Mr. BENNETT:

If by that statement the hon. gentleman is saying they were able to coerce a reluctant government into acknowledging them as adherents, I suppose it was felt, and I apprehend that the government would say it was not only feLt but was apparent.

At any rate, we may now leave for the moment the question of our trade. It would be a very interesting matter to discuss at length, but it would serve no useful purpose. The Minister of Finance has indicated that we are now confronted with an adverse trade balance, with diminishing trade and falling revenues, and that we must prepare for a situation which some of us ventured to point out to the house would one day arise. Are there any hon. gentlemen here who recall that I was received with some scoffing when I endeavoured two years ago to point out that the era of speculation in this ocuntry was reaching a stage where it would involve Canada in very great losses. If the gentlemen are interested in reading Hansard, they will find the warning which I then gave. I stated at that time that those of us who felt these things to be true might be jeered and laughed at, but the moment might come when people would look back and say: At least there were some public men who had courage enough to point out to the people of Canada what would be the inevitable result of overinflation. I little dreamed at that moment when I listened to the then Minister of Finance, that I would hear another minister of finance rise in his seat and point out to the people of this country that one of the difficulties we are now labouring under is the great fall in values on the stock .market.

The fall in values did not touch this government except in so far as it may have touched the mining tax which my hon. friends yonder were so insistent upon. The shrinkage in values upon the exchanges of this country from the high point in 1929 to the low point in 1929, excluding bonds and debentures, amounted to very nearly $5,000,000,000. That shrinkage included oil stocks, speculative mining stocks, and various securities of that kind traded in on the regular exchanges as well as 2419-115

on the curb exchanges. If the Minister of Finance had pointed out that that did no

Mr. DUNNING:

I said that.

Mr. BENNETT:

That is not the way it was put; no doubt the hon. gentleman intended to say that. The collateral securities with which men receive credit from financial institutions, whether they be banks or otherwise, were lessened to that extent and therefore there was a lessening of the borrowing power of the people. Of course, it involved enormous losses in other instances; it involved a change in capital values and men who thought they had something of worth found themselves suddenly confronted with something which was worth little or nothing and upon which they could not borrow. This did not touch the national life of the country except in so far as it restricted the credit power of the people. However, a few moments later the hon. gentleman said that he was happy to say that the credit power of the people had not been interfered with and that the monetary institutions had been able to take care of every reasonable demand made upon them. It would then follow that this great restriction and contraction in the value of stocks did not in any sense affect the borrowing powers of the people because the credit facilities at their disposal were sufficient to meet every reasonable demand made upon them. That appears to be the situation, as indicated by the hon. gentleman himself.

Leaving the matters of trade and debt, we come to .the real purpose of the motion made to you, Mr. Speaker, that is that you do leave the chair to enable the house to resolve itself into a committee of ways and means by which this House of Commons under our constitution and under the direction of the government of the day will indicate to the country the methods and means it proposes to resort to for the purpose of providing the funds necessary to carry on the business of Canada. That is what a committee of ways and means is, and I again come back to the fundamental principle, that this house should not be asked to go into committee of ways and means unless it knows how much money it has to raise. Up to the present moment that has not been indicated, except as to the interest on the national debt, the service of the debt, the items mentioned in the main estimates and the statutory obligations placed upon the Dominion. How does the government now

The Budget-Mr. Bennett

propose to raise revenue? That is the question for consideration. The Minister of Finance came here, as did the Minister of Railways (Mr. Crerar), as great advocates of the principle of free trade. Let us assume that they did not come here as advocates of free trade; that they came here as advocates of tariff for revenue. They cannot get away from that, although they may try to escape free trade. The Minister of Finance comes here as an advocate of protection. I shall deal with the case of the Minister of Railways later; it is unique and stands separate from any other case in this house. He left the government for conscience sake; he came back to it because of lack of conscience.

Now, sir, we come to an investigation of the conditions under which the government proposes to raise its revenue. First of all it proposes to have recourse to customs duties. Then it proposes to have recourse to excise duties as heretofore in force, because no changes have been made. It then proposes to ask from the incomes of companies and individuals a contribution to the national revenue by way of income tax and it has in addition the non-taxable items to which I have referred, namely, reparations, interest on investments, and banking transactions.

The changes with respect to the imposition of customs duties are numerous and far-reaching and involve a very careful consideration of the whole economic structure of the country. They divide themselves into three classes: those imposed against the world, those imposed against the British Empire and those imposed against countries with which we have treaties. With respect to the trade of this country apart from the trade with the British Empire, the government has made substantial changes in the tariff. The hon. gentleman read them the other day and as I listened I realized that although the voice be the voice of Esau, the hand is the-

Hear, hear.

Mr. BENNETT:

I mean to say that although the voice be the voice of Jacob, the hand is the hand of E6au. For the moment my scripture was a little mixed, but who, contemplating such a budget, would not find that happening?

As I have said, the government put forward tariff and customs proposals, and I wonder if anyone hearing the minister read them had any difficulty in determining the author and origin of these proposals. Those of us who remember the bond guarantees given in days gone by by the western provinces to the Mackenzie and Mann enterprises, recall that at the end of the statement issued there often

appeared the name "W. H. Moore, Secretary." We have no difficulty in realizing that it is the same W. H. Moore, chairman of the tariff board, who is speaking through the Minister of Finance. Whatever difficulties there might have been in that regard were entirely removed as he proceeded with his statement, for this reason: hon. members will recall that when flotations were made upon the market of securities guaranteed by the provinces, there were no railways then built. In fact the bonds in connection with the railway from Calgary south to Maoleod were sold, but the railway has not yet been built although that is over fifteen years ago. When one realizes the principle that governed the issue of prospectus one has no trouble in appreciating the origin and the author of this budget on the customs side of it. It will be seen there is no indication as to what the result of these changes is to be or what revenue will be earned. That was always the case with the sale of these guaranteed securities and while the secretary of the Canadian Northern at that time was always sure to have these securities underwritten and guaranteed at least by the provinces, in this instance he substituted in some cases the Conservative party for the province in the guarantee that the hon. gentleman has given as to the benefit to be derived with respect to some customs items.

Let us examine the underlying principles in connection with the budget. There are changes in some five or six hundred items. It is said that the number of free items has been vastly increased and that there have been great changes in many of the schedules. Suffice it at this time to say, as was said in the British House of Commons the other day, that when we consider these matters in committee we must necessarily deal with them in 'detail and then the minister will have to be prepared to furnish us with information as to the effect on the revenue in any particular case Where there has been a change in the customs duties. Let us however deal with a few of them, because they become somewhat important.

The iron and steel schedules, the minister said, were perhaps the most important that would be considered by the house. They are very important; they have been important now for seven years, for more than seven years, and I assume that were it not for the fact that our constitution provides that there must be a general election every four or five years, they would not be important yet so far as the government is concerned.

In the field of manufacturing iron and steel constitute a basic industry. They enter into every branch of the industrial activities of the

The Budget-Mr. Bennett

country. Everyone in Canada is affected by them and the first question we have to ask ourselves in connection with these customs changes is this simple one: Will these tariff

changes aid in the development of the natural resources of Canada: Will a single man more obtain employment in Canada than before these changes were made? "In Canada" are the important words to remember. In the absence of information as to what the effect upon the revenue may be, it is only necessary for me to repeat what the Conservative party has on previous occasions said so frequently, namely, that we desire by every means in our power to aid and assist in the development of the great natural resources of this Dominion. Those resources, varied and rich as they are, must be developed if we are to take our rightful place amongst the self-respecting and economically independent nations of the world. Nearby great deposits of iron ore we have coal; we have limestone for fluxing; we have, so far as iron and steel are concerned, all the resources that go to make a great nation. About a year ago I visited the great rolling mills at Sydney and I saw steel rails being rolled. As an hon. gentleman reminded us a few days ago, I saw steel products being loaded for transportation to New Zealand. Some time ago I saw at the Soo great mills rolling steel rails of eighty pound sections or greater and I saw some structural steel being manufactured. At another point I saw nails and other articles of iron and steel being produced. I realized then how great and important this industry was. Is a farmer to build a house on the prairies? He must have recourse to iron and steel. Is a great building to be constructed in a city? Recourse must be -had to angle iron and structural steel to give it strength. In this way you find that every activity in the Dominion is linked up with the iron and steel industry.

When the minister said the other day that $120,000,000 were being paid for wages to this industry I realized its greatness, its importance and the far-reaching consequences of its development. No one who is familiar with the history of this country will fail to remember the great struggle which was made by Sir Charles Tupper, in which he was later assisted, it will be recalled, by Mr. Fielding, for the development of an iron and steel industry on the island of Cape Breton. But who, in dealing with a matter of this kind, will venture to forget for a moment the report of the Duncan commission which was made in September, 1926, with respect to that industry? This is 1930. The session of 1926-27, the session of 1928 and the session of 1929 went by, and now in 1930 some relief is to be 2419-115i

afforded by placing a bounty of 49-J cents per ton on coal used for the purpose of producing primary steel and iron. That was demanded not to-day nor yesterday, but in 1926, and ever since that time we have endeavoured to induce the government to have regard to their obligations in that respect. Have they done so? They have not. Why now suddenly do they yield to what was a just claim four years ago or more? Why is it only to-day that this is done? Why was it not done years ago? Someone has said that in matters of this kind you have a death-bed repentence and the malefactor who died at the beginning of our civilization found heaven quite as well as one who had espoused the Christian cause all his life. But may I remind the hon. gentleman that that is not quite a sound analogy, for there were five, it will be remembered, who were unwise enough to be too late in trimming their lamps.

Mr. DUNNING:

The hon. member is

mixing malefactors with virgins, is he not?

Mr. BENNETT:

I am glad to see that the hon. gentleman's biblical knowledge is still not wholly impaired, but it is a little doubtful yet.

Mr. McLEAN (Melfort):

Burning.

Mr. BENNETT:

Not burning, trimming,

and certainly there has never before been greater evidence of trimming on a budget than on that which we are now discussing. I wish to point out what the Duncan report was in connection with this matter. It will be recalled that Sir Andrew Rae Duncan and his committee declined to enter into any discussion with respect to political matters. They said that they were not in a position to deal with the political phase of the situation, but that certain representations had been made to them. May I read the words, in order that they may be placed on Hansard, and then I will request hon. gentlemen to ask themselves whether or not in this tardy recognition of a claim four years after it had been adjudicated upon and they were directed to meet it, they have done justice to the maritimes. Paragraph 23, page 36, of that report reads:

Several features of the customs tariff in its relation to coal were brought to our attention, both by the government of Nova Scotia and by the operators of the coal mines. These we feel ourselves precluded from dealing with, since they are a matter properly to be considered by the Tariff Advisory Board; but we may be permitted to say that we are impressed with the need for reconsideration of the customs tariff in its relation to coal, anthracite and coke, and we recommend that the Tariff Advisory Board should be asked to give immediate consideration to the subject.

The Budget-Mr. Bennett

Not three years later, not two years later, but that immediate consideration be given to the subject, and the only authority under the present regulations who could seek the opinion of the Tariff Advisory Board was the government itself. For three and four long years this government has paid no attention *whatever to the recommendations of the Duncan report, has entirely failed to observe its terms, and now it regards the recommendations made in September, 1926, for immediate action as having been carried out by action taken in May, 1930.

I turn to the item of steel and the customs tariff. This is dealt with in paragraph 25, page 37, of the report. It reads:

It was submitted that the tendency of the tariff, as affected by successive alterations, has been to lessen the protection upon the primary products of iron and steel and to encourage their importation from other countries as being the raw materials of iron and steel-fabricating and finishing industries in Canada.

In respect of this matter, we do not conceive it to be our duty to express any opinion, since the question is, as we were informed by the chairman of the Tariff Advisory Board, who met us at our request, at the present moment under the consideration of that Board. But we do regard it as our duty to record that the significance of this industry to the maritime provinces was forcibly brought home to us, not only in the manufacturing towns we visited in the maritimes but also throughout the agricultural districts of the maritimes. We record this in order to emphasize the need for prompt action.

Prompt action! In that regard, sir, let me point out again that this party, the Conservative party, is the party that took the onus and responsibility for urging that maritime claims be considered by this house. It is too long to review that now except to say that in the end it resulted in the Duncan commission being appointed, and before that commission there appeared representatives of the various parties affected, and as a result of the work of that commission certain recommendations were made for immediate consideration for prompt action. Is it immediate consideration, is it prompt action, when taken four years after the report was submitted? What has happened in the meantime Let the Minister of National Defence (Mr. Rals-' ton) say that in the meantime there has not been unemployment in the maritimes, that conditions have not existed there that might nave been remedied bef6re this. If the remedy applied to-day is to benefit the steel industry, why was it not applied three years ago? A government is the true custodian of the national welfare, the true author of great national policies. Here we have a government which in 1930 says: We have now

solved the problem, and here are the benefits that will accrue by reason of the action that we are now taking. It takes this action now after three years with all the resultant injuries to this country, without moving a hand to remedy the conditions. Is that their idea of government? Is that the reason why Mr. Cromie, who spoke here yesterday, sent throughout Canada an advertisement directed to the Prime Minister, headed " Seven Years Too Late"?

Sir, let me remind you that this country is at the moment faced with conditions which it has not had to face for many long years, conditions which are admitted by the Minister of Finance and by every student of economic conditions. The strength and vigour of this young country will respond if the people to-day are given an equal opportunity with their competitors to assert themselves. Instead of in the days of plenty having the opportunity afforded to them to prepare for the conditions that are now upon us, instead of the great steel industry being strengthened as it should have been not only at the Soo, in the maritimes, and in Upper Canada, by the application of principles which the government now say is the panacea for our ills, instead of that being done at a time when the industry might have been enabled to prepare for the conditions of hardship prevailing today, only now when the tide has turned does the government come along and say: Here is the remedy to apply. Is that their conception of government? Is that the idea that the Prime Minister has with respect to this matter? Let the people answer.

Hear, hear.

Mr. CHAPLIN:

Bring on your election.

Mr. BENNETT:

Let me turn for a moment to the Consumers' League, the Consumers' League which during the last summer has been sending literature broadcast throughout Canada, to western Canada under the frank of the Minister of the Interior (Mr. Stewart), and to other parts of this country under the frank of other ministers. That literature I have in my possession. Of that league the hon. gentleman who just applauded was a member. The hon. member for Swift Current (Mr. Bothwell) was the admired president at one time, and I believe that he is yet. Let us see where the Consumers' League stands to-day.

Mr. VALLANCE:

Do not1 read it. It won't do you any good.

Mr. BENNETT:

Here is the last letter

issued by the league, by R. J. Deachman, dated

The Budget-Mr. Bennett

April 28, 1930. This is the way in which he contemplates the budget that is to come:

Taking a guess at the budget has been a popular amusement for some time. One guess is as good as another. There is no reason why people should not find amusement that way. Conservative papers are quite sure what the document will contain. It will in their opinion be a protectionist budget-so strongly protectionist that only the modesty of Mr. Bennett will prevent his acceptance of it with cheers and a glad amen!

Now I read these observations, which will carry great balm and solace to the Minister of Finance:

It will not be thus that the budget will be revised. Minor upward changes may take place. In trying to adjust a tariff downward it would be remarkable if there should not happen to be odd items which called for the reverse process. The general trend of the budget, however, will be downward, not upward. It will be thus because this is a Liberal government. No Liberal government could walk up to the penitent bench and pretend conversion at the request of Mr. Bennett or sell its convictions to the highest bidder and expect to cash in on the transaction.

And mark you, sir, that is after dealing with the iron and steel schedules. The correspondent deals with the profits of the British Empire Steel Corporation, of the Steel Company of Canada, and of the Soo enterprise, and he says in conclusion that there will be a downward revision of the tariff. Did I hear some hon. gentleman cheer that sentiment? Did I hear some hon. gentleman cheer the idea that this was a downward revision? Let me read what the hon. Minister of Railways and Canals (Mr. Crerar) who left the administration of Sir Robert Borden, and whose resignation in such touching terms I have under my hand, said at the time of his resignation, dated June 4, 1919, not quite eleven years ago. Let us read his own words, always desirable:

My dear Sir Robert,-

The government, in its consideration of the budget to be placed before parliament tomorrow, has reached, I take it, definite and final conclusions as to the form it will take. As you are aware, I am not in accord with it and therefore cannot support it, either in the house or in the country. Having reached this decision, there is only one course for me to follow, and I therefore tender you herewith my resignation as a member of the government. The reason for my decision shall be given more fully when the subject is under discussion in the house.

Then follow other paragraphs. He gave his reasons in the house why he could not stand a $3 tariff or less on steel. He could not stand the tariff of S3 on iron and steel; but he swallows the $6 one now proposed.

But that is not all. In days gone by the party now sitting to the left of the Speaker, has been charged with being a high protectionist party. Look at the schedule here. Look at cast iron pipe.

Oh, oh.

Mr. BENNETT:

Why do you laugh? Look at cast iron pipe,-the duty has been raised only 100 per cent. When did you ever hear of a Conservative government that raised the duty on iron and steel products 100 per cent.

Never.

Mr. BENNETT:

Now, sir, in this schedule the government have raised that duty 100 per cent. What has the hon. gentleman to say about it? Does he resign or stay? Where is the hon. gentleman who in 1925 and 1926 as premier of Saskatchewan painted in glowing terms the evils of protection? Why, he is here and raises the tariff 100 per cent. Another item is raised 80 per cent, another only 60 per cent. And these are the good old days of low free trade tariffs! We must not overlook in that regard that the dumping duties still obtain. The little byplay this afternoon was so encouraging to those who desire to secure protection.

Mr. CHAPLIN:

Especially on furniture.

Mr. BENNETT:

Of course, on furniture with a protection of only 30 per cent. Now we must save it from dumping. Just imagine low-priced furniture from the southern states, where labour and wood are cheap, coming in here to interfere with the 30 per cent industry of the Minister of Trade and Commerce (Mr. Malcolm).