Sir HENRY DRAYTON:

My hon. friend is quite right; I suppose it is covered by some assets. But there is certainly not enough of assets to cover it appreciably. And in any case, is it any more represented by a physical asset than would be the case either with a harbour or with a dry dock? Is there any more reason for showing honestly in our books the cost of our canals and the like? What difference is there, seeing that the railways are ours? We have in connection with them either assets or liabilities and if we are to be honest about it we should show the exact state of affairs. I submit therefore that my hon. friend's calculation as to debt is entirely wrong. There is just one modification which the situation may suggest, and it certainly is

not apparent to us. The railways say that they advanced their capital $118,000,000, but I can hardly understand how that could take place unless they have some cash on hand; and to the extent that they have cash on hand I quite agree that that amount might be deducted.

Mr. HUGHES:

Was there any of this large amount wasted through extravagance and bad management, or from any other cause whatever? And what is the remedy? What remedy can the Canadian people apply to meet the situation?

Sir HENRY DRAYTON:

The first remedy to right a wrong is to let some light in; let the light in and let us know where we are. That is all I want to have done. And as for knowing anything about the matter, my hon. friend is in far closer touch with the situation than I am.

Mr. HUGHES:

No. I was not on the committee that looked into these accounts last year; my hon. friend was.

Sir HENRY DRAYTON:

But the hon. member will agree that last year we had not the accounts that are involved this year. If this budget had been held back until the railway annual account had come down I might be able to answer my hon. friend; I should at least have had an opportunity of going into the matter. Perhaps the hon. gentleman can suggest the reason for the budget being down in advance of that report.

Mr. STEVENS:

Why the rush?

Mr. ROBB:

May I be allowed to remind my hon. friend that in bringing down the budget to-day before the end of the year we are following precedent. In 1916 parliament met on January 12 and the budget was brought down on February 15; and in 1915 although parliament met on February 4 the budget was brought down on February 11. We are now within one week of the end of the year whereas my hon. friends brought their budget down six weeks in advance.

Sir HENRY DRAYTON:

I have not quarrelled at all to-day about the budget coming down at this time. I have not the slightest objection. But the hon. gentleman from Kings, Prince Edward Mand (Mr. Hughes) was asking me about the accounts of the railways, and I am simply pointing out this one thing, which is plain to everybody, that we cannot consider those accounts to-day because the accounts are not down, and the only information I have from the Minister of Railways and Canals (Mr. Graham) is that there-

The Budget-Sir Henry Drayton

is an increase of $118,000,000 of debt. As I say, no one can tell what the real condition of the country's debt is. From the figures of my hon. friend it looks very much like an addition of eighty-one, plus that sixteen, minus the seventeen which he gave us as refunding, which would make it eighty. But if the railway company is right, all refundings are taken care of in their $118,000,000, and therefore it looks as if the total should be $118,000,000, plus the $16,000,000 my hon. friend admits. So much for that.

I now want to touch upon another point which my hon. friend stresses in his admirable collection of statistics, highly suitable for his budget, namely, the statistics showing the prosperous condition of trade. I congratulate him on the care he has taken in their compilation. He has selected just exactly the right kind of statistics to suit his text. At one time there was a controversy, which I am not going to renew now, as to business failures in Canada. I notice the accuracy of our figures has been mildly challenged because some of the businesses included in the list were too small. Well, I would have thought that this government would not want to take the position that they are only interested in the success of the big businesses, and that they would look after the little ones as well. I would point out that if ours were very small in Canada, they were even smaller in the United States, because the average liability of failing firms in Canada in 1924 was $58,467 as against S55.063 in the United States.

But, Mr. Speaker, I would direct the attention of my hon. friend and the House to the fact that the trade in which the country is immediately interested and which is more vital to it than anything else is its domestic trade, the trade which cannot be disturbed by customs laws or be put, out of joint by ocean freight rates and the like; it is trade which is the country's own. My hon. friend has given us some very attractive statistics of big export business, and nobody will question those statistics, but it would really have been much more to the point if he had given us something showing our internal activities, something showing that the purchasing power in our home market was not. a disappearing power. Now, there is one index which is considered authoritative and fundamental as showing these activities; I refer to the freight tonnage carried by our railways. The railways carry practically everything that we make or produce. In the first instance we have a great loss of wheat tonnage, amounting to 2,300,000 tons. That certainly was not the fault of this government any more than the great crop of the year 95i

before was their virtue; that is something which has nothing to do with their fiscal policy one way or the other. But the great mass of agricultural consumption in this country at any rate depends on local demand, the power of somebody in the local market to pay for the goods, and I am pointing out some startling declensions in railway tonnage as showing eloquently the decreased activities locally in Canada practically everywhere, decreases all the more marked in view of the increases in export trade, because while we have the decreases mirrored here those decreases would have 'been much greater had there not been increases in the export of the same articles carried over the same lines. Last year our railways carried 38,161 tons less of apples; 9,752 tons less of eggs-and there are many eggs to a ton; of hides and leather 17,922 tons less-and that means an awful lot, but it is a pretty good indication of the condition of the boot and shoe business. If you really want to see where the benumbing effect of tariff tinkering with its attendant uncertainty is at its worst you have only to look at the iron and steel industry.

Mr. FORKE:

Where did the hides go?

Sir HENRY DRAYTON; They did not go. That is what I am complaining about. I am complaining that the demand fell down to such an extent in this country that 17,922 tons less of hides and leather were handled,- something, I take it, that a farmer ought to be interested in. Now then, the drop in iron ore tonnage was 443,403 tons; in pig iron and bloom 275,547 tons; in rails and fastenings 50,757 tons; in bar and sheet iron, structural iron and iron pipe 639,105 tons; in castings, machinery and boilers 144,858 tons. As hon. gentlemen well know, the activities of our foundries and other iron and steel plants depend to a large extent upon other manufacturing activities-and these other manufactories were not there to be looked after. The movement in coke, something which is almost entirely industrial, fell off 266,326 tons; the movement of raw cotton fell off 32,488 tons; cement 49,308 tons; brick and artificial stone 135,686 tons; lime and plaster 62,023 tons; agricultural implements and vehicles, other than automobiles, 58,458 tons-

Mr. GOOD:

Between what calendar years is the comparison made?

Sir HENRY DRAYTON; Between the calendar years 1923 and 1924. These figures are given by the railways. The movement in household goods fell off 38,743 tons; in furni-

The Budget-Sir Henry Drayton

ture 4,008 tons; in canned meats 1,123 tons; other manufactures and miscellaneous 844,887 tons, and merchandise 327,538 tons. This list covers many diversified activities. But take forest products, which are divided into five headings: first, logs, posts, poles, cord-wood; second, ties; third, pulpwood; fourth, lumber, timber, box shooks, staves, headings; fifth, other forest products. The only thing we are going ahead in is the depletion of our pulpwood reserves. While pulpwood shows a large increased tonnage, on the other band there is a considerable decrease in logs, posts, poles and cordwood of 75,390 tons; in ties 16,287 tons; in lumber, timber, box shooks, staves and headings, 835,465 tons; and other forest products of 111,240 tons.

These reductions are serious in the extreme. For example, the reduction in tonnage in hides and leather was 9.3 per cent; coke, over 26 per cent; iron ores, 72 per cent; slate dimension or block stone, 57 per cent; lumber, timber, box shooks, staves, heading, 11.9 per cent; other forest products, 17.75 per cent; iron, pig and bloom, 43 per cent; rails and fastenings, 18 per cent; bar, sheet iron, and so forth, 38.6 per cent; castings, machinery and boilers, 23.6 per cent; agricultural implements and vehicles other than automobiles, 20.99 per cent; and household goods, 34.7 per cent.

My hon. friends say that the country is prosperous and that a lot of business is being done. Well, let us see what the figures with respect to railway employees show in this connection. In October, 1923, 177,876 men were employed in railway services in Canada, and in the same month in 1924 there were 156,338 employed, a decrease of 21,538 in respect to that one month. For November, 1923, the number employed was 164,724, and for November, 1924, 149,209, a decrease of 15,515, while in December, 1924, there was a decrease of 10,305 in the number employed as compared with the same month in 1923. We find that the decreases continue pretty steadily, because while in October 1923 there were 177,876 employed, in December, 1924, there were only 143,761. I am inclined to believe, Mr. Speaker, that the only person who really thinks that conditions are good, that production is good, that employment is good, must be my right hon. friend the Prime Minister.

Mr. Speaker, I move the adjournment of the debate.

Mr. MEIGHEN:

May I suggest to the

Acting Minister of Finance (Mr. Robb), before the motion carries, that he be prepared on Thursday before the resumption to give

the House an estimate of the increased revenue which he anticipates from the increases in the tariff in the various schedules.

Mr. ROBB:

Did I not make that statement?

Mr. MEIGHEN:

I did mot catch it, if

it was in the address.

Mr. ROBB:

About a million dollars.

Mr. MEIGHEN:

That was one item, as

I understood it, there are several others.

Mr. ROBB:

I will check that up.

Motion (Sir Henry Drayton) agreed to and debate adjourned.

Right Hon. IV. L. MACKENZIE KING (Prime Minister) moved:

That the order for consideration of the motion for Mr. Speaker to leave the chair for the House to go again into committee of Ways and Means have precedence over all cxther business except the introduction of bills, questions, and notices of motions for the production of papers, until disposed of.

Mr. SPEAKER:

Except to-morrow?

Mr. MACKENZIE KING:

Yes.

Mr. MANIQN:

Does that supersede private members' day on Monday next?

Mr. MACKENZIE ICING:

It postpones

that private members' day until after this budget debate is over.