for that reason I would welcome with the greatest possible pleasure such a proposal as has been indicated.