Mr. W. D. EULER (North Waterloo):

I would like to bring to the attention of the Government a matter of great public importance There appears to be a state of unrest among certain of the postal enn-p'oyees with threats of a strike. I understand that the Government have introduced a Bill, which has been given its first reading, providing for increased remuneration to the postal employees dating back to April 1 of last year, but so much time has elapsed in bringing this legislation into effect that the men concerned are very much dissatisfied. I would therefore ask the Government what is being done in the matter, an I whether they can make any pronouncement as to when the added pay, if any, will reach the men.

Hon. NEWTON W. ROWELL (President of the Privy Council): As my hon. friend has stated, a Bill is now before the House which, when passed, will authorize the payment of the moneys which the Pod Office employees desire to secure. That Bill would have been proceeded with before this had not so much time been taken up with the Franchise Bill which had the right of way.

As soon as that measure is disposed of the Bill in question will be proceeded with The matter can then be dealt with.

, THE BUDGET.

Mr. MICHAEL CLARK (Red Deer):

Mr. Speaker, in rising to detain the House for what I hope will be no very great length of time, considering that it is a Budget debate, I feel that it is my duty to voice what is a very general sentiment, and that is a sentiment of gratification that I once more apeak in the presence of my right hon friend the Prime Minister of Canada. Sir, those of us who in an intimate degree shared the heavy load which the country placed upon his shoulders followed his search for health with the utmost sympathy, and in my own case I can say truly that my mind and heart were continually with him. I have had the honour of being his colleague in this House for twelve years. We have differed politically-we never differed otherwise,-we never differed except in opinion. His tenacity during the whole of the great struggle, and especially his statesmanlike patience in hanging on to the tough job of forming Union Government, have made it certain that when the heedless blast of time has swept away the passion and the prejudices of the present the name of Borden will occupy no lowly place on the lid of those who, in the Great War, kept the standard floating in high places of the field.

I feel sure the House joins with me in offering my right hon. friend the warmest congratulations that our hearts can conceive on his return to work and our best wishes for a long and useful public service in the future.

I turn to another matter when I compliment my old friend the Minister of Finance (Sir Henry Drayton) on the personal aspects of his financial statement. I think every one I have heard speak of his speech has admitted that the preparation and presentation of his case was somewhat in the nature oif a personal triumph. For the case itself, Sir, I perhaps cannot say quite-so much-that will develop as I go along

Meantime I must remember that we are dealing with an Amendment as well as with a Budget Speech. There are considerable disadvantages attaching to the practice of moving amendments to a complicated Budget on the part of the chief critic in one's having to plan before having seen the Budget itself. I cannot help thinking that if my hon. friend from Shelburne and Queen's (Mr. Fielding) had heard the Budget Speech and studied it for a day or two he would have produced a rather different amendment than that which he presented to the House. I should have hoped it would have contained more milk and less water under those circumstances, and would have been less a shilly-shally, temporizing, and opportunist piece of print. Nevertheless it has one virtue-it calls for a downward revision of the tariff.

Mr. GAUVREAU:

Hear, hear.

Mr. M. CLARK:

It calls for a considerable reduction of the tariff. Well that is at least one virtue. I do not know that I am unfortunate with the preambles of the amendments that come from my hon. friends of the Official Opposition. I do not quite sympathize with the preamble of this amendment. It is quite true that my right hon. friend the ex-Finanee Minister (Sir Thomas White) promised a revision of the tariff downward, after an examination last fall. But my right hon. friend is no longer a member of the Government. He unfortunately, and with the sympathy of all of us, felt that his health did not enable him further to carry on the business of that position,-the Government was not to blame for that. Then we had a fall session and I do not know that any one on this side of the House was much more opposed to a fall session than honourable members on the other side. Anyway we had to come here and do our duty, and I think, common fairness would lead the Opposition to recognize that these were almost insuperable obstacles in the way of a thorough examination all over the country in the fall of last year followed by a revision of the tariff. And we are further in this strange position, that the amendment calls for a revision from the Government which in its Budget Speech is promising this very thing. It is a most peculiar position from a parliamentary point of view. A revision is promised by the Government and a revision is asked for by the Official Opposition, and thus we of the Independent party have to make a choice between the two positions. However, as I have said, the amendment calls for a downward division of the tariff.

The fact that both parties are pledged to revision is a strange comment upon the position which was taken by my right hon. friend, the ex-Minister of Finance, in a speech which he made, I think in reply to some remarks of mine, in the debate on the Address. I regret very much that my right hon. friend is not paying one of his somewhat infrequent visits to the House of Commons to-day. However, I am not going to say anything very savage about my right hon. friend; and I do not think any one will imagine I have treated him very badly.

My right hon. friend (Sir Thomas White) put up the argument that what the coun try needed at the present time was stability, and he seemed to argue that that stability was to be arrived at under a tariff. Well, that position would scarcely be supported by the faet that on both sides of the House at this moment it is recognized that the tariff is not stable, because we all want to revise it. I do not know whether we all want to revise it downward -I know that on this side we want to revise it downward. They have had a tariff in Germany for a great many years. Germany is not in a very stable condition to-day. Germany's tariff policy was entirely mixed up with her militarist policy; the two together produced a top heavy bureaucracy, and instead of stability we have absolute chaos, confusion, and the products of an unstable condition. If one looks at the United States they had in that country within my recollection, a Wilson tariff-not President Wilson but a former Minister of Finance- a McKinley tariff, a Dingley tariff, an Underwood tariff, and what the next one will be will depend upon the name of the next Secretary of the Treasury.

We have had in Canada, first the propagation of the National Policy; then the Fielding tariff; then the White tariff-now there is a double demand for a revision and the question comes to all of us what are we going to do with the blessed thing? Yet my right hon. friend the ex-Minister of Finance brings that before us as the emblem of stability. The fact is that once you seed the bad of protection you sow a crop of vested interests; you may be lowering the tariff, you may be raising it, you are always tinkering and pottering with it, but it is never stable. Nothing is ever settled in this world unless it is settled right, and the only way you can settle the tariff right is. to cut its head off just in front of its tail.

Now I have had this much to say in answer to my right hon. friend (Sir Thomas

White) on the question of the stable nature of the tariff. It would appear that the unstability of the creed communicates itself also to the apostle. I do not know that my right hon. friend's career on this tariff question has been an example of very great stability. For fifteen years he supported Sir Wilfrid Laurier and the Government of that day in a policy which was always proclaimed-while they were in power anyhow -as a policy of tariff for revenue. But he went down to Toronto a few weeks ago and put himself at the head of the protectionist forces of this country as far as a proclamation could put him at the head. (He said: " We must have a tariff not only for the production of revenue but we must have a tariff also for the building up of our industries. He proclaimed himself then and there a high protectionist. There has been a great evolution because last year in this House he was promising a revision of the tariff and, we understood, a revision downwards. He was at that time hobnobbing to a considerable extent with western members and promising a revision of the tariff which we understood was to be in a downward direction. He now proclaims that a tariff is needed not only for revenue but for protection, overlooking that he is making a tariff that should perform two completely hostile operations. If the tariff is to build up our industries it must keep goods out of the country. If it is to give us revenue it must bring goods in. There is a stable performance for you! It has to bring goods in and to keep them out, at the same time conducting two completely different operations.

My right hon. friend has given some other examples on instability in regard to the tariff. He and the Government of which he was a member came into power in 1911 pledged against free wheat. We were told that free wheat would ruin the country, break up the British Empire and turn the traffic on our railways north and south instead of east and west. They were pledged against free wheat. I remember his maiden speech in which he said that the great province of Ontario had spoken and was it not the part of wisdom to listen to it? But my right hon. and stable friend gave us free wheat which he said would ruin the Empire.

For three and a half years after the war began he told us that the Income Tax was the most impossible consideration for Canada that could enter the mind of any Finance Minister, and that it could not be thought of. He talked against the irnposi-

[Mr. M. Clark.I

iicn of the Income Tax but he imposed it himself. It was imposed by my stable friend the ex-Minister of Finance. He was still the Minister of Finance at the time that tax was imposed. This criticism applies as much to the Government as to himself except that there was this difference: that some of them bad not a past Liberal record as being in favour of a tariff for revenue only. I understood that an outstanding figure in that regard is to be seen in the person of the hon. the Minister of the Interior (Mr. Meighen). No reed which ever shook its slender tip in the summer wind could compare with the exMinister of Finance as an emblem of instability.

I revert for a moment to the question of tariff revision, and I want to say, and say it with the utmost seriousness, that in my opinion the immediate future prosperity-yes, the immediate future financial solidarity, honesty and stability of this country, depend upon a revision of the tariff downward and that very speedily. At this point in my remarks I would say that the basis for that very strong and emphatic statement is the opinion-not my own opinion-but the opinion of everybody who is worth listening to in Canada upon this subject. We must increase the commerce of this country-export and import. We must increase the commerce of this country in the years immediately in front of us-export and import. What does Mr. Lloyd Harris who has had a remarkable chance of forming an opinion upon this subject, say? What do our great financial leaders say? What do Sir Vincent Meredith, Sir Frederick Williams-Taylor and Sir Edmund Walker say? Every one of these authorities says just what I have proclaimed though I admit they attach more importance than I do to an excess of exports over imports, although I will show you presently why we must have an excess of exports over imports. The commerce of the country must be increased and my hon. friend from Gloucester (Mr. Turgeon) put the matter in a way which cannot be disputed when he said the other night that ships do not sail loaded one way to come empty the other. The only way you can carry on foreign commerce is to import-to sell exports in exchange for your imports. I mention the same authorities, Sir Frederick Williams-Taylor and Sir Edmund Walker, as concurring substantially in the statement that in the years immediately before us we need to export $200,000,000 worth of produce, roughly, to pay the

foreign liabilities of our peopleto pay the interest on money that Canadians in various capacities have borrowed from abroad we need to export every year $200,000,000 worth of produce, because that is the only form in which you can pay that interest. Mr. Speaker, that is a very serious liability for any country, but it' is a tremendous liability for a young country like this, loaded, as we are, with our own internal troubles as well. Now, I want to proceed to another position: that for the payment of that liability; for the payment of that interest; for the procuring of that excessive export, you must depend largely upon your agricultural produce. Agriculture and kindred industries must carry the load. The immediate future of Canada depends to a demonstration-and I am trying to be as logical as I can-on the extent to which you promote the free production of your fields, the free production of your cattle ranches, the free production of your forest, the free production of your mines, because it is demonstrable to absolute proof that that is the way you must get the goods to pay your external liabilities.

I do not often burden the House with a large number of figures, but I want to give, in round numbers, some figures which, I think, will carry home pretty substantial proof of the position which I have just taken. I have here the figures of our total expert and al=o tht figures for the exports r f our agricultural produce,-that is, the produce of the farm and the ranch-for the last five years. If the House will allow me I will cut out the thousands and the hundreds and give the figures in millions. In 1916 the total exports of Canada amounted to $741,000,000, and the exports of the farm and the ranch were $352,000,000. Even at that time, when we were in the middle of the war and our exports were inflated by munitions, note the tremendous proportion of our exports that consisted of the produce of our agriculture alone. In 1917, our total exports were $1,151,000,000, and our total exports of agricultural produce were $501,000,000. In 1918 our total exports were $1,540,000,000, and our total export of agricultural produce, $739,000,000. In 1919 our total exports were $1,216,000,000, of which $469,000,000 were produce of the farm and the ranch. But here is the most significant figure of all: for the first nine months of the fiscal year 1920, when munitions had gone out, the total exports amounted to $941,000,000 and the produce of the farm and ranch, $545,000,000,-much more than half our entire exports. Add to that the produce of the mine, the forest and the fisheries and have I not gone far, Sir, to prove my case w'hen I state that you must depend upon the produce of your agriculture for the discharge of your foreign obligations?

We have to remember something further at this point: that the figures I have just given all apply to the war and the demobilization period, and, therefore, to a period during which there was enormous inflation of prices. There will be a decrease of prices, and we shall still have our $200,000,000 to pay in the shape of interest. What does that teach us? Surely that nothing will meet our case except an enormous increase in the volume of that very produce or otherwise we shall not be able to meet our financial liabilities as a nation. No other conclusion is derivable from the figures I have given,-and here I am talking no party politics; I am talking the best I know for the good of the nation to which we all belong and of which we are all proud. I hope that hon. gentlemen on all sides of the House will look into this matter carefully and receive my argument in the spirit in which it is given. It is an urgent national situation; yet we tax agricultural implements and place obstacles in the way of our foreign trade in the shape of a tariff wall, and a high tariff wall at that.

There is another matter to remember in this connection. The nations of Europe will get into their industrial stride, I think, faster than into their agricultural stride. In Germany and Austria you have very large Industrial skill and manufacturing ability. The war has taught us that each nation needs the co-operation of all the other nations of the world; so these nations are looking all over the world for a market in which they can place their products. They are looking to the Argentine, where there is a nominal duty only on agricultural implements,-five per cent I think- with a view to selling their manufactured products there. With what results? That ships crossing the Atlantic from these countries which are rebuilding their business will sail to South America instead of to the northern portions of North America. That is the inevitable result if we keep the duty on implements as we hav.e it and if we continue to keep up a high tariff war against international commerce.

While on this matter I recall that something has been said about key industries in the Old Country. There was for a time a belief in some quarters that the Old Country would desert her traditional free trade faith, and there was talk of some key industries,-I am not sure that my hon.

friend the Minister of the Interior (Hon. Mr. Meighen) did not give an address to the Ottawa Board of Trade in which he mentioned that the Old Country iwas looking after her key industries. Well, it is amusing in that connection to recall that Lord Selborne's committee which sat for the purpose of finding out what was the best way of promoting the good of agriculture in the Old Country, advocated the production of all the food in Great Britain that the British people needed to eat. That was one of the findings of that agricultural committee,-and, Mr. Speaker, the Old Country could do it. If she devoted herself to agriculture of as intensive a kind as is followed in Denmark and Holland, she could produce far more food than her people require. But she has more sense. What is the use of her breaking her neck to produce wheat when she can buy far better stuff from us at a far cheaper rate, selling us in turn, her manufactured goods,-better than we can make-if we have the sense to let her? Our Canadian wheat cannot be beaten anywhere; we can sell it in exchange for the beautiful cotton goods of Lancashire, which equally cannot be beaten anywhere,-that is the way to expand your trade. But I should like to task my hon. friend (Mr. Meighen), if he is touching on key industries at all, what would happen to us in Western Canada if the suggestion of Lord Selbome's committee with regard 'to what it looked upon

I have very much pleasure in agreeing with many of the praises bestowed on my hon. friend the Minister of Finance (Sir Henry Drayton). I think he did an extremely brave and wise thing, and the ohly defensible thing, when he put the actual condition of the finances of the country before the people and Parliament. The removal of the seven and a half per cent duty was good as far as it went. The ees-tsation of borrowing is an absolute necessity for the good of the State. Economy, which he promises to practise-in that he will have difficulty with some of his colleagues -is all important. Just on that head I may observe that there are two ways of improving a bad financial position, whether

it be on the part of the individual or on the part of the State. You *can raise more income. That will improve your condition, but that is a much safer thing than in the case of an individual than in the case of a State. As regards some ministries, I do not think it is Safe for them to have too big incomes, as they are custodians of the people's money-and that is true in the case of this Ministry. There are also some human beings who would be better off if they had less to spend. Still, I would, on the whole, rather trust an individual than the Government of any country with a big income. It is better for Governments if they have just sufficient income to carry on, except of course, when they have a large debt to take care of, as is the case in Canada at the present time, and I do not think we are at present in a position to form a sinking fund for the extinction of our debt. One wajr to Teduce the. debt of a State is to raise more income, but a far more salutory method is to spend less, and the latter operation is a vitally important step in what is all important as regards the finances of this country at the present moment. That is, a determined effort should be made to bring our daily expenditure within the limits of our daily income, and as far as I can see there is plenty of room for this Government to make large strides along the road of public economy, which Cobden describes as public virtue.

Like the hon. member for Gloucester (Mr. Turgeon), I listened very carefully to the most important and startling speech made the other day by the hon. member for Guysborough and Antigonish (Mr. J. H. Sinclair), in a small House, there being certainly not more than two ministers and very few members on the Government side present. I venture to take what is perhaps an unusual parliamentary course of procedure in quoting three of the statements that my hon. friend made in that speech. He stated on his authority-and he is a pretty careful man-that in a volume recently issued of the Auditor General's Be-port there was an item of $119,000,000 which was unaccounted for. The minister does not know where that money has gone; the deputy minister does not know where it has gone, and the Auditor General has it marked down "unaccounted for." That is a very startling statement. My hon. friend (Mr. Sinclair) further stated that on four or five pages of the same volume of the Auditor General's Beport there are twenty-four cases of individuals whose names are mentioned, going to some department or

subdepartment or another-we have so many of these things that you do not know where you end-and getting sums ranging from $100 to, I think, $220 right into their hands and those sums are marked down in this volume of the Auditor General's Eeport as "unaccounted for." The name of the individual getting the sum, $100, $150, $200, of public money is printed right in the report, and no account is given of what was done with this money. Some economies could surely be effected in that direction, I am not stating these opinions on my authority; I am quoting from the speech of my hon. friend, and I hope whoever replies to me will give some information as to where this money has gone.

My hon. friend further stated that, according to a return issued about the beginning of this session, the Civil Service Commission had appointed fifty civil servants every day from the date of the Armistice to the date of the issue of that return. I give these statements for what they are worth. They were apparently not worth very much to the Ministry, because not even a private member was put up to reply to my hon. friend, and the hon. member for Gloucester seemed astonished at that. The only explanation I can offer is that, when statements of that seriousness as regards the expenditure of public money are made in this House and no reply is forthcoming from the ministerial benches, I am bound to remind myself that the nearer an autocracy gets to its doom, the more autocratic it becomes.

Without going into the past, there is plenty of room for warning as regards economy in public expenditures. I have told the Government again and again of instances where they could save money and of things they went into that they should never have gone .into, and I wish to issue a warning now. The other day in a copy of, I think, a Canadian illustrated magazine, courteously sent to me, I read very carefully an article entitled the " Case for Shipping Subsidies."

I wanted to see what the case was because I had not been able to see it on my own account, neither did I find it in the article. What do you think, Mr. Speaker, the writer gave as an argument in favour of granting shipping subsidies? These are temptations that come to Governments, especially amateur members of Governments-I mean politically amateur-and they are supported by arguments of this kind. The writer of the article favouring shipping subsidies 170

said that Great Britain could build ships 50 per cent more cheaply as regards labour than Canada could, and further, that she turns out 15 per cent more finished work in a given period of time. Mark that, Mr. Speaker. Nevertheless, we have in this country a Government that expect they can embark with success in a shipping industry. I am dumbfounded that they should ever think so. Who, in his private life, would want to embark to any great extent in a business in competition with another person who could employ labour half as cheaply and get 15 per cent more done by that more lowly paid labour in any given period of time? As regards shipping, 1 noticed the other day in a leading article in The Times, the statement made that there are on the seas to-day 4,000,000 tons of shipping more than there were just before the war. The amount of tonnage is increasing every day; the United 'States, for instance, are very busy constructing ships. I throw out these facts and arguments with, in addition, the confident statement that freight rates must in a very short period come down, against any temptations that are held out to the Government in the way of granting shipping subsidies.

I should now like to say something about the new taxes. I was wondering this forenoon what Bernard Shaw would say if he were to come to Ottawa. Without coming to Ottawa, he said the other day that it looked as if the other planets were, at the moment, using this planet for a lunatic asylum. I imagine him coming to Ottawa and emerging from the central station on to the plaza. The first thing he would see would be that on the railway buildings the time would be, say two o'clock and on the Government buildings, three o'clock-the time arranged on the one hand by the railways and on the other by the municipality, with the Government concurring in the action of the municipality. Last year, the Government took a hand in the matter and were eventually beaten out by the railway companies. I will not dwell on that further than to remark that this is a funny country. Mr. Bernard Shaw comes up to the Parliament Hill and he finds that we are seriously discussing a bad system of taxation which died out on the other side some two centuries ago, and I am sure he will be confirmed in his opinion that this planet is being used for the purpose which he has described. In the first place, these taxes should be rechristened. They are called " excise " duties, and I appeal to the min-

ister in this connection. By the way, very little that I say in the way of criticism applies to the minister personally. He has newly come into the Government; he has hardly found his feet amongst them, and I have no doubt he did not have anything like full responsibility for these taxes. If he did, if he has done all this off his own bat, he has preferred a tremendous indictment against the Government of which he is a member, because if these taxes are good, if they are defensible, and are going to raise us $100,000,000 a year, they should have been put on six years ago at the beginning of the war-$600,000,000 from this source would be a very tangible reduction of the national debt we are now labouring under. I should like the Government and Parliament and the people of this country to consider that; if these are good taxes, if they are defensible, they should have been put on six years ago. As I say, if my hon. friend is wholly responsible for these taxes he has got the Government into frightful hot water in regard to the operations they undertook before they had the benefit of his services.

I return to the point that these are not "excise" duties at all. I very much question if there ever were any such duties imposed in the world. I said that they were a bad imitation of what used to go under the name of excise duties on commodities in Great Britain. In 1643, nearly four hundred years ago,- just about a suitable period for a really Tory government to go back for its precedents - there were duties somethinglike these on goods brought from Holland into England, but I doubt if they were placed direct on the consumer. I do not think they were. They were collected in bulk, just as excise duties are now in England. Beal excise duties, such as those on spirits, for example, are not collected from the consumer. If a man wants a glass of whisky he is not asked to pull an extra cent out of his pocket. They would not undertake a ridiculous procedure of that kind-a man would not have time for it late at night. I is recorded of these duties in England, however they were collected that they were most unpopular, and I dare say that the Government individually and collectively have already had evidence that their taxes are not likely to be much more popular here. Their unpopularity was very well shown by Dr. Johnson, a good old English Tory, who described them as "a hateful tax levied upon commodiites and are judged not by the common judges of property but by wretches hired by those to whom excise is paid." I repeat that these

duties are not excise duties as the word is understood. An excise duty has had a precise meaning for at least a century of time.

I have fortified myself with authority on this question. Webster in his dictionary says that an excise duty is:

An inland duty or impost laid on articles produced and consumed in a country.

That is an excise duty. It has always been placed on a home produced article, and it is not placed on the consumer. It is placed to save the consumer from being taxed more than he should be. It is placed so that the Government gets the excise duty in lieu of the tariff which is placed on the article coming in from abroad. The Encyclopedia Britannica defines an excise duty as:

A duty charged on home goods, either in the process of their manufacture or before their sale to home consumers.

The tax is placed before the article is sold to the consumer, to protect the consumer. But there is no question of home goods in these taxes. If one goes to buy any of the goods in these almost wholesale lines which are in the schedule at the end of the Budget Speech, he will not be asked whether this article came from abroad or was produced in Canada. All he will be asked, under these proposals, when he buys a $50 suit of clothes is whether he has an extra $5, and if he does not have it I presume he cannot get the clothes. That ds all he is asked. He is not told where the suit came from. He is simply taxed $5, and has that $5 taken from him. It is a ease of catching a man buying in these many lines of goods and fining him for a legitimate operation between him and his neighbour. It is not an excise duity at all. It is an arbitrary proceeding. One should not in the main debate on this subject dwell on details and anomalies, because if the Budget carries on the second reading- and I suppose it will, because a government that is supported by a majority under certain conditions can get almost anything. In this House anyhow, we have had examples of that. We supported daylight saving by a huge majority one year and killed it the next year wiith just as big a majority, and nobody paid much attention to either of our operations-I suppose the Budget will be carried, but there are some terrible anomalies in the thing. The fact of the matter is that it is a totally arbitrary method of taxation, and there is no principle as to the incidence Off the tax. If a man goes to buy a $20 suit of clothes he

is not taxed at all. If a returned soldier who, after all, hae as much right as anybody else to wear a respectable suit on Sunday, goes to buy a $50 suit of clothes and he just has the extra $5 necessary to give to the Government, he pays his $55. The millionaire goes and gete his $150 suit, and I suppose he will pay $15 in taxes. If I were a millionaire I would pay the tax very cheerfully under those conditions, but I am not so sure about the returned soldier or the working man who just manages to scrape together $55. There is no equality or decency in the incidence of a tax of that kind. It is wholly indefensible, and I am not sure that anything like it has been done in history, until something like it was done in the United States, and t-he department sent some all-sufficient individual down there for five minutes to look at the thing and he said, "This is the pure cheese." This is another piece of imitation the Government are giving us, if this is an excise duty, but I think I have proved it is not.

What is it? In some respects you might say it is a levy on capital. That has been talked of on both sides of the water as a method of raising money to meet war obligations, but I do not think anybody with preciseness in his make up would want to define this as a levy on capital, and I am sure no supporter 0f the Government would because, if it is a levy on capital, it is in many cases not a levy on the capitalist. The levy on capital I want is the levy on the capitalist, the man who has some capital worth levying on. So I think we may dismiss that. Then what is it? We have to classify this thing. It is a new species in the fiscal zoological garden and we have to classify and describe it. If it is not an excise duty, and not a levy on capital, what is it? What does it bear most resemblance to? When a taxable article is brought into this country we place a Dominion officer at the port in buttons and blue coat and pay him a salary and he collects the money. That is a tariff against external goods, and, as I hold, against external trade. But in the case of the duties on all these lines of goods you do not have an officer to do your business. You do not pay him to give a license to the buyer even to do the collecting for you. But thiatt does not alter the rule. This is an internal tariff and it will have, and it is having to-day

and it'ls a splendid object lesson from that point of view-exactly tthe effect which an external tariff has on the commerce and life of a nation.

That leads me to an enumeration of objections which I think are cardinal and insuperable to this form of taxation. As this is an internal tariff, and it cannot be defined in any other way, my first objection to this whole line of taxation is that it is practically an enormous increase of the tariff on whole lines of articles by a government that in the same breath is promising revision of the tariff, presumably downwards. That is my first real objection to this taxation. My first general objection, of course, I have already dealt with; that there is nothing like it in the heavens above, or in the earth beneath, or in the waters under the earth. But my first real objection to this taxation is that it is a huge boost of the tariff in the case of long lists of articles in some cases by ten per cent, in others by twenty per cent, in others by thirty per cent, and in others by fifty per cent. It is a huge boost of the tariff. It is nothing else, and cannot be otherwise described, and the mischief of it is that in many cases the Government have boosted things thirty per cent which they should have boosted only ten, and in other cases have boosted only ten when they Should have boosted thirty per cent. There is a tax of ten per cent on candies, for example. Well, I am told that young people who go to dance halls in large numbers in this and other cities throughout the country eat a lot of candy, and a young fellow never thinks he does properly by his girl unless he gives her a $2 box. If you wanted to tax luxuries, I would have put that young fellow in the thirty per cent class. Keep him at home more nights in the week; there would be lees money spent on candies, and it would' make more ,for the good of the community. But the Government encourage that kind of thing. Then they put a thirty per cent tax on Pain Killer. I have no brief for patent medicines, bust Pain Killer has been used for so long as a workingman's medicine that I think there must be something useful in it, and I would put it in the ten per cent cl'ass. But these things we can thresh out in Committee, if we'ever get there, and I have hopes.

My next objection to the tax is that it will be complex and difficult of collection. Another objection to the tax is that it will inevitably lessen business. That is too true, Sir. This tax will lessen business; it will diminish the prosperity, the trade and the accumulation of wealth in the country at a time when we never needed so much to accumulate wealth as we do

now. It must do that, and it is exactly what its twin brother at the sea coast does all the time. That is the value of this thing, and that is the value of our study of it in regard to the trade of the country. This internal tariff was not imposed three days till individuals all over Ottawa were going to the stores and cancelling orders. That is a fact that cannot be gainsaid. On the way to this House I met a gentleman in whose word I have implicit confidence, and he told me that one firm in a large line of articles, had lost $400 in trade that had been cancelled, and the reason is obvious. The cost of living is so high, that when a man who has made up his mind to buy a carpet for $150 finds $30 or $40 added to the price he determines to do without it and trade is lost to that extent. He wants a carpet, but he calculates that he cannot afford more than a certain amount, and when a large sum is added to the price which he contemplated paying for the article he prefers to do without it. I have met a great many individuals who have told me of their having cancelled orders.

I may say that the same thing is true in Tegard to myself. I am a poor man and I have made up my mind to deny myself the extra suit which I had intended getting and to go this summer wearing overalls and duck shirts. The Government, I have no doubt, will take enough interest in me personally to congratulate me on that, because they say they are teachers of economy. But they reverse the rule. They have no right to teach me economy in my personal capacity. They have no right whatever to do that; indeed, there are far too many schoolmasters in the country. But I have every right in my capacity as a citizen to inculcate economy on the Government, because it is the money of the public which the Government are taking care of. Let me say, Sir, that there are limits to this practice of teaching individuals economy. Now, if it be a fact that you cancel orders in stores on articles of necessity, what is the effect? The store where orders are cancelled will be dismissing a hand before you know where you are; and to go further back, the factories will be employing fewer workers. What effect will that have on agricultural production? The people will not have money to buy agricultural produce, you will lessen trade, and you will hasten that stagnation which is bound to come before we are much older, according to all the men who know anything about trade conditions. I desire to revert for a moment to the question of [Mr. M. Clarlc.l

economy on the part of individuals. When I spoke on the Address I said I doubted very much the soundness of the doctrine that individuals should be exhorted to economize in order to help the State at this time. What a man does with his own money, so long as he does not do anything that is not within the law, is no business of anybody's. It was my privilege at one period of my life to enjoy from time to time brief private conversations with one of the greatest men in the Empire to-day, Lord Morley, then John Morley, the member for Newcastle; and having a good deal of Scotch training in regard to the value of "thrupence." I remember saying to Mr. Morley: "There is a passage in one of your essays which I have been reading lately that rather puzzled me. You refer to the cant of having few wants." He said: "Well,

I cannot at all recall having written such a passage, but it is just what I would have written; don't you think that it is the part of a high civilization for every one to have lots of private wants and to be able to supply them in a legitimate way?" I confess I could not reply to him; I thought he defended very well his criticism of that old doctrine of having few wants. But that same gentleman would have been the first to come in and preach, as I have often heard him preach on public platforms, that the duty of the Government is to economize because they are taking care of the money of the public. They are the nations' housekeepers, and as a matter of public uprightness and governmental righteousness it is incumbent upon them to take the best possible care of the peoples' money.

These taxes, therefore, I repeat, will be complex and difficult to collect. They will lessen business; they are lessening business at the present time. Furthermore, they will increase the cost of living in very many respects; there is no doubt about that. So far as the cost of any given article is concerned, they increase the cost of living at the point of the revolver. You go into a store and you are told that you have to produce $5 extra on a suit of clothes costing $50; otherwise you cannot do any business. That is increasing the cost of living with a vengeance, and yet we are all saying that it is our primary duty, in order to alleviate the unrest which exists in the country today, to decrease the cost of living as far as we possibly can. We all say that our object should be to lower the cost of living, but the intelligent rows of hon. gentlemen opposite me, who have been working their

brains to see how the cost of living is to be reduced, are going to vote for the principle of a Budget which, on the whole line of absolute necessaries, will increase the cost of living in the most crude and arbitrary manner. The use of that word " crude " in this connection reminds' me of a quotation which I am tempted to make, confining its application, however, strictly to the Government. Adam Smith says somewhere that the methods of taxation employed by primitive peoples are generally crude. I will not insult the Canadian people by making them, through all their representatives, responsible for a taxation to which that statement can be applied. I restrict the quotation entirely to the Government. They are a primitive Government, in regard to their taxation at any rate.

The Budget, in the way I have pointed out, increases the cost of living at a time when large numbers of people, with every means of economy which they can devise, are unable to make ends meet. It burdens those who are already burdened to the point of back-breaking, and in that respect I want to say that I except the class to whom I belong. The farmer is not the worst hit by this thing; he can avoid it by wearing overalls and duck shirts. He raises his own food and lives on the land, and therefore I exempt the farmer class from those who are hardest hit. I have said here before, and I repeat, that one of the defects of the Finance Department of this Government during the term of the war has been that it did not get enough out of the farmers when they were making money. We are always being asked "Where can we get more revenue?" If the Government had done a reasonable amount of thinking, or consulted those who were doing the thinking, they could have been told a dozen ways to get revenue. But this taxation does hit the city working man, and rwhat is worse, it hits the veteran. That as who it hits, and that moves me to the special condemnation-the damning charge ogainst this line of taxation is that under it war wealth is left untaxed in any special (way, and the profiteers and the millionaires are left practically intact, while you are striking at the men who saved their country and the men who* work in the factories With their hands for a daily living. Now these are the Characteristics of this^ taxation as I see it. Some of the statements I have made about it no one can controvert, it is impossible to do so; and yet my hon. friend, the Minister of Trade and Commerce (Sir George Foster),

claims for the Minister of Finance the quality of courage for putting on this taxation, well, Mr. Speaker, I can only say in regard to that, that you mistake foolhardiness for courage. However, I am (willing to waive the point and give my hon. friend the characteristic of courage. He certainly has courage. Any one who becomes responsible for that taxation, whatever other qualities he has, has courage, but I want to say that the members of the Government do not share that characteristic with him.

Now my hon. friend the Minister of Trade and Commerce made a most interesting speech on the evening No:f the day the Budget was presented. He also said "You isee we are coming to Idirect taxation." I was charmed to hear him. I had been urging that for years and (been looked upon as a fanatic for my pains; (but here is the most experienced politician in the House *-I would not be far wrong if I said the ablest debater in Canada-a man of unexampled parliamentary experience, a man who must be nearer the end of his days than the beginning, who actually says what I have been saying for years-and yet I maintain a reasonable degree ol modesty. Of course there is this difference between my hon. friend and myself; he says we must arrive at this very gradually. Gradually we are coming to direct taxation ! Well the gradualness of the process was remarkable to behold. We met for the" first war session in August, 1914, and 1 ventured to say something about income tax then. The Government raised the duties on sugar and coffee. They would not put an income tax on-"Oh, no," they said "You cannot collect income tax in this country." And income tax went by for 1914. Of course my right hon. friend (Sir George Foster) believes in a gradual approach to direct taxation. The year 1915 came; the first real war session. Burden on the consumer but no income tax! The year 1915 witnessed a flat raise of taxation all around. More burdens for the common people, further protection for the millionaire and the rich man,- no income tax! The year 1916 came. All blank, no income tax, no foresight! All blank, not a cent! The year 1917 came. Then came the foresight. An income tax came along and the thing that could not be collected was collected, and we have been collecting a little more ever since. I give the Government and the Minister of Finance full credit for any raise he has made in the income tax, but it is a very,

and I do not know how in the world the hon. the Minister of Immigration and Colonization (Mr. Calder) was ever got to swallow this Budget, because he once believed the same about the tariff that I do. What influence has been brought to bear upon him, or how he has been mesmerized I cannot tell because in the general course of his human intercourse he has more often been the mesmerizer than the mesmerized. On this occasion he has been mesmerized; he must have been. I wonder if it is not too late for him to mend? How well that huge brain would look on the cross benches. I would very much like him to pay attention to what I say; to give serious consideration to my modest and humble invitation.

And what about my friend from Neepawa (Mr. Davis) and my hon. and gallant friend from Skeena (Mr. Peck), whom I see before me? And there are others,-my hon. friend from Strathcona (Mr. J. M. Douglas) and my very much respected and valued friend from Lethbridge (Mr. Buchanan)-are these gentlemen all going to vote for a diminution of the prosperity, the wealth and the trade of the country and for an increase of its tariff and its cost of living? Well, human nature is a funny thing; you cannot tell what it is capable of. I shall watch the operation of their voting with the very greatest interest. As for us, there is no doubt about where we stand.

We are against the Budget. We think the amendment is a little milk and watery. Our policy on the tariff is the tariff policy of the Dominion Council of Agriculture. If we were against the principle of the amendment I do not think we were made to think very much more of it by the speech in which it was introduced by the member for Shelburne and Queen's (Mr. Fielding). I do not want to say a single word in criticism of that speech; I would only repeat one single sentence of criticism that was passed upon it by the Minister of Trade and Commerce (Sir George Foster). The right hon. gentleman said: " I was very much pleased with the speech of my hon. friend from Shelburne and Queen's. When my right hon. friend (Sir George Foster) says that about any speech of mine on tariff matters I shall have my head examined by a doctor. I think that is the most effective piece of criticism in one sentence that was ever passed upon a speech in this House. When my hon. friend the Minister of Trade and Commerce stands up and says to the Opposition's financial critic, " I was very much pleased with your speech," the member for Shelburne and Queen's (Mr. Fielding), ought to know very

well that he has, fiscally speaking, gone to the devil.

Now, I am having a little crow to pack with the Official Opposition. My hon. friend from Beauce (Mr. Beland) whose attractive personality makes him an object of the love of every one in this Chamber, went down to a by-election in Montreal, and he said, in so many words: "I am in favour of a well-regulated protection of Canadian industry." Well, he is no good for the cross benches; I may tell him that out of hand; there is no place for him here. But he can line up 'splendidly with the Minister of the Interior (Hon. Mr. Meighen) who went out to Winnipeg and said that he believed in a moderate tariff. " Well-regulated protection" and "moderate tariff" are very close to one another. For the life of me I do not see why the Minister of the Interior and my hon. friend from Beauce should not be absolutely in the sajme camp on tariff matters. Would Sir Wilfrid Laurier have said that he was in favour of protection? Never; the word never came from his lips except by way of condemnation. There has been a retrograde metamorphism upon the part of some members of the Official Opposition. If my hon. friend from Brome (Mr. McMaster) had been in his place I would have tried to do a little Borneo business on my own account- this Romeo businesis is getting popular in tariff matters. I have done the best I could with the Minister of Immigration, but he ds leaving the Chamber now; he is a very coy and unapproachable spinster.

I would like also to address a word to my hon. friend from Victoria, Alta, (Mr. W. H. White), for whom I have as much respect as for any member in this House, and who is. to my knowledge, almost a free trader. And my hon. friend from East Quebec (Mr. Lapointe) will never say that he is a protectionist. I really would like hon. gentlemen on both sides to consider where they are going to get by these mixed up rations. There is my hon. friend from Russell (Mr. Murphy), the ex-Secretary of State. He has very broad and advanced views on the fiscal question; he would never describe himself as a protectionist.

Mr. MURPHY:

Hear, hear.

Mr. MICHAEL CLARK:

Why not come

along and stretch out our number on these benches a bit? Bring the others along, too, and let the Progressive party get the majority and choose the best man from among them to be Prime Minister. I will not tell you who that Piime Minister would be; I hold out no bribes to the Official Opposition.

Contrast these statements. My hon. friend from Shelburne and Queen's says that under certain circumstances bounties would be all right. He says: "I hold up

my hand, theoretically, for free trade." Yes, and he would be prepared to hold out his hands for the bounties; that is the trouble. And my hon. friend from Beauee says: " I am in favour of a well-regulated protection of Canadian industry." I am going to give some quotations now, very brief, not for the purpose of recrimination; not to say whether the Liberal party did or did not do its duty, but to state the progressive fiscal policy that I have believed in all my life, and to give it as affirmed by a man who, being dead, still speaketh. Sir Wilfrid Laurier said before 1896:

I submit to you that the ideal fiscal system is the British system of free trade.

I come to expose to you the policy of the Liberal party. Let me tell you that the policy may he summed up in the good Saxon word " Freedom," in every sense of the term-freedom of speech, freedom of action, freedom of religious life and civil life, and last, not least, freedom in commercial life.

I denounce to you the policy of protection as bondage; yes, bondage, and I refer to bondage in the same manner as American slavery was bondage; not in the same degree, perhaps, but in the same manner. In the same manner the people of this country, the inhabitants of the city of Winnipeg especially, are toiling for a master, who takes away, not every cent of profit, but a very large percentage, a very great portion of your earnings for which you toil and sweat.

That was sound doctrine, Mr. Speaker, when those sentences were uttered by the voice that is stilled forever so far as this scene is concerned, and it is as profoundly true and more applicable to-day. I am here to claim for the little group by whom we are surrounded that we inherit that doctrine. We are the inheritors of that creed. We come by it honourably. We followed and believed Sir Wilfrid Laurier then, and we follow his teachings now.

Mr. HAY:

What is the date of that

speech, please?

Mr. MICHAEL CLARK:

These utterances were made either at the 1893 convention, or in speeches immediately preceding. I do not know what that has to do with the matter in hand; the doctrine, not the date, is what matters, as my hon. friend will probably find when he goes to his western constituency.

I was saying that we believe that doctrine is as true to-day as it was at that time. We believe protection is economic bondage. Sixty thousand of the brightest.

best and bravest of Canada's sons are lying in France and Flanders to-day because they were prepared to die to accomplish the political freedom of the inhabitants of Europe. Any man deceives himself who thinks that their survivors, and the workingmen, farmers and women of this country, who stood behind them in the fight, are going to submit any further to economic slavery in Canada. It is substantially true that from Confederation to the present day Canada and her people have been owned by a few manufacturers, a few railroad magnates, and a few lumbermen, and we all know that. But the war has changed all that, and an army of emancipation is on the march. The sound of it may be yet as distant thunder, but it is getting nearer every day. The farmers are in that army; the workingmen are in it; the veterans are in it; the women are in it; the best journalistic heads in Canada are in it; men of goodwill of all ranks and classes are in it, and it is marching. We are its outposts for construction purposes. When that army arrives, it will say to all and sundry, whether they be Conservative-Liberals or Liberal-Conservatives: We have come to

enter into the inheritance which our sons and brothers died to purchase; we have come to free our beloved land from economic slavery; we have come to put Canada where she belongs in the forefront of the battle of the free and democratic peoples of mankind.

Hon. ARTHUR MEIGHEN (Minister of the Interior):

Mr. Speaker, much as I admire the hon. member for Red Deer (Mr. M. Clark) and, indeed, envy many of his gifts as a public stpeaker, I cannot say that I stand altogether appalled at the task of answering his arguments this afternoon. The hon. member has given us an example of the maximum of merit that a speech may reach, without the ingredient of logic and without the assistance of facts. There were, incidentally, as he proceeded, matters that emerged as to which I do not feel myself in possession of all the details and circumstances to enable me to reply. He made mention of certain items in the Auditor General's Report that were marked in that report "unaccounted for," and large items they were. These were referred to first by the hon. member for Guysborough and Antigonish (Mr. J. H. Sinclair). I was not in my place at that time; but I would presume that the items were British or foreign credits, the accounting for which had not yet reached the Auditor General.

and that consequently they appeared in the report in that form. But the hon. member for Guysborough, or the hon. member for Red Deer, knows that if there is anything he does not understand in the Report of the Auditor General, there is a standing committee of this House for the purpose of investigating every item questioned, and although we have been in session three months, that committee has never been called. If there be any reason for calling it, hon. members have it in their power to have it called, and if there be anything dark it will be revealed.

My hon. friend rather surprised me this, afternoon by a prolonged and violent attack on what is described as the "luxury tax" of the Budget. He says that this is only a case of more tariff, 10 per cent upon sales of articles of special value; that is upon luxuries so far as luxuries can be isolated and designated by name. All these things, he says, are only additions to the tariff and cannot even enjoy the good name thlat belongs to an excise tax; there is nothing right about them; they are too big and they are too small; they came too soon and they came too late; everything that he can think of in connection with the luxury tax is wrong. He says: If this were an excise tax, it would be all right, because an excise tax is on home manufactures alone. Well, an excise tax is on home manufactures alone but there is always a corresponding duty against the import of .the same goods, and this is exactly the same thing. There is here a tax on the goods produced in Canada, there is a tax on imported goods-there is the corresponding one to offset the other. If the hon. gentleman would haye us pay ten per cent extra for a suit of clothes if it were made in Canada and nothing at all extra if it were imported from the United States, do you think, Mr. Speaker, many more suits of clothes would be made in this country? But that is the character of tax my hon. friend (Mr. Clark) says he would support. I would be sorry for the country that ever took the hon. member for Red Deer as its business mentor. My hon. friend says that we know where his political associates stand. I do not know where they stand.

Mr. COWAN:

Nor anybody else.

Mr. MEIGHEN:

His leader (Mr. Crerar), who sits to his right, was down in New Biunswick not long ago and he told the people of that province that he was against the tariff and that he wranted to raise revenue by a luxury tax. With the leader arguing in favour of a luxury tax and his

first lieutenant opposing it, how are we supposed to know where they stand?

Mr. CRERAR:

Does the minister consider a $45 suit of clothes a luxury?

Mr. MEIGHEN:

If a $45 suit of clothes is not a luxury, then we have a pretty prosperous country.

Oh, no.

Mr. MEIGHEN:

It may be that the limit on certain articles is too low, but does that affect the principle? Would the argument of the hon. member for Red Deer not be just the same against a tax on a $100 or a $150 suit of clothes or against anything in the whole range of the luxury tax? He did not oppose any item in the tax; he opposed the tax on principle, and his leader supports the tax on principle. How then are we to know where they stand? The hon. member for Red Deer says that this tax will add to the cost of .living. The reports that have so far come to hand-and they have come direct from dealers in these articles-are to the effect that the tendency has been to bring down the sale price below the limits of the luxury tax. That tendency is in operation and effect.