April 13, 1933

CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

I would suggest to my hon. friend that nothing is to be gained by that sort of language; it does not add to the dignity of the house nor does it help the amity of debate. I am prepared and willing to give to this committee all the information I can. A moment ago the hon. member said that all I had succeeded in demonstrating was that I knew nothing about my department.

[Mr. Stevens.1

I do not wish to boast, but I am not afraid to meet the hon. member or anyone else in a discussion of the affairs of the department.

I do not pretend for a moment to have mastered in detail all its intricacies, but this I certainly do: From eight-thirty in the

morning until late in the evening I devote whatever energy, ability and time I have to a study of the affairs of the department, and so far as the Board of Grain Commissioners is concerned I leave the administration of the act very largely in their hands, as it is my duty to do. When I come to parliament with the estimates of the board I come fortified with as much knowledge as I have been able to gather to anticipate ordinary questions asked, and I can assure hon. gentlemen opposite, who, generally speaking, are pretty fair and sportsmanlike, that I am prepared to give as complete answers as possible on all matters relating to the department. In this instance I am quite prepared to grant that hon. members have a right to criticize;

I do not object to that at all. But I do feel that it is not quite playing the game for the hon. member to suggest to the committee, and particularly to the public, that I have been so neglectful of my duty since taking office as not to know anything about the affairs of the department. That, I think,

I have a right to resent.

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?

Some hon. MEMBERS:

Hear, hear.

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LIB

William Richard Motherwell

Liberal

Mr. MOTHERWELL:

The rearguard

think they have something to cheer about, but they have not. I was just referring to this branch of the Department of Trade and Commerce, the work under the grain act, which is the only matter before us at the moment. This is the second time this session that the hon. gentleman has undertaken to lecture me on the amenities of debate, although I have been fair enough to allow his ghastly mistake to pass with regard to the wheat which the government were holding over-saying that the government were not in the grain trade when all the time they were-and I excused him before Christmas on the ground that perhaps it was not in the best interests of the state to have the actual facts brought out. Now he takes me to task and picks me out as the chief sinner in criticizing him. Don't I remember when he was on this side of the house? If he had had his way not one of us would have had a square inch of hide left on us after he was through. And [DOT] then to squeal now because we give him a little bit of his own medicine! As a matter of fact, the appointment was made by the hon. gentleman without knowing whether it

Supply-Trade-Grain Act

was necessary or not, and now he tells us, a year and a half afterwards, that he does not know whether the man's services were used by the farmers.

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

I made no such statement.

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LIB

William Richard Motherwell

Liberal

Mr. MOTHERWELL:

The hon. gentleman has just said it. What did he say? The hon. member for Macdonald and two or three others have asked for information with regard to the suggestion about farmers falling prostrate before the hon. gentleman's appointee and asking for succour and advice at a time when they did not need it, and he lectures us. If he wants to keep his head on his shoulders he had better be civil himself. We do not always get him in the box he is in now. He had better come down the tree as the coon usually does when smoked out. We are not particularly concerned whether he comes down head first or tail first, but I suggest that it would be well for the hon. gentleman to admit that he is up against it instead of attempting to lecture us as he has been doing.

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LIB

John Vallance

Liberal

Mr. VALLANCE:

I have listened with

interest to what the minister has had to say with regard to the appointment of Mr. Taylor. Going through the evidence, I find a letter sent by the Deputy Minister of Trade and Commerce to the Civil Service Commission, setting out the reasons why the appointment should be made. During the discussion this afternoon, or at least that part of it that I have heard, I have not detected the real reason given to the Civil Service Commission. Let me quote from a letter written to the secretary of the Civil Service Commission by the Deputy Minister of Trade and Commerce:

I have your letter of the 22nd instant and in reply beg to say that at the moment I cannot furnish definite information regarding the probable duration of the employment of Mr. Taylor.

Matters have been cropping up from time to time which require his attention; and more especially now that the ten cent wheat bonus is being paid, many legal questions regarding the ownership of the wheat grown, etc., are having his attention. I would suggest if possible that the Civil Service Commission extend the certificate for another six months when the matter may then be given further consideration.

This letter was dated December 23 and was addressed by the Deputy Minister of Trade and Commerce to the secretary of the Civil Service Commission. I suppose the six months have expired, and it will be seen that he speaks here of a ten cent bonus, which was

never ten cents at all, and which is no longer in existence. So that the reasons given by the department, for the appointment no longer exist, and I think the minister would be well advised to cancel the appointment.

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LIB-PRO

William Gilbert Weir

Liberal Progressive

Mr. WEIR (Macdonald):

Has the minister anything to show what work this gentleman is doing?

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

I have stated it over and over and my hon. friend has added one other duty which I overlooked; it is true he did give some service in that respect. As regards the individual oases, I am sorry I have not under my hand a statement containing that information. I understand there is an amendment before the chair to cut the item by $5,000. I am advised by the Board of Grain Commissioners that they have reduced their estimates as low -as they possibly can consistently with proper administration, and we cannot accept the amendment. I have already said that the appointment is temporary'. It has been renewed at the request of the department and the commission and I am quite prepared to say that, in the light of what is disclosed, the services may be discontinued at the expiry of the period.

Amendment negatived on division.

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LIB

Edward James Young

Liberal

Mr. YOUNG:

I asked the minister whether he had anything to tell us of the government's activities in the wheat market. When the committee of the House of Commons was investigating the grain marketing situation a few years ago, Mr. James Richardson told us that one of the principal reasons for the prevailing low price of wheat was the fact that the federal farm board of the United States was holding a quantity of wheat. A few weeks ago an announcement was made that the federal farm board 'had got rid of their surplus and since then the price of wheat in Chicago has been steadily advancing. We believe that the Canadian government, through Mr. McFarland, is holding vast quantities of wheat, but we see no corresponding advance in price here. When may we expect the government to get rid of the wheat which it is holding, with results similar to those obtained in the United States?

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

Let me point out in the

first place something which I am sure my hon. friend knows, namely, that the price of wheat in Chicago has risen because the United States market is no longer on an export basis. It is virtually on a domestic market basis, and that is the chief reason for the rise. Canada, on the other hand, still is and in-

Supply-Trade-Grain Act

evifcably will continue to be on an export basis; consequently there is not likely, through any local agency, to be any rise in price in Canada, except in so far as the price of wheat rises in the world market generally. Now, as regards the quantity of wheat which my hon. friend says is hanging over, let me say this: The official figures of the bureau of statistics show an anticipated carry-over of about 150,000,000 bushels. Of course, it is impossible to give precise figures. The movement of wheat this year has been very creditable. The following movements for export have taken place:

Bushels

1931 217.000,000

1932 191,000.000

1933 239,000,000

These figures show that our wheat is moving out to the world markets in a fairly creditable and rapid manner. In my opinion, given for what it is worth-in the estimation of Eome it is not worth much-the world situation in connection with wheat is gradually and steadily improving. The obvious failure of the winter crop of the United States and the comparatively poor quality of the Argentine crop of the past season has changed the situation very materially. Russia was almost entirely out of the market last year and the indications are that she will not be in the market next year as an exporting factor to any great extent. The position has greatly improved over what it was two years ago. The position at that time was due to the heavy crop of 1928-29. The fact that the government through the agency of Mr. McFarland contributed to the stabilization of the wheat market in Winnipeg during the past two years does not necessarily enter into this picture. That was something which was done to prevent the cash wheat market from collapsing. I think every hon. member will admit the grave danger with which we were confronted during the last couple of years in the complete collapse of the cash wheat market. That collapse was prevented by the action taken by Mr. McFarland acting under the instructions of the government. We feel confident that the holdings which Mr. McFarland has and which are merely futures can be put forward in an orderly manner so as not to create a sudden break in the market. I do not know whether my hon. friend intended to suggest it, but I have heard the suggestion made that we should sell this wheat as quickly as possible. Such action would result in the complete collapse of the market. We intend to make possible a gradual liquida-

tion of the surplus Canadian wheat. I suggest to my hon. friend and to others who are interested that the best and most helpful thing that can be done for this country and for the producers of this country is to have the surplus quantities of wheat fed on to the market in quantities that the market can bear. May I point out again that in my opinion the general world situation is such that the outlook is not too black.

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LIB

Edward James Young

Liberal

Mr. YOUNG:

The minister has stated that there is some 150,000,000 bushels of wheat still in the country. Can he tell us how much of that is in the farmers' hands, how much is in the hands of the trade and how much in the hands of Mr. McFarland?

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

That figure I gave was the likely carry-over but there is more than that in the country. I have not the exact figures before me but I think I can give them fairly well from memory and they may be subject to correction. According to the latest estimates there are about 80,000,000 bushels in the hands of the farmers. This is an abnormally large amount for this time of year. I think it can be accounted for very largely by the fact that the farmers more remotely removed from the head of the lakes and Vancouver and subject to additional freight charges have been inclined to hold their wheat.

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UFA
CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

Yes. About a week or so ago there were about 69,000,000 bushels at the head of the lakes, 10,000,000 bushels at Vancouver and about 10,000,000 bushels in transit on our railroads and on the high seas. There are about 4,000,000 bushels in the hands of the milling companies, which is somewhat lower than normal-the normal holdings of the milling companies being about five to six million bushels.

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CON

James J. Donnelly

Conservative (1867-1942)

Mr. DONNELLY:

Will the minister compare those figures with the figures of a year

ago?

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

I have not all the figures my hon. friend asks for, but I can give some of them. As at the end of March, 1931, there were 69,000,000 bushels at the head of the lakes, and as at April 1, 1932, there were 55,500,000 bushels. The amount at the head of the lakes this year is about 15,000,000 bushels over and above what it was a year ago. The amount held by the farmers would be about thirty per cent more than normal,

Supply-Trade-Grain Act

while the amount in the hands of the millers is less than normal. There is a little excess at Vancouver, amounting to probably one or two million bushels.

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LIB

James Malcolm

Liberal

Mr. MALCOLM:

I think the remarks of the minister are worthy of a good deal of consideration by this committee, because they have confirmed what I knew to be the case when I was occupying the position now occupied by the minister, namely, that the law of supply and demand as it applies to commodities like wheat cannot be changed by governmental regulations. I have a distinct recollection of making a statement in this house which was severely criticized. I said that as far as the trade commissioners were concerned they had nothing to do, nor could they do very much, in connection with the selling of a commodity like wheat. This commodity must find its own levels on the markets of the world. The minister has referred to the abnormally large crop of 1928-29 as having been a disturbing factor in the price of wheat a few years ago. He is perfectly right in stating that that was the disturbing factor. The minister states also that the present plan is to put forward this carry-over wheat in an orderly manner, but it must be realized that the opportunities which we will have to dispose of our wheat will not be caused by any action of the Canadian government or any action of any member of the Canadian government. These opportunities will be brought about by a world shortage or a need of wheat and the wheat will go forward just as fast as the markets can absorb it and will command the price the markets can afford to pay. One fact should be impressed upon the producers of such commodities as wheat; they should realize that the commodity which they produce is liable to be affected by weather conditions in various parts of the world. Wheat is a world commodity and must be sold at the prices prevailing upon the markets of the world. I think the minister's statement, when analyzed, will remove a lot of the nonsense that has been talked as to what can be done to control wheat prices. We have in this dominion, under this item which the minister is asking us to vote on to-day, the very finest wheat handling system in existence in any country, paid for by the producers; the taxpayers are not being asked to pay a cent of this item. Our certificate for Canadian grain is treated in the markets of the world as a final certificate.

There is another delusion that it is well to shatter when the minister talks about the growth of Canadian trade with Great

Britain since the imperial conference was held. We have sold a great deal of wheat lately at a price that the world would pay for it, but that wheat has not all been consumed in Great Britain. It has been credited in our trade returns to Great Britain, but some of it has gone to other countries.

I rose for two purposes: one was to thank the minister for clearing up the situation by pointing out that it was the 1928-29 crop that caused such a surplus all over the world, because the crop was heavy. The minister pointed out also that Russia is not-and in my opinion it never again will be-a large exporting country. Only about five billion bushels of wheat are grown in the world and this is all consumed in the countries in which it is grown with the exception of

700.000. 000 or 800,000,000 bushels. Russia cannot produce more than 1,100,000,000 bushels and has 160,000,000 people who need it all. If they raise the standard of living in that country they may need more. The days when the Russian peasant consumed black bread and Russia exported 300,000,000 bushels of their good grain have gone; the Russians will use more of their own grain as food, and I look forward to Canada coming back to her place as the greatest grain exporter of the world. Shortage of crop may make the

500.000. 000 bushels needed very valuable. A long crop may throw an extra 500,000,000 bushels on the market and the price of course will be affected by the surplus so offered.

The second point I want to make is that European countries can do without wheat. France can consume her soft wheat; she can grow practically as much wheat as can the Dominion of Canada. Germany can use rye bread, and can substitute her coarser grain for Canadian wheat. The only thing that will stop Germany from using rye bread and that will induce France to use hard wheat is for this government to give those countries an opportunity to sell something to the Dominion of Canada. If a favourable trade treaty can be made to take some French commodities and another one to take some German commodities, the very high rates of duty prevailing in those countries against Canadian grain might be modified and we might have a still better market more willing to absorb this carry-over, while the price would reach a high level very much sooner than it would with these trade restrictions existing. Nothing should be more important to a country with 150.000,000 bushels of grain carried and financed by the taxpayers' money than to find an outlet at a high level. I suggest to the minister that the only way in which he

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Supply-Trade-Grain Act

can find an outlet is to get favourable entry into countries like Germany and France which now have very high tariffs against us. If he wants that favourable entry, he will have to give favourable consideration to imports of commodities we may satisfactorily buy. The whole wheat situation revolves itself around the opportunity Canada has to trade.

Before I sit down, may I say that it is unfortunate-and the minister knows it, as well as I do-that France, Germany and other continental countries subscribe to the system of keeping their statistics on a country of origin and country of destination basis, w'hile Canada, the United States of America and Great Britain subscribe to a system of export and import figures, regardless of the country of origin. Our trade returns of exports of Canadian wheat to Great Britain are invariably larger than is the actual consumption in Great Britain because, on the Liverpool Corn Exchange, she is the greatest jobber of wheat in the world and resells much of the wheat we ship to her. Nothing would be more valuable in computing what our actual British trade is than for the minister to be able to present-and I tried to get the figures but I never was successful-a statement of the actual consumption of Canadian wheat at all times and in all years by the British consuming public. If he were able to find that and show it to tihe Canadian people, 1 think the public would discover that we show very considerable quantities of wheat credited to Great Britain which are going from Britain to Other markets.

So far as this item is concerned, I have no desire to hold it up. I have spoken, indeed, at greater length than I had intended. Phis matter is in the hands of an efficient board. I do not think we need this extra lawyer, buit that is aside and apart, as the minister says now that he is not anxious to retain his services. Members of parliament on this side have joined with members of parliament on the other and great assistance has been given by members of the Progressive group, notably the leader of that group and the hon. member for Bow River, to make the grain act so clear, so plain, that I believe any layman can interpret it. I agree with the hon. member for Melville there are not many lawyers in Canada who are as familiar with the act as are members who sat on the committee on agriculture, and no one knows the act better than does Mr. Ramsay. Our inspection system is almost as close to perfection as perfection can be

achieved. We have returned to the sensible idea that in order that grain may be handled, it must be hedged on the market. It cannot be taken off the market. I have a distinct recollection of Doctor Magill telling the committee that in 1922. He was right then, and the same thing is true now. Wheat is ripening in some country all the time and the sooner we realize we have to protect our position from day to day and take world market prices, profiting by the years when prices are higher and facing the situation when they are lower, not allowing any carryover to disturb the market, the wiser we shall be as a wheat exporting country. When we realize we can broaden the scope of our market, by entering into trade treaties with countries that can use our wheat, the wheat situation in Canada will improve. It is improving now owing to actual scarcity. I agree with the minister that the situation will improve during the coming season and before long we may be in a much more comfortable position with regard to wheat producing and marketing in this dominion.

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LIB

Edward James Young

Liberal

Mr. YOUNG:

I do not think the minister quite got the drift of my question. He said that there were some 80,000,000 bushels in the hands of the farmers, 69,000,000 bushels at the head of the lakes, 10,000,000 bushels in Vancouver, 10,000,000 bushels in transit and

4,000,000 bushels in the hands of the millers, making a total of 173,000,000 bushels. If there are in Canada 230,000,000 bushels, that still leaves 57,000,000 bushels to be acounted for. Let me explain the object I had in mind: it was to find out how much actual wheat we shall have to sell yet and also how much paper wheat is in the hands of Mr. McFarland on behalf of the government, which wheat will have to be disposed of. If the minister will tell us that, we shall have some light on the question.

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

I think my hon. friend is wrong in saying "also," because they run more or less concurrently, if I might use that term; the one is complementary to the other; if you have a contract for the delivery of wheat, that means that someone must deliver that wheat to you, and so on.

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LIB

Edward James Young

Liberal

Mr. YOUNG:

If he has purchased options, he lias a contract not to deliver wheat but to

take it.

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April 13, 1933