March 26, 1925

LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

Those coupons would

be attached to bonds issued by the country of importation and taken by the country whioh had invested the money abroad and had sent money there in the form of goods.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

But that has

absolutely nothing to do with the question I am now discussing as to the necessity of buying before you can sell. In the case of Cuba and the Argentine the figures are theie and speak for themselves, and I must point out that both countries have a smaller population than Canada. If Cuba and the Argentine can do what I have described is there any reason why Canada-with an equally tremendous drain on her in the form of interest coupons-cannot do the same? My hon. friend (Mr. McMaster) is driven to this point that the only case where it is not necessary to buy in order to be able to sell is where you are a heavy debtor. Then your interest payments create the credit which permits of the importation of goods. My hon. friend shakes his head. I wonder whether I am to take that as in affirmation of the principle?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

Most of your interest

payments will be on something which you have imported from abroad, perhaps years before, and on which payments have been deferred. The interest payments that Canada is making to-day represent, in large measure, vast amounts of foreign capital which were invested in this country between 1900 and 1911.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

Oh, Mr. Speaker, my hon. friend will have lots of time-

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

We borrowed pretty

heavily in the British market and created credits on which we bought goods from the United States when we were developing this country.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

Mr. Speaker, I

hope you will not look upon that as a speech from my hon. friend. I would like him very much to have the opportunity of discussing this question.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

I did not want to have any misunderstanding in regard to what my hon. friend calls my "affirmation."

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

I do not object to my hon. friend making any speech he likes so long as he can speak again at the proper time. He has already spoken half a dozen times but I hope he has not exhausted his right to speak. I am going to develop the point which has been referred to in regard to the great importance of the interest coupons. What my hon. friend has stated as to the result of the railway debacle which existed in the ten years preceding 1913, is perfectly correct. My hon. friend shakes his shoulders but I am going to demonstrate the fact to him and if he is just as fair with me on that point as I hope he is going to be on another question in a minute, he will admit it. _

I am going to invite my hon. friend to go to a country which is the greatest creditor nation of the world, the United States. There is a country that sells without buying very much; there is a country that is collecting the interest coupons of the world. She is not a debtor nation, she is a creditor nation. Let us see how the "ism" works out there? Well, the figures of the United States are progressive figures. For the ten years ending 1893 her excess of exports was $531,073,572; for the ten years ending 1903, $3,839,744,076; for the ten years ending 1913, $4,564,462,410; for the ten years ending 1923, $20,729,457,292. Let us apply our percentage for one minute and see what that means; let us apply the 60 per cent of the cost which goes to labour, low as it is. That means during the period mentioned that while the United States has taken out of all other countries 4 p.m. the sum of $29,664,737,350 the workmen of the United States have been employed at the expense of the workmen in other countries with a resultant gain to themselves of fifteen billions of dollars. Is there any reason why anyone should wonder

The Budget-Sir Henry Drayton

at the tremendous growth and the tremendous financial strength of the great republic? My hon. friends opposite will not say that that enormous balance has been met by the United States paying debts which she owes. Why, she is trying to collect debts.

How consistently Canada has worked to put her where she is! Let us come to that period of railway exploitation to which I was referring a moment ago. During the first ten years of chat forty-year period our imports from the United States were $486,927,738. In the ten-year period ending 1903, they were $828,485,184. In the period of railway exploitation, Grand Trunk loans which smashed the property, transeontinemtals, Grand Trunk Pacifies, Canadian Northern railways, the load of which to-day is bending our backs, how is that iooked after? Our imports from the United States in the period ending in 1913 were $2,216,293,258. During the war period our imports rose to $5,986,957,558. We see where the world in general comes out as a result of the forty years' trading. Let us see where Canada comes out. The net result of the forty years' trading with the United States is an adverse trade balance for Canada amounting to $4,397,248,129. Was that not a remarkable achievement for a country of our population? Is it not remarkable evidence of-I am going to leave the naming of that action for the moment to the hon. member for Brorae (M". MdMaster). Let us see how much Canada helped the United States in the period of railway exploitation. In the period ending in 1913, the United States enjoyed the comfortable, favourable trade world balance of $4,564,000,000 odd and Canada accounted for no less than $1,303,000,000 odd of that enormous sum. Just think of it I-out of a favourable trade balance of $4,564,462,410, Canada accounts for $1,306,950,513. My hon. friend would think that sort of thing ought to go on; that it should be made still easier to exploit this market instead of something being done to keep Canadian money wording for Canada. There is a great deal of it working for the United States. What we did in that ten-year period in helping to make the United States the world industrial colossus that she i3, is indeed remarkable evidence of the resources and purchasing power of this people, but the thing can be done only at the expense of the purchasing power of today, and where is it? At the same time k is a monumental example of misapplied energy (,nd wasted opportunity.

But there is another way in which this matter could be settled, and that is by grid 100 [DOT]

imports. My hon. friend did not suggest that, and perhaps I had better come to it a little later on.

I would like the government to put this question to themselves: Is it not

about time at least to try to secure

some of this work for Canadian workers, some fairer and better share in the work of Canada for Canadians? What is government policy? Is government policy a policy which is to be a pro-Canadian policy or a pro-American policy? There ought to be a sharp difference between the two. Is there thait sharp difference in the minds of some hon. gentlemen? The government, of course, could very well object to a Canadian answering this question: Is the government pro-Canadian or proAmerican? They might very well say: Political bias, the desire for greed or something else renders you an unfair witness. The best way of judging policies is by their effect, and I am going to call as a witness, no Canadian, but expert American opinion. The United States Department of Commerce is a very well organized and complete department, and it has excellent publications which appear regularly. Its publication of November 3, 1924, has a great deaJl to say about Canada. It first reminds the reader that it is interested in extending his sales in our territory; that Canada affords the second best market for the American seller.' At page 265 of this issue the article on the ^hare of -the United States in the foreign trade of Canada commences as follows:

Economically and socially Canada may be considered as a northern extension of the United States and our trade with Canada is in many respects more like domestic trade than our foreign trade with other countries. The movement of industrial raw materials from Canada into United States and the return flow of a miscellaneous assortment of partly or wholly manufactured goods is not unlike a similar flow between the west and south, and the more industrialized northeastern part of the United States.

Here we have an expert, unbiased opinion as to the result of Canadian policies. This opinion is unpalatable in the extreme to any Canadian that thinks somewhat of his country, that sees in Canada, with her great resources and1 her virile people, a great nation of the future, strong and potential, if her resources are used for Canada and are not exploited by the foreigner, no matter who he may be, or for the benefit of other countries. Hon. gentlemen have all heard a great deal about the losses which this country today suffers from in the exportation of pulp-wood at $10 a cord as against paper at $70, and they are familiar with the payroll that is lost to this country as a consequence. I

1560 COMMONS

The Budget-Sir Henry Drayton

merely draw that matter in this connection to their attention. It is another confirmation of the correctness of this expert's opinion. I will give just one other case. Canada produces a very large share of the asbestos of the world. The hon. member for Brome (Mr. McMaster) nods his head in approval. I am gratified. It is true, she does. What does she get out of it? Exactly what this expert tells us. All we are getting out of

it is simply the wage roll which the first rough operation provides. We are the providers of the raw material for our friends to the south.

Mr, McMASTER: Just as they supply the raw material for our cotton factories.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

My hon. friend has great difficulty in making a point. In the minds of some hon. gentlemen, the fact that the United States supplies us with a little bit of raw material here and there is a sufficient warranty for this enormous inundation of imports. But that could never be accepted by the mass of the Canadian people. There is one thing however which the hon. gentleman forgets; he forgets that cotton is an annual crop while pulpwood is not and asbestos certainly is not. And this shows the reasonableness of most of the objections raised by the free trader. Here we have the suggestion that because the United States gets rid of a small portion of its annual crop, which it is quite anxious to dispose of, we should therefore send out in the raw state irreplaceable material which should be manufactured at home.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
?

An hon. MEMBER:

Won't pulpwood grow here?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

If the hon.

gentleman has some prescription whereby pulpwood may become an annual crop I shall be glad to know what it is, but until he produces it I will not discuss the question with him. Now, the United States tariff commission held an investigation into the asbestos factories and this is what they have to say on the subject:

Known deposits of asbestos in the United States are entirely inadequate to supply domestic needs, and, although efforts are being made by the government to discover additional areas, it is probable that no very large deposit of the mineral exists in this country.

At present our chief source of supply is Canada, which supplies fully 95 per cent of the total annual imports. The bulk of the imports from Canada consist of " mill " fibre, and the rest " crude " fibre. Imports from other countries consist wholly of crude fibre, and come in large quantity from southern Africa-Rhodesia and the Union of South Africa.

tSir Henry Drayton.]

Canada produces about 85 per cent of the total world output and exports about 90 per cent of its annual production to this country.

The United States is the world's largest producer and consumer of asbestos manufactures. The total annual domestic production of asbestos textiles and manufactured textile products alone is estimated at from $60,000,000 to $70,000,000. This does not include the heavy asbestos products, such as shingles, slates, wood or lumber, paper and millboards, and pipe and boiler coverings, the production of which amounts to several million dollars annually.

In 1924 we exported to the United States $5,546,769 worth of raw asbestos and $994,500 worth of asbestos sand and waste. And that sum, considerably less than $7,000,000, is increased in the United States through process of manufacture to at least $75,000,000. Does any hon. gentleman think that this country with its exodus of population can afford to throw away a pay roll like that? How can anyone call it reasonable unless we proceed on the assumption that this country owes no debt whatever to its workers?

Then as to gold. In the ten year period ending 1893, the United States shipped out some $187,582,000 of gold more than she received, but in the next ten year period evidence of the payment of adverse balances by gold become apparent. The excess of gold received by the United States in this period was $98,088,000, in the period ending 1913, $86,698,000, and in the period ending 1923, $1,997,724,000. As a result, in these forty years when the United States has an excess balance in her world's trading of $29,664,737,350, she only receives in payment of this balance excess gold to the amount of $1,994,928,000. The war obligation of the Allies to the United States accounts for much more of the movement but a vast sum still remains to be accounted for. And there is another way in which payments can be made, which hon. gentlemen forget all about, and that is by debts, by loans, by the acquisition of property. That is how it is done, and it is also done by transfer of ownership. I saw a statement the other day, although I do not know just how true it is, that American investments in Canada were in excess of some $2,500,000,000. How does that come about? Why, it comes about as a result of these enormous adverse trade balances.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

It has come about

largely because the tariff enables the American manufacturer to come here and establish branch factories owned in the United States, whither the profit goes.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

My hon. friend

is very ingenious, but he is entirely wrong. The period in which that took place, a period of American expansion in building in Canada,

The Budget-Sir Henry Drayton

was not the period ending in the year 1913; my hon. friend will find that it was during the war.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

It has been going on

for the last twenty- years.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

Yes, but I am

referring to the really big movement. After all, we might as well get down to rock bottom and deal with the situation as it really is. It is serious enough and we should try to get at the truth. What was really the cause of the big factories coming here? What for example brought the General Motors here? If my hon. friend wants evidence I will again quote an American authority from that same article. That great establishment was not completed here until 1921 or 1922, I forget which, and it was brought here in order that exportations could be made from the Canadian market so that they might get the benefit of the Canadian preference in Great Britain.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

But that preference has existed only a very few years.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

And I am giving investments that have been made within a very few years past. Now, the fact is this, that if our tremendous adverse balance does not account for these holdings it means something very much worse; for it is worse to pay for it by loans out of Canada "than by factories established in Canada to afford Canadian workmen employment. I leave my hon. friend to take whatever horn of the dilemma he likes. I was helping him out, but I will take the argument his way. Let us say that the establishment of American factories here has nothing to do with the adverse balance, that they come as the result of tariff regulations.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
LIB

Andrew Ross McMaster

Liberal

Mr. McMASTER:

The hon. member was

dealing with investments in Canada; that was the question. I was pointing out that American branch factories had been induced to come here through tariff regulations; I pointed out that the tariff was responsible to a certain extent for that investment, whether it was a good thing or a bad thing.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
CON

Henry Lumley Drayton

Conservative (1867-1942)

Sir HENRY DRAYTON:

I wonder what my hon. friend wants. I wonder if that is another grudge against the tariff. The whole effect is that we have got a tremendous adverse trade balance, which can only be paid for by acquisition by the Americans of great properties in this country, or by the floating of a large number of Canadian loans in the American market. I was just going to point out to my hon. friend how it is done. Hon. lOOi

gentlemen, if they will take the trouble to look at the American Statistical Abstract, will find that at page 678 a singular compliment is paid to Canada; they will find that of all countries in the world Canada alone is named in connection with these issues. They deal with municipal bond issues in that great money market of the world as it is to-day and the form of the table is:

Municipal-Domestic Canadian

United States Possessions

I have no idea whether we are so sandwiched there because we are regarded as more American than the United States possessions; but I do know that if the query was to be: Does the United States make more money out of Canada than it does out of its own possessions?-why, we would certainly have to come in front of them, for undoubtedly they do make more money out of the Dominion. So I submit that it is just about time that we gave serious consideration to this question. We have often heard it said that a nation cannot be both bond and free. This country is a perfect shandygaff to-day so far as its fiscal policies are concerned; it is neither one thing nor the other.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink
PRO

Thomas Wakem Caldwell

Progressive

Mr. CALDWELL:

Explain.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
Permalink

March 26, 1925