April 23, 1934

LIB

Charles Edward Bothwell

Liberal

Mr. C. E. BOTHWELL (Swift Current):

Mr. Speaker, my first word is one of congratulation to the Minister of Finance (Mr. Rhodes) for the clearness and frankness with which he laid before the house and the country the situation in which our country is to-day. I should possibly qualify that in one or two particulars. In referring to increases in prices, the minister stated, as reported on page 2270 of Hansard:

As an indication of the extent to _ which the maladjustments between various price groups have been corrected in Canada, I may add that while the wholesale price index was rising 13.4 per cent, the index for farm prices rose by no less than 34.9 per cent.

I believe the minister based his figures upon the index of February of last year, which belief is to be gathered from the preceding paragraph, but I think a fairer comparison would have been to take the index figures at a normal time rather than at a time when agricultural prices were at their lowest ebb. If that were done, then the percentages would have been very close to or possibly the same as those given this afternoon by the hon. member for Shelburne-Yarmouth (Mr. Ralston).

I do not intend to follow the arguments of the preceding speaker, the hon. member for Compton (Mr. Gobeil) except as to one remark he made. He stated that the people of Canada would not stand for continued deficits in Canadian National railways account of about one million dollars a week. I have gone through the budget statement of the Minister of Finance pretty carefully, but I do not believe that there is anything in it to help remedy the railway situation. Before our railway situation can improve I believe we shall have to have some traffic for the railways, and so long as our trade is restricted to the extent that it is at the present time then the railways will have

nothing to do, or at any rate will have insufficient work to make them pay.

I have also carefully gone through this budget to see whether there is anything in it that may be of particular interest to the people whom I have the honour to represent. I do not think they will be particularly interested in some of the changes that have been made, for instance, the reduction in the tax on beer, ale and porter. There may be a little benefit from the reduction of the excise tax from 3 to li per cent on goods imported under the British preference, but I hardly think that any of the people I represent will benefit in any way by the reduction from $1.50 to 75 cents on champagne and other sparkling wines. They may derive some benefit from the reduction of two cents on postal notes not exceeding $1, but few of them will benefit by the reduction of four cents per hundred or fraction thereof on cigarette tubes. I gather from the newspapers that in connection with the reduction on cigarette tubes it is the opinion of the tobacconists that it will mean no reduction in the price. Whether the newspapers are correct or whether the opinions of those who have been consulted by newspaper reporters is correct, I am not prepared to say. The people however will welcome the reduction of one cent per pound on sugar; we only regret that the budget this year did not wipe out that tax altogether. We realize the difficulty the minister faces in raising revenue; we realize that when he reduced the excise tax on sugar from two cents to one cent per pound he had to find some other means of raising the same amount of taxation, and this apparently he did by putting a tax on gold. In passing, I believe that the tax on gold is a reasonable kind of tax, but I think it should be applied somewhat differently. In my opinion it should be a graded tax, as explained by the hon. member for Shelburne-Yarmouth (Mr. Ralston) this afternoon. I cannot understand how the hon. member for Winnipeg North Centre (Mr. Woodsworth) can object to a graded tax on gold and be in favour of a graded tax on income; the two seem to me to be very similar ways of raising revenue. However, the hon, gentleman objected to it this afternoon; he thought the tax was all right but not high enough.

Under this budget I find that the duties have been raised on three series of articles that may affect the ordinary individual: 278b,

crude peanut oil, for refining for edible purposes, used as materials in Canadian manufactures; 537a, rovings, yarns and warps, wholly or in part of vegetable fibres; and 375, ferro-alloys of various kinds. The duties have

The Budget-Mr. Bothwell

been lowered on twenty items when imported by manufacturers for use in their own factories, on twenty-seven items or classes of goods imported only for manufacturing or processing purposes, and on five completely manufactured items.

None of the people I represent are particularly interested in any of these changes in the tariff with the exception of completely manufactured goods, and I have looked into the matter to see how far these will benefit any of them. I take the first item, 409e. This item reads:

Fruit and vegetable grading, washing and wiping machines and combination bagging and weighing machines, and complete parts therefor.

Under the old tariff it was free under the preferential, 10 per cent under the intermediate and 10 per cent under the general tariff. Under this budget the rates are the same, but I find that in the old tariff there were items carrying rates of 15 per cent preferential, 27i per cent intermediate and 35 per cent general. So far as the farmer is concerned however, in the purchase of fruit and vegetable grading, washing and wiping machines, as I read the schedules there has been no change in the tariff affecting him; it has been changed more in the wording of the tariff sections, clarifying the tariff to indicate that farmers will get the goods they require under these rates.

The next item is 410d. This item reads:

Well drilling machinery and apparatus, and complete parts thereof, of a class or kind not made in Canada, and seamless iron or steel tubing over eight inches in diameter, for use exclusively in drilling for water, natural gas and oil, and in prospecting for minerals, but not to include motive power; packer rubbers for oil and gas wells.

This item is free under the three tariffs. In the old schedule it was also free, but packer rubbers for oil and gas wells are added, and under the old tariff that particular item bore rates of 15 per cent preferential, 25 per cent intermediate and 27? general, and apparently it came under item 618. Now it is included with well drilling machinery. That does not bring any benefit to the people I represent.

, Mr. STANLEY: It does to some of the

rest of us.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

How much did it cost

my hon. friend or any of his constituents for packer rubbers?

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

George Douglass Stanley

Conservative (1867-1942)

Mr. STANLEY:

It assists some of the people in carrying on their work and in promoting an industry which is of so much importance.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

I appreciate the reduction even if it is small and affects only one particular industry. The next item is 445j, electric dry shaving machines, of a class or kind not made in Canada, for use in removing human hair, and complete parts thereof. I do not think our people will be very much interested in that. The next item is 511a, cricket bats, balls, gloves and leg guards. I do not know whom this will benefit. In my youth we used to play cricket a little but at that time we had to make our own bats. I can scarcely recall now how we got the ball or whether there was a duty on it or not, but I can say at any rate that among farmers, who are hardest hit at the present time, there are not many who will be interested in that item. The next item is 597b, harps. Is this an election bait for the Irish? It is free under the preferential tariff.

There is in this schedule one item in which I am rather interested, and that is:

267b. Crude petroleum not in its natural state, '7250 specific gravity or heavier at 60 degrees temperature, when imported by oil refiners to be refined in their own factories.

The rates are, per gallon, British preferential tariff, free; intermediate tariff, one and one-half cents; general tariff, one and one-half cents. The old rate was: British preferential tariff, one-half cent; intermediate tariff, one and one-half cents; general tariff, one and one-half cents.

A couple of years ago we had considerable discussion on gasoline in the house or in a committee of it. That did not get very far in the house that session, but we are not satisfied with the gasoline situation yet, and when I noticed that item I wondered just the reason for the change in the duty on crude petroleum not in its natural state. I began looking into the matter to find out whence that particular kind of petroleum was coming, and from the Trade of Canada for the fiscal year ended March 31, 1933, I find the imports were as follows:

From

United Kingdom-

British IVest Indies- Imports

Date gallons

1929 nji

1930 nij

1931 nil

1932 nil

1933 10,849,658

The Budget-Mr. Bothwell

That was imported under the preferential rate.

From Peru-

1929 ail

1930 7,684,088

1931 7,047,497

1932 1,351,595

1933 nil

From Russia

1929 nil

1930!! nil

1931 nil

1932 nil

The Trade of Canada shows nothing for 1932, but the fiscal year ended March 31. The fiscal year 1933, includes from March 31, 1932, and as I understand the situation, some time in the early part or in the summer of 1932 some big shipments of this particular grade of gasoline came in from Russia. I find in the Trade of Canada that 9,963,048 gallons of this particular brand of gasoline were imported from Russia. Then in the fall of 1932 the government apparently thought none of this gasoline should come in from Russia, so they raised the duty on this particular brand from three-tenths, four-tenths and one-half cent per gallon under the various tariff classifications to one-half, one and one-half, and one and one-half cent per gallon. In the latter part of 1932, as I understand the situation, this importation of 10,000,000 gallons came in from Trinidad, in the British West Indies. I am sony I was not able to get the figures for the fiscal year ending March 31, 1934, because I expect I would have found that the importations from the British West Indies were still greater in that year. Apparently what happened was this: before the budget came down, I presume the oil companies asked the government for a reduction in the duty. They began to get that particular class of gasoline from the British West Indies and as the gasoline imported under that item is to be imported by oil refiners to be refined in their own factories, nobody else will get the benefit of the reduction. So much for that.

The Minister of Finance in his budget statement realizes the serious position in which many of the people of Canada are to-day. This is shown by his remarks as reported on page 2270 of Hansard where he says:

For certain individual debtors the burden has become unbearable and the government proposes to bring down at an early stage legislation designed to provide machinery whereby farmers who find themselves unable to pay the fixed charges on their outstanding debts will be able by an expeditious and inexpensive process to work out compromises with their creditors and to obtain new working capital. The guiding principle of this legislation will be to

secure for the farmer a simplified debt structure reduced in size to a point where the carrying charges will be within the capacity of the farm enterprise to pay. This will involve some concessions on the part of creditors but these will be more than outweighed by the advantages which will follow as a result of retaining the farmer on the land as a willing and effective producer. The release of economic energy so produced and the substitution of hope and goodwill for despondency and discontent which are now prevalent in certain areas should result in a very real gain to our whole domestic economy.

That shows, I say, an appreciation on the part of the minister that our farmers in particular are in desperate straits. He is also trying to find means of raising revenue, and before I get through I am going to suggest to him one method of doing so which I think he has overlooked. That is, the oil industry should be put on a basis where it will be fair and equitable to all persons in Canada, and then, if the government needs to raise additional taxation, let them do a little taxing there instead of allowing the oil industry to get away with all the profits they are now extorting from the people of Canada. In the first place, dealing with that industry, I want to quote from the Petroleum Products Industry in Canada, 1932, a publication issued by the bureau of statistics under the authority of the Minister of Trade and Commerce (Mr. Stevens). I find there that the refineries in Canada used 930,114,055 gallons of crude oil in 1932. Canada in that year produced only about 36,000,000 gallons, or less than four per cent of the crude oil that was used in the refining industry in this country. If there is a necessity for duties in order to maintain that industry which is producing less than four per cent of the crude petroleum used, I think it would be a more equitable way to deal with the matter to bonus that industry rather than to penalize for the benefit of the major oil companies all the people of Canada who use oil and oil products. The significance of the following figures is rather startling.

Petroleum Products Industry

1930 1932

Number of persons

employed 5,134 4,116

Salaries and wages.. ..$ 8,190,130 $ 5,980,681

Cost of material

71,800,429 52,237,387Selling value

91,787,205 71,697,757Surplus

11,796,646 13,478,689Those latter figures would not be all profits, but they would include profits. When the prices of raw material dropped as thisschedule shows I submit that the cost ofother materials entering into the cost ofgasoline or lubricants would drop also, so

The Budget-Mr. Bothwell

that the main difference between those figures of 811,796,000 for 1930 and 813,478,000 for 1932 would be profit. It shows that between 1930 and 1932 there was a wage cut of $2,209,449 or an average wage reduction per man employed of $142.24. The average yearly wage was reduced from 81,595.27 to $1,453.03. But between 1930 and 1932, although the selling value of the product at the works is some 820,000,000 less, the amount left for profit-or profit and other costs-increased by 81,683,043, which to me indicates that the oil industry, taking advantage of the depression, reduced the wages of their employees and used the money to pay additional profit. That is the only conclusion that one can draw.

I clipped from the Financial Post the record of the three major oil companies operating in Canada, and I want to read a few extracts. Here is the statement of the Imperial Oil Company taken from the Financial Post of April 21, 1934:

Lands, buildings, plant and other equipment increased from $112,333,827 to $113,457,235 and floating equipment dropped from $12,252,502. to $12,008,380. Against this, reserve for depreciation went up from $54,702,873 to $60,411,958, a gain of $5,709,085 or more than net profits on all Canadian business. Other reserves on fire, marine, cargo and freight insurance, and annuities, increased from $12,538,862 to $12,761,920.

Then we have the British American Oil Company. Here is the heading:

B. A. Oil Sales Down Somewhat But Earnings

Up.

Company Reduced Bank Loan From $3,000,000 to $1,750,000.

British American Oil Company's consolidated financial statement shows the company to have increased its gross and net profits in 1933 as compared with 1932, to have increased its earnings on the common stock from 99 cents a share in 1932 to $1.01 a share in 1933, to have reduced its bank loan by $1,250,000 to $1,750,000 and to have redeemed $178,572 of fifteen year five per cent convertible sinking fund gold debentures due 1945, leaving $4,462,500 outstanding.

Then there is another statement, income and surplus account. It shows an increase in the surplus carried forward from 86,810,805 to $7,338,510. The working capital is increased from 13,101,142 to 84,375,227.

I submit that the major oil companies in Canada were making profits prior to the change in the tariff in 1930 and do not need the protection given them now. I remember during the boom days in the west when the cities and towns were filled with real estate agents. Coming down the street in the morning a fellow would meet you and say: "The corner of Second avenue and Main street is sold." "Who bought it"? "One of the banking institutions." Next day you 74726-156

heard about another comer. "What bank bought that?" They knew it was the banks coming in and buying the best corners in the towns. But that is all changed now. You can go through any village, town or city, anywhere in Canada I presume, and you find that most of the best corners are occupied by Imperial Oil, Supertest, British American or some other oil company. The investment in oil stations must be tremendous, and the cost of distribution consequently tremendous. I do not know whether they are hiding their profits in that way, trying to spend their surplus so that they will not have to show excess dividends, but the inference is quite clear as to the position that the major oil companies are in.

Then we get letters like this. Here is one from Prince Rupert comparing prices charged in Prince Rupert and in Alaska-

Gasoline

Distillate

Mobiloil A lubricating oil

Prices per Imperial gallon Alaska Prince Rupert 17-4e. 24c.

15*6c. 19-5c.

75-6c. $1.10

The writers of this letter, the Canadian Halibut Fishing Vessel Owners' Association,

say:

From this you will see there is a great deal more difference than is represented by the duty. This we take it, is brought about from the fact that the duty prevents the bringing in of foreign products, consequently the home product has the field, and they not only add the price of duty but as much more as they can get away with. . . . There is absolutely no reason why the price of these products should be any more here than they are in Alaska, particularly as we understand that the Union Oil Co. supply their Alaska station from Vancouver, the same product, as is delivered to their station here.

I have another letter dealing with full diesel tractors. This is written by the Caterpillar Tractor Company:

One of these tractors sold to Mr. O. B. Lassiter of Chin, Alberta, was able to one-way plough 4,200 acres at a cost of 9 cents per acre for fuel, oil and labour. This result was partly due to Mr. Lassiter's location, as he was able to buy Diesel fuel from the Kevin-Sun-burst oilfield in Montana at a price which enabled him to lay it down on his farm for 61 cents per gallon. Had he bought a similar fuel from any of the larger Canadian oil companies, he would have paid 12 to 15 cents per gallon. Why this condition should prevail is something of a mystery as Mr. Lassiter paid duty on every gallon he imported. Over and above that, he paid duty and excise tax on the tractor itself which represented an increase of about 40 per cent over the cost of a similar tractor to a farmer living just south of the international boundary. In fact, the charges

The Budget-Mr. Botliwell

paid by this farmer over and above the factory price and freight amounts to more than the total fuel cost for 7,000 hours operation on fuel costing 6J cents per gallon.

In addition I have a letter from the Craig-Jensen Company in connection with lubricating oil, in which they talk about the dumping duty which has been added. The writer states:

That you may have at hand convenient information in connection with this matter, by obtaining copies from the department of customs manifest No. 2159, which covers shipment of 4,179 imperial gallons of oil (their invoice RS 8762, Freedom Oil Works). You will note that customs charges total $688.65 and this special duty clause accounts for $300.09 of this amount, or 7.18 cents per gallon.

That letter was written on November 5, 1932, after the sales tax of four cents per gallon had been imposed in the United States and added to our price for import purposes. The situation in connection with oil was explained early in the session by the hon. member for Beauce (Mr. Lacroix), who told us that he could have purchased gasoline from the Standard Oil Company and the PanAmerican Oil Company at 4-89 cents per gallon laid down in Quebec city, without duty or sales tax, while to buy oil from the Imperial Oil Company or the Champlain Oil Company in Montreal would cost 12-50 cents in Montreal plus 2-50 cents for shipping from Montreal to Quebec, or a total of 15 cents per gallon. That price, I presume, would include the sales tax and the duty of 21 cents per gallon, although I doubt if the Imperial Oil or the Champlain Oil paid any duty.

This difference in price has caused the people of the west to seek for means to obtain cheap fuel. They organized independent oil companies, but I understand that these companies have been bought up by one of the major oil companies or there has been some amalgamation, so that the farmers, through their cooperative associations, are now endeavouring to raise money themselves in order to build an independent oil refinery. I would quote the following dispatch from the Regina Leader Post of March 24, 1934:

Further details of the proposal that farmers' cooperatives establish a $150,000 oil and gasoline refinery in the province will be discussed by directors of the Sherwood Cooperative association at a meeting at 10 o'clock next Wednesday morning in the Sherwood rural municipal building, Cornwall street.

C. O. Smith, president of the association, said details of the plan liad been sent to the central cooperative buying association, Saskatoon, for consideration but no reply had been received up to Saturday afternoon.

The plan calls for construction of a refinery at a cost of $75,000 at some central point in the province with an additional $75,000 as operating account.

Then last year the Saskatchewan legislature endeavoured to take some action. A bill was introduced by Hon. A. C. Stewart, Minister of Highways, in an attempt to stop discrimination in regard to gasoline prices as betw-een different sections of the province. I understand that the bill was introduced because, when an independent oil refinery was constructed, the major oil companies were in a position to cut prices in the territory to be served by that small refinery, and so put it out of business. The object of this bill was to prevent the major oil companies from taking that action. Under the provisions of the bill any company found guilty of discriminatory sales was liable to a fine of not less than $1,000 and not more than $10,000, rvhile any person violating this provision of the act was liable on conviction to a fine of not less than $100 and not more than $500, or to imprisonment. That act was not passed, however.

A move now is under way, for the third time, to get at the small refineries by way of freight rates. A year ago the Canadian railways proposed that any refinery in Canada not reshipping at least sixty-five per cent of its finished product by rail should pay a higher freight rate on its crude oil than the refineries that use the railways for their gasoline distribution. The next proposal was that a higher rate should be charged on crude of 40 gravity or over. The independents claimed that as they used a crude of 40 gravity or over, whereas the big refineries were able to use a lower gravity crude, this proposal was another attempt to put them out of business. The latest move, according to information sent the board of railway commissioners, is that the Canadian railways, through the Canadian Freight Association, have given notice that after June 30, 1934, they will not participate in a through rate on oil from the southern field to Saskatchewan. That is very alarming to those small local refineries remaining in the west, and municipal councils are also alarmed. I should like to read one resolution that has come to me:

The following resolution was passed at the regular meeting of the council of the rural municipality of Miry Creek No. 229. and we are forwarding same to you for your consideration.

1. Whereas there now appears to exist in western Canada a complete monopoly of the oil refining industry as indicated by available statistics and information which show:

(a) That seventy per cent of the stock in the Imperial Oil Company is owned by the Standard Oil of New Jersey.

(hi That prices quoted on all refined oils, whether by the Imperial Oil Company or by

The Budget-Mr. Stitt (Nelson)

any other refining company in western Canada, are the same and do not vary one from the other, pointing to the dictation of such prices by the Imperial Oil Company.

(c) That all refineries in western Canada are owned or controlled either by the Imperial Oil Company or by some other refinery whose prices appear to be governed by those of the Imperial Oil Company.

(d) That the dividends accruing to the Standard Oil Company of New Jersey on their Imperial stock alone are nearly double the whole Canadian payroll of the oil refining industry of Canada, and independent oil distributor having no other source of supply the consuming public is helpless in the hands of this monopoly. .

2. And whereas for these reasons there is

now no competition in the oil refining industry in western Canada. ,

3. And whereas crude oils come to the said refineries duty free while the refined gasoline used by the consumer is charged with a duty of 21 cents per gallon, 1 cent per gallon additional tax, plus G per cent sales tax and 3 per cent excise tax: such duty ostensibly for the protection of the Canadian labour, but the profits going out of Canada on Imperial oil stock alone are nearly double the whole payroll earned in the oil industry by Canadian workers.

4. And whereas under the operation of the N.R.A. in the United States the price of crude and refined oils and the cost of labour are controlled so as to practically eliminate the posibility of surpluses of cheap oil products being dumped on the Canadian market.

Therefore be it resolved:

First. That the council of the rural municipality of Miry Creek No. 229 recommend to the government of Canada that all duties be lifted from all refined oil products.

Second. That a copy of this resolution be forwarded to the Department of Trade and Commerce, the Department of National Revenue and the sitting member of this constituency at Ottawa.

I have received a resolution in very much the same terms, passed by the board of trade of Abbey, Saskatchewan.

I trust that the minister and the government will give consideration to this matter and see that justice is done the farming communities which are dependent upon oil and oil products for the successful operation of their industry.

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Bernard Munroe Stitt

Conservative (1867-1942)

Mr. B. M. STITT (Nelson):

Mr. Speaker, at the outset may I join with the other speakers who have congratulated the Minister of Finance (Mr. Rhodes) on the clear and concise manner in which he presented the budget.

I hope the bon. member who preceded me (Mr. Bothwell) will pardon me if I do not attempt to follow him in his diatribe on gasoline, his pet hobby.

The hon. member for Shelburne-Yarmouth (Mr. Ralston) the official opposition critic, again made a clever legal analysis of the budget, as he usually does, and skilfully skated 74726-156^

around most everything which tended to touch on the basic facts of the whole set-up. To my mind this year's budget is not very contentious. It was framed to meet a difficult situation, not to meet popular demand. At the outset of the hon. member's remarks, with great gusto he brought out the fact that the British government, when, presenting its budget, Iras shown a magnificent surplus. Once again he skated around the basic facte when he omitted to say that in the British budget no provision was made for the payment of war debts or the interest on them; consequently when he attempts to compare that surplus with the deficit shown in the Canadian budget he has not been fair. As hon. members are aware, Canada is paying the interest on war and other debts; she has met her obligations in full. Like a voice crying in the wilderness his whole argument was, as last year, based on the assumption that Canada, is the only country in the world suffering from the depression. His argument will not register to any great extent with the Canadian people; they know differently; they are not as gullible as they used to be. They are beginning to think for themselves. The people of Canada know that with the exception of relief expenditures practically the whole debt structure was left by a Liberal administration on our doorsteps when we took office. The late Liberal administration, when in power, coasted along on the wave of prosperity like a man in a deep well looking up at the stars. Had they exercised even a little vision and made some attempt to provide for a rainy day instead of embarking upon a wild reckless orgy of spending, purely for political purposes, the problems confronting the present government would have been greatly minimized.

The member for Shelburne-Yarmouth spoke vigorously about the promises made by the Prime Minister (Mr. Bennett). We have heard this criticism so often that it is beginning to grow whiskers. I believe any fair-minded Canadian would be quite willing to absolve the Prime Minister from most of those promises, and that even hon. members opposite would be fair enough to admit that in 1930 no one could see what was ahead of Canada. Certainly no one thought the depression would bo so intense. All the childish chatter about election promises does not hold any great appeal for the Canadian people. To-day the people are interested in the problems confronting them, and the remedies this government may effect to meet those problems. They are not interested in what happened in the daj's of William and Mary, at the time of the signing of the Magna

The Budget-Mr. Stitt (Nelson)

Charta, or in a lot of other ancient stuff to which we have been listening. Speaking about trade the hon. member employed the age-worn political trick of using the dollar and cents basis instead of the volume basis for purposes of comparison. He made no allowance for world prices which, every school child knows, fell to almost unheard of levels during the last three years.

There is one portion of his speech, however, with which I find myself in agreement-not wholly, but to some extent-namely that portion in which he referred to the new taxation on the gold mining industry. I have availed myself of every opportunity to oppose this tax. I need not remind hon. members that gold mining in the last three or four years has saved Canada from destruction. I should not have to remind the house that the new gold price has resulted in a great expansion of that industry, not only in that it has attracted fresh capital, but also that it has provided markets for the primary producers and industries of Canada. Old mines which have been closed for years have been revived, shafts dewatered and reopened. Many of these mines were closed down because they could not work at the old price of gold. As a result of the new price there has been intense prospecting. Representing an extensive mining district I am in a position to know that in my constituency hundreds of men are now going into the bush where, in other years, there would not be dozens. This will mean that new finds are going to be made and new mines are going to be brought into being, resulting in added employment.

Then, there is another angle to the situation, namely that even the older mines, and many of the newer ones, are to-day milling ore which only a few years ago they could not afford to handle. My objection to the tax as now constituted is based on the fact that it is a gross tax on the production of gold. I do not think I need remind hon. members that it costs as much to mine and mill a ton of rock with two dollar gold content as it does to mill a ton of rock with fifty dollar gold content. Every dollar which gold expands in price expands industry, and every dollar that the price of gold contracts is bound to contract industry that much. There is no doubt about that. As I said a moment ago, they are now working ore which they could not handle at the old price, and the result has been that thousands of men have been taken out of the relief camps and put back to work.

I am of the opinion that the tax should be graded on a basis somewhat similar to that followed in connection with the income tax,

[Mr. B, M. Btitt.l

where those best able to pay will pay, and those least able to pay, namely the low grade producers or the base metal producers in connection with which gold is simply a byproduct, will not be taxed as heavily.

I have confidence enough in the government to believe that the matter will be given consideration and that the proper adjustments will be made. Possibly the budget may have been drawn in a hurry and all phases of the matter may not have been considered. I sincerely hope the minister and his government will reconsider the whole set-up, and I am quite sure that if they are given proper consideration the miners and prospectors will not hesitate to make further contribution to the well being of Canada.

I was more than pleased to note that the Miinster of Finance intends to bring down legislation in connection with debt adjustment. I do not know what form the legislation will take, but may I say in passing that I believe it is long past due. We know that the western farmers are to-day suffering from loan conditions which are at extreme variance with conditions obtaining when those loans were created. The loans were negotiated with loan companies at abnormally high rates. Loan companies and banks thought the loans were justified and loaned accordingly. Of course, at that time farm prices were good, and through the sale of his products the farmer could take care of his obligations. However, during the past three years the prices of farm products have decreased approximately fifty per cent, and as a result the farmer is carrying on at a loss. Under the circumstances he is not in a position to pay his taxes, interest and so on. Land values are falling and in most cases the amount of the mortgage is in excess of the value of the property involved. Consequently, there is no hope either for the mortgagor or the mortgagee. An adjustment of these conditions is long past due and unless some move is made to wipe out or reduce considerably this burden of interest and accruing interest rates, only chaos can result. The land companies and the banks would be well advised to accept half a loaf and maintain their solvency; otherwise insolvency will result, and any mortgagor or vendor who cannot see this fact is fooling only himself. Had the land companies and the banks taken this action voluntarily months ago, the debt legislation which the western provinces have brought down and which this government is going to bring down would have been unnecessary. The legislation brought down in the west will prevent most mortgagees from obtaining anything like the full amount of their claims.

The Budget-Mr. Stitt (Nelson)

I was pleased to hear the minister state that the government intends to inaugurate a public works program. We have been looking for this for some time and to my mind it is the only way to bring about prosperity. Our people will be put back to work and payrolls will be created to be passed around to everyone.

I was pleased at the move of the government in bringing down a central bank bill. I am sure this legislation was a great shock to our friends on the other side of the house. They have been going through this country from coast to coast telling everybody that this government was the great friend and champion of the banks and financial interests. Anyone who has studied this legislation will know that it is not very popular with the banks. Some of our Liberal friends have gone so far as to say that the Conservative party is going red. If what we are doing is red, then I am glad to be on this side of the house. If anyone had told me that the government would bring in a central bank bill which would take over the entire gold reserves of the banks at the old price, I would have said that they had one more guess coming. But the government has done this, which shows that it is prepared to meet courageously and without fear the situation which confronts it.

From day to day we hear in this house another argument which has grown whiskers, the argument of the usurpation of power and the utter disregard of constitutional rights. May I say that the people of this country are not interested in that sort of childish chatter, and the sooner hon. members opposite get that into their heads, the better it will be for them. Hon. members opposite do not seem to realize that we are facing new conditions. Once the march of progress is started, you can do no more to stop it than you can stop the tide coming in and going out. In my considered opinion the greatest enemies which any political party can have are those orthodox members within its ranks. We are facing changed conditions and we must change accordingly. Any government which refuses to remake and reshape itself to meet those conditions is going to cease to exist; do not make any mistake about that.

If there are any doubting Thomases in this house who do not believe in the intentions of the government, I ask them to withhold their criticism until all the legislation is brought down. If they have any doubts as to the courage of this government to bring down the necessary legislation to bring about the happy conditions for which we are all looking, let them wait.

The marketing bill which the government has brought down has received a great deal of attention. Once again we have met with considerable opposition from the other side. Why this has happened, I do not know. Even the western members are talking against i& and I would like to know how they will talk when they get back to their constituents. I think some of them will back track a little. I noticed they were labouring somewhat when they got up in the house to talk against the bill. This is probably one of the most revolutionary pieces of legislation ever brought before this house.

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IND

Alan Webster Neill

Independent

Mr. NEILL:

Revolutionary is right.

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CON

Bernard Munroe Stitt

Conservative (1867-1942)

Mr. STITT (Nelson):

I am glad to be a member of the government which has brought in this legislation, and I am going to support it with all the force I can. This bill was prepared after a careful three year study of the problems confronting the primary producers, particularly the producers of agricultural products. We cannot do very much with wheat because the ramifications in connection with that commodity are considerable. Because of the conditions prevailing in the world markets, this would be very difficult. Once again let me remind the house that the government has not lacked courage in handling the wheat problem of this country. I think hon. members must admit that, whether or not they agree with the methods adopted. This marketing bill is proposed to regulate production where there is overproduction. We know that production beyond a possible hope of sale or consumption is poor business and can bring only chaos.

Some very prominent men in this country -I do not hesitate to mention one leading Conservative in the west, Mr. Sanford Evans -and other so-called economists condemn all co-operative movements. Being so closely associated with the grain exchange I do not attach importance to the position he has taken. In attacking this act some hon. members opposite have spoken of legitimate business. As far as I am concerned, there is only one business that is legitimate, and that is the one in which the producer receives a fair return for his labour and investment. This bill is framed to permit the marketing of our surplus in an orderly manner, both at hame and abroad. It is framed for one purpose only, to provide a fair price to both producer and consumer. When I drive along Wellington Crescent in Winnipeg, one of the principal streets, and see the mansions which have been built from profits taken from the farmers, I cannot help but think that this legislation is long overdue, I am not one of ttiose who be-

The Budget-Mr. Golding

lieve that prosperity can be restored by raids on the public treasury, but we are facing a new era and we must meet it with advanced ideas in legislation, and that is what this government is doing.

I have spoken at greater length than I had intended. I rose to make a few remarks on the budget, particularly in connection with the mining tax in which I am greatly interested. For several weeks we have been meeting in this chamber but we have not made very much headway. I have been sitting here wondering why, in times like this, we in this house who are all, I think, deeply interested in the welfare of this country, cannot shake off this political leprosy which threatens to destroy us at this time and get away from this holy show of parliament.

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?

Some hon. MEMBERS:

Order.

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CON

Bernard Munroe Stitt

Conservative (1867-1942)

Mr. STITT (Nelson):

We should try to

make this Canada of ours the great country which such eminent statesmen as Sir John A. Macdonald and Sir Wilfrid Laurier thought it would and should be. In brief, I think it is about time this parliament got down to business.

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LIB

William Henry Golding

Liberal

Mr. W. H. GOLDING (South Huron):

In rising to make a few observations on this 1934 budget, I hope that my hon. friend opposite will not consider me discourteous if I do not follow him in his remarks. I need hardly say to the members of this house that this is only the second time I have had the privilege of hearing the Minister of Finance (Mr. Rhodes) deliver his budget address. One year ago it was my privilege to hear the hon. gentleman deliver an address when introducing his 1933 budget which I think, for composition and for delivery, should go down in the records of this house comparing favourably with any address given by any of our previous ministers of finance. I think the present minister deserves our congratulations on the very efficient way in which his budget is prepared and also on the excellent manner in which he delivers his address, and I want to assure my hon. friend that it was a pleasure to me to have had the privilege of listening to his address one year ago, as it also was a pleasure to have the privilege of listening to his address again on Wednesday last.

I shall always look back on that address of last year as one of the outstanding incidents in my first experience as a member of this House of Commons. I remember very well I had a great deal of sympathy with the minister at that time because I did feel that he was introducing in his budget many things which he must have known were going to affect

seriously many citizens in a way in which I am sure he had no desire to see them affected. Indeed, I remember that on one occasion, when we were discussing the items of that budget in committee, the Minister of Finance was visibly affected by some criticism to the effect that he did not care what certain classes of our citizens had to contend with or the hardships they had to endure. I want to be fair to the minister and I may say that I did not share in that criticism, because I believe that he is a very humane person and has an interest in and a great deal of anxiety for all classes of citizens. Naturally therefore I had a good deal of sympathy with him because I felt that circumstances had placed him in a position where he was advocating a policy which was going to have an effect that ordinarily he would have no desire to see brought about.

I recall also one incident when we were discussing the budget in committee last year. The question was asked the minister as to what he expected the saving would be through the reduction in the salaries of civil servants and others. He replied that he estimated that the saving would be approximately $8,000,000. The hon. member for Temiscouata (Mr. Pouliot) immediately rose and asked the minister then the question what he estimated the loss in revenue would be through the reduction on two articles of luxury, namely, cigarettes and liquor. Again the minister's answer was that, with the same volume of business, it would be approximately $8,000,000. In other words, the saving that was effected by the reduction in the salaries of civil servants and others was going to be entirely offset by the reduction in the tax on these two articles of luxury. I think that is certainly reversing the order of things, because I believe it is the duty of governments to see that there is no reduction on any article of luxury if such reduction means an increase on articles which are the very necessities of life.

Now there were in that budget of last year certain things which were bound to create a great deal of criticism throughout the country, and that is particularly true in regard to the tax that was imposed on sugar. I am very glad to see that the government have realized their mistake in placing the tax on that commodity and have reduced it by at least fifty per cent. It did seem to me that the tax was quite unjustifiable in view of the fact, as I have pointed out before, that there was a reduction to a great extent on two articles of luxury. It was manipulation such as this that created a great deal of criticism and discussion all over the country.

The Budget-Mr. Golding

I remember that when discussing the budget last year I made the statement that it was a typical Tory budget, its outstanding features being taxes, tariffs and deficits; and having had an opportunity of conversing with my constituents since that time I have found that I was expressing the opinion of the great majority of them when I made that statement.

There was another thing that received a good deal of discussion last year and about which there were many complaints, and that was the advantage that many had gained at the expense of the government by what was supposed to be a leak in connection with the tax that was intended to be and actually was placed on sugar. From all parts of the country complaints came pouring in with regard to this so-called leak, and I believe the minister did endeavour to locate the source of it. Whether he was successful in that task I do not know, but I do know that the people resented information of that kind being spread abroad before the actual presentation of the budget itself. I am glad to know that nothing of that sort is occurring this year, and I think the minister should be congratulated on that.

If we go back to the last federal election we cannot help remembering the promises and predictions made by members of the government as to what would happen if they were given control of the country's affairs; and bearing those promises and predictions in mind it is certainly interesting to review what has actually taken place in the presentation of the various budgets that have been brought down by this government. If we turn to the 1931 budget, which was the first one introduced by the present government, we find that taxation began immediately to increase. That budget was introduced by the Prime Minister, who was acting as Minister of Finance, and almost his first words were to announce a duty on tea, an increase in the postage stamp tax, a raising of the sales tax from one to four per cent, the levying of a tax on coal, and burdening us with numerous other forms of taxation such as increases in the tariff on many essential articles, all of which placed a burden on the people at a time when they were least able to bear such a burden. There is no doubt that this had a very depressing effect not only on business in Canada but on every citizen. But if I may put the matter in this way, there was a silver lining to the dark cloud that was settling over the Canadian people at that time because the Prime

Minister was then introducing a real budget, something which, according to our hon. friends opposite, had not been done for some time. The silver lining to this dark cloud was the fact that those increased taxes were going to provide the government with a splendid surplus at the end of the fiscal year and with this assurance of course the people took courage and went forward to meet the financial burden which they know lay before them. But what happened at the end of that year? Imagine the consternation of the people when at the end of the year they found not the expected surplus but a very substantial deficit, and, according to the public accounts, an increase in the public debt of some $114,000,000!

Now we come to the 1932 budget which was introduced by the present Minister of Finance and which included further additional burdens of taxation. Indeed, it was conceded, I think, to be one of the most burdensome budgets so far as taxation was concerned, that was ever submitted to the house. But once more the country was led to believe that with the additional taxation imposed at that time it would have a surplus at the end of the fiscal year. In that budget the sales tax was increased from four to six per cent; there was an increase in the excise tax on cheque's, telegrams, railway tickets, long distance telephone calls and almost everything one could imagine. But after all the additional taxes that were imposed by that budget, what did we find at the end of the year? We found not the expected surplus but a very substantial deficit and again, according to the public accounts, an increase in the public debt of some $220,000,000.

That brings as to the 1933 budget and we will remember the additional taxes that were imposed last year. The minister in his address on Wednesday last- had to announce another deficit and another addition to the public debt of some $135,000,000. The point I wish to make is that notwithstanding all the promises, arguments and predictions that were made as to what would happen were the present government returned to power, we have found in each and every budget presented by the government in comparison with the 1930 budget, the last one introduced by the Liberal party, increased taxation, increases in the public debt, increases in tariffs, in fact, an increase all along the line. That is not a new experience for our hon. friends opposite or for the party they represent, because if we review the record of the Conservative party since confederation, we find that only four times have they been able to show a reduction in

The Budget-Mr. Golding

the public debt, as the foil-owing figures will show:

Reduction in

Year public debt

1871 $ 503,000

1882 1,734,000

1912 122,000

1913 25,617,000

On the other hand we find that the party-represented by those who sit on this side of the house, the Liberal party, have had eleven years in which they have been able to show a very substantial reduction in the public debt, as follows:

Reduction in

Year public debt

1900 $ 779,000

1903 10.222,000

1904 730,000

1907 3,371.000

1924 35,993,000

1925 345.000

1920 27,700,000

1927 41,896,000

1928 50,984,000

1929 71,345,000

1930 47,740,000

I think we ought also to point out that the Liberal party have controlled the affairs of the country for some twenty-nine years since confederation, while the Conservative party'and union governments have been in control for thirty-eight years. The point I would like to make there is that the Conservative party have had more opportunities to show what they were able to do in a financial way than have the party on this side of the house. That represents a true picture of the financial accomplishments of the two parties.

Much has been said in regard to our trade with the United States. I remember very well during the last federal campaign the amount of discussion that took place as to our unfavourable balance of trade. It was stated in my constituency that if this government were returned to power, that unfavourable balance would be wiped out. What do we find has happened since this government has come into power? Notwithstanding all the trade barriers that have been in effect and notwithstanding the rate of exchange which has existed and which in itself has been a very substantial tariff, we find that for the years 1931, 1932 and 1933 there is still an unfavourable balance of trade of an average of $138,000.000 per annum. There is something significant in that: I think it proves conclusively that our natural market for much of our basic produce lies to the south of us. In view of that I still believe it would be splendid if these two countries could get together and agree on some reciprocal trade arrangement which would be mutually beneficial.

[Mr. Golding.!

I fully appreciate the fact that the present government has done its utmost to control imports by raising tariffs, by imposing the dumping duty and by every other method possible, but apparently it forgets that it is quite impossible to reduce imports without at the same time reducing our exports, and our trade figures are grim reminders of this indisputable fact. I would like to put on Hansard our trade figures just to show how, as the imports were reduced, exports were reduced in almost the same proportion:

Year- Imports Exports

1923 $ 802,000.000 $ 945,000.000

1924

893.000.000 1,058.000.0001925

796.000,000 1,081,000.0001926

927.000.000 1.328.000,0001927

1.030.000.000 1.267,000.0001928

1.108,000.000 1,250.000.0001929

1,265,000,000 1,388.000.0001930

1,248,000.000 1.144.000,0001931

906.000.000 817.000.0001932

587.000.000 587.000.0001933

406,000.000 480.000.0001934 (est.) . . .. 443,000,000 579,000,000

Looking at those figures one sees that as the imports were reduced exports were reduced correspondingly. The figures tell their own story, and demonstrate the point I have been endeavouring to make.

When we remember the bitter and extreme criticism that was directed against the Liberal government in the last federal campaign, how our friends opposite were almost in tears over the alleged neglect of the interests of the farmers, and how they blamed and condemned the Liberal party for not securing more markets and higher prices for their products; and when we see now articles and interviews in the press endeavouring to show the splendid trade that they say is being built up between the United Kingdom and Canada, I think it would be well for us to turn back the pages to recall the volume of trade that existed between Canada and the United Kingdom at the very time to which this criticism relates. I was interested in the campaign in our own constituency, and I took particular notice of the arguments advanced by the supporters of our hon. friends opposite. What do we find was the condition that existed at that time? In 1930 our imports from the United Kingdom amounted to $189,000,000 and exports to $283,000,000. That is the time at which this criticism was aimed against us. In 1933 imports had fallen to $86,000,000 and exports had also fallen to $185,000,000. For the present year, when all this splendid trade is said to have been built up, returns for eleven months indicate that imports amounted to $95,000,000 and exports to $204,000,000, far from approaching the values of 1930.

The Budget-Mr. Golding

There is another feature I wish to touch on. I have noticed that the comparisons of trade figures sent out by the Department of Trade and Commerce are made between the years 1933 and 1932. In view of the arguments made in 1930 I submit that comparison should be between 1933 and 1930. That is the year when the promise was made that the wrongs of the Canadian people would be righted. That is the year when, as I said, our hon. friends were almost in tears-

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LIB

Cameron Ross McIntosh

Liberal

Mr. McINTOSH:

Crocodile tears.

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LIB

William Henry Golding

Liberal

Mr. GOLDING:

-owing to the terribly low prices that the farmer was receiving for his produce. That is the year the Liberal party was condemned in every way, shape and form for its alleged neglect to secure markets for farm products. And in view of all the arguments at that time I think anyone who is at all fair will agree that all comparisons should now be made between the years 1930 and 1933.

I need hardly say that I do not wish to be too critical of the actions of the government. I fully realize that they are having their difficulties and troubles and have many hard problems to face. I believe that in their way they are endeavouring to give the best service they can. That service, whether we realize it or not, is taking its annual toll. One need only look at the change in the personnel of the federal and provincial cabinets of this country to realize the toll that is being taken from year to year, the price that is being paid by those who are endeavouring to carry the burden and responsibility of government. Therefore I do not want it to appear that I am not- sympathetic with our hon. friends opposite or anyone else who is carrying such a responsibility. I have every sympathy for them. But I believe they are pursuing a wrong course, a wrong policy, and they are making their task all the more difficult by so doing. As a representative of a rural constituency it is my duty to oppose any policy which I believe is not in the best interests of the country. I think I can fully appreciate the position of the government in regard to the expansion of trade; practically every country in the world is engaged in this policy of tariff competition. We have entered the scrap also, and it is this policy which is so seriously affecting not only the trade of Canada but the trade of every country in the world. In the interests of the farming community of this country it is absolutely necessary that the tariff on commodities that the agriculturist uses should come down. I am perfectly satisfied that that has to come about. I have been rather amused since I became a member of

this house by arguments advanced by some hon. members opposite. Some tell us that as far as the two old parties are concerned there is little or no difference in their outlook in regard to tariffs. I have heard hon. members on the government side endeavour to show that the average tariff has increased very little since the present government took office. On the other hand the Prime Minister frankly and honestly tells this house and the country that they saved the situation by imposing tariffs of unprecedented height. Both these arguments cannot be right. I attended many meetings in our constituency during the last federal election, and if I understood the English language at all correctly, those representing the party on the other side tried to make the people believe that they were going to save the situation if they were elected by imposing higher and still higher tariffs.

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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN:

Prohibitive tariffs.

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LIB

William Henry Golding

Liberal

Mr. GOLDING :

I think the Prime Minister tells the truth when he tells the house and the country that that is what he did. That is one promise at any rate that he carried out.

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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN:

The only one.

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LIB

William Henry Golding

Liberal

Mr. GOLDING:

The imperial economic conference provided a splendid opportunity for this country and for the British empire to set an example to the world by reducing tariffs. It is well known that at the opening of that conference the Right Hon. Stanley Baldwin expressed the hope that that would be done. But we all know that the very opposite took place, and I refuse to believe that that has not seriously affected our trade prospects in more ways than one. It is all right to tell us of the splendid trade we are building up between the British empire and ourselves; that is all very fine, but let me say once more that I am satisfied that many markets to which we might have had access have been closed to us to a certain degree at any rate as a result of the action taken at that conference.

There is another point on which I should like to touch for a few moments; that is the problem of our debt. I must confess that last year I was disappointed with the action taken by the government in regard to the loan floated at that time; I did think the interest rates would have been lowered to a much greater extent than was the case. I believe this whole debt problem must be dealt with in a courageous way. Interest rates in this country must come down if we are going to come through, and I stand solidly behind any policy which will bring about a readjustment of our whole debt structure. Australia tackled

The Budget-Mr. Golding

this problem in a manly way; the United Kingdom did likewise, and there is no question but that their position has been very materially improved as a result. I see no reason in the world why we in Canada should not endeavour courageously to deal with this problem also.

The debt of our country, federal, provincial and municipal, is increasing at an alarming rate. This is particularly true in regard to our federal debt. What is the use of the government boasting of how splendidly they have come through the depression when practically everything that has been done has been accomplished with borrowed money? What is the use of boasting of our splendid balance of trade when we are being swallowed by the quicksands of debt? I think the financial critic of the Liberal party, speaking on the budget this afternoon, made the statement that the increase in the national debt since this government came into power amounted to something like 8586,000,000. We can hardly conceive that this amount has been added to our national debt. I believe the hon. member for Vancouver Centre (Mr. Mackenzie) gave the members of this house something to speak about when he pointed out, during the course of an address not so very long ago, that since the war, in interest charges alone, this country has paid the enormous sum of over $1,900,000,000. These are staggering statements, and I think the government should give serious consideration to this whole debt problem.

I would suggest, Mr. Speaker, that there are other problems to which serious consideration should be given in order to give our people a chance to come through. The various governments of this country should take immediate steps to deal with the problem of the cost of government in Canada. This may require changes in the British North America Act; if so, well and good. I am quite satisfied, however, that it is the general opinion among all classes of citizens that we are being governed and legislated to death. It does not matter where you go, whether it is on the street, in the church, on the farm, in the factory or in business places; you hear this matter discussed by everyone, and it is a problem with which the Canadian people will have to deal. In my opinion a committee should be set up by the federal and provincial governments which should be representative of business, industry and the great masses of the people, to investigate and report as to the solution of what I consider to be one of our greatest problems. I do not know that it would not be beneficial to have all politicians excluded from that committee, in

(Mr. Golding.]

the interests of the Canadian people; that is my opinion.

Now I should like to say just a few words in regard to the Liberal policy in connection with external trade. Hon. gentlemen opposite tell us that we have no policy. Let me give the policy behind which we stand, which was announced in this house by our leader:

The Liberal party believes that trade is the basis of industrial and commercial development, and that Canada needs trade.

It will promote trade with all nations and negotiate trade agreements with any countries willing to trade with Canada on a reciprocal basis.

It will abolish the extravagant increases in the tariff made by the present administration, which have had the effect of strangling trade, exploiting consumers and robbing railways of business.

It will abolish all unwarranted extra taxes on imports, such as the exchange and dumping duties, as imposed by the present administration.

It will end the making and altering of tariffs by executive action.

It will substitute stability for uncertainty in the administration of customs laws.

It will continue the Liberal policy of British preference by a percentage reduction in existing tariffs rather than by a percentage increase against foreign countries in existing tariffs.

It will grant to British imports a real preference.

In that connection, Mr. Speaker, while hon. gentlemen opposite may take a great deal of credit for having put through the empire treaties and having practically forced the United Kingdom to adopt the policy of protection, I am satisfied that it will not be very long before they deeply regret having done so. I have been reading and watching the developments in the United Kingdom, and I am sorry to say that in my own mind I am persuaded that we are going to be up against a stone wall before many years have passed so far as the export of our products is concerned.

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LIB

Frederick William Gershaw

Liberal

Mr. F. W. GERSHAW (Medcine Hat):

Mr. Speaker, in rising to continue this debate I should like to say first that we were all delighted to hear the genial Minister of Finance (Mr. Rhodes) say in no uncertain terms that he saw some signs of reviving confidence, of increasing revenues and of business improvement. It will be the prayer and hope of the Canadian people that these signs may materialize and that the trend may continue to be upward until the spectres of want poverty, privation and unemployment are banished from our land.

I do not wish to quote numerous figures on this occasion, but for a few moments I should like to present the human interest

The Budget-Mr. Gershaw

side of the problems and to suggest some of the solutions which might be applied to them. While we are emerging from the depression the time is surely opportune for us to take stock of our assets, to investigate the weak spots in our system, and in the light of the experience gained to make such remedies and so to build for the future that our children will not suffer the economic defeat which is upon us at the present time. In looking backward at what might be called the man-power age we find that in the past the fear of scarcity was ever before the people. It was uppermost in their consideration, and it was the chief guide to the conduct of mankind. For centuries the struggle for existence, the struggle for the necessities of life, required drudgery, hard work and long hours of labour, and the stress and strain of that exertion did much to bring premature old age upon the people. We find that the span of life has been increased from about forty to about fifty-eight years. This to ?ome extent is due to modern health methods, but to no small degree it is due to the fact that it is no longer necessary for people to labour so hard in order to get a bare living. There is no doubt that the hard living certainly caused the breaking down of the arterial system. Of recent years however machines have been invented to do the drudgery and the uninteresting and difficult tasks which in other days were done by hand labour. Men have succeeded in harnessing steam power, water power and electricity, so that in these' days machines have solved the production problem. Professor Soddy has estimated that since the introduction of mechanical power the productive capacity of Great Britain has increased by 4,000 per cent. This, however, has brought its problems. It is regarded as the arch enemy of the unemployed, because as the machines developed so the requirements for labour fell. This is why so many people feel that machines have taken away their means of livelihood.

A few examples might be cited. One man in a glass factory in charge of a bottle making machine displaced fifty-four men, and another man with the aid of a cigarette wrapper has displaced as many as one hundred men. This problem has brought about the paradox of poverty amid plenty. There is very clear evidence of that condition. Ogden L. Mills of the United States made this observation:

The paradox of poverty amid plenty will never be solved by doing aw'ay with plenty.

Economists tell us that our distribution system is at fault, and that production has far outstripped distribution in the race.

Science, behind closed doors in laboratories and research departments, has made it possible to harness machine power, and people were unprepared for such great advances. The advance came upon them so quickly that the distribution was found to be obsolete, although heretofore it had worked satisfactorily. And so we have the paradox of on the one hand hungry stomachs and on the other great stores of food. In a book entitled Looking Forward, President Roosevelt makes this statement:

It is common sense to take a method and try it. If it fails admit it frankly and try another. The millions who are in want will not stand by silently forever while the things to satisfy their needs are within easy reach.

Those who have suffered most from the depression are the people living in the remote rural parts of the country. They still have to undertake laborious tasks. The men, women and children have to work hard. Machinery has helped them but little, and in many cases has been their undoing. All hon. members recognize that in Canada a greater number of people are engaged in agriculture than are engaged in any other industry. Agriculture is said to be the most important industry, and as a result the slogan has arisen, "If you can save agriculture you can save all." When the present government came into office the prices of farm products were falling. Perhaps they could not help that, but from that day to this the farmers have been greatly handicapped because they have had to sell their products at prices lower than production costs. Wheat which was costing them sixty cents to produce had to be sold for forty or forty-five cents. Cattle which cost five and a half cents per pound to raise were sold at from two cents to three cents, and sometimes as low as one and a half cents. While such a condition exists there can be no hope, because nothing but chaos stands before the primary producers.

When the present government took office they could not control the fall of farm prices, but they should have so planned that the little money the farmer did receive would go farther. They should have planned a reduction in the prices of other commodities so that those prices would harmonize with the prices received for farm produce. The government failed in that respect. On the contrary they increased tariffs on barbed wire and cream separators, commodities which probably since confederation, had entered this country free of duty. A duty of ten per cent was levied against barbed wire and of twenty-five per cent against cream separators. The duties on binders, drills, cultivators and a

The Budget-Mr. Gcrshaw

Topic:   THE BUDGET
Subtopic:   ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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At eleven o'clock the house adjourned, without question put, pursuant to standing order. Tuesday, April 24, 1934


April 23, 1934