Mr. LUCAS:

I was simply quoting a headline which appeared in one of the papers. If the hon. member believes it is not right he can take that up with the newspaper. I am told that if the shoe factories in the United States worked full time for seventeen days they could manufacture sufficient shoes to last the whole nation for one year. It is general knowledge that the productive capacity of our plant and equipment is far beyond the ability of our people to purchase. On the one side we have a tremendous capacity to produce: on the other side we have a tremendous unfilled demand, but there is a barrier between. We have the resources, we have the man power, we have the plant and equipment and we

have the demand, but we have not the purchasing power with which to make the exchange and in my opinion until we deal with this matter our efforts to bring about an improvement will be of little avail.

Surely no one will say that he is satisfied with present conditions. The committee dealing with price spreads considered many of these problems and brought in a report recommending that certain rules should be laid down for the governing of business and that legislation should be introduced to see that the game was played according to those rules. The question is whether we are going to see that that end is brought about, or are we going to continue the unfair rules which exist to-day. It is a onesided game which enables 64,434 persons out of a population of over 10,500,000 to obtain some or all of the luxuries of life while the rest have difficulty in obtaining the necessities. These figures are taken from the income tax returns and show the number paying tax on incomes of S3,000 and over. Business and industry have had a free hand and having failed to make proper rules it then becomes the duty of the state to interfere and endeavour to evolve rules which will be fair and satisfactory to all concerned. But if we are to make these rules we should have a complete understanding of the game.

While I have no criticism to offer of the investigations carried on by the price spreads commission as far as they went-in fact I believe they were restricted by the reference -I claim that they left untouched the most important problem of all, that of finance and its relation to our economic life. I would make this suggestion: No matter which party may be in power after the next election, one of the first things which should be undertaken is a full and complete investigation into our whole- financial system. There is no question about our power to deal with such a matter in this parliament. Last year a group of prominent business men appealed through thie London Times for such an investigation in Great Britain. The London Chamber of Commerce, the Southampton Chamber of Commerce, the British Rotary and other bodies are on record as asking for a change in the financial system of Great Britain. In my humble opinion until something is done to bring the factor of consumption more nearly into balance with our greatly increased factor of production, our efforts to improve conditions will be of little avail. The greatest thing we can do to-day to help industry is to give it a chance to produce. The producer is being strangled simply becouse he cannot sell his goods, the very goods which the

Trade Commission-Mr. Lucas

people would buy if they had incomes large enough to do so. Everywhere people are beginning to realize that there is something wrong with our system of distribution. The fundamental principle of finance is to facilitate the distribution of goods; it superseded the barter system. We all know why we have an agricultural industry; we all know why we have developed an industrial system; we know why we have a transportation system. But why have we built- up a financial system? In my opinion it is simply to facilitate the distribution of goods among the people, and apparently it is not functioning properly. Henry Ford put the situation very well when he said:

Although money is supposed to represent the real wealth of the world, there is always more wealth than there is money and real wealth is often compelled to wait upon money thus leading to that most paradoxical situation, a world filled with wealth but suffering wrant. The poverty of the world is seldom caused by lack of goods but by a money stringency.

We hear a great deal about sound money and one is inclined to ask, what is sound money. I think it reasonable to say that a sound money system is a system that works, a system that makes effective the necessary demands for goods. Our present money system is therefore anything but sound. In this connection I might quote the following extract from the London Times under the heading Money System's Disease:

Money System's Disease The Times (London)

There are millions of decent, hard-working people and their children in, the richest countries in the world, including ours, wTho are living below the poverty-line at this moment. Why? Is it because of scarcity? No. It is because of over-abundance. That is the supreme paradox of our generation. We are producing too many and too much of the commodities that these poor people need, therefore they must go without. The prolonged flood of good things has created a drought.

There is too much corn, too much beef, mutton, bacon, butter, and in order to cure it millions of deserving people have to be kept on half rations. We are turning out too many clothes, too many boots, so little children ir the distressed areas must go in rags and tatters until this overproduction is stopped

of the very things for lack of which they are shivering in this damp climate.

Certainly we in Canada have an abundance of practically everything we need. Our labour is of a high standard; our machinery is of the best; our electrical and other power now developed-and that development is only in its infancy-is equal to one hundred and fifty million slave men ready and willing to do our bidding. No one will say that we have not sufficient transportation; our banks

are efficient and adequate and our retailing equipment is more than adequate. Thus purchasing power in the pockets of the people is the only thing lacking. This can be secured not by using the printing press but by a scientific credit plan to balance consumption more nearly with our production. This can be secured by a national credit account based, hot on a gold reserve but on the country's capacity to produce. Just as slavery lifted the burden of toil from the backs of the free citizens of olden days, so should the power-driven machine do now. The machine is now our slave instead of the human slave as in olden times.

Mr. LUCAS:

One feature of it, at any rate.

I think if there is one thing the people of Canada want and expect to-day it is action. We hear a great deal about the communistic propaganda that is being spread throughout the country. If there is anything that will spread communism in Canada it will be our failure to bring about some alleviation of the conditions that were exposed by this investigation. So I think a tremendous responsibility rests upon this parliament to see that speedy action is taken to bring about an improvement of conditions.

Up to the present we have heard a great deal, especially from our legal friends, as to what cannot be done. The question with which the people are concerned, however, is what can be done. The hon. member for East Kootenay (Mr. Stevens), in his very able speech this afternoon, referred to the tremendous monopolies that have been created in Canada in the last several years; he mentioned that 246 mergers took place between 1924 and 1930. I am of opinion that these mergers and monopolies could not have been carried through if it had not been for the fact that these men had the ability to manipulate finance, and if we want to deal with these monopolies I do not think there is any need to argue about the constitution. One thing is sure; this parliament has power to deal with finance, and until we reassert our sovereign power to deal w'ith finance I am afraid we will continue to have monopolies as we have had them in the past. It cannot be said that up to the present governments have materially interfered with business management, so one must conclude that the responsibility for the present chaotic condition rests upon those who dominate the business life of this country.

I want it clearly understood that I am not making a blanket condemnation of all business, because I think it is well understood that the small business man finds himself in just as bad a plight as do the majority of other classes in the country. One hears a great deal these days, especially from opponents of government interference, about private initiative, rugged individualism and the pioneer spirit of our forefathers, and the argument is advanced that these qualities alone are needed to lead us out of our difficulties. It may be true, Mr. Speaker, that these qualities solved the problems of earlier times, the chief one being to provide sufficient to keep the people from starvation, or what is commonly referred to as the problem of scarcity, but that age is past. We no longer live in an

age of scarcity; our great problem to-day is one of abundance. Prior to approximately one hundred years ago, down through all the centuries of time, there was very little advance in the art of greater production and the only agents a man had to assist him in making hi* living were his bare hands, a strong body, a few crude implements, and the animals which he trained. But following the discovery of solar energy and as the knowledge of its use increased, conditions changed rapidly. The main problem of our forefathers was one of scarcity. They were continually faced with the haunting fear of famine and starvation. Then what happened? Why has there been more progress in the art of production in the last one hundred years than there was in all the centuries that went before? In my opinion, Mr. Speaker, that has been so because of the spread of education among the people. Let me point out that it was in 1832. also about one hundred years ago, that the first reform bill was passed in England, that was the beginning of the spread of education to the masses, and it is interesting to note that as education improved and spread more rapidly among the people, tremendous changes have taken place in our productive system until to day the picture is completely changed. Rugged individualism and the pioneering spirit of our forefathers may have solved their problem, but it left us with an entirely different one, namely that of learning how to distribute the abundance we are now able to produce. But surely if our forefathers faced with the haunting spectre of starvation were able to overcome their difficulties, we to-day, freed from that fear, should find it much easier to face the problem which confronts us. Human beings are mainly creatures of habit and custom; and like the small boy with bad habits will not give them up until compelled to do so, and it is only necessity to-day that is compelling us to change our views on many matters; and the struggle is a hard one.

The fact we must realize is that we are living in 1935 and not 1835. In the past great changes have come about only after a bitter fight. In proof of that statement one has but to remember the tremendous struggles which have taken place to secure our religious and political freedom, the abolishing of slavery and so on. But once those rights were secured we would not go back to the old conditions. I believe the biggest fight now confronting the human race is that of gaining our economic freedom. The solid foundation upon which our British

Trade Commission-Mr. Lucas

civilization was founded was that of justice and fair play, and if we are to erect a superstructure in keeping with that foundation a great many changes will have to be madte to curb the greed and avarice of certain predatory interests which threaten to wreck the whole structure.

The tremendous changes which have taken place in our industrial and1 economic life through the growth of the corporation, mainly since the beginning of the twentieth century, have relegated the individual to a secondary position, and no matter how strong may be his private initiative or pioneering spirit he is no match for the soulless corporation which opposes him. It has been the generally accepted idea that shareholders control the management of a company, but mow we learn that to a great extent that is incorrect.

Let me quote one or two paragraphs from the report of the price spreads commission. At page 14 of the report, in that part dealing [DOT]vith the ownership and control of corpora-;ions, we find the following:

The corporation has allowed the development or multiple ownership-that is. an indefinite number of people may own the corporation (and thus its assets) through the minute subdivision of ownership shares. This development has brought about .a distinction between ownership and control.

Under simple conditions, ownership implies the control of the thing owned. The development of the corporation, however, with its multiple shareholders, has made it possible for an individual to own without controlling, and to control without ownng.

Then on the next page we have an analysis of some 145 companies indicating methods of control in Canadian corporations. The summary at page 17 is as follows:

The significance of the results above is further emphasized by the fact that very few directors owned more than one per cent of the voting stock of the companies they directed. In 91 of the 145 companies no directors owned more than one per cent of the voting stock. Of the 101 directors of the other 54 companies (owning more than one per cent of such stock) 60 of them held between 1 and 3 per cent; 25 held between 3 and 10 per cent; 7 between 10 and 20 per cent; 5 between 20 and 30 per cent and 4 above 30 per cent.

So we find that the individual has very little control. As the late Woodrow Wilson once said, all our activities are in the hands of a few dominant men who chill, check and destroy genuine economic freedom. The evidence brought out before the price spreads commission clearly demonstrates this fact.

The truth of it is found when we think of such companies as the Imperial Tobacco Company, Canada Packers Limited, Canadian Canners Limited, The Robert Simpson Company, Limited, The T. Eaton Company Limited and1 many others. Here we find1 managements composed of only a few men drawing huge salaries and bonuses, while the workers and the primary producers eke out a miserable existence. In addition bo that about a million of our citizens have to depend upon charity. Of course the system is satisfactory for those who are in control. Men drawing salaries of $25,000 per year and over and bonuses of $40,000 to $60,000 have surely found Utopia. But is that justice; is it fair play?

Let me now turn to that part of the price spreads commission report dealing with wages paid in the tobacco industry. At page 115 I find the following: .

The most striking fact revealed by our evidence on the tobacco industry is the combination of low wages and high profits. In 1930, the average annual earnings of the workers on this industry, $662, were the third lowest in the 40 industries for which the Domnion Bureau of Statistics published data. Since that date they have declined to as low as $555.

Then, at a later point I find this statement:

While workers in this company were being paid such low wages, an average of 28 chief executives received in salary and bonuses $616,318 in 1931, $506,982 in 1932 and $421,388 in 1933.

I would say at this point that if there is to be interference in business a maximum should be set as to the salary, including bonuses; which any one person may receive. One thing is certain, that the highly paid executives to whom we have been taught to look up and to consider as supermen have shown no great ability either in preventing or in leading us out of the present collapse. A publication of the Department of Labour indicates that a family budget requires from $800 to $1,000 for food and housing alone. On this basis a family would require from $1,200 to $1,500 to meet the minimum requirements for a decent stam dard of living. When one learns, however, that out of 1,947,771 male wage earners reporting at the last dominion census 1,178,975 or 09-53 per cent reported as receiving less than

S1,000 per year, and that including all male wage earners the average yearly earnings amounted to $927. and for the female wage

Trade Commission-Mr. Lucas

earners only $560, one realizes the seriousness of the situation. Is it any wonder that under these conditions we have poverty and unrest

Earnings

Under SI,000

8 1,000 to 1,499

1,500 to 1,499

2.000 to 2,999

3.000 to 3.999

4.000 to 4,999

5.000 to 9,999

10.000 to 24.999

25.000 and over

Totals

in Canada? I shall now place on record a table showing the classification of earnings as indicated by the last census reports:

Males Females

Per cent Per cent

Number of total Number of total1,178.975 60.53 437,409 82.77400.781 20.58 71.836 13.60198.577 10.20 14,173 2.68112,527 5.78 4.485 .8533,895 1.74 440 .089,959 .51 62 .0110,982 .55 51 .01145 .10 1 .01145 .01 1,947,771 100.00 528,457 100.00

If lion, members will study that table they will find it very illuminating and it will give them am idea of the small number who are earning sufficient to provide a decent standard of living.

When we come to agriculture, it is even worse. In 1930 the net value of agricultural production in Canada, according to the Dominion Bureau of Statistics, was $758,791,743, and in 1931 it was $538,192,000. Deducting from $758,791,743 the ordinary payments such as taxes, rents, interest on mortgages, repairs and so forth in order to arrive at the farmers' personal income, it is estimated that the amount would be in the neighborhood of $500,000,000 in 1930. In the census year there were 728,623 farms in Canada, so that the average income per farm would be slightly less than $700. This figure would include cash income and the value of products raised on the farm for consumption by the farm population. The farm population other than hired workers was slightly more than three million persons in 1931, so that we have thirty per cent of the Canadian population subsisting on an income of $500,000,000. Those are the figures for 1930, and from that year until 1933 the value of farm production fell tremendously and the farmers' income was reduced by about one-quarter.

There is something terribly wrong with the distribution of our national income when, as disclosed in the income tax returns for 1932, only 203,957 persons out of ten and a half millions, in other words only about two per cent, were able to pay the tax. With all male wage earners getting an average of only $927 per year, female wage earners an average of $560, and with farm income from $500 to $700, and on top of this with 1,250,000 of our population on relief, is it any wonder that conditions are bad?

In the shocking evidence brought out before the price spreads committee we heard of workers getting as low as two and three dollars per week. Here is a clipping from one of our Ottawa newspapers carrying the following headline:

.Skilled men get $3 weekly pay.

Average wage for 26 furniture plants is placed at $9.94.

The article goes on to say:

Weekly wages of $3, $4 "and $5 to skilled workmen were found to-day when the royal commission on mass buying investigated the furniture industry, which centres in Ontaro and Quebec. Boy apprentices were paid) as low as $1.68 ,a week and women received $4, $5 .and $6.

The Ottawa Journal commenting on these facts on June 22, 1934, has this to say in part:

In considering evidence before the Stevens parliamentary committee, all of us should want to be fair. Fairness, however, must work both ways, and it is hard to read of what was told to the committee on Wednesday without indignation-or shame. Consider the following, concerned with the operations of a boot and shoe factory in Quebec:

It has made substantial profits for four years.

The average weekly wage paid women employees in October, 1933, was $8.75.

The average for 172 men was $9.39.

Of the 172 men, 126 were married, with 401 dependents.

Eighty-two men received less than $6 a week.

In one department only two of 55 girls received the minimum wage, and boys received $2.50 and $3 for a week of 52 hours.

Business itself, decent business, can't afford sweated labour. More than that, and more important, Canada can't afford it. Cheapness may be important, may be often desirable. It is not as desirable or as important as the maintenance of Canadian citizens in a condition of human dignity and decency.

Last fall we read in the press a story about twelve hundred miners in Hungary who went down into a mine and refused to come up because of the starvation wages that were

Trade Commission-Mr. Lucas

being paid them. It was reported they were receiving two dollars per week. They decided to die rather than try to live under those conditions. And yet, Mr. Speaker, we have right here in Canada conditions almost as bad. It is enough to make every decent Canadian hang his head in shame. Yet these conditions have been brought about or have come about with highly paid executives in command. I do not say that they are entirely responsible, but they are the men who have been in control, and with no government interference; they have had a free hand. Yet there are those who say: Hands off business and let these terrible conditions continue.

I think it is safe to say that everyone in Canada and indeed in most countries of the world is dependent for his daily happiness not merely upon the protection of his own property rights but also upon some limitation of the property rights of others. There seems to be gradually emerging from generations of trial and error, from hard work and hard thinking, a broad principle which can be soundly applied in the writing of laws needed to protect the public and private interests in business enterprise, the principle that every right carries with it a corresponding obligation, that every freedom carries with it a corresponding servitude. The right to own a cobbler's tools and the freedom to make shoes as and when and where one wished carried with it little social obligation and imposed little servitude. But the right to own the factories that are sufficient and necessary to produce the shoes of a nation and the freedom to control the operation of these factories carries with it a heavy social obligation and a servitude to the nation. No community can long sustain by law the right of any one man or group of men to decide by the wisdom or folly of their arbitrary decisions whether a community shall be well fed, well clothed or well housed, or shall starve and shiver in hovels. Those who seek power must accept obligations, and so as the property under individual control increases, the owner's social responsibility must likewise be increased as a matter of law. Public obligations must be imposed in exact proportion to the public interest. The owner of a ten acre farm or a little business may operate his property, may run his business to suit himself, but the owner of 100,000 acres or a huge factory has power to give a thousand men employment and the opportunity to earn a living, or to deny them that opportunity or grant it only on oppressive terms. The operation of any great business furnishes opportunities for employment to thousands of men, whereby they obtain the wages which are the means

to life and liberty, and whereby they produce goods to meet the needs of thousands of consumers. Surely the community has a claim against the owner of such a business for a wholesome use of its property rights which is at least as valid as the claim of the owner of the business for a wholesome protection of his property rights by the community.

We are inclined to boast a great deal about the liberties and freedom of our people, but I say without fear of contradiction that the present system has brought about the most insidious form of slavery that has ever existed among the human race. If any man challenges that statement just let him place himself in the position of some of those lowly paid workers, and then he will very soon realize that he has neither liberty nor freedom. When one sees the poverty of the many on the one side, and the affluence of the few on the other, one sometimes wonders at the patience of the workers. I should like to quote briefly from a speech made before the Canadian Club in Ottawa last December by the Hon. W. D. Herridge, Minister to Washington. He said in part:

Are those who are profiting entitled to the same tags of virtue and innocence as those who-are suffering? Are the former beyond all criticism and indeed like sweepstake winners, to be congratulated as the group arbitrarily chosen by providence to be the beneficiaries of a system which just won't work in any other way?

This total disregard for human welfare, this blind grasping for huge profits, belongs to an age which is passing and it cannot pass too soon. We are beginning to realize that we are all in the boat together and profiteers will not be tolerated much longer. They should not be permitted to scuttle the welfare of whole large groups and play havoc with honest business. A great deal has been said about respect for the constitution, and I should' like to quote John Bright as follows:-

I believe there is no permanent greatness to a nation except it be based upon morality. I do not care for military greatness or military renown. I care for the condition of the people among whom I live. There is no man in England who is less likely to speak irreverently of the crown and the monarchy of England than I am; but crowns, coronets, mitres,military display, the po-mp of war, wide colonies and a huge empire, are, in my view, all trifles light as air and not worth considering, unless with them you can have a fair share of comfort, contentment and happiness among the great body of the people. The nation in everycountry dwells in the cottage: and unless the light of your constitution can shine there,unless the beauty of your legislation and the excellence of your statesmanship are impressed there on the feelings and condition of the

people, rely upon it you have yet to learn the duties of government.

Trade Commission-Mr. Lucas

We all know that a fair share of happiness and contentment does not exist among the masses of the people. How can it with the wages received by ninety per cent of the people? I should like to make a short quotation from a report presented to the League of Nations, as follows:-

Millions of children are the innocent victims of the world's economic depression.

The general lowering of the standard of living "from which millions of families totally or wholly unemployed have been suffering for a long time past, constitutes a serious danger to public health," states the report presented by the international labour office to the child welfare committee of the league of nations.

And again:

The dangers to which the health of the children of the unemployed are exposed are lack of clothing and bodily care, deterioration of housing conditions and underfeeding.

And again:

As a whole, the information collected by the international labour office shows that the economic crisis has produced almost everywhere such a reduction in conditions of life that there is grave danger that millions of children will not be able to grow up in normal conditions of health.

Every hon. member should be impressed with the realization that many of the rising generation is being undernourished; it is facing a handicap which will possibly never be overcome in this life. These matters should give us grave concern. Why does this condition exist? Is it that we have not the resources, the man power or the plant and equipment to supply all with abundance? Of course not. Our resources have only been scratched, we have over half a million idle men pleading for work and a chance to live. Our plant and equipment is working less than fifty per cent of full time. A headline which appeared in one of the Ottawa papers last winter, commenting on the price spreads report, stated that the Canadian milling plants could supply the entire world.

Mr. LUCAS:

Has the minister any information to show that the packers have a uniform grade themselves? I wa9 led to [DOT]believe some time ago that each packing plant had a grade of its own and that they did not conform, so that when the bacon went on to the British market, there were different grades of Canadian bacon. I think every hon. member will agree that there is no other oountry in the world that should be able to produce as fine a quality of bacon hog as Canada. Nevertheless it is humiliating, when we take the prices that are given in these, I think, weekly reports that are issued by the Department of Agriculture giving the comparative prices of bacon that goes on to the British market from the other countries of the world, to find the price for Canadian bacon is the lowest of that of any country reported. I am strongly of opinion that if we are going to build up a market for Canadian bacon, there should be some standard for export to which all these various packing companies would have to conform. The minister says that he has the power. I trust, if he has it, he will see that a standard is set so that all packers who are exporting will have to conform to that standard and that there will be brought about some more uniformity in our bacon on that market in order that we will get a better price for it

Mr. LUCAS:

Has the minister been able to make an estimate of the additional amount of revenue under the amendments made this year to the Income War Tax Act?

Mr. LUCAS:

Would the minister please

explain why this in included. It is free-under all categories?