Mr. IRVINE:

' How would you prevent competition from leading to monopoly? That is what has happened.

Mr. YOUNG:

By competition. No. that is not what has happened. A monopoly is created by eliminating competition. When the tariff is built up around this country it is a simple matter then, with outside competition shut out, for the domestic manufacturers to get together and form an agreement

Trade Commission-Mr. Woodsworth

or a combine or some sort of monopoly. Take down your tariff walls, let competition come in, and see how long that arrangement or combine will last.

Mr. BAKER:

How many more would we have on the dole?

Mr. YOUNG:

We should not have as many on the dole. If my hon. friend wants to know the cause of the dole, let him look at the tariff policy of the present government.

Mr. J. S. WOODSWORTH (Winnipeg North Centre):

Mr. Speaker this trade and

industry commission for which the bill provides is really the means suggested! of exercising government control over industry. I note that in the report of the royal commission on price spreads the methods of public control are enumerated, with brief comments made on each class of control. They are (a) the protection of private economic activity; (b) the promotion of private economic activity; (c) the encouragement of monopoly; (d) licensing; (e) the protection of the public from the excesses of competition; (f) the prohibition of monopoly and maintenance of compulsory competition; (g) government acceptance of monopoly with regulation; (h) government toleration of monopolistic or quasi-monopolistie industrial combinations; (i) public ownership and operation. So far we have heard a good deal about regulation, something further with regard to competition of the very freest kind, but there has been very little said with regard to this latter mode of controlling the situation by public ownership and operation. The report says, if I might read a paragraph, at page 251:

The extreme example of government intervention is where the government engages lirectly in the ownership and operation of business enterprise. Government ownership and operation of postal services, schools, and roads provide some of the oldest examples. In violation of extreme individualistic theories, governments neai'ly everywhere have taken these enterprises out of private hands, sometimes simply because private enterprise could not profitably supply satisfactory service, sometimes because it did not operate to produce maximum social welfare. Public ownership for a variety of reasons-to provide a com-jretitive check on private enterprise, to supplement ineffective regulations of monopoly, to control consumption, to provide revenue-has continued to expand until a world survey of such ownership to-day would include every type of economic activity. In Canada governments are directly engaged in such businesses as railways, steamships, street railways, telegraphs, telephones, radio, electric light and power, water, gas, stockyards, grain elevators, public markets, liquor sales, banking and insurance.

From my standpoint it seems rather unfortunate that the commission should not have given much greater attention to this means of regulation than it has done. For some reason or other, possibly because of the composition of the commission itself, it has chosen the path of regulation. It has rejected uncontrolled competition such as has been suggested by the hon. member for Weybum (Mr. Young) and has chosen the method of state regulation. This bill which is now before us is the government's method for meeting the problem. This means that some of us who do not have very great faith in this method are placed in a rather awkward position when dealing with a bill of this kind. We may possibly vote in favour of it as being a small step in the recognition of the necessity for an ordered arrangement in society, but at the same time we recognize clearly that it is bound to be ineffective. We hear a good deal about regulation and we hear a good deal about unfair practices, but those of us who have in any degree adopted the socialistic analysis of society believe that our system as such is essentially unfair. We cannot hope that by merely regulating such practices we shall arrive at anything like an equitable state of society. Perhaps I could illustrate by refer-ing to the age of chattel slavery. It might have been very well in those days to insist that there should be regulations under which the slaves should not be worked more than twelve or fifteen hours a day, or under which the slaves should be housed somewhat decently; there might have been regulations to prevent the slave owners from whipping their slaves but the fact is that the institution of slavery gradually came to be recognized as economically unsound and ethically unjustifiable. It took a civil war to abolish slavery in the United States. In the West Indies, largely through the efforts of Mr. Wilberforce, slavery as a system was done away with through government action, the slave owners being compensated to a certain extent for the loss of their slaves.

Some of us believe that the present system of capitalism under which a comparatively small number of people own and control the greater part of the production machinery of this country is essentially wrong in its very nature. It is becoming, like slavery, economically unsound and ethically unjustifiable. Under these conditions we cannot believe that petty regulations will solve the problem. The commission to 'be set up may do away with certain of the more gross forms of unfair practices; the amendments to the criminal

Trade Commission-Mr. Woodsworth

code proposed last night may further advance the cause by making actually criminal certain of these unfair practices; I submit that that is all to the good, but it does not touch the vital problem with wdiich we are faced under this system of capitalism.

During the investigations of the committee and later of the commission on price spreads an attack was made particularly on the departmental and chain stores. Very great solicitude was expressed for the smaller merchants.

I confess that I feel a great deal of sympathy for the small business men who are being gradually crowded to the wall. In my judgment they are the victims of that competition which has been lauded so by the hon. member for Weyburn. Competition has been given free rein with the result that the larger merchant and possibly the more efficient or in some cases the more unscrupulous merchant has been able to crowd out his less efficient or more scrupulous opponent.

I would point out that after all the organization of business into larger units has meant an added efficiency, at least up to a certain point. The farmers of western Canada patronize the large departmental stores because they find that these stores give services which they could not receive from the small local dealers. I have lived on the prairies and I know something of conditions from the early pioneer days. I have great sympathy for the local man in the small town who has helped to build up his community, but at the same time I recognize that under the competitive system referred to by the hon. member for Weyburn there are services which cannot very well be provided by the local man. It seems to me that by emphasizing the necessity of keeping the small business alive we are, as it were, trying to turn back the clock.

In a general way I should say that what is happening to-day to the small business man is closely paralleled by what happened to the labouring man one hundred and fifty years ago. I do not know why it is, but in our schools even to-day comparatively little emphasis is laid upon the profound effect of what is known as the industrial revolution which occurred in Great Britain, about a hundred and fifty years ago. Before that time the handscraftsman was supplying the needs of his oiwn immediate neighbours. There was a certain amount of competition between individual workmen. But the factory was set up with its large machinery and the small man could not begin to compete with the larger organization. These small craftsmen had to leave their little village workshops to go to work in the factories, which

meant a complete revolution in the industrial life of Great Britain. I have not the time to outline the economic, the social and the political changes which occurred as a result of that revolution, but I would point out bhat instead of free competition there was organized production; instead of each individual workingman being, as we say, his own boss, he became a wage earner. The owner of the factory determined largely the conditions of work, and owning the tools of production he was able to retain whatever profits were made, the workingman receiving only his wage, large or small. The abominable conditions which existed at that time led gradually to the enactment of the factory acts which ameliorated somewhat the conditions of the labouring man. Later on there was a development of trade unionism which helped materially to better the condition of labour.

In my judgment the business man to-day is very much in the position in which the industrial worker was at the time of the industrial revaluation. We have the organization of industry which is something like a concentration of effort within the walls of a factory. In many ways a large departmental store is like a factory and many of the smaller business men have had to desert their small businesses to work as departmental heads in such concerns as Eaton's. Instead of making their own profits, running their own businesses, they are simply hired men in the large departmental stores. Looking at *things in the large way, it would seem as if this concentration in a comparatively few hands was an almost inevitable development and that the change that is taking place in our merchandising is very closely parallel to the change that took place in industrial life at an earlier period.

To-day we must recognize the large number of people who are living under the wages system. In the price spreads report, in the chapter Labour and Wages, I note o-n page 105 the following statement:

Two-thirds (2.565,000) of the total working population of Canada (3,923,000) are wage-earners. If agriculture, in which over a million people are employed chiefly as proprietors, were eliminated, the proportion would be raised to nearly five-sixths.

That is to say, practically five-sixths of the population are to-day wmrking, not under the free system of competition but under a system in which they are merely wage earners, forming a part of the large industrial organization. All the discussion that we have ad, and practically all the ground that is being covered by this bill, concerns directly at best a very small proportion of the population of

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Trade Commission-Mr. Woodsworth

Canada, those people that are still in the stage of small industry, in the small business stage, who control or think they control their own' affairs and are still in the competitive era. But the vast mass of the people to-day are no longer living under conditions of competition; they are wage earners, employees in great concerns in the conduct of which they have very little voice indeed.

A very similar process, although varying somewhat in detail, has taken place in recent years in connection with the farming industry. The farmer is still nominally his own master; he is still nominally a proprietor; but in effect ait least two-thirds of the farmers of the west are so heavily under mortgage that they are practically under the control of the mortgage companies. They work long hours, they have to a considerable extent control over the details of their own work; but the mortgage companies step in and have the first claim on what they produce. That development has gone to such an extent that on a great many farms the mortgage companies and the banks are beginning to dictate the conditions under which even the farmer must carry on 'his work. Certainly when the farmer steps off his farm he is immediately brought into this larger organized sphere. He cannot get his implements unless they pass through a large number of hands, and so he has to deal with a certain monopoly of agricultural implements and all that sort of thing. He cannot bny his household necessities without coming in contact with modem industry with its monopolistic practices. He cannot sell ais grain without coming in contact with the larger world outside. The proposal to establish a wheat board in Canada is simply the recognition of and the response to this new state of affairs which has developed, which means that we can no longer have free competition as between individual farmer and individual farmer, but rather that we must have some sort of control over marketing or processing or whatever it may be. We cannot go. back to the period visualized by one or two members of the house, the old free individualistic society in which our grandfathers lived.

I regret indeed that the committee, owing to the terms of reference, could not make an investigation into t'he larger financial concerns as we have them in Canada. The hon. member for East Kootenay (Mr. Stevens) this afternoon referred to that matter, as he has been referring to it in a number of his more recent public speeches. In my opinion, concentration of finance in the hands of a comparatively small group of people is the most serious

aspect of this present development. In the old days each man performed a whole round of activities for himself; he made his goods, he sold his goods, he financed the transaction. But gradually there has come about specialization with division of work, so that to-day one group of people manufacture goods, a second group do the merchandising in various ways and a third group of people do the financing; and we 'have developed to that stage where instead of the producer being the main factor or the distributor being the most important individual, as has been the case until recent years, the financier is the most important of the three. The producer can produce only as he can secure loans from the financial people, and the distributor can carry on only as he too can secure loans from them; and so today the financial people are in the very heart of the system.

Mr. BAKER:

Is the hon. gentleman's statement quite correct?

Mr. WOODSWORTH:

I hope so; it is my point of view at any rate.

Mr. BAKER:

There are producers who distribute and finance their own transactions.

Mr. WOODSWORTH:

I am speaking of

the general tendency, and I hope the hon. member will permit me to advance my argument.

Mr. BAKER:

You are making a statement that is not fair.

Mr. WOODSWORTH:

It is my opinion.

Mr. BAKER:

Well, it is unfounded.

Mr. WOODSWORTH:

My opinion is that, looking at the present trend, the financial people occupy the central, dominating position in the whole economic structure; and as the hon. member for East Kootenay remarked today, it is a comparatively small number of people who practically control the. whole situation. I think it must be six or eight years since in this house I placed on Hansard the names of the directors of our banks and other financial institutions and showed how through a system of interlocking directorates a few men control the greater part of the economic life of this country.

Some of us for years past have been urging that the control of finance is essential if we are really to control the other phases of our economic life. I still believe that. I do not think we can get very far until the country itself controls its currency and credit, its financial instruments. So I cannot be very hopeful of the efficacy of this legislation until such time as the state on its own behalf takes over

Trade Commission-Mr. Woodsworlh

eontrol of the currency and credit of this Country. I do not intend to go further into that matter to-night; we in this corner have tried to emphasize that again and again. We may vote for the bill in the hope that it may bring about some amelioration in conditions and may do away with some of the more gross forms of unfair practices. At the same time, since it has not undertaken to control the financial mainspring of our economic life I cannot see that it is likely to solve any of our major problems.

Regulation then from my point of view cannot be effective. The only thing that can be effective is .a change in our existing system. We believe that instead of a system built on the basis of profit we must have a system that is primarily designed, to supply the needs of the people. No other system will prove effective. This proposed; legislation does nothing in regard to such a change of system. It is possible that it will provide machinery which later on may be used by an administration having the social ideal, but we cannot very well hope that it will produce very great results as long as the machinery is in the hands of those who still believe in the profit .motive and in the present capitalistic system.

I know that it is difficult to impress upon Canadians the necessity for a new economic system. We are most of us children of the pioneers. Most of us have a good deal of the old pioneer psychology. Our fathers came to this country several generations ago and carved out for themselves homes in the wilderness; there was work for all who wanted to work, and there were unlimited opportunities for expanding their business affaire. That was the era of individualism, and undoubtedly it developed a great many excellent qualities in the people of that day. But we have passed beyond that stage. One of the major difficulties with us to-day is that, living in this complex state of society, we still adhere to the old traditions. Take our Slogan-"Competition the life of trade"; did we not all write that in our copy books? We were brought up to believe it.

Some still believe it.

Mr. WOODSWORTH:

Yes, a few people who belong to the earlier day still believe it and still venture to say it. But they are anachronisms antique specimens, and we must not bother very much with them. The trouble is there are a good many of them lying around.

Mr. YOUNG:

Do you mean lying?

Mr. WOODSWORTH:

Yes, if you insist on the term, because they necessarily misrepresent the entire situation. We cannot have that free competition when we have these great combinations .that exist to-day. Take the five-sixths of the population to which the price spreads report refers; they know nothing about that free competition. They are simply wage earners taking the wages handed to them, unless they can combine in sufficient strength to force a little more. They know nothing about free competition in production. We .must learn to adapt our policies to the new age in which we live. I wonder if I may give once more an illustration that is a favourite of mine; I feel sure I must have given it in this house before-

Mr. GEARY:

We always like to hear it.

Mr. WOODSWORTH:

All right. I refer to the traffic regulations we have .to-day. In the old days of the horse and buggy we could drive as we pleased, here, there and yonder. But in our modern cities with their congested traffic it has become absolutely impossible to go as we please. We have our traffic policemen, our traffic regulations, lights and so on, and we have to obey them. I do not see how we can avoid it. Even an individualist of the old school like the hon. member for Weyiburn (Mr. Young) must conform to the traffic regulations.

Mr. YOUNG:

But that is no reason why we should travel in a chain gang.