May 19, 1921

?

Some hon. MEMBERS:

Oh, oh.

Topic:   THE BUDGET
Subtopic:   DEBATE CONTINUED ON THE ANNUAL STATEMENT PRESENTED BY THE MINISTER OF FINANCE
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L LIB

Georges Henri Boivin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Laurier Liberal

Mr. DEPUTY SPEAKER:

Order, I

*must ask hon. gentlemen to maintain the dignity and decorum of Parliament.

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UNION

Donald Sutherland

Unionist

Mr. SUTHERLAND:

The report says:

Mr. Boucher said that there had been Liberal traitors who had left Laurier, such, for instance, as Hon. W. iS. Fielding, and like L. J, Gauthier, recently.

Hon. gentlemen opposite are so kindly disposed towards each other that you may rest assured that if they were called upon to form a Government, the hon. member for Shelburne and Queen's (Mr. Fielding) would not likely be included in it.

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L LIB

Joseph Archambault

Laurier Liberal

Mr. ARCHAMBAULT:

Will my hon.

friend tell the House what Mr. Mondou said about the IPirime Minister of this country?

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UNION

Donald Sutherland

Unionist

Mr. SUTHERLAND:

My hon. friend or his colleagues will have their opportunity later on. Now I want to refer to the policy that has been advocated both by the official Opposition and the opposition led by the hon. member for Marquette. Both advocate the removal of the tariff on articles of food. Both advocate that the British preference be increased to 50 per cent of the general tariff. The Farmers' party also advocate complete free trade between Canada and Great Britain within five years. Both advocate proportional representation. One of them advocates the adoption of an eight-hour day, and the other a direct tax on unimproved land values. I am not going to comment on those because I wish to say a word or two with reference to a matter on which a good deal of emphasis has been placed. I find that in the Liberal platform adopted in 1919 reference is made as follows to ocean traffic facilities:

Adequate facilities and tonnage for ocean traffic are a vital concern to the commerce of Canada and the utter lack of foresight on the part of the -Government in neglecting to see that such facilities and tonnage were provided

for the immediate after-the-war period is not only humiliating to the Canadian people, hut is materially impairing our export trade.

Further on I find this:

We are confronted with the lamentable situation that no adequate provision has been made for the transportation of the products of the farm, the factory and the forest to the markets of the world.

Yet hon. gentlemen opposite are loudly condemning the Minister of Marine and Fisheries and the Government because ships have been built in this couintry. These same gentlemen in 1919 were condemning the Government for not doing what they now condemn them for doing. Is not that a consistent attitude to adopt?

I want to point out one of the things that has been accomplished by the Government's policy of building ships, and that is that we have to-day ocean rates such as we have not had for many, many years. The products of this country can be landed to-day in the markets if the world at a reasonable rate, which is something I do not remember having been the case at any time in the past.

Take, for instance, the matter that has been referred to by the Millers' Association of this country-the discrimination in the rates on flour and wheat. That discrimination was so great that it was practically impossible for the millers tc ship their flour. That is now a thing of the past. Though some of our ships may be idle to-day, I contend that they have rendered a valuable and splendid service to this country in obtaining better ocean rates; we jnay look forward with confidence to the future if we can only get our railway transportation facilities down to a proper basis. Even if we have to tie up some of our roads in order to bring about lower railway rates, we shall have accomplished much if we succeed in reducing them.

I have spoken longer than I had intended, but I was anxious to show the motives that are in the minds of some hon. gentlemen who are so loud in their criticisms of the Prime Minister and his Government. They say: We must have the farmers represented in this House; we must have labour represented in this House. Let me point out to hon. members-and I know whereof I speak-that the Prime Minister of this country was born and grew to manhood on a farm near a small town in the county adjoining the one in which I live. In his early years he attended the school in the nearby

town until he could receive no further education there, and then he went to the university. He graduated from a humble farm home in the county of Perth, and like thousands of others from Ontario he went to Western Canada. He was not long in that country before his sterling worth was recognized by the people amongst whom he had located, and soon he was elected as their representative in this House. He has been in the House now for quite a number of years. He entered Parliament as a very young man, and from the day he came here down to the present time he has been noted as one of the hardest-working members in the House. It is acknowledged by every one that he has not been called to the Premiership through pull or influence of any kind; it was through sheer outstanding ability. He is a self-made man. By burning freely of the midnight oil he had qualified himself to enter into competition, as it were, with the best intellects of this country. He outstripped them all and became Prime Minister of this country at an age younger than that of any other man that ever reached that high position. When hon. gentlemen opposite say that the farmers and labour must have representation in this House, I say to them that the farmers of this country have in the right hon. the Prime Minister the finest example of the product of a farm home that we have ever seen in this country. I say further, that labour has in the right hon. the Prime Minister one of the finest specimens of the product of hard and diligent labour that this country has ever witnessed. I say that the right hon. the Prime Minister supported the ex-Prime Minister during the years of the war and rendered him valiant service; he never deserted him. He stood by him and they carried on government, just as the right hon. the Prime Minister is endeavouring to carry on government to-day. When we find that there is an effort being made to link up all the discordant elements in this country, under the leadership of the allied Opposition, with a view to defeating the Government, I say that it is time for plain speaking in this House, and that is the reason why I am speaking as I am to-day. I am sorry that I have found it necessary to speak as long as I have done. But I do wish to emphasize again the fact that one of the leaders of the allied Opposition was a member of this Government. It is quite evident, from articles which have been published, that he intrigued with

other elements that were endeavouring to establish a party in this country in opposition to the Government, and the hon. leader of the official Opposition (Mr. Mackenzie King), who was absent from this country during the early years of the war, hurried back to Canada when the election of 1917 was on. He entered the contest in opposition to the policy of the Government, in opposition to the cry for help that had been sent across the seas by Sir Arthur Currie from the agony of the battlefields: "We beseech you to support us." Although he opposed the offer of such help, he was chosen leader of the official Opposition, over and in place of men who had been in this House for many years, and who had not been repeatedly turned down by their electors. The hon. member (Mr. McKenzie) who sits almost immediately to his right was a leader in the House, but he was not acceptable to those who were selecting a leader at the time the hon. gentleman who now heads the official Opposition was chosen. I repeat, Mr. Speaker, that we have to-day in this country, supporting this Government, very many of the best and sanest representatives of the Liberal party, men who have the best interests of the country at heart; and for that reason I say-

Topic:   THE BUDGET
Subtopic:   DEBATE CONTINUED ON THE ANNUAL STATEMENT PRESENTED BY THE MINISTER OF FINANCE
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?

Some hon. MEMBERS:

Oh, oh.

Topic:   THE BUDGET
Subtopic:   DEBATE CONTINUED ON THE ANNUAL STATEMENT PRESENTED BY THE MINISTER OF FINANCE
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UNION

Donald Sutherland

Unionist

Mr. SUTHERLAND:

Yes, I know that some hon. members will take issue on that statement, but I declare it to be true, nevertheless. Now, we have in Canada a country that is but slightly developed, and if we are going to divide ourselves into independent sections, groups and communities, we shall not get very far. Nor shall we make that progress which we should and reach that stage of development of which this great country is capable through proper co-operation, if the great province of Quebec, with all its resources, is going to refuse to join the other provinces in the government of the country. But, however^ this may be, of this be assured, that you will receive fair and decent treatment from the other provinces; and I think it is unfortunate and deeply to be regretted, after the work that was accomplished by many of Canada's great statesmen from that great province in the years gone by, that we should have a condition such as now exists in this Dominion.

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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Hon. W. L. MACKENZIE KING (leader of the Opposition) :

When Parliament assembled some three months ago, meagre as was the programme of legislation out-

lined, hon. members were given to understand that at least one subject of first importance would command their attention during the present session. That subject was a revision o.f the customs tariff. The announcement of the Government's intention with respect to this revision was no mere afterthought on the part of the ministry. It was made with all the formality and solemnity that attaches to a declaration of matured policy, conveyed to the country through the medium of the speech from the Throne by which His Excellency opens the proceedings of Parliament.

I shall not speak of the many public professions which preceded this formal announcement. They are well known to the House and to the country. One or two among the number may, however, be mentioned.

There was the declaration of Sir Thomas White, the former Minister of Finance, in his Budget speech of June 5, 1919, to the effect that a general revision of the tariff was "long over due," but, owing to the war, unavoidably overdue. It was urged that, because of the unsettled condition of international trade, still hampered by war restrictions and prohibitions and by exchange conditions, it would not be practicable to make a sound general revision of the tariff at that time. The hope, however, was expressed that within a year conditions would have become so stabilized as to permit of a general revision of the tariff The Finance Minister urged that, preceding the revision, a thorough inquiry should be conducted by the Minister of Finance and two or more of his colleagues, and gave it as his view that this inquiry might well be commenced about the autumn of that year. It was stated that the result of such an inquiry should be "a body of information which would enable the Government to effect a general revision of the tariff fair to all parts of the community and effectually promoting the national welfare of Canada." This pronouncement served the purpose of the avoidance of any tariff revision during the session of 1919.

The autumn of 1919 came and went, but the inquiry foreshadowed for the fall of 1919 was not proceeded with. This occasioned a second official declaration. It was made, not by Sir Thomas White, but by his successor in office, my honourable friend the present Minister of Finance (Sir Henry Drayton). It took the form of a statement issued to the public on December 15 of that

year. That statement was intended to prepare the public mind for a further postponement of the day of tariff revision preliminary to the session of 1920. In that remarkable utterance, not only the time of general revision, but the time also of the inquiry which was to precede it, was further postponed. It was urged that international and economic conditions were in many respects worse than they were six months previous, or at any time during the war. Whilst this might serve as an excuse, if not as a reason, for delaying the general revision, it was evidently recognized that it would not serve with like effectiveness as a reason for abandoning the promised general inquiry which was to precede it. Accordingly the Government hit upon the rather unprecedented device of reversing the order of procedure with respect to inquiry, and instead of having the ministers confer with consumers and producers in a series of public hearings throughout the Dominion, announced its intention of having interested parties present their views and opinions in the form of written statements, which could be "systematically analyzed and classified for the purpose of making them a basis of general public inquiry to be held throughout the country."

The written statements were made to do duty for the session of 1920. Parliament was informed by my hon. friend, in his Budget speech of May 18 of that year, that though unfortunately trade and economic conditions were yet unstable, the tariff investigation had commenced, and public sittings would be held throughout Canada after prorogation. My hon. friend went further than promising the prosecution of the inquiry; he told the House that to make the inquiry thorough the Department of Finance would have the assistance of expert and other advisers, and he went on to say, "I am further of the opinion that not only should the investigation proceed, but that information should now be given of the principles.and policies of the Government in the light of which effect will be given in the tariff revision to follow to the evidence and facts developed in the inquiry."

Then followed a somewhat pretentious and high-sounding enumeration of principles and policies, preceded by the declaration, "Our policy calls for a thorough revision of the tariff," and concluding with a reiteration of the affirmation that "a general revision of the Canadian tariff based upon the foregoing considerations was due." This statement of the hon. the Minister of

Finance was limited only by the condition that the revision should not be undertaken "until a thorough inquiry is made to ascertain the essential facts upon which tariff provisions must necessarily be based."

That brought us to the end of the session of 1920. I shall omit for the moment reference to the somewhat remarkable, if not momentous, happening which occurred when the session ended, the disappearance in name, of the old Unionist party, and its disguised continuance under the all-embracing designation of the National Liberal and Conservative party. All I shall mention is that, as respects the tariff, the platform of the party as approved on July 1, 1920, called for a thorough revision.

Before the summer of 1920 was over, my hon. friend and certain of his colleagues, together with their experts and other advisers, entered upon the public sittings of the investigation, which was announced as having commenced when the statements of consumers and producers were called for. Across this continent, from ocean to ocean, at most of the important centres throughout the Dominion, and at great expense to the country, the Committee of the Cabinet conducted its hearings. Nothing was omitted in the way of press propaganda to have it appear that the committee was doing a great public work, and incidentally that protection was the one thing which everybody wanted. When the public hearings were over, the country was given to understand that the delay in the summoning of Parliament was due to the time required by the committee to get its information in shape for the tariff revision which was to be the main feature of the present session. Finally, on February 14, Parliament reassembled, and with the opening of Parlia ment came the pronouncement, in the speech from the Throne, respecting tariff revision.

I invite the attention of hon. members to the wording of the paragraph in the speech from the Throne referring to the promised tariff revision, and in particular with respect to the need for such revision.

"My advisers," says His Excellency, "are convinced of the necessity for revision of the customs tariff." There is no uncertainty there. "Conviction" and "necessity" are strong words, and both find a place in this terse and emphatic sentence. His Excellency continues: "In order to secure the most complete information, a committee has conducted an extensive and thorough inquiry." Here again are clear and emphatic words. Not only has the inquiry been con-

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REVISED EDITION. COMMONS


ducted, but the inquiry has been extensive and thorough. The pronouncement continues: "The hearings necessary for this purpose have now been completed, and the conclusions founded thereon will be submitted to you in due course." It is unnecessary to quote further. No declaration could be clearer. It only re- 5 p.m. mained for the Budget to be brought down for the House to enter upon the important work of this session. I need not remind hon. members how week after week I inquired of the Government when we might expect the Budget, nor need I remind the House of the questions asked the ministry with respect to rumours that the promised revision might not be forthcoming, and of the Government's repeated denials of all such. Patiently we waited for pronouncements of the Finance Minister, allowance being made from every quarter for the protracted delays because of the supposed magnitude of his task. What, then, was our surprise and the surprise of the country when on Monday the 9th instant, my hon. friend, in presenting his Budget to the House instead of submitting the conclusions founded upon the hearings of the committee of investigation, and outlining the measure * of revision of the customs tariff promised by His Excelency in the speech from the Throne, calmly informed the House that it was "not proposed to put into effect now a general revision of the tariff schedules." I shall not delay the House by repeating the platitudes with which my hon. friend sought to conceal this complete change of front and humiliating retreat on the part of the ministry. There was nothing in anything he said which might not be said at any time, which, in fact, has not been said over and over again with respect to every contemplated revision of the tariff. It is true that my hon. friend made allusion to some emergency legislation being enacted in the United States, and which may or may not become permanent; but since when have hon. gentlemen opposite come to believe and to affirm that Canada cannot revise her tariff independently altogether of what the United States does or proposes to do? What was the whole burden of their professed objection to the reciprocity agreement? It was that it rendered Canadian tariff conditions dependent on those of the United States. The representation was not true, but it gave expression to a point of view which is the only right and proper one, namely, that every country must regulate its own tariff in accordance with its own needs, and should be free to do so wholly irrespective of the action of any other country. Let me point out that the fact that the Government of the United States was likely to revise its tariff, and that in a manner possibly prejudicial to Canadian trade, was well known to the Government long before the assembling cf Parliament. The attitude of the Republican party towards the tariff was well known, and, as the House will recall, the return of the Republican party was assured on November 2 last. That the Government not only knew, but sought to have the Canadian public believe, that the return of the Republican party to power would mean additional barriers to trade between the two countries, is apparent from publications for which hon. gentlemen opposite are themselves directly responsible. I hold in my hand a pamphlet published by the National Liberal and Conservative Party Publicity Bureau, entitled "What the Return of the Republican Party to Power in the United States means to Canada." It bears on the title page th« following quotation from the Torontc Globe of November 3, 1920: "Canadians may be prepared for an additional barrier to trade between the countries." That pamphlet was issued during the by-election campaign in East Elgin held in November of last year, and its whole purport is to arouse the electorate to the certainty of a raising of the American tariff wall in virtue of the return of the Republican party to power. The first paragraph of the pamphlet reads as follows: Canadians generally, and the electors of East Elgin in particular, would do well to give the most serious consideration to the result of the election in the United States on November . 2nd as it affects Canada, because there is no doubt that the return of the Republican Party to power will have the most important bearing on our future trading relations with, the United States. That was in November. Subsequent events only served to confirm the predictions made. The American Republican party was in power when the advisers of the Crown made their- promise of a revision. The Fordney Bill, which subsequently became the Young Bill, was introduced in the House of Representatives early in December of 1920. It was February 14, 1921, that our Parliament reassembled, and that the speech from the Throne declared the conviction of His Excellency's advisers of the necessity for the revision of our customs tariff. If uncertainty as to American tariff legislation is a reason for delay in our much needed tariff revision it was as much a reason in the month of February as in this month of May. As late as April 20, in answer to a question from the hon. member for Jacques Cartier, as to whether it was an accepted fact that there was not to be a general revision of the tariff, the Prime Minister replied in the negative. In his remarks on the Budget, the Minister of Trade and Commerce led the House to believe that one of the reasons there had been no general revision of the tariff was the unfavourable state of the exchange with the United States. "The exchange situation", he said, " grows worse every day-and upon the exchange conditions, much depends in the fixation of your tariff." Now what are the facts? As between February 14, when the speech from the Throne promised revision, and May 9, when the Budget was brought down, the only change was favourable to Canada. On February 14, the rate of exchange between Canada and the United States was 14 per cent, and the value of the Canadian dollar in New York 86 cents; on May 9 exchange was at 101, and the value of the Canadian dollar therefore 89.75 cents. Under these circumstances, it is useless for the Government to seek to have the country believe that it was influenced in its decision to withhold the tariff revision at the present session because of any actual or proposed action on the part of the United States. There were other and more subtle influences at work. That they can be shown to be more sinister influences as well is, I fear, unfortunately only too true. But one of the alternatives is possible; either the Government, despite all its professions, has never had any real intention of revising the tariff; or, having such an intention, it has been frustrated in the carrying out of its intention the moment advance had been made to the point where definite action became necessary. It matters little which of these alternatives we take: the one really significant fact is apparent, the Government is not a free agent, in the matter of either intention or action. Its members in truth do not constitute the real Government of Canada to-day. In word and act, it is but the visible expression of influences and forces which dictate the policies, aye and in large measure are controlling the destinies of Canada to-day- forces and influences which constitute the real though the invisible government of this Dominion. Were I to adopt the language of the right hon. the Prime Minister, and apply to him and his associates the terms which in his gratuitous and vituperative manner he has applied to a highly responsible and representative group of honourable members of this House, I would speak of him and his colleagues as "the servile tools and minions" of these sinister influences and forces. Let me remind my right hon. friend that people who live in glass houses should not throw stones, and that there is a passage of Scripture which says, "Judge not, that ye be not judged, for with what judgment ye judge, ye shall be judged, and with what measure ye mete, it shall be measured to you again." To say that the changes being made in the American tariff are responsible for the abortive professions, the frustrated intention of the Government, is to assume an unlimited degree of gullibility on the part of the Canadian people. The failure of the Government, at this time of high living-costs, and much needed increase of production, to give any relief from burdensome taxation to either consumers or producers, is not due to any circumstances so much a matter of chance as the present emergency legislation of the United States; it is due to a deliberate and determined effort to thwart trade and to restrict competition in every direction, with the Mother Country and our sister dominions even more than with the United States, in order that a few wealthy men and their immediate friends and associates may reap still larger fortunes through obtaining, not a much-needed home market, as they would have us |believe, but a monopoly of the Canadian market, in addition to markets abroad secured for them through Government action in a variety of directions and at enormous expense to the taxpayers of this country. Let me proceed to make good the truth of this assertion. I have referred to the need for a thorough revision of the tariff as set forth in the Budget speech of my hon. friend the present Minister of Finance in May of last year, and to the demand for such a revision as set forth in the platform of the National Liberal and Conservative party as framed some six weeks later. I wish now to draw the attention of the House to a comparison of the two statements pertaining to this



so-called thorough revision. The comparison lets in a flood of light; it reveals the whole situation. . It is not often that a political party discloses in a manner so apparent, and shall I not add, so abhorrent, the sinister influences that frustrate its good intentions and bind and shackle its freedom of action. In referring to the Budget speech of my hon. friend, I made mention of the pretentious and high-sounding principles and policies in the light of which it professed effect would be given, in the tariff revision, to the evidence and facts developed in the inquiry which he and his colleagues and experts and other advisers were to conduct. Those principles and policies were of course fresh in the minds of the hon. gentlemen opposite, and were before them in printed form in the pages of Hansard when, at the end of the session on the 1st of July, they met in secret conclave to disown the name of the party to which they belonged, to rechristen it as the National Liberal and Conservative party, and to draft the platform of policies and principles on which they were thereafter to stand. That the principles and policies outlined by the Minister of Finance in his Budget speech were actually before hon. gentlemen opposite at the time of the drafting of their political platform is wholly apparent from a reading of the two pronouncements. With a single remarkable exception, to which in a moment I shall refer, the one follows the other almost literatim et verbatim. Each has its six main assertions of policy and principle, under the letters a, b, c, d, e, f; and each has the development in extenso of each of its several assertions. To all intents and purposes, with the exception mentioned, both pronouncements are the same throughout. My hon. friend in delivering himself on the Budget had evidently two objectives in mind. He was seeking a means of avoiding any immediate revision of the tariff; and he was trying out on interested parties and the public in advance the tariff plank of the political platform which he and his friends had in mind for the secret conclave to be held at the close of the session. Now here, Mr. Speaker, is the astounding disclosure which a comparison of these two apparently identical pronouncements reveals. To appearance, they are identical; in reality there is from the one an omission of a statement of policy and principle contained in the other, which omission is dam- aging, shall I not say "damning", in the extreme. I have already alluded to the statement of guiding principles and policies being set forth in the case of each in the six main assertions which appear in the case of both, under the letters a, b, c, d, e, and f. Let me repeat, they are, with one exception, practically identical in virtually every particular. Let me read the two statements to the House. Here is the statement of principles and policies as given by my honourable friend to the House in his Budget speech on May 18, 1920: Our policy calls for a thorough revision of the tariff with a view to the adoption of such reasonable measures as are necessary-(a) to assist in providing adequate revenues, (b) to stabilize legitimate industries and to encourage the establishment of new, industries essential to the proper economic development of the nation- to the end that a proper and ever-increasing field of useful and remunerative employment be available for the nation's workers, (c) to develop to the fullest extent our natural resources, (d) to specially promote and increase trade with the Mother Country, the sister dominions and colonies and Crown dependencies, (e) to prevent the abuse of the tariff for the exploitation of the consumer, and, (f) to safeguard the interests of the Canadian people in the existing world struggle for commercial and industrial supremacy. Observe, Mr. Speaker, that there are the six assertions of policy and principles, a, b, c, d, e, and f. Now let us look at the statement of tariff policy as set forth in the official platform of the National Liberal and Conservative party. The language is the same. Observe, too, that it has its six assertions: a, b, c, d, e, and f. A thorough -revision of -the tariff with a view to the adoption of such reasonable measures as are necessary-(a) to assist In providing adequate revenues, (b) to stabilize legitimate Industries, (c) to encourage the establishment of new industries essential to the economic development of the nation, (d) to develop to the fullest extent our natural resources, (ej to prevent the abuse of the tariff for the exploitation of the consumer, and (f) to safeguard the interests of the Canadian people in the existing world struggle for commercial and industrial supremacy. Do you observe any difference, Mr. Speaker? To all appearances they are the same; they begin and end the same. (a) in the case of each is "to assist in providing adequate revenues." (f) in the case of each is, "to safeguard the interests of the Canadian people in the existing world struggle for commercial and industrial supremacy." (e) in the case of each is the same; it is "to prevent' the abuse of the tariff for the exploitation of the consumer." (b) in the case of each begins "to stabilize legitimate industries;" but here a slight change occurs: (b) in the case of the speech of my hon. friend continues: "and to encourage the establishment of new industries essential to the proper economic development of the nation." In the case of the political platform of the National Liberal and Conservative party, this part of (b) is made a separate proposition; it is not set forth as a part of (b), but appears as (c) . Why is that? It is because, between the time of the speech of my hon. friend on May 18 and the holding of the secret conclave on July 1, it had been found necessary, at the instance of the influences which control the Government, to drop something from the pronouncement of my hon. friend and, if possible, to conceal the omission. Well, let us see what policy or principle it was that it was found necessary to drop when the party platform was framed. It was not the next proposition (c) to develop to the fullest extent our natural resources; that has become (d) in the party platform. That, Mr. Speaker, completes the slate so far as the statement of policies and principles in the party platform is concerned; a, b, c, d, e and f are now complete. The division of (b) in my hon. friend's speech into (b) and (c) of the party platform, and the placing of (e) of my hon. friend's speech under (d) in the party platform, made possible the squeezing out altogether from the platform of the party of (d) as given to this House and to the country in the Budget speech of my hon. friend. Well, Mr. Speaker, what is (d) ? What is the policy of the Government as set forth in the Budget speech of the Minister of Finance in May, 1920, which it was found necessary to delete from the platform of the party as framed some six weeks later? If it has passed unobserved, the House and the country will be astounded, I think, when I read it. Here it is, Mr. Speaker: To specially promote and increase trade with the Mother Country, the sister dominions and colonies and crown dependencies. Let me read that again, and read it along with the context: Our policy calls for a thorough revision of the tariff with a view to the adoption of such reasonable measures- Mark the words, Mr. Speaker, "reasonable measures": [DOT]-as are necessary to specially promote and increase trade with the mother country, the siste* dominions and colonies and crown dependencies. Would you have believed it, Mr. Speaker these words stricken out? And that by the hon. gentlemen who call themselves Empire-builders, that by the party that claims to have arrogated to its ranks all the patriots; that parades and boasts of its loyalty; that talks of a community of interest, of keeping the Empire united, of the family of nations comprising the British Commonwealth? And as if this were not enough-oh, unkindest cut of all-to choose for the occasion of thus stabbing at the heart our interimperial trade, July 1, the birthday of our Dominion, the anniversary of the day on which the Mother Country gave us our status as a self-governing Dominion, the beginning of our nationhood within the British Empire-was there ever like ingratitude or baser treachery? Why has this policy, this policy of promoting and increasing trade with the Mother Country, the sister Dominions and colonies, been erased and effaced from the platform of hon. gentlemen opposite? I) is surely not because of the sacrifices oi life and wealth shared in common in the Great War; it is surely not from motives of loyalty or affection towards the Mother Country; it cannot be from a desire to unite, to bind and to consolidate the different parts of the British Empire; nor is it from any concern for the great body of consumers in our own country. The Prime Minister has given us the answer. He knows. He ought to know. It is due to the dictation of the few wealthy men whose powerful interests are alone responsible for his being where he is to-day, the interests that demand what he calls "protection," that are not satisfied with the adoption of such reasonable measures of tariff revision as are necessary "to assist in providing adequate revenue," "to stabilize legitimate industries," "to encourage the establishment of new industries," "to develop the natural resources," "to prevent the exploitation of the consumer," and "to safeguard the interests of the Canadian people in the existing world struggle for commercial and industrial supremacy," but who, for their own selfish ends and personal aggrandisement, wish to control and monopolize the trade of this Dominion and are prepared, in that endeavour, to sacrifice every obligation of honour, of loyalty, and of human need. In the light of this disclosure, what becomes of the hypocritical pretension that



emergency changes in the United States tariff are responsible for the absence of any tariff revision in accordance with the professed intentions of hon. gentlemen opposite? Hon. members will do well to reflect upon the significance of this episode. It gives the key, to all the rest. It explains the usurpation and maintenance of power by the right hon. the Prime Minister, against all constitutional right and the will of the electorate of this country. It explains the somewhat frantic and certainly undignified appeals made by my right hon. friend whenever he enters upon his advocacy of protection. It should let the country understand why we on this side of the House, however different the shades of opinion or however wide the divergences of view that may exist between us, are at all events one in our inability, to use the words of the amendment which is before the House, to concur in the declarations by the Government that the tariff should be based on the principle of protection. They talk of protection; it is not protection they want, but monopoly. Mr. Speaker, is more needed to explain the sinister forces and influences that are dictating the policies, and for the time being controlling the destinies, of this Dominion? I have referred to their combined power as constituting the real, aft>eit an invisible, government, compared with which the Government we see personified in hon. gentlemen opposite is but as form and shadow. Perhaps the time would be well spent if we paused for a moment to look a little more penetratingly behind the shadow, and discern what we can of the reality. A moment's reflection will enable us to see how this organized power came into being, and how menacing its existence is to the social and industrial wellbeing of our country. I need not remind the House that for four years the energies of this country, the energies of its Government, of its industries, as well as of its people, were strained to the one herculean task, the winning of the war. It was inevitable that during that period there should be the closest kind of association between certain of the financial, manufacturing, transportation, and distributing interests, and between these several interests and the Government and its members. That association between tbe more active and prominent members of both groups was uninterrupted, and indeed necessarily intimate, over the greater part of the entire period. They were linked the one to the other by the most powerful of bonds. There was the bond of disinterested public service at the moment of the greatest crisis in the world's affairs, and there was the bond, wholly different in character it is true, but to some individuals even more powerful, of personal and private self-interest at a moment of opportunity such as has presented itself but once in the history of this world. During those four years, a sum amounting to something like two billions of dollars was loaned by the country to the Government, and under Government direction was disbursed among these financial, manufacturing, transportation, and distributing interests. The Government was permitted a free hand; in the loans thus subscribed, the sacrifices present or future were never questioned; in the spending of these vast sums little or no check was exercised by Parliament; Orders-in-Council, at the caprice of the ministry were permitted to replace legislative enactments of both Houses of Parliament. It was an era of unparalleled opportunity both for the exercise of autocratic power and for the bestowal of favours. Strange indeed it would be had not the closest kind of relationship been formed between the controlling factors on both sides. That they were so formed, every Canadian citizen is well aware. With the termination of the war and the demobilization of the military forces, this era of unlimited expenditures and unparalleled contracting came to an end. Not, however, the association between the financial, manufacturing, transportation, and distributing interests, among themselves, or with the Government. In considerable measure, it is true the compelling force of. the bonds which had united these interests with the Government were lessened. Hon. members of the Government who read their obligation to the country in terms of disinterested public service, recalling the pledges on which the Government was returned to power, one by one retired from the ministry. Others of their colleagues, for reasons best known to themselves, continued in office. Similarly, it is to be presumed, among the financial, manufacturing, transportation, and distributing interests, were numbers of influential and prominent men who were quick to sever the intimacy of the relations formed with members of the Government during the period of stress and strain, and to give their thought to their particular business interests regardless altogether of Government favours or action.MAY 19, 1921 Unfortunately for our Dominion, all the men of great wealth and power have not been of this class. The same self-interest which caused members of the Government to cling to office despite honourable obligation and constitutional right, has operated in like manner to cause certain members of the financial, manufacturing, transportation, and distributing interests to continue to look to Government for special favours and special privilege, and in return to support the administration by direct methods as well as indirect in its retention of power against the will of the people as a whole. Thus we have come to have in Canada, on the one hand, a Prime Minister and a ministry to whom usurpation of office and the exercise of autocratic methods in Government belong as a sort of natural right, and, on the other, a small circle, a sort of little oligarchy of interwoven financial, manufacturing, transportation and distributing interests, prepared, in return for a continuation of favour and special privilege, to use their wealth and influence to keep the Administration in power, and thereby constituting in a very true sense the real though invisible Government of this country. We have, in other words, political power united with plutocracy in a bond of selfinterest, the former the visible symbol of authority, the latter the governing and directing force in the State. We have a Government democratic in form, but autocratic in behaviour, and back of that Government, and vastly superior to it in many respects, we have the privileged coterie of wealthy and influential men,' connected with certain of the financial, manufacturing, transportation, and distributing interests mentioned, who are not satisfied with sharing in the control of industry and the State, but wish to dominate both. They are for the time being able to exercise this domination at their own free will, for the Administration owes its existence to their dictation and its continuance in office to the powerful influence which in a multitude of directions they are able to exert. There is" the real situation with which this country is faced at the present time. That is the danger to Canada at the moment, not that her Government is a Government carried on in the interest of the people as a whole, but rather that we have on the one side the selfish groups united together working for their joint ambitions, and, on the other, the great body of the people left to look after themselves. This is the explanation, first of the Government's change in policy and principle respecting the promotion and increase of trade with the Mother Country and the sister Dominions in the period intervening between the Budget speech of the Minister of Finance and the secret conclave of July 1 of last year. It was part of the price paid by the Administration to these representatives of special privilege for a continuance of their support. It was not limited competition they were after; it was a monopoly of Canadian markets. Secondly, this is the explanation of the failure of the Government to revise the tariff at the present session. It was not fear of the consequences of American emergency legislation-that really was a ground for action-it was the maintenance by the favoured few of their privileged position as it has come to be in consequence of the war and conditions as they have grown out of the war. Thirdly, this is the explanation of the declaration made by the Prime Minister in the course of his lengthy speech on Friday last: "This Government stands for the tariff that Is in existence to-day, and in any adjustment that will he made we will admit the principle of protection and we will apply it. . ."


?

Some hon. MEMBERS:

Hear, hear.

Topic:   REVISED EDITION. COMMONS
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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

Hon. gentlemen opposite say: Hear, hear. But protection for whom? Protection for these favoured interests, not for the great masses of the people. The invisible government has decreed that thus he must stand, and so the day of tariff revision in the interests of either producers or consumers is indefinitely postponed.

I shall not ask hon. members to accept my analysis of the situation as a last word. Did time permit, I might cite an abundance of evidence as proof of its accuracy. Fortunately we have the evidence of one who has been on the inside, one of the Government's own supporters who was permitted a peep behind the scene, in a position of exceptional opportunity, who was appointed to office by the Government itself, and who has given to the public a description of what he has seen, in the form of an official document, a State paper, may I not term it.

It was thought that a life position and a good salary would be enough for Mr. James Murdock, when he was appointed a member of the Board of Commerce, and that he might ibe expected to lend himself to the Government's game of pretending to be solicitous of the well-being of consumers

and the public interest though all the while screening and protecting from public disclosure and public censure the few wealthy men whose business interests through close association, have become intimately interwoven and whose combined strength constitutes the power behind the throne, applying the simile for the moment to the present Administration. Fortunately, Mr. Murdock was not of the spineless and time-serving character it was hoped he would prove to be.

Having accepted nomination as a member of the board, he came at once into a specially favoured position. Indeed, strategically, he was in the best of positions; he was where he could view, on the one side, the organization of the specially favoured interests I have been describing, and, on the other, the relation thereto of hon. gentlemen opposite. Both situations he had described with perfect clearness; they are depicted in the official communication sent the Prime Minister in June of last year, and which the Government has had before it ever since. Here is the situation as respects the favoured interests.

Referring to the preliminary investigations of the Board of Commerce, and the necessity for some governmental machinery to protect the consumers and producers of the country against the kind of protection my right hon. friend has been advocating, Mr. Murdock says:

(a) Business men living together under the protection of the tariff have got to know each other so well that price-fixing agreements and arrangements are the rule, rather than the exception. The board has already on file evidence in some scores of cases of such agreements. Not all of these are reasonable or proper. It should not be left to the unfettered will of the businesses interested to fix prices on necessaries of life. . .

(b) Combines which have fastened themselves on the production and distribution of certain essential articles of food, such as canned fruits have introduced systems of merchandising which are injurious to trade and the consumer, and prevent fair competition. . . .

(c) The board has discovered that unfair and excessive profits are being taken by certain textile manufacturers, cement companies, and other large concerns. It is In the public interest that these investigations thus begun be not stopped at this point. . .

(d) There is reason to believe that sugar is not the only commodity in which speculation to the detriment of the public has taken place. . .

(e) Without a Board of Commerce the public has no organization to watch and protect its interests, while on the other side there is the most complete organization and cross-organization : Manufacturers' associations, retail associations, packers' associations and hundreds of other associations. The public, unorganized as the sands by the sea, requires a protector against the super-organization of modem business."

Now, Mr. Speaker, Mr. Murdock speaks of the need of protection, but it is not the protection of the members of the associations he has described, but the protection of the great body of consumers that are like the sands of the seashore, without any protection whatever against what he terms the super-organization of modern business. It is the few wealthy men responsible for this super-organization of modern business depicted by Mr. Murdock who constitute the ring that controls the Government of Canada to-day, that shackles its freedom of action, and compels the Government on pain of extinction to do its bidding. It is the favoured position of these privileged few that the Government is striving in all its measures to advance and to protect.

Let us see how, in this particular, the situation appeared from the vantage ground accorded Mr. Murdock while a member of the Board of Control. Here is what he has to say of the Government's attitude as he came to know it-and let the House remember that this was a statement issued to the Prime Minister of this country by Mr. Murdock, while Mr. Murdock was still a member of the board:

I am convinced-

1. That the majority of the Cabinet of which you are the honored leader are not, and have never been, in sympathy with the provisions and intent of the Board of Commerce Act and of the Combines and Fair Prices Act.

2. That your advisers only recommended to Parliament the passage of those Acts as the result of temporary alarm incident to the Winnipeg strike and other strenuous demonstrations when the people demanded some means of controlling profiteers.

3. That as soon as the Board of Commerce Act and the Combines and Fair Prices Act were made law by the Parliament of Canada, honourable gentlemen prominent in the councils of Canada and members of your Cabinet at once began to undertake to minimize, to as great an extent as possible, what they believed to be the unnecessary and unfair provisions of these two Acts when applied to the businesses of those for whom those honourable gentlemen no doubt had first regard.

4. That the chairman appointed by your Government to the Board of Commerce was regarded by certain interests as being safe and sane in conserving to Canadian manufacturers and other large financial and business interests the generally unrestricted leeway heretofore enjoyed by such interests in the taking of profits, determined alone by the so-called market price and governed by supply and demand. . . .

Then, with special reference to the chairman, in paragraph 10:

10. That during the entire term of service in which he and I were together connected with the board .... nothing was done which could in any way affect the business and financial interests, which, in his judgment,

should be protected from encroachments upon or interference by the Board of Commerce of Canada.

11. That the general, viewpoints and desires of the former chairman were well known by various honourable members connected with your Cabinet, and especially by the Hon. Mr. Calder.

12. That many of the honourable gentlemen composing your Oabient saw in the former chairman's resignation an opportunity almost beyond their expectations to minimize the activities of the Board of Commerce, and to prepare for its demise and that several of them repeatedly undertook to thwart the board's desired activities by quiet and hidden restrictive opposition since that time.

14. That on January 28, 1920, when this board issued a declaration challenging the right of the Cabinet to interfere on behalf of the textile manufacturers in the Canadian Manufacturers' Association (they having made representations to the Government that it would cost $1,500,000 to prepare the data asked for by a questionnaire of this board, and that it would take weeks to so prepare) certain of your honourable colleagues were prepared to concede the claim made by the textile manufacturers and relieve them from the necessity of complying with the board's requests for information, and that only the public challenge to your Cabinet placed in the newspapers by the Board of Commerce prevented the textile firms from being relieved of the requests foi data made by this board.

15. That later records show that the textile manufacturers had ample reason to struggle desperately to prevent the- true facts from being known to the board and that if this board could have secured the assistance desired, a statement of the facts and figures disclosed, followed by an order as the results of the analysis of the statements of affairs sent to this board, would have startled and incensed the Canadian public beyond anything that has developed in recent months.

Finally, as indicating beyond shadow of doubt his view of the Government's relationship to the super-organization of business interests he has described, Mr. Murdock concludes:

In connection with your suggestion that I continue as a commissioner ot the Board of Commerce until the decision of the Privy Council, I feel that the people need, and are entitled to, some results now. The light should be let in. I believe your Cabinet will devise some means to prevent the Board of Commerce from functioning, even should the Privy Council give a favorable decision. My conscience will not permit me to become a high-salaried time-server.

Could anything be clearer, Mr. Speaker? There are the specially favoured duly protected interests on the one side; the Government, their protecting and willing servants, on the other; and the whole a matter of public disclosure and now of public knowledge.

Let me say, so that my words will not be capable of misconstruction, that in making these references to certain

financial, manufacturing, distributing and other business interests I am making no attack on big business as such, I am making no attack on wealth as such, 1 am making no attack whatever on vase organization as such, for in these days of competition between industry and industry, between locality and locality, between nation and nation, between continent and continent, large organization is absolutely necessary, and vast accumulations of wealth in particular industries are absolutely necessary if the country is to hold its own in competition. So I am making no charge against the organization of business as it is carried on to-day, nor against the men to whom this.country is, indeed, vastly indebted for their skilful organization of industry and the way it is carried on. But what I wish to do is this: I wish to distinguish between those men who are prepared to share in the government of industry and in the government of the country, and those men who wish to monopolize and dictate in matters of industrial policy and the- control of political affairs. You have in every country the two types. You have the men who are willing to work with their fellows and to share with their fellows, and you have others who wish to dictate, who wish to control, who wish to monopolize, and it is these latter groups that have been brought into combination through the circumstances of the country being as I have described them, and who are controlling this country at the present time. Think of a Government permitting itself to lie under the shadow of such an indictment! Mr. Murdock's charges were made on the eve of prorogation a year ago; the Government has taken no steps to free itself from all that those representations imply. Why has Mr. Murdock not beeen summoned to appear before some committee of this House and prove the charges he has made? There is one reason, and one reason only: the Government knows the charges to be true, and that any attempt at investigation will mean the letting in of more light.

Actions speak louder than words, Mr. Speaker, and we have not only the failure of the Government to defend itself against these most serious of charges, but we have also the record of this Government with respect to legislation to protect consumers and producers against the exactions of combines, monopolies, trusts, and mergers that seek to enhance prices and restrict trade unduly. We know, too, its record with respect to profiteering and profiteers.

When the Borden Administration came to power, there was on the statutes an Act to provide for the investigation of combines, monopolies, trusts, and mergers. It was known as the Combines Investigation Act, assented to on May 4, 1910. That law may not have been all that could have been wished; like other legal enactments, it was capable of amendment, but it at least afforded some protection to the public against the unrestricted acts of these combinations.

Under that Act, large powers of inquiry were given the Board of Investigation instituted thereby. The consumers were permitted to name their own member of the board; the expense of investigation was borne by the Government; heavy penalties were imposed upon combines restricting manufacture, trade, or competition. The Act gave the Governor in Council power to direct that, if it appeared to the satisfaction of the Governor in Council that, with regard to any article, there existed any combine to promote unduly the advantage of the manufacturers or dealers at the expense of the consumers, and that if it appeared to the Governor in Council that such disadvantage to the consumer was facilitated by the duties [DOT] of customs, such article should be admitted into Canada free of duty or at a reduction in the duty.

This important Act was repealed by section 15 of the Combines and Fair Prices Act, passed in 1919. This Combines and Fair Prices Act was meaningless apart from the Board of Commerce Act, passed during the same year. The Acts were passed because at the time the people of Canada asked, yea, demanded that something should be done to check and pursue the profiteers. The fate of this legislation is well known. The truth respecting it has been told in the statements from Mr. Murdock which I iiSYfc just read.

On February 23, Judge Robson, the chairman, resigned, admitting that he himself was not in sympathy with the Act. Then doubts arcse as to the powers of the board, and the matter went to the Supreme Court of Canada, the court dividing itself on that question. In the meantime, the board issued its first report, dated May 1, 1920.

The report, amongst other things, says:

While the present commissioners had been

aware that there was close association between the various manufacturers of and dealers in commodities, your commissioners express profound surprise at the extent to which such organization has proceeded.

TMr. Mackenzie King.]

And further, about packing houses:

These packing companies are beginning to

exhibit a rather close association in their operations, and it would be quite undesirable to permit them to obtain in Canada anything like the impregnable position which, for a time, they had secured in the United States.

The interim report concludes with a minority report by Mr. Murdock, in which the following^ appears:

My belief is that it would be very much in the public interest for the public of Canada to know something more of the reasons that prevented the Board of Commerce of Canada from performing its functions in controlling profiteering and combines against the public interest as by law intended.

Here, early in 1920, was direct information, to the Government by its own board of the extensive association between various manufacturers and dealers in commodities, of the combines existing among packing companies, and of profiteering against the public interest. And yet no action was taken by the Government. Instead, the board was allowed to die, or rather, because of its exposures, was strangled by the Government. On June 16, Mr. O'Connor resigned, and a few days later, on June 25, Mr. Murdock, its sole surviving member, resigned.

Then an amazing happening occurred. Some months later, notwithstanding the loss of its entire membership, the board for some reason or another, was resurrected and was reconstituted in a sort of fictitious fashion. Members of the Civil Service were taken from their important posts of duty, and loaned to the board so as to constitute a temporary tribunal. For some little time the public tried to fathom the Government's solicitude on its behalf. It was not long, however, before they were undeceived. It soon became plain that it was not the interests of consumers the Government had at heart. It was the wealthy friends of the Government again, those belonging to one of the specially favoured of the privileged groups, this time the sugar refiners. I shall not go into the details of what took place at the time, the conversations and interviews between the refiners and members of the Government on the one hand, and members of the Government and their temporary appointees on the board on the other. Suffice it to say that, to the amazement of the entire country, the board, on October 14, issued an order fixing the price of sugar to Canadian consumers at 21 cents per pound and virtually prohibiting the importation of sugar at a moment

*when sugar was selling in the United States and should have been selling in Canada, at from 12 to 14 cents a pound.

After all that had been made public of the board's doings and misdoings by Commissioner Murdock, this was the last straw. Public indignation has seldom been at a higher pitch. The Government had at last to choose between its friends. In vain the sugar refiners sought to retain Tor the Government the support of the press, by the distribution of costly explanations paid for at advertising rates. Public clamour could not be silenced, and the Government, for once obliged to heed the voice of the people, suspended the order and allowed the board again to dissolve by permitting the temporary appointees on the board to resign. Prom that day to this, nothing further has been heard of the Board of Commerce; the combines in almost every branch of commerce and trade have been permitted a free hand and the consumers have been left absolutely without protection of any kind.

Little wonder is it that when Parliament assembled, the Prime Minister found it necessary to give some assurance to his followers that this intolerable situation would not be indefinitely prolonged, and that some protection would be granted the public during the course of the session Protection was promisel, and protection has been given, but it is not the protection that was asked for. More and more protection there has been for the trusts and combines, the super-organization of business, but none for the consumers.

I hold in my hand a despatch to the Montreal Gazette giving an account of the . sessional programme as outlined to his supporters by the Prime Minister at the first Government caucus. It is dated Ottawa, February 18. After mentioning that the Government caucus "was informed to-day by the Prime Minister of the sessional programme and its details," it says:

An important measure not yet before the House was indicated by the Prime Minister;

And it continues:

"To the caucus the Prime Minister forecasl legislation to control trusts and combines where the former Combines Act and the comatose Board of Commerce have failed. This legislation will probably be brought down before the Budget debate.

Hon. members opposite will be able to vouch for the accuracy of the representations contained in this despatch. But what, may I ask, has become of the promised

legislation? You will observe, Mr. Speaker, no mention was made of this legislation in the speech from the Throne. That would have been too conspicuous. The friends of the Government would never have permitted that. The assurance of the Prime Minister was enough to silence agitation during the session, and once again we find the Government, with respect to its legislation on trusts and combines, just where it was with respect to promoting trade between Canada and the Mother Country and the sister Dominions, just where it was with its promises of tariff revision-absolutely fettered and manacled by its friends, the few wealthy men who are responsible for the super-organization of business which dictates the Government's policies and controls its actions.

Do you see now, Mr. Speaker, why this session has gone by, with nothing constructive in the way of legislation; why to every one in the House and in the country there appears to be something wanting, something lacking: why the word "reconstruction," of which we heard so much for a time, has virtually been dropped from the vocabulary of the ministry; why, in the twc to three-hour speech of the Prime Minister a day or two ago, one will search in vain for a single expression revealing any human feeling or sympathy with the needs of the people; why, from beginning to end, it was one long plea for protection, not protection of the consumer, which is what is needed in Canada to-day, but more and more protection for these few wealthy men and the interwoven financial, manufacturing, transportation, and distributing interests with which they are associated.

Do you see also, Mr. Speaker, why it is, in the Budget which has just been presented by the Finance Minister (Sir Henry Drayton) that this year, as in former years no account whatever has been taken of profiteering; why another year has been allowed to pass without any effort whatever having been made by the Government to recover any of the war-time wealth; why, instead of the removal of any of the taxation that bears immediately upon the masses of the people, the duties upon the necessaries of life, it is the business profits taxes and the luxury taxes that have been abolished? The Prime Minister says we are all for protection. Let him have it so; but let me tell him that the protection for which we stand is the protection of the consumer against the exactions of combines, monopolies, and the super-organization of associated business, not the protection of

\

these specially favoured organizations against the interests and well-being of the people at large.

At Six o'clock the House took recess.

After Recess

The House resumed at eight o'clock.

Topic:   REVISED EDITION. COMMONS
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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

Mr. Speaker, when the House rose at six o'clock I was speaking of the protection afforded to special interests in their actual or attempted monopoly of Canadian trade and markets. Let, me now come to the bestowal of favours in another direction. Mr. Murdoik has exposed the manner in which, as n-spects the necessaries of life, the food, the clothing, the articles required for the shelter of the people, associated businesse

, with their trade agreements, combines, and monopolies, have been permitted, with the assistance of a protective tariff, and to the detriment of consumers, to reap their excessive profits through unrestrained freedom of action. Let me now direct the attention of the House to the manner in which, through the interweaving of business associations and interlocking of directorates as respects a different class of enterprises, the Government has, at great cost to the taxpayers of Canada, accorded a privileged position to another few of its wealthy friends.

The two classes of expenditure most severely criticised in this House and throughout the country to-day are the expenditures on account of the Canadian National railways and the Government merchant marine. They are the two classes of expenditure about which the representatives of the people in this Parliament have been able to obtain the least information. The public know that freight and passenger rates have been increased; they know that last year there was a deficit on the national railways amounting to $48,242,536.65; that this year there is a further deficit estimated at $70,331,734.88; and that, despite the increase of rates, the deficit estimated for the ensuing year will in all probability be in the neighbourhood of $100,000,000. They know, too, that despite repeated protests, and without due regard for either the law or customary practice, $70,000,000 has been spent on the construction of the Canadian Government Merchant Marine. They are aware that, as respects the latter, contracts were awarded by the Government without calling for tender; that the work of construction was distributed by the Government among its friends from the

Atlantic to the Pacific; that in many cases the contracts had been awarded, and the work permitted to get under way before the money for the purpose had been appropriated by Parliament.

The condition, however, of which the public is not as yet fully seized is the significance of the methods devised by the Government for permitting to a few of its wealthy friends a free hand in the awarding of contracts with public moneys, and claiming for itself immunity from all responsibility to Parliament and the people for enormous outlays of public moneys in the work of construction and operation of these vast systems of transportation by land and sea.

What have hon. gentlemen opposite attempted to do in the various discussions that have taken place in regard to these enormous deficits? They have talked about the increases that have been paid to the labour on the road, and throughout this country a great deal of publicity has been given to the wages that are being paid to the workingmen. Well, the Government talk about protecting labour. < Let the people's representatives in this Parliament get the facts, let us find out the truth in respect of these contracts-how they are being awarded, whom they are going to, and the prices paid, and labour will be able to take care of itself. We wish to protect labour just as much as hon. gentlemen opposite, but our methods are somewhat different. We believe the best protection that can be afforded any group of people in this country is the protection which comes from ample publicity in dealing with public affairs, not from concealment.

Talk of the super-organization of business, of the interweaving of financial, manufacturing, transportation, and distributing interests-I venture to say that never in the history of the world has a scheme been devised so well calculated to make interweaving and interlocking of private interests complete, or to permit, on so unlimited a scale, and in a manner so whol'y indefensible, the use of public moneys to augment private fortunes at the expense of the state.

What is the method to which I allude? For clearness of understanding as to its significance, let me present, by way of contrast, the method that has hitherto obtained in the management, operation, and control of like enterprises by the Government of this country; the method, for example, that obtained formerly in the management of the Intercolonial railway

and that obtains to-day under the Post Office Department. In both the latter instances, we have the doctrine of ministerial responsibility to Parliament for all that pertains to the management, operation, and control of a government enterprise, fully recognized and adhered to. In everything, the right to the fullest publicity is maintained. Contracts awarded are awarded in accordance with terms and conditions prescribed by law. Parliament looks to the minister, and the minister expects Parliament to look to him, for an accounting of every cent of public money expended under his direction, the names of the persons to whom the contracts have been awarded, the manner in which, and the terms on which, the awards have been made, the prices paid, and so forth and so forth. In other words, it is recognized that public moneys are being expended, that they are held in trust by the ministers of the departments concerned, and that the public is entitled to be satisfied in its mind both as to the necessity for, and the economies exercised in, the transactions pertaining thereto.

Compare this now with the methods devised by the present Administration in the expenditure of public moneys on those vast transportation systems. Both in the case of the Canadian National railway and the merchant marine, the Government has constituted boards of management. These boards are composed almost exclusively of the Government's own friends; almost without exception the gentlemen who compose these boards are associated with large industrial enterprises and businesses which are engaged in the manufacture, selling and distribution of the equipment and supplies required by these Government undertakings. In the awarding of contracts, they are given a perfectly free hand. They may award to whomever they please, in whatever quantities they please, and at whatever prices they please. That of itself one would think, where there was no personal liability, and where the moneys to meet the required payments were not coming out of the bank accounts of the parties concerned, but out of the public treasury, would be sufficient to encourage an .all but unlimited degree of extravagance. But what is to be expected where, in addition to this opportunity of helping one's friends, an undertaking is given by the ministry that, no matter what the transaction, notwithstanding it is out of the taxes of the people that payments have ultimately to ibe made, the people's representatives in Parliament shall be denied all right of inquiry, all right of information, on the score that such right and knowledge are not in the public interest? And yet, Mr. Speaker, that is exactly the situation as it has existed for the past couple of years, and as it exists to-day. Is it any wonder there are huge expenditures and colossal deficits? The wonder of wonders would be how deficits could be avoided under such a system.

Now, Mr. Speaker, that it may not be said this is mere theorizing, let me give to the House the names of the members of the boards concerned, and the names of the companies with which these gentlemen are concerned. But, first of all, let me give a list of a few articles of commerce required in connection with the equipment and supplies of these transportation systems. It requires no understanding of human nature to believe that, unless the gentlemen who are directors of companies directly or indirectly concerned in furnishing such equipment and supplies are woefully neglectful of the business interests it is alike their duty and personal advantage to watch and further in every manner possible, the companies of which they are directors, or businesses associated with such companies, are not likely to be forgotten in the contracts awarded, and in the prices paid for the articles necessary to the equipment and supplies of these vast transportation systems.

But before I speak of the companies with which these gentlemen are connected in a business way as directors, let me refer to the classes of commodities which are likely to be required in large quantities as supplies . and equipment for the Government railways and the Government merchant marine.

Iron and steel (locomotives, rails, cars, castings, couplers, bolts, bars, etc.).

Cement.

Oil; coal oil, white lead oil, boiled linseed oil.

Gasoline.

Lumbei and timber, for car decking and roofing and for construction (fencing).

Paints..

Cotton and wool waste.

Uniforms for conductors and employees.

Coal.

Food of all kinds.

Ties.

Pullman and sleepers materials.

Electric materials.

Fuses.

Wheels.

Hose.

Air-brake materials.

Tie plates.

Hotel supplies.

Insurance.

Advertising.

Printing.

It requires only the mention of this list to show what enormous patronage is extended through this particular source,-a patronage running into millions of dollars; and all of it, mark you, under this arrangement is disposed of by the Government's friends just where they think best, and the people's representatives in this Parliament are denied all knowledge of where the contracts are placed. Now who are the members of the Board of Directors of the two companies? The personnel of the two directorates is the same, and is as follows:

Mr. D. B. Hanna, of Toronto.

Mr. A. J. Mitchell, of Toronto.

Mr. E. R. Wood, of Toronto.

Mr. R. Hobson, of Hamilton.

Major G. A. Bell. C.M.G., of Ottawa.

Sir Hormisdas Laporte, of Montreal.

Mr. A. F. Barnhill, K.C., D.C.L., of St. John, N.B.

Colonel Thomas Cantley, of New Glasgow, N.S.

Mr. R. T. Riley, of Winnipeg.

What are the companies with which these gentlemen are connected? Now, Mr. Speaker, I wish it distinctly understood that I make no reflection upon any of these gentlemen or their business integrity,

I merely place the information before the House and let it speak for itself. This list is taken from the Annual Financial Review for June, 1920, and, by the way, it dpes not, I believe, begin to include the companies with which these gentlemen are connected in an indirect way, nor is it complete as regards the companies of which they are directors. Mr. D. B. Hanna, is president of the Canada Flour Mills and a director of Canada Steamship Lines, Limited; Electrical Development Company of Canada, Limited; Canada Mortgage Investment Company; British-American Assurance Company; Western Assurance Company; Canadian North Prairies Lands Company; Brazilian Traction, Light and Power Company, Limited; Rio de Janeiro Light and Power Company; Sao Paulo Light and Power Company. Mr. A. J. Mitchell is a director of the Western Canada Flour Mills. Mr. R. T. Riley is vice-president of the Union Bank of Canada and of the Great West Life Assurance Company. Mr. Robert Hobson is president of the Steel Company of Canada, Limited, and a director of the Canadian Locomotive Company, Limited; Bank of Hamilton; Tuckett Tobacco Company, Limited; North Star Oil and Refining Company; Chartered Trusts and Executor Company; British Empire Trust Company;' Dominion Power and Transmission Company; Toronto General

Trusts Corporation. Sir Hormisdas La-porte is a director of Credit Foncier Franco-Canadian; Societe d'Administration Generale; Frontenac Breweries, Limited; La Sauvegarde Life Assurance Company. Mr. A. P. Barnhill is president of the New Brunswick Electrical Company and the Acamac Land Company, Limited, and a director of the Eastern Trusts Company; St. John Iron Works, Limited; James Pender and Company, Limited; Telegraph Publishing Company; Fenton Land and Building Company; Westfield Land Company; Times Publishing Company. Colonel Thomas Cantley is a director of Eastern Car Company, Limited; Nova Scotia Steel and Coal Company, Limited; Brandram-Henderson Paints and Varnishes. Mr. E. R. Wood is president of the Central Canada Loan and Savings Company, vice-president of the Canada Life Assurance Company; National Trust Company; Brazilian Traction, Light and Power Company, Limited, and director of British-American Assurance Company; Western Assurance Company; Canadian Bank of Commerce; Dominion Steel Corporation; Toronto Savings and Loan Company; Calgary Power Company; Mexico Northwestern Railway Company; Barcelona Traction, Light and Power Company, Limited; Rio de Janeiro Tramway, Light and Power Company; Sao Paulo Tramway, Light and Power Company; Mexico Tramway Company; Mexico Electric Light Company; Toronto Railway Company; Toronto Power Company, Limited; Toronto Electric Light Company, Limited; Electrical Development Company of Canada, Limited; Dominion Securities Corporation, Limited.

Major Bell, being the Deputy Minister of the Department of Railways and Canals, is not included in the list of directors of any companies. I imagine that if he is doing his full duty as a deputy minister, which I believe he is, his whole time is taken up in the department and practically none of it can be given to the work of this Board of Management.

In this connection, Mr. Speaker, let me repeat that I do not for a moment desire to be considered as reflecting upon the honesty or business integrity of the gentlemen connected with these various boards. All I wish to say is that if these gentlemen are directors of a large number of business enterprises from which commodities in the nature of supplies and equipment for the railways and merchant marine can be or are being obtained, they

are not true to their obligations as directors of those business concerns if with the inside knowledge they have of what is available in the way of contracts they do not go after those contracts and try to get them for the companies with which they are connected. That is their duty. The duty of a director is to watch the interests of the businesses with which he is connected, and I say that these gentlemen being on the board of directors of various companies, and having knowledge of large numbers of contracts running into millions of dollars, it is certain that they would not be doing their best by the companies of which they are directors if they did not look out for the interests of those companies.

Could interlocking of directorates be carried to a degree of greater perfection? Just think of it, Mr. Speaker, all these vast industrial concerns, and many more, to all intents and purposes represented by this little circle of favoured individuals who comprise the Board of Directors of the Government railways and merchant marine, who have a free hand in the disbursing of millions upon millions of the public moneys, with a guarantee that no information will be given to the people through their representatives in Parliament as to how or to whom the moneys were distributed. Need we look further, Mr. Speaker, for an explanation of the size of the deficits in these undertakings, and the vastly increased expenditures, and consequent increased taxation to which the people of Canada are being subjected. Could a more powerful combination of business interests be imagined? What government under such a system should not be able to keep itself in power indefinitely?

I wish now tc refer to a somewhat parallel method of dealing with public moneys [DOT] in a manner which ensures benefits to friends of the Government and not to friends only, but to supporters in this House. I shall not take up much time in referring to this parallel; it was referred to at some length last night by the hon. member for Chambly-Vercheres (Mr. Archambault). I refer to the system of making loans of public money to foreign countries and then, through the agency of the Government or its friends, ensuring the placing of contracts with business concerns in this country, with which members of this House are associated as directors, the money, in settlement of these contracts, being paid out of these loans to foreign

countries. Remember, Sir, that this money is the money of the taxpayers of Canada. The Government in thus loaning it and allowing it to be disbursed for the purchase of commodities to be sent to these different countries, has devised another scheme under which so far as any accounting for public funds is concerned, there is no way of finding out what opportunity there has been for freedom of competition or what opportunity there has been for anyone other than the immediate friends of the Government to secure contracts. Sir, as an indication of the way in which this system works, let me cite to the House some of the contracts which have been awarded and some of the orders given to industries with which some friends, not remote, but immediate friends of the Government, sitting on Government benches opposite, are concerned. I shall spare the House the possible pain of having to listen to the names of hon. members who are directors of these concerns.

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LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

My hon.

friend is not one of them, so he is perfectly safe in calling for the names. But while he nods his head in one direction some of his neighbours are shaking theirs in another.

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UNION
?

Some hon. MEMBERS:

Order.

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L LIB

May 19, 1921