Hon. JAMES MALCOLM (Minister of Trade and Commerce):

I have not had an

opportunity to see the article in the Philadelphia Ledger referred to by my hon. friend, but my visit to Washington had nothing to do with any negotiations with regard to tariff or waterways matters. My visit was purely social; I called upon the president out of courtesy, he being the only official of the American government upon whom I called.

Mr. BENNETT:

The Canadian ambassador accompanied the hon. gentleman.

Mr. MALCOLM:

Surely; he introduced

me to the president.

Mr. BENNETT:

The photographs indicate that.

Mr. J. T. THORSON (Winnipeg South Centre):

I would like to ask the Postmaster General whether any action has been taken with regard to increased remuneration for employees of the Post Office Department including railway mail clerks, letter carriers, postal clerks and mail porters.

Hon. P. J. VENIOT (Postmaster General):

In reply to my hon. friend I might say that in regard to mail clerks and porters I repeated to the Civil Service Commission this year the request I made last year, when I recommended that they take up the question of further compensation to these employees of the department. I received a reply from the Civil Service iCommisison under date of March 9, 1929, as follows:

Your recent communication confirming your previous recommendation for higher compensation for the classes postal clerk, letter carrier and mail porter, has been placed before the Board of Civil Service Commissioners.

After full consideration of the subject matter in your letter the commissioners have decided to confirm their decision of May 2, 1928, which was communicated to the Deputy Postmaster General by letter of the same date, that further increase in the compensation of these classes is not justified.

This letter is signed by W. Foran, secretary. With regard to higher compensation to railway mail clerks, this question was taken up last year bj^ the commission and at that time nothing definite was decided. During the summer vacation I again took the matter up; after consultations here in Ottawa between the executive of the railway mail clerks and the officials of the department a certain agreement with regard to the classification or grading of railway mail clerks was arrived at. That agreement was submitted to the Civil Service 'Commission for their consideration, and after some considerable discussion the question was finally decided by a system of grading in connection with the railway mail clerks. Under this system the clerks are divided into two classes, class A and class B, being railway mail clerks in charge of runs, railway mail clerks assisting and so on. The commission accepted that grading, but excluded a certain number of railway mail clerks, whom they did not grade. There are about 1,300 railway mail clerks, and under the system of grading adopted by the Civil Service Commission I think 242 of these clerks were not included. When that was reported to the Post Office Department I took

The Budget-Mr. Heaps

it up with the Civil Service Commission and asked why these 242 clerks were not graded and why they received no consideration with regard to increased compensation.

In my first letter to the commission I suggested that all railway mail clerks should receive an increase of at least $60 per annum according to their grading, but they gave an increase of forty cents per hundred miles to the higher grade and twenty-five cents to the minor grade instead and in that way granted what was considered by the executive to be sufficient compensation. When the commission refused the minimum increase of $60 per annum which I suggested for the 242 clerks mentioned, I proposed that they at least give those 242 men, who were not included in the new classification, an increase of fifteen cents per hundred miles. The Civil Service Commission refused to consent to that. The railway mail clerks who were affected favourably have accepted the decision of the commission, but they are asking that the 242 left out be considered.

Mr. BENNETT:

The minister has referred to certain correspondence and has read in part from communications; will that correspondence be laid upon the table of the house?

Mr. VENIOT:

I intended to say that that correspondence would be laid on the table.

Mr. BENNETT:

The explanation would

have been much better had it not been prearranged between the minister and the hon. gentleman who asked the question.

Mr. VENIOT:

Under the rules of this

house I was entitled to make the explanation.

Mr. A. A. HEAPS (North Winnipeg):

Mr. Speaker, a good deal has been said during the course of this debate with regard to coal, iron, steel, apples, onions, potatoes and tomatoes, but in carrying on the discussion I do not intend to deal particularly with the question of commodities but rather with what I would term the human factor. We are apt to gauge prosperity, if such exists in this Do-fMr. Veniot.l

minion, by the yardstick of how much is being produced in a given period. The mere fact that production has increased is taken as an indication that prosperity is general throughout the length and breadth of this country. When the Minister of Labour (Mr. Heenan) spoke in this house the other day he said that there were some people who were loath to believe that prosperity really existed in the Dominion of Canada. I am one of those persons, and there are many millions of people in the country who are of the same opinion. In his effort last year to prove that we had prosperity in Canada, the Minister of Finance (Mr. Robb) called the bankers, financiers and industrialists to his assistance. He does not bring those gentlemen forward as witnesses this year to prove that there is prosperity in this country, but satisfies himself with the term "we are prosperous." I would like to know who the Minister of Finance believes is the "we." There may be some people who will say that there is a certain prosperity, but it is w*hat I would term a one-sided prosperity. I would like to know if the minister, or those who agree with his statement, would say that the men engaged on the farms, the mechanics and labourers, are prosperous at the present time. I do not think anyone will deny the statement that the banks, financial institutions and railways are prosperous, but the fact that they are prosperous does not mean that the general body of the people are sharing in that prosperity. Most of the shareholders in those institutions live outside of Canada, and if there are any juicy melons to be cut they are the ones who receive the portions. I do not know what portion of the melon the average man or woman in Canada would receive, but all the average workingman, labourer or agriculturist would get out of the melon would be just the pip. The Minister of Labour quoted figures to show that the volume of wages paid to-day to the men employed on the railways was greater than that paid a number of years ago. I feel constrained to reply to that, because of the fact that a statement made by a minister of the crown may, and probably will, receive wide circulation through the various avenues of publicity which a minister commands. He said that the wages paid on our railways in the year 1923 amounted to $253,320,000; in 1927 to $254,386,000; and that for 1928 the estimate was $276,000,000. In other words, there has been an increase in the wages paid during that period of approximately nine per cent. But the minister neglected to point out one fact. The official Year Book shows

The Budget-Mr. Heaps

that 157,771 were employed on the railroads in 1923, and that that figure had decreased to 144,176 in 1927, or a reduction of 13,595 in the number employed during that five-year period. The question arises in my mind: What has become of those men who are not now required by our railroads? It is quite true that more money is being paid out in the form of wages, but the fact that a comparatively large number of men are receiving a slight increase in wages does not offset the fact that there are a large number of men who are without employment to-day. According to the figures of the minister, the wages paid on the railways in 1923 amounted to an average of $115.50 per month, and this average had increased to $126 per month in 1926. According to the figures submitted by the hon. Minister of Trade and Commerce (Mr. Malcolm), the number of cars of freight loaded in 1923 was 2,851,000, and in 1928 that had increased to 3,696,000; in other words, there had been an increase in the number of cars loaded amounting to 845,000, or approximately 30 per cent. If we take into consideration the fact that a larger type of freight car is being used at the present time, it would not be out of place to say that there has been an increase of approximately 40 per cent in the freight haulage, and yet wages have only gone up 'nine per cent in the same period.

The Minister of Finance (Mr. Robb) was good enough last year to give some advice to the people of Canada. He said the people should work and be thrifty; that was the sure road to success and prosperity. Unfortunately or fortunately, I do not know which, the people of Canada have not heeded altogether the advice given by the Minister of Finance, because, since the budget speech of 1928 the gambling that has been indulged in by the people of Canada has been unparalleled in the history of this Dominion. Consequently I can well understand why he is not offering any advice in his budget speech of 1929. But the minister -I do not know whether it was because they did not accept his advice-has this year gone so far as to tax those people who gamble in stocks and bonds and I heartily agree with his action in that regard.

When, however, the Minister of Finance tells the people that there is a wave of prosperity throughout the length and breadth of the Dominion, I feel constrained to take issue with him. One can go from the Pacific coast right to the Atlantic and have great difficulty in finding traces of that prosperity amongst the masses of the people. I know it is quite true that when we consider the figures of banks, railroads and

other large institutions, there is prosperity; large dividends are being paid. But that form of prosperity in the way of dividends and the clipping of coupons is not shared by the great masses of the Canadian people.

The hon. member for Victoria (B.C.) (Mr. Plunkett) told us some days ago of conditions in the city from which he comes. The minister himself visited Victoria last year during a by-election and in order perhaps to give a little more prosperity to the people of British Columbia or more particularly of the city of Victoria he had to make them very large promises. One thing I think the government ought to be thankful for was that the Liberal candidate was not elected in Victoria.

The members from Alberta have told us of conditions in their province. In fact, the discussion which took place in the house in regard to the grain act just prior to the Easter adjournment was in itself sufficient indication of conditions amongst the agriculturists in western Canada. The Minister of Finance did Winnipeg the honour of paying it a visit last summer. I do not know whether he found evidences of prosperity amongst the masses of the people there, but I am glad he visited Winnipeg because I heard that during the time he was there he was introduced to the Seven Sisters.

I come now to the province of Ontario What do we find there? We find amongst industrial workers as well as amongst the farmers the same conditions as we find in western Canada. We have had in the house instance after instance of the conditions that exist there, of the conditions of industrial workers and of the strikes that have taken place. One instance to which I wish to allude at this time is the condition that now prevails in the city of Oshawa. Last year I brought to the attention of the house conditions in that city where the men had been out on strike and where they had had their wages reduced to the extent of approximately 40 per cent. On that occasion I tried to show how little that 35 per cent protection we give to the automobile industry really means to the men employed in that industry. This year, according to statements I have had given to me and letters I have received, I find that wage cuts have been made by the General Motors Corporation; that men have been discharged for no other reason than that they happen to belong to an industrial organization, and that men have been brought in from Germany and other parts of Europe to take the place of men who have worked for that company during the past twenty

The Budget- Mr. Heaps

years. As I said a moment or two ago, I have received several communications and I am going to read extracts from one or two that have come to me within the past few weeks. This one, which is dated Oshawa, March 13, reads:

Instances can be proved where Canadian citizens have been let out of their jobs and these imported Germans being put into their places. One reason for this is probably due to the fact that the Germans have agreed to pay back to the company the full amount of their passage money at the rate of $25 per month.

That is an indication that the passage money for these people was paid by the company to bring them from Germany so that they could take the places of men employed at the Oshawa factory of the General Motors Corporation. The writer continues:

With reference to wage reductions throughout the plant, it is a fact that there have been wage reductions ranging from around 20, to in some cases, 50 per cent. The speed-up in some departments is so bad that men working in the paint department, the stamping plant, the assembly lines, the enamel plant, in fact the whole plant is speeded up to a point where the men are showing signs of physical exhaustion. In spite of the fact that the company agreed not to discriminate against union men, they have persistently followed a policy of intimidation and victimization and have in every instance denied the men any opportunity to clear themselves of such charges that might have been put against them.

I have in my file of correspondence a communication from a man who has worked in the General Motors Corporation for twenty years. He was discharged at a moment's notice and we are powerless in the house to do anything in regard to the whole situation. There is another case of a man who worked there who, when he was told his services were no longer required, was informed that he should go and see Jimmy Simpson who happens to be vice-president of the Trades Union Congress of Canada.

This is the case of a man who worked there for quite a long time and who was told to go and get his discharge slip. This is what he writes in regard to what happened when he went to the office:

I was given a gold badge for long and satisfactory service, and was told that my services were no longer required.

Another man who had been there for three years was hired again by the company, and when they found that he had been formerly employed by them, his services were also no longer required. In the Oshawa papers and in papers in other parts of the country, you do not find a word being published in regard to conditions at the Oshawa plant.

I come now perhaps a little closer to Ottawa than. Oshawa in order to examine some of this so-called prosperity with which members of the house are being continually regaled, and in which I am loath to believe. We are meeting here within a stone's throw of the city of Hull. Speaking in the Quebec legislature not many weeks ago, the provincial member for Hull Mr. A. Guertin had this to say about the prosperity in the city he represented in that legislature:

The minister did not tell us that barely a month ago the Eddy Company warned the city of Hull that it could barely carry on unless reduction of civic taxation was granted. It formerly employed 2,000 hands, whereas it now has only 1,025, of which difference the abandonment of the match industry only accounts for 500. There are 2,000 unemployed in the city of Hull under the era of perfect prosperity boasted of by the government.

A little further on the same provincial member says:

Continuing, the member for Hull deplored the many restrictions visited on the Gatineu district, whose inhabitants might no longer hunt game, carry firearms, enjoy freedom in fishing, or other liberty. All that they were offered in exchange was work in the shanties of the International Paper Company at a wage varying between $25 to $40 per month. Contract work was no better and generally ended in overwhelming debt for the man that took it on.

I have no need even to go to the city of Hull. I think of tihe statement made by the Postmaster General (Mr. Veniot) in this house only a few minutes ago. When we are boasting of a surplus in the budget this year of approximately $70,000,000, the Postmaster General informs us that some of the lowest paid men in the Dominion of Canada, postal employees, cannot have a slight increase in their pay. Will the Minister of Labour (Mr. Heenan) or any other minister tell me that these postal workers are enjoying some of this so-called prosperity? Yet the government sits there hopeless and powerless to intervene in a simple case of that character.

I feel satisfied that if the government were determined to give tihese postal employees decent and reasonable wages they could somehow or other find ways and means of overcoming the civil service commission.

I will leave this part of the country now, and discuss conditions in Nova Scotia and . the maritime provinces. I do not think that any member of this house, no matter on which side he sits, who has seen conditions in the [DOT] maritimes with his own eyes, will say that there is prosperity in those provinces. I was in the maritime provinces myself just a few months ago, and I saw conditions in cities like Sydney and in towns like Glace Bay

The Budget-Mr. Heaps

and I want to say to this house that any Canadian who sees for himself the conditions of the masses of the people there is bound to bow his head in shame to think that such conditions can exist in the Dominion of Canada, where we are boasting of our so-called prosperity. When you go into a place like Glace Bay and see young children ill-fed, ill-clothed, going about in the mud in the streets, with the sewage running down a little gully made right in front of the homes of these people, I say tve have no right in this house to talk about prosperity until such conditions are remedied. We all have a responsibility in this matter, and I would go a long way myself to see that conditions in the maritime provinces are remedied in a real and proper way.

What are some of the conditions in the maritimes? Last year a committee of the ministerial asociation of the maritime provinces investigated conditions in the Dominion Iron and Steel works, and on the 5t'h day of November, 1928, they published their findings. I will read just one or two brief extracts from their report, and then perhaps my good friend the Minister of Labour will understand why I am one of those who are loath to believe that there is prosperity in the Dominion of Canada. The report says:

The ordinary work day at the D.I.S. Co. plant is ten hours-from 7.00 a.m. to 5.30 p.m., with thirty minutes at noon for lunch. For night duty there is a twelve hour term, with thirty minutes at midnight for lunch. For the continuous operations, consisting of the coke ovens, blast furnaces and open hearth departments, involving approximately 1,000 men, the day term is eleven hours and the night thirteen throughout a seven day week.

That is, the men in this department work an average of eighty-four hours every week, sixty-six hours during the week on day duty, and one hundred and two hours for the week on night duty. A little further on the report says:

Your committee cannot help feeling that this is a very cautious and moderate statement. We believe that the plight-it can scarcely be called other

of the some 1,000 men in the contimious operations is a scandal and a shame. To be on night duty, under the most favourable working conditions, from eleven to thirteen hours were trying enough, but when we know the necessarily almost intolerable conditions in which these men have to work, heavy manual labour in gas, smoke, heat, and in some cases, exposure to the elements summer and winter, the situation is nothing less than appalling, and their treatment utterly abhorrent to the dictates of humanity.

I will give my last quotation from tihis rather lengthy report: [DOT]

For the year ending June 30. 1928, as gleaned from the published statement of the corporation, there was an operating surplus of $2,200,000,

as compared with $1,500,000 for the previous year, a total for the two years of the receivership of $3,700,000. (This before anything was set aside for interest on bonds or depreciation.) Now, of that amount, $2,000,000 has been retained for depreciation, $1,000,000 per year, the balance presumably being available for interest charges on bonds, and so forth.

What suggests itself is this-Should $2,000,000 of the profits of the industry which the men at least had helped to make, be set aside, not for repairs (these were taken care of in course of the operations and charged to them), but for future replacements, while not a cent of this amount has been allowed for the better condition of the human element in the industry? It does cost money, doubtless a great deal, to replace the machinery of steel making. Unfortunately, it costs the industry little or nothing to replace men-there is nearly always a surplus of labour.

These are the wages paid in Sydney in the month of November last: The labourer, who we have just heard works from eleven to thirteen hours a day, receives 33 cents per hour; helpers, 36J to 38J cents per hour, and their hours are ten, eleven and thirteen hours per day, according to the shift they happen to be working; handymen, 42J to 50 cents per hour; mechanics, 52 to 57 cents per hour. Mr. Charles Schwab, of the United States Steel Corporation, said recently before the United States investigating committee that the average wages in the United States for a similar class of labour averaged about 63.08 cents per hour.

It has been pointed out by several of the ministers and others that there has been an enormous increase in production in the Dominion of Canada. That is perfectly true. I do not think anybody will deny that there has been a great increase in all lines of industrial and even agricultural activity, but, of course, that does not mean that the people who have produced those commodities are necessarily any better off than they were previously, and I shall try to prove that in a moment or two. Labour efficiency has increased enormously in the last few years. About three years ago I placed figures on Hansard which showed that over a period of about eight or nine years the individual industrial efficiency had increased by approximately 40 per cent. Professor Michell, of McMaster university, Toronto, has made some rather interesting calculations along the same lines, and he arrives at somewhat similar conclusions to those at which I arrived when I made this study a few years ago. He points out that from 1890 to 1900 the value of production per worker increased 15.5 per cent, or 1.55 per cent per year on the average; from 1900 to 1910, the increase was 58.5 per cent or 5.85 per year; from 1910 to 1920, the increase

The Budget-Mr. Heaps

was 7.3 per cent, or 0.73 per cent per year; from 1920 to 1927, the increase was 52.8 per cent, or 8.8 per cent per year.

Now, he shows further that from 1920 to 1927, while production had increased by 52.8 per cent, on the average wages increased only 13 per cent. But even those statistics are not complete in themselves and therefore I shall add a little to them. According to our year books I find that the total wages paid in 1917 to men and women employed in industry was $420,094,869; in 1925, $452,958,655; an increase in dollars-not necessarily in purchasing power -of $32,863,786. In that same period the cost of living increased from 100 in 1917 to 116 in 1925. Therefore if we compare the purchasing power in 1925 with that in 1917-and these are the latest figures available in the Canada Year Book-we find there has been actually a reduction in purchasing power to the disadvantage of 1925; and if the purchasing power of the wages were calculated on the 192o basis real wages would be considerably less than in 1917, the figures, as I make them out, being approximately $34,551,000. In that same period the number of persons employed had decreased from 552,968 to 466,602-a difference of 86,366.

It is quite true, as has been pointed out, that wages may have increased to the individual, but I might give a very simple illustration of how they have been increased. Let us imagine, for instance, a factory employing ten men, paying out ten thousand dollars a year in wages, and producing, say, forty thousand dollars' worth of commodities annually. At the end of one or two years let us assume that two men have been discharged, the remaining eight producing, say, forty-five thousand dollars' worth of commodities, but receiving nine thousand dollars in wages. Then there would be a relative gross reduction in the wages paid, and the general purchasing power would be correspondingly reduced, with the result that the ten people could not purchase the same quantity of commodities as before. This would leave the ten men, in a relatively worse position than at the outset, while those who owned the factory would be getting the benefit of the increased productivity, and the reduction of staff.

Now, Mr. Speaker, a word or two in connection with the amendment to the amendment that was moved by my hon. friend from Battle River (Mr. Spencer) and seconded by myself. In this subamendment it is suggested that we give an increased preference to the people of Great Britain. I believe that is a policy that ought to commend itself to prac-

tically all the members of this house. The Conservative party have been preaching that doctrine for a number of years. We in this corner of the house, who have so often been accused of unfriendliness towards the mother country, to-day desire to give practical expression of our true friendship for the people of Great Britain by extending to them the benefits of a much increased preference.

There is another and perhaps a more important reason why we should give an increased preference to the people of Great Britain. At the present time both the public men and the press of the United States are expressing their intention of raising the tariff against commodities manufactured or grown in Canada. Well, if the people of the United States are not anxious to deal with us, then at least we can transfer our trade to those who are willing to trade with us. And Canada has no better customer than Great Britain. Indeed, our Conservative friends have been telling us in season and out of season, in this house and throughout the country, that we are buying many hundreds of millions of dollars' worth of goods from the United States in excess of what we are selling to them. For this reason it is claimed we should erect a barrier whereby the adverse balance of trade will be reduced if not entirely wiped out. If that doctrine of the Conservative party holds good in relation to the United States, then certainly it must hold good in relation to Great Britain. We sell to Great Britain far more than she sells to us. That being the case, I think Great Britain would be justified in complaining against this adverse balance of trade with us just as insistently as hon. members of the Conservative party complain about our adverse balance of trade with the United States. Therefore one means of overcoming that difficulty would be to grant an increased preference to Great Britain. In this way we in turn may become one of the best customers of the mother country.

In this connection, however, I wish to make one statement that I regard as of particular importance. It has been freely stated in the press, without any denial by any member of the government, that Canada might enter into a trade arrangement with the United States by bartering away our rights in the St. Lawrence waterway. I hope and trust that statements of such a character are entirely without any foundation. If we are to negotiate with the United States on matters of tariff, then we must confine the negotiations to tariffs. The waterway question should in no way be made a bargaining point between the two governments. If the United State*

The Budget-Mr. Cahan

wants to use water-powers which may be international in their character, that question must be settled on its merits, and no extraneous question must be allowed to interfere in any such negotiations.

If the United States does not want to deal with the Dominion, then we must find other avenues of commerce. I think my colleague who moved the amendment pointed out one of the avenues of trade now undeveloped is Russia. This country to-day is doing practically no business with Russia; whereas Great Britain, in spite of her diplomatic difficulties with the soviet government has still, I am informed, about twenty-three trade agencies doing business on behalf of the Russian people. Now, Canada has not within its confines one single trade representative of Soviet Russia.

I cannot understand why our Minister of Trade and Commerce, who seems so anxious to develop our trade in all parts of the world, has allowed the occasion to slip by of adding a Canadian representative to the British trade delegation which is now visiting Russia.

A moment or two ago, Mr. Speaker, I referred to our trading with the United States. As I said, if the United States is not anxious to trade with us I am not anxious that we should trade with them. On the other hand, I view with considerable misgiving our entry into negotiations with the government of the United States for the joint development of the St. Lawrence waterway. Let me give my reasons for this disquietude. Two years ago, speaking at a banquet of the United Press in New York, the then president of the United States, Mr. Coolidge, made the following significant statement:

The person and property of a citizen are a part of the general domain of the nation, even when abroad.

One well known citizen of the United States, Mr. Yanderlip by name, commenting on that opinion used some rather caustic language in condemning the speech then delivered by the president of the United States. I should hate to think that where there is United States capital in this country the United States government might claim it to be a part of the United States domain. If that were the case then a great part of Canada would be to-day a portion of the domain of the United States. However, I do not believe that to be the true voice of a very large section of the people of the United States. Nevertheless, when the president of the republic uses language so emphatic, and we witness the subsequent actions of that country in places like Nicaragua, Haiti and elsewhere, we in this country ought to be

extremely careful before bartering away any of the rights and heritages we may have in this Dominion. I rather prefer the United States of Abraham Lincoln, as represented by him on many occasions, and perhaps I might be allowed to quote a few sentences of his spoken on one famous occasion when he referred to labour in his country. I much prefer the United States of Abraham Lincoln to the United States of ex-President Coolidge, and as my time has about expired I will conclude by quoting this great American:

Labour is prior to capital and deserves much the higher consideration. Who and what is labour? You are labour, if you work for a living. You till the soil, you mine the coal, you write the books and spin the yarn. You invent cunning machines, you serve and sell across counters and you build the dwellings of men, all the world over.

In America you are the great majority. All that serves labour serves the nation. All that harms labour is treason to America! No line can be drawn between these two. If any man tells you he loves America yet hates labour, he is a liar. If any man tells you he trusts America, yet fears labour, he is a fool. There is no America without labour, and to fleece the one is to rob the other.

Mr. C. H. CAHAN (St. Lawrenee-St. George):

000,000; and it was equivalent to one and six-tenths of the value of the entire field crops in Canada in the year 1928. You will find that so long as activities of that character prevail there will be on the surface a fictitious prosperity which never reaches the homes of the great body of our citizens.

The Minister of Trade and Commerce (Mr. Malcolm) has stated the policy of this government to be exclusively-I do not think the word exclusively is a misrepresentation -to devote the activities of that department to find markets abroad for Canadian products, and that policy is to be commended in so far as it deals with the surplus of production in this country. To that end, as he has told us on different occasions, we made a treaty with France in September, 1923. But I find that our exports to France have fallen in the fiscal year 1928 to about $5,000,000 less in value than in 1925. We made a treaty with Italy in January, 1924, and yet I find that our exports to Italy in the fiscal year 1928 were $4,000,000 less in value than in 1927. We made a new treaty with Belgium in October, 1924, and in our fiscal year 1928 we had increased our exports to Belgium by $4,000,000 over our exports in 1925; but that was $2,000,000 less than in 1926 and $550,000 less than in 1927. We made a new treaty with Finland in August, 1925, and I am glad to see that we had increased our exports to Finland by $800,000 in 1928. We made a new treaty with Australia and also gave new trade concessions to New Zealand in 1925, and in the fiscal year 1928 our exports to Australia were less than in 1927 by $4,700,000. Our exports to New Zealand in the fiscal year 1928 were $3,700,000 less than in 1925. We made a new treaty with the British West Indies in 1925, and our exports to these islands in the fiscal year 1928 were only $473,000 more than in 1926. I may say by way of comment that I have visited the British West Indies more times than I can remember, and I went through them with some care about fifteen months ago. So that I know something of local conditions; and while I hope to be disappointed, and while recent arrangements made by this government with the West Indies may be commended as a step on our part towards imperial unity and the assisting of dependent colonies of Great Britain, nevertheless-and I think I am a practical business man-I can see no hope during my lifetime at least for this country receiving any return from that trade, any compensation, adequate to cover the expenses of operation of the new ships costing, I believe, $10,000,000, as I pre-

dieted two years ago in a discussion with the Minister of Finance, together with a meagre allowance for depreciation and the annual interest on the capital expenditure. Therefore, while we may be commended for extending a hand to these colonies by reason of our imperial sentiments and our desire to promote and assist colonies of that kind, yet in my opinion we cannot hope for any adequate financial return from that undertaking. If we wish to do anything for the West Indies we must assume control of the administration, placing in charge competent. men who will see to it that the productivity of those people is rapidly increased and that they assume a higher standard of living than they have ever enjoyed up to the present time.

British Gu.ana gave our export trade a preference from March 1, 1927, and our exports to that country for the fiscal year 1928 were $124,000 less than in 1927. We made a new convention with Czecho Slovakia in September of 1926, which was extended in January, 1927, and our exports to that country for the fiscal year ending March 31, 1928, were only $962,000 in excess of our exports for the previous year. I do n.o,t disparage these efforts, in many cases futile, on the part of the Minister of Trade and Commerce to extend the foreign and external trade of this country, but it must be remembered that the net result of the intensive activities of this government in negotiating these trade treaties and conventions, on the whole, does not show a very great improvment in our export trade to these several countries, although there may have been some minor increases during the fiscal year.ending March 31, 1929. Any slight improvement in our export trade to these countries was only attained by granting very liberal tariff rates on their exports to Canada.

I believe that the whole difficulty is that the Minister of Trade and Commerce and his colleagues on the government benches unfortunately are actuated by the mistaken opinion that the scope of their official duties and responsibilities excludes domestic trade and embraces only the foreign or external trade of this country. Since I have 'been in this house I have seen no evidence that either the Department of Trade and Commerce, the Department of the Interior or the Department of Agriculture have been actuated by any strong desire-and if they have had the desire they have not exerted the corresponding effort-to increase the domestic productivity of this country upon which its real welfare must always depend. The Minister of Trade and Commerce says that we are represented throughout the world by groups

The Budget-Mr. Cahan

of trade commissioners as intelligent and aggressive as any country could desire. That is very good; I hope they possess these qualities. I am sorry the minister is not in his seat, because I like to look a man in the face when 1 ask him questions, but what has his department, ever accomplished by way of extending the domestic or internal trade of Canada? What means has he taken to further, even in part, the production in Canada of the $1,220,000,000 worth of commodities which were produced abroad and imported for consumption in Canada during the last calendar year? If the Minister of Trade and Commerce and the staff of officials under his direction should devote their intelligence and their energies to promoting the establishment in Canada of industries which would produce commodities to the value of $500,000,000 of that total of $1,220,000,000 imported, which we could readily produce here but which we now bring in from foreign countries for our domestic consumption, chiefly from the United States, in a few years there would be an increase in employment throughout Canada sufficient to maintain an additional population of at least 1,250,000, and in my opinion, soon Canada would be enjoying increasing industrial activity of every sort and description from the Atlantic to the Pacific. As yet, however, sitting in this house for the last three years, I have never seen evidence of any honest effort on the part of the government, the members of the government or the officials under them to meet and solve this pressing problem of our industrial future. And when I say "industry" I do not mean manufacturing only; I refer to industry of the farms, the fields, the mines and the fisheries as well.

I think the Minister of Trade and Commerce has largely abandoned his real vocation, in devoting the high intelligence which we admit he possesses and the energy of the officials of his department to the extension of our external trade which, under existing conditions, is now of less importance to the general well-being and prosperity of Canada than the internal or domestic trade of the country. In fact, one who attempts intelligently to study the economic conditions of Canada cannot but regret to observe an ever-increasing effort on the part of the government and its supporting public press to overemphasize on aid occasions the importance of the increasing foreign trade bf Canada, Their arguments, it seems to me, are based on the undoubted fallacy that an increase in foreign trade is always indicative of the increasing general prosperity of the whole country. The real truth is that an increasing import trade

often implies a deplorable decrease in domestic productivity and a corresponding decrease in domestic employment. I suggest that the principle which should gutide the government and a parliament of this country has been long established by the experience of the most prosperous nations, namely, that the domestic or internal trade of a country is more profitable for the country as a whole and should be first considered, continuously conserved and never sacrificed merely to extend the volume of our foreign trade by unnecessarily increasing the quantity and value of our importations from abroad.

The surplus of our production in Canada over and above the domestic demand, and those foreign commodities for the production of which our own soil, climate and other conditions are unsuited, are the legitimate subjects of foreign trade, but a foreign trade which exceeds these reasonable limitations and sacrifices domestic industry to promote foreign industry is conclusive evidence that the country is not utilizing its own industrial resources and productive activities to the best advantage to its own people. It seems to me that no greater economic fallacy can delude the minds of men than that which measures the general prosperity and industrial welfare of the Canadian people solely or even chiefly by the extent of our foreign commerce, without serious regard, at the same time, as to whether those imports which swell the volume of that foreign trade might not be produced profitably in Canada.

It seems to me that the highest statesmanship of this country should seek to ensure the production in Canada of all commodities which can be produced from our own natural resources or from such raw materials as are readily available for the use of our industries, with as little labour as would be required to produce them in foreign countries and transport them to Canada. Our surplus home products could then be carried to foreign markets to pay for our purchases abroad. Commodities such as iron, steel, woollen, and cotton clothes, hardware and utensils of many kinds and descriptions can be produced in Canada with as little labour as elsewhere. They should be produced here, at least to' the extent of our increasing domestic demand for such commodities. It is certainly the duty of Canadian statesmanship to promote such domestic production, primarily for domestic consumption and then any surplus which may be available could be sold for foreign consumption.

If Canada were unable to grow grain the volume of our foreign trade would be greatly increased, to the great disadvantage of this

The Budget-Mr. Cahan

country. There would be first the necessity of importing grain to feed our own people; and secondly, the necessity of producing in and exporting from Canada a surplus of other commodities wherewith to purchase abroad and pay for the grain so imported. It seems to me that the increase in our foreign trade through the selling abroad of our raw materials, produced here by unskilled labour, in exchange for foreign manufactured commodities, produced by skilled labour, is a menace to the continuing prosperity of this country which should receive the attention of the government. The production by cheap domestic labour of low-priced raw materials for use in foreign factories leaves the producing country impoverisred and compels its skilled labour to seek employment in other countries. In order that there may be no misunderstanding, I desire to say that by raw materials I mean those which are subject to further refining processes abroad after they are exported and which refining processes could, under favourable conditions, be effected by skilled labour at home. The exportation of raw materials, produced by cheap labour, is characteristic of a stage of civilization which is but a short advance from barbarism. It results in the slow but sure depletion and exhaustion, without adequate compensation, of the natural resources of the country which so devotes all its energies to encouraging such practices, and it also results in a lack of domestic employment for highly skilled labour which must then emigrate to seek a higher standard of living in other countries.

The people of new and only partially developed countries such as ours, which show the largest relative volume of exports and imports, very rarely enjoy such a considerable measure of comfort and prosperity as is enjoyed by those countries which encourage domestic production to meet the demands of the domestic markets. The motto of always buying where you can buy the cheapest and selling where you can sell the dearest can never form the objective of successful statesmanship in a country such as ours. This country is largely undeveloped and it can only retain the natural increase of its population by creating a diversity of domestic employment. It seems to me that the best interests of Canada can only be fully conserved when each and every citizen shall consider not only his individual welfare, but the welfare of the whole body politic.

The question of cheapness cannot be determined by single transactions, as the apparent interest of an individual purchaser is not always identical with the best interests of the community. The general prosperity

of the whole country is expanded as its industrial activities are increased and its sphere of production enlarged and diversified, even though higher money prices are paid from time to time for domestic products over and above the prices which prevail in foreign markets. It is a fundamental law, with casual and special exceptions, that although the Canadian farmer may buy his clothing and other textile products for fewer dollars in England, Belgium or Trance, he can buy [DOT] them upon the domestic markets in exchange for fewer bushels of grain or vegetables when their manufacture in Canada is encouraged and facilitated. When the Canadian buys or sells upon the domestic market he saves in a large way the costs of transporting his own products to a foreign market, as well as the costs of bringing the foreign products to the Canadian market. The money price paid is not the only material element in the transaction. The net profit is greater if he sells upon the domestic market a smaller quantity of his own products at a better price.

The prime objective of Canadian statesmanship should ever be to provide increasing, diversified and remunerative employment for our Canadian people. There are commodities such as wheat and pulp and paper which require a special exception. We are producing them in large quantities and the prosperity of this country depends to a large extent upon their continued production and sale abroad. But to devote our entire energies to their production, to the exclusion of encouraging and facilitating a vast number of domestic industries for the production of commodities for consumption at home, is, I think, a fallacy, and will only lead, as I said, at the outset, to a deplorable retrogression in the industrial life of this country.

For the great majority of Canadians employment at remunerative wages is the prime necessity. Their continued remunerative employment at home is a matter of paramount economic importance to them and to the nation as a whole. The elevators of this country may be full of wheat, but they offer no relief to idle men and women who are compelled to emigrate to foreign countries to seek the employment which they have failed to find in Canada. The people of Canada are becoming convinced that that economic policy is bad for Canada which tends to deprive them of employment in Canada while opening wide our extensive and profitable Canadian markets to commodities -**produced by foreign workers.

One can go back and ask the question again: Why should we not produce wool on the

The Budget-Mr. Cahan

farms in Canada and work it up into cloth in the woollen mills in Canada, instead of sending our raw wools to foreign countries to be worked up into cloth and re-imported to clothe our own people?

Why should we mine raw mineral products in Canada and send them to the United States and other foreign countries to be refined and manufactured into metal products, and thence import manufactured metal products of foreign factories into Canada to supply the demand of our domestic Canadian markets as we are doing?

We must all agree that ever-increasing domestic employment is the only preventive against increasing emigration from Canada, and that increasing domestic employment in Canada is the only incentive to desirable immigration into Canada. Our existing fiscal and economic policies compel our sons and daughters, who have intelligence and education, to seek new homes in the United States, while we expend millions upon immigration to induce unskilled and uneducated immigrants from abroad to undertake for low wages the production of raw materials in Canada for export to more prosperous countries.

The people of Canada are persistently asking in their homes, in their public debates, in their social intercourse: "Why should our sons and daughters be obliged to leave Canada for the United States to earn a living there, while we annually send hundreds of millions of money to pay there for the goods which they produce in the United States, and then sell to .their fathers and mothers to be consumed at home?"

It is therefore true, I think, that to the extent that we Canadians import from abroad commodities which, under favourable conditions, could be produced in Canada by our own people, to that extent we impair the available domestic industrial employment of our own .people and become .more and more dependent upon foreign workers. Every million dollars in value of commodities annually imported, which could under favourable conditions be produced in Canada, deprives Canadians of $1,000,000 of annual revenue. Moreover, when we lose our home market for this million dollars' worth of domestic products, we can be compensated only by opening up new foreign markets for $2,000,000 worth of our own products. We can be compensated for our loss of domestic trade only by obtaining a double equivalent in our foreign or external trade. Therefore, if we purchase abroad $100,000,000 worth of products which have been or could be produced at home, we are not compensated by our sales in a foreign

market to the extent of $100,000,000 in value of our own products. To be fully compensated, and to afford equal employment to our own people, we must find additional foreign markets for at least $200,000,000 of Canadian products per annum.

The impressive fact is therefore that whenever we import, instead of producing commodities which may readily be produced1 in this country, Canada is the loser by the change until our additional exports of our domestic products double the value of the new imports; and this loss to Canada will be decreased only by .the percentage that the cost of purchasing and importing the foreign commodity is less than the average price in Canada of the domestic product, which is, in fact, a very small percentage indeed, especially when the contribution which the domestic producers make, as sales taxes, business taxes, income taxes and the like to the public treasury of the country for the purpose of carrying on and maintaining the administration of public affairs, is taken into consideration.

The entire value of any commodity produced in Canada is spent in Canada in its production, and yet ever reappears in the form of a new product. The expenditure of that value in its production not only gives employment in this country to its producers, but also serves to maintain all other classes of workmen and traders throughout the country, by furnishing a demand and market for their other diversified productions, especially for all our farm, dairy, and other food products. The foreign producer bears no part of the burden of maintaining municipal, provincial or federal governments in this country. He makes no contributions to the general development of Canada.

On the other hand, while producing in Canada, the Canadian producer spends in Canada, and yet the thing produced retains its entire value and thereby doubles the economic productivity and the increasing potential wealth of the whole country. The production of goods in Canada for consumption in Canada, instead of the importation of the same goods from foreign countries, for consumption in Canada, affords twice the employment in Canada that is given by the .production in Canada of goods to be exported from Canada in exchange for foreign commodities which could be produced in this country. Therefore it seems to me that the government is going on an entirely wrong principle; it is adopting an entirely erroneous policy if it has a view to the permanent welfare and development of Canada and its future industrial and commercial prosperity.

The Budget-Mr. Cahan

I had intended to show in a brief review conditions which prevail in our trade relations between this country and the United States. The United States, with a total population of nearly twelve and one-half times our own, imports less than twice the amount of fully manufactured goods that are annually imported into Canada. In fact, Canada imported in the fiscal year 1928, $720,090,000 of fully manufactured goods, while the United States imported only $1,312,345,000 of fully manufactured goods, in their fiscal year ending June 30, 1928. If the people of Canada imported fully manufactured goods per capita only in the same proportion as the people of the United States, our annual import of such goods would have4>een reduced from $720,090,000 in 1928, to about $186,880,000; and we would now be manufacturing annually in Canada $533,200,000 worth of goods which we now import from foreign countries; and we would also be maintaining in Canada, in active employment, at least 300,000 more workmen with families, representing over 1,200,000 more people than we now have in Canada.

Canada's imports for consumption during the calendar year 1928, amounted to $1,222,318,000 or $126.56 per head of our estimated population of 9,658,000. The imports for consumption in the United States in the same calendar year amounted to $4,077,451,000, or less than $34 per head of their estimated population of 120,013,000. And yet there are some people in this house and in this government who seem to be so unsophisticated as to believe that the fact that Canada imports $126.50 per head of our population, as compared with the United States imports of $34 per head, is an evidence of Canada's increasing prosperity as compared with that of the United States. That is the whole burden of one or two of the addresses that I have heard from the opposite benches.

Each family of five in Canada, on the average, pays annually about $632.50 to maintain, clothe and feed the families of the workmen and workwomen of foreign countries, while each similar family in the United States pays only $170 for the same purpose, resulting in a proportionate annual saving for the United States of at least $462.50 for each and every family of five resident in that country.

If we merely maintained workmen in foreign countries in the same proportion as do the people of the United States, we would have had $1,021,000,000 more money annually to distribute in Canada last year for the maintenance of an ever-increasing Canadian population, and this sum of $1,021,000,000 is nearly

twice the value of all the grain and grain products exported from Canada during the calendar year ending December 31st last.

I have the figures here of Canada's annual production of both primary and secondary Products, as given by the statistical branch of the Department of Trade and Commerce, and it is now approximately $3,600,000,000 annually, or nearly $400 per head of our population, and yet of this $400 per head of the annual revenue of all the people of Canada from all their industrial and other activities, we sent abroad during the calendar year 1928, $126 per head to purchase foreign products; or in other words, we sent abroad nearly one-third of the revenue derived from all the productive activities of Canada to assist in maintaining foreign workmen in foreign countries, and, in particular, we sent abroad nearly 23 per cent of our entire revenues from the aggregate productivities of Canada, to support the industries of the United States.

When you look at the importations from the United States, you find that we spent during the calendar year ending December 31, 1928, in the United States the enormous sum of $826,000,000 to purchase United States products, or more than 67 per cent of our entire importations for the calendar year 1928. How can anyone imagine that we can maintain this country in a happy, prosperous and progressive condition When we send to the United States annually $826,000,000, giving employment to the people of that country to that extent? Is it any wonder that our sons and daughters desert us to engage in the industrial activities of the neighbouring republic?

Mr. GEORGES BOUCHARD (Kamour-aska):

Mr. Speaker, as I am the only member of this house who had the good fortune to listen to your lectures at the Sorbonne in Paris, and to witness the increasing interest taken in them by an illustrious audience, I wish to join with the country in extending to you my most hearty congratulations. May I express the hope that this series of lectures, which has deserved the highest praise of outstanding men of letters and of statesmen, be printed for the benefit of those interested in Canadian questions on both sides of the ocean? I am sure that the reading of these lectures will bring to the mind of every Canadian the French saying: "Yous avez bien merite de la Patrie, Monsieur 1'Orateur."

My congratulations naturally go to the Minister of Finance (Mr. Robb) for the encouraging budget which he has introduced in the house this year. A net surplus of approximately $70,000,000, and a substantial reduc-

The Budget-Mr. Bouchard

tion of $25,000,000 in taxation, means something in relieving the people of this country, who, shortly after the present administration took office, had the pleasure of seeing deficits turned into surpluses. However disparagingly the hon. members of the opposition may regard it, I do not see that a reduction of 33J per cent in the sales tax, and the removal of taxation on railway tickets and telegrams, together with a lowering of the tariff, could alarm even the very few who are not directly benefited thereby.

While abroad I was proud to proclaim that Canada, which ranks twenty-seventh in population among the nations of the world, stands fifth in its export trade, which amounted in the year 1928 to $648,000,000.

The hon. member for South Wellington (Mr. Guthrie) in his able speech was free to admit that " Providence has continued to shower upon the country unbounded prosperity." It is with no little gratification that we on this side of the house, as well as the country at large, realize that Providence has made use of the Liberal party as the medium or agency through which the country has been relieved of the depression caused by the policies of our opponents.

During this budget debate we have not had the explosion of pessimism from hon. gentlemen opposite which has marked previous budgets. With muted strings, this year the opposition strikes the doleful note of " blue ruin." Enlightened by their experience in the past, they know that they cannot delude the country to the extent they delude themselves. There is not a note of political anguish of which our friends opposite are not masters. This year they repeat one after the other that to be wretched is the destiny of the Canadian farmer. The opposition know that their " whisper of death " has not prevented the country from rising to a greater national activity. The mournful warning about the closing of automobile and farm implement factories has not been borne out by the facts.

I read, for instance, in the Montreal Gazette of March 24, 1929:

For the ten months ending October 31, 1928, the cumulative production of automobiles in Canada was 221.188 cars, having a sales value, f.o.b. plant, of $139,909,876, as compared with 169,331 cars valued at $110,736,126 made during the corresponding period of 1927. The increase this year amounted to 31 per cent in number and 26 per cent in value.

I will quote now from Agricultural and Industrial Progress in Canada, in its issue of February, 1929:

There is no doubt but that to-day Canada is one of the most fortunately situated countries 78594-83

of the world, enjoying a degree of comfort and prosperity paralleled in few other places. The Dominion has completely recovered from all the effects of the war in more rapid manner than most nations involved, and having made up the distance lost during the period of hostilities, is taking yet more lusty strides upon a broader road leading to a greater destiny than she previously visioned.

I read again fro-m the Montreal Gazette of March 18, 1929:

Purchasing power of the people of Canada increased by half a billion during 1928,-

And so f orth. Here is another quotation of March 23, 1929, from the same paper:

Canada's foreign trade expanding. Volume nearly 85 per cent greater than at outbreak of war.

In regard to the tariff, the government evidently has not departed from its ordinary course. The Minister of Finance in introducing his fifth budget said:

The policy of this administration is not a high tariff policy; it is a low tariff policy.

In 1924, under similar circumstances, while the tariff was reduced mainly in relief of four of our basic industries, the Minister of Finance said:

Of these basic industries I would place agriculture in its various branches first; next to agriculture I would put our forests, our minerals and our fisheries.

Mr. Fielding, when introducing his last budget in 1923, said:

The tariff as it will be when the changes proposed come into effect will be a moderate tariff, and probably as low as the country can afford to have under present conditions.

The speech of the then acting leader of the opposition (Mr. Guthrie) was, on the contrary, a well-qualified high-protection speech. Certainly his speech was heard with much more pleasure than profit. Its manner is no doubt better than the matter. But high as it may stand in oratory, this speech will, I am sure, have no bearing on the economic life of Canada. May I compare it to a seedless orange? -sweet to swallow, but deprived of all reproductive power. In other words, this speech, so brilliant in form, is frail in the undierstructure, its foundation being on the quicksand of higher protection. I wonder to what extent the hon. leader of the opposition (Mr. Bennett), with all his broadmindedness and his keen sense of national responsibility, would like to use his colleague's speech as a lifeboat to keep him safely afloat on the endless sea of golden wheat in the western provinces. This speech, echoed in every corner of the house occupied by the Conservative party, has rekindled the zeal of high tariff worshippers.

The Budget-Mr. Bouchard

I propose ito deal particularly with the agricultural side of the policy enunciated by the hon. member for South Wellington and by other hon. members opposite, who repeated the keynote of high protection struck by him as the only solution of the problems which confront the farmer.

When we come to consider the tariff issue in Canada we must bear in mind that high protection is a menace ito our farming class, and even to our national unity. There is no country in the world where agriculture is so vital to the national well being as it is to Canada's, and therefore I propose to study the effect of the tariff on our farming class. Public prosperity may be compared to a tree. Agriculture is its root; industry and trade are the branches and leaves. If the root is injured, the leaves fall, the branches break off and the tree dies. Therefore we must look first to the welfare of the root of our national prosperity. It will be generally agreed that we can never do too much for the agricultural class. But is high tariff a solution for any of their problems? I think not.

The prosperity of the United States has been cited as an argument in favour of high protection, and though we cannot deny this prosperity, yet the extent to which American farmers have profited by it may be very much questioned. In spite of the fact that nearly all the protection possible has been given to the American farmer, his present situation does not give him much satisfaction. The cry for relief coming from the farming class of the United States and heard over the border does not speak well for the policy advocated by the members of the opposition. This cry shows at least that if high protection has showered prosperity on the United States, the farmers have benefited by it much less than the other classes of the population. They were far from getting their share of the questionable (advantages of that policy.

And if high protection does not properly serve the interests of the agriculturist in the United States, a nearly self-supporting country, how can you logically press it in a country like Canada, which needs outside markets for the greatest bulk of its farm products? In this connection I may be permitted to quote from an article in the Journal of Farm Economics for January, 1928, entitled, Which does Agriculture need-Readjustment or Legislation? It is written by Professor G. F. Warren, of Cornell university. He is a recognized authority on economics. But lest it be objected that- he is merely a theorist, I may add that he is also a very successful farmer. He writes:

Statistical evidence indicates that we are in the eighth year of the most serious agricultural depression ever known in the United States. The depression involves primarily the producers of staple foods.

Throughout the whole article I fail to find any argument in favour of high protection. Evidently he does not think that high protection is the medium by which the farmers of the United States can be relieved. The subject of the article is also discussed by three other well-known professors, and apparently they reach the same conclusion as Professor Warren.

Now coming to the situation among the farmers in the United States, I would refer the house to the Congressional Record of the United States for the year 1928, page 7787. Mr. Blease, by unanimous consent of the senate, put on the record certain excerpts from various publications relating to the subject of farm relief and the farm loan system, and in an editorial appearing in the magazine Cooperation, published by the Cooperative League, New York City, on the question of relieving the farmer, the following comment is made;

Last year 2,000,000 people left the farms in the United States. More than half the population of this country is now living in towns and cities of more than 2,500 population. Only about one-fourth of the people are on the farms. The mortgages on the farms, unlike the people, are steadily increasing. The farms are slipping out of the hands of the farmers. The farmers are slipping away from the farms.

Senator Caraway, speaking in the United States Senate, is reported in the Congressional Record of 1928, at page 3614, as saying:

In 1919 the invested capital in agriculture was more than .$79,000,000. In 1926 it had shrunk to less than $59,000,000.

And Mr. Greenwood, on May 24, 1928, is reported in the Congressional Record, House of Representatives, at pages 9736-37 as follows :

During the period of depression . . . 171,000 farms were sold at forced sale. It is estimated that almost 1,000,000 people have been forced to leave the farms because of these sales and failure. It has always been emphatically declared by some political economists that high protective tariff schedules spell prosperity, it is time for the farmer to come out of this

deceptive delusion Suffice it to say that

I am not a free trader, neither do I believe (l using the taxing power of the federal government as a means of robbery of the many for the benefit of the few. High tariffs cannot raise the price of commodities of which there

is an exportable surplus The export

price controls the domestic price.

Mr. M. Nelson, of Missouri, on March 2, 1928, is reported in the house Congressional Record as follows:

The Budget-Mr. Bouchard

Hoping to secure first hand information, I have just gone through replies to questions submitted to some 500 Missouri farmers.

Let me quote a few typical answers given to the questions:

Why have so many farmers failed in business since 1920?

Some of the answers given are:

Depletion; slump in the farm values and prices in everything produced on the farm; low buying power of the farmer's dollar; high cost of production; protective tariff; because the tariff cannot be made to do as much for tile farmer as for the manufacturer.

And in reply to the question, " Would legislation by congress help the farmer?" some of the answers given are:

Repeal or reduce the tariff, thus placing agriculture and all other industries on the same basis.

Gradually take away protection from the so-called "infant industries" which have grown to be powerful and arrogant.

The final question was:

If not legislative action, what then is the greatest need of farmers?

To this question 26 per cent answered, organization, while 24 per cent replied, cooperation.

Whatever the political expediencies of the United States may be, we find that the leading economists of that country are taking a stand against the principle of high protection, particularly for the farmers. The prevailing, not to say unanimous, opinion is that high protection does not benefit the farmers. In a book written in 1924 by Professors G. F. Warren and F. A. Pearson of Cornell university, entitled The Agricultural Situation, we read at page 293 that the protective tariff in the United States protected only the sheep industry, flax growing and certain varieties of wheat. The protective tariff on other matters is said to have conferred no benefit upon the farmers.

One may read in the Journal of Farm Economics, of January, 1925, the views of Professor Hibbard, of the Agricultural college of Wisconsin. At pages 143-44 this authority writes:

What the situation will be a generation hence we do not know, but at present a tariff on blitter and cheese is about as effective as Wonter Van Twiller's campaigns against the Swedes by proclamation. The conclusions, mainly adverse, do not mean that the tariff on dairy products should be repealed. They merely mean that not so much is to be hoped from the tariff on dairy products in the way of relief.

Now I wish to quote from the Gazette, a " low tariff newspaper " published in Montreal, certain views with regard to dairy products. Under date Washington, December 29, 1925,

there appears an article under the heading, Cattle Tariff is Declared Futile, and a statement is made by:

Dr. Lynn R. Edminster, of the Institute of Economics, Washington, speaking here to-day at a conference on the tariff question called by the People's Reconstruction League.

The article in question reports this gentleman as follows:

Dr. Edminster believed the present duties, if continued, will gradually tend to raise domestic prices, resulting in substitution of other foods for beef, and cutting of profits to producers. He contended that efforts to stimulate the cattle industry through tariff will impose upon industry, as it now does, a burden which comes from support of general policy of protection in which the cattle man concedes much and gets little in return.

When we come to consider the condition of agriculture in the United States and measures taken for its improvement, we might refer to a report of the Business Men's Commission on Agriculture, published jointly by the National Industrial Conference Board and the Chamber of Commerce of the United States of America, Washington, 1927. At page 169, on the question of tariff readjustment, the following appears:

The principal effect of the protective tariff upon the American farmer is to restrict the market for those products of which he produces a surplus above domestic needs. The tariff in agriculture, as in other fields, is a double-edged and dangerous weapon.

Let us turn for a moment to France, another self-reliant country, to find out what the rural economists and the farmers there think about that matter. In his book Economic Rurale, Professor E. Jonzier, at page 74, says:

Waves of protection, having spread over a country, rarely bring about any other effect than the imposing of a tariff duty on all commodities and under such conditions there is no longer protection for anybody or anything.

What do the farmers think about protection, even in France, a self-supporting country? The National Congress of Agriculture in France, which met in 1925 and in 1927, was unanimous in recommending the lowering of the tariff on manufactured products, and an increased tariff for agricultural products was sought only in the event of the tariff on industrial products not being lowered. Just here let me quote a sentence from the Journal d'Agriculture pratique of April 16, 1927: Agriculture and tariff reforms.

The National Agricultural Congress for the study of the customs' Act, organized by the .National Federation of Agricultural Associations, was held on. April 11, at Paris, in the Salle des Agriculteurs de France, under the chairmanship of Mr. Jules Gauthier, in the presence of a large number of distinguished guests.

The Budget-Mr. Bouchard

Various recommendations follow, among others, the following:

Lower the duty on industrial products. And to the repeated applause of the entire audience, Mr. Garcin was able to assert that this was the desire of all French farmers who do not belong to the Agrarian party and only claim a moderate protection. If this reduction of duties on industrial products1 was impossible, then, but then only, the French farming community would request a higher protection on its products.

The farmers, he adds further on, request Parliament to work towards restoring tariff equality by a general increase of duties protecting farming products, if the proposal to lower the duty on industrial products cannot be effected.

In the course of a speech delivered on March 17, 1926, the Marquis of Vogue, speaking of an ex-minister of agriculture in France, said:

Mr. Meline had never erected the protection tariff as a tent for slumbering.

Then he went on to say:

We cannot think for a moment of bottling ourselves at home like in a closed urn: selling abroad or rather bartering our products is of the utmost necessity to us.

If a policy of high protection is declared by the best authorities and by the farmers themselves to be unsuitable for self-contained countries such as the United States and1 France, how much more so is that the case with regard to Canada, which depends so greatly on export markets? Protection for Canadian farm products can be effective only where no exportable surplus exists, and even then a surplus will be soon created to render protection inefficient. As soon as under-production is turned into over-production the prices fall; the alternation of ups and downs in the prices of produce, which would take place every few years, would discourage the farmers.

In order to present these facts I would ask permission of the house to place on Hansard statements showing first the agricultural and animal products which, according to their origin, do not enter into competition with domestic products, and secondly, agricultural and animal products the production of which considerably exceeds the consumption:

Agricultural and Animal Products which, According to their Origin, do not Enter into Competition with Domestic Products.

Imports For twelve months ending Deeem-

Fruits, fresh ber, 1928Apricots, quinces and nectarines.. $ 122,611Bananas

5,253,414Grapefruit

969,288

Guavas, mangoes, plantains and

pomegranates 14,723

Agricultural and Animal Products which According to their Origin, do not Enter into Competition with Domestic Products.-Con.

Imports For twelve months ending Deeem-

Fruits, fresh-Con. ber, 1928

Lemons 1,778,485

Limes 1,639

Oranges 10,748,085

Pineapples 469,331

Other fruits, fresh 6,999,027

Total fruits, fresh $26,356,603

Fruits, dried

Currants $ 829,788

Dates 775,699

Figs 351,618

Other fruits, dried 4,352,039

Total fruits, dried $6,309,144

Fruits, prepared, n.o.p.

Total fruits, prepared, n.o.p $3,744,380

Fruit juices

Total fruit juices $199,932

Nuts

Total nuts; other nuts, not shelled;

other nuts, shelled $5,315,996

Vegetables, fresh

Potatoes, sweet $128,907

Grains

Rice, uncleaned, unhulled or paddy. $1,432,073

Rice, cleaned 647,460

Total rice $2,079,533

Other grains

Sago and tapioca $123,925

Oils, vegetable for food

Total oils, vegetable, for food .. $1,060,129

Sugar and its products

Total sugar and its products .. .. $34,466,567

Tea, coffee, cocoa and spices

Total tea $12,325,650

Total coffee and chicory 6,825,629

Total spices 1,628,329

Total cocoa and chocolate

4,223,421Total tea, coffee, cocoa and spices. $25,003,029

Beverages, alcoholic

Total distilled beverages

$43,898,992Total wines

3,440,933Other beverages, alcoholic

507,895Total beverages, alcoholic

$47,847,820

Gums and resins

Total gums and resins $3,283,802

Oils, vegetable, not food

Total oils, vegetable, not food .. . $9,923,214

Rubber and its products

Total rubber and its products .. . $23,611,543

Bone, iovry and shell products Total bone, ivory and shell products $518,965

Total $189,973,489

The Budget-Mr. Bouchard

Agricultural and Animal Products, the Production of Which Considerably Exceeds

the Consumption.

Grains

Production Imports ExportsFor year For twelve months For twelve months1928 ending Dec. 1928 ' ending Dec. 1928Barley $ 76,112,000 (n.o.p.) $ 2,648 $ 26,584,465Oats 1,637,555 10,335,193Wheat 140,039 433,767,578Buckwheat 13,873 336,888Peas, whole

4,786,000 (n.o.p.) 128,968 296,58SRye 116.882 11.350,170Other grains 16,554,154 615,804Total grains $18,594,119 $483,286,686(Beans, corn and rice included) Milled products Total milled products. $ 1,217,702 $71,134,868Vegetable products, n.o.p. Hay $ 106,482 $ 1,285,960Animals, living Total animals, living, less animals for exhibition purposes $ 3,147,632 $17,098,988* Fishery products Total fish, fresh or frozen $ 909,092 $10,927,370Total fish, dried, salted, , smoked or pickled $ 942,739 $10,514,680Total fish, preserved or canned, n.o.p $ 1,473,348 $13,517,079Other fish products.. . . 221,127 1,329,107Total fishery products, n.o.p $ 3,546,906 $36,288,236

Total furs.

Total meats.

Furs

Meats

Milk and its products

Total milk and its products,

(1928) 253,736,605

Seeds

Total seeds, (1928) 14,933,940

16,744,956

5,391,288

6,580,915

2,167,819

We also have a class of other agricultural manufactured, which is practically of no inter-or animal products, manufactured or partly est to the farmer:

Fruits, prepared and jellies Total fruits, prepared, n.o.p. and

jellies $ 3,744,380 $ 664,031

Prepared foods and bakery products

Total prepared foods and bakery products $ 1,547,926 $ 2,609,693

Oil cake and meal

Total oil cake and meal $ 334,267 $ 1,059,978

Hides and leather

Total hides and skins

Total leather unmanufactured

Total leather manufactured $14,750,106 6.293.559 4,902,774 $11,530,456 10,926,870 1,044,604Total hides and leather $25,946,439 $23,501,930Oils, fats, greases and waxes Total oils, fats, greases and waxes $ 1,896,816 $ 2,533,252

The Budgel-Mr. Bouchard

When we are asked to increase the duty on butter, cheese and eggs, we diould remember that during the calendar year 1928 we exported 140,000,000 pounds of cheese as against our exports of 100,000,000 pounds of cheese during the previous year, but before discussing the Australian treaty I would like to consider for a few moments the opinions of the farmers themselves. I have in my hand the report of a delegation from the Canadian Council of Agriculture which came to Ottawa on April 2, 1924, from which I will read one sentence:

The need for immediate and substanial reductions in the customs tariff as a measure of relief to the agricultural industry ....

Mr. GOTT:

What date was that?