[Stage Direction]
The SPEAKER laid on the Table the organization of the House of Commons staff.
Right Hon. W. L. MACKENZIE KING (Prime Minister):: I beg to move that the organization of the staff of the House of Commons laid on the Table of the House this day, be approved. I may say, Mr. Speaker, that this does not involve any change in expenditure but is simply a redesignation.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the Orders of the Day:
Mr. C. A. GAUVREAU (Temiscouata):: Mr. Speaker, I rise to a question of privilege, and at this stage of the session I shall be very brief. My attention was called, by a man of high position, to a certain part of a speech delivered by a member of this House at a public meeting on Saturday. I will quote from The Citizen of Monday last the following sentence from that speech:
Miss Macphail again emphasized that her whole heart was with the people of the farm whose battle, she said, she was trying to fight
in the House of Commons or rather the House of Anesthetics where principles and honour and justice were lulled to sleep, she averred.
Mr. Speaker, in my humble judgment these words are a direct attack on the honour of Parliament, on the honour of every member of this House, nay on the honour of the three parties in this House, and as I am one of the oldest members I think it is my duty to resent these words and to protest most strongly against them. I hope, Mr. Speaker, that the member for Southeast Grey will avail herself of the first opportunity to tell this House if she has been fairly or accurately reported by the newspapers. If not, so much the better for herself and those who are concerned. If it is true that she did make the statement attributed to her by this newspaper, the least she could do would be to apologize or explain.
Miss AGNES C. MACPHAIL (Southeast Grey) : Mr. Speaker, there were two other members of this House present at the meeting at which I am alleged to have uttered the words complained of-the hon. member for West Edmonton (Mr. Kennedy) and the hon. member for Humboldt (Mr. Stewart). The only thing of the kind referred to that I can recall in connection with that speech was that I had been referring to the much-talked-of "House of Temptation", and I said I thought a mistake had been made in that; I said I did not think that was proper, but that possibly "The room in which they administered anesthetics" would have been a more correct interpretation. The words which the hon. member has quoted I did not use at all, as I am sure both the hon. members who were with me on the occasion referred to will confirm. I will be very glad if both these hon. gentlemen will corroborate what I have said. I repeat that I never used the words with which I am credited at all.


Mr. STEWART (Humboldt):: At the request of the hon. member for Southeast Grey I can state that I heard her address on Saturday evening. I know that she referred to the quoted statement that has been attributed to her and did qualify it as she has stated; but I do not recall, and I do not think, that she used any such terms as are reported in the statement ascribed to her by the press.



WAYS AND MEANS


[Stage Direction]
House again in committee of Ways and Means, Mr. Gordon in the Chair.
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Hon. W. S. FIELDING (Minister of Finance) :: Before I proceed to take up the resolutions, may I make a word or two of introductory observation? I shall have several amendments to propose, not making any material change, but designed to facilitate the carrying out of the resolutions. Various suggestions have been offered by hon. members on both sides with regard to the rates of duties imposed on some of the items to which their attention has been drawn. I desire to say that, after giving full consideration to these suggestions, I am of the opinion that it would be wise to make no change in the rates we have proposed. I do not imagine that the resolutions, as I have presented them to the House, are perfect; I have no doubt, in the light of experience, we shall find room for some changes, and, perhaps, improvement. But in every case where the reductions have been made in the rates of duty, they have been made with due regard to the embarrassments that might be created if a more radical change were proposed. My hon. friends who proposed these amendments may consider it their duty to move at a later stage, but I thought it better to say at once that, to make any change in the various matters in the budget resolutions will be difficult, and, at this stage, very embarrassing. Of course, hon. members must act according to their own views, but I am going to ask members on all sides to accept the resolutions, as far as may be possible, as the settled policy for the present session; and if experience shows that there is room for improvement, no one will be more ready to accept suggestions in that direction than. I. Hon. members who have been making these suggestions may feel it necessary, from their own viewpoint, to deal with them further, and, possibly, to move amendments. I regret that I cannot accept these suggestions, but I consider it reasonable, having considered the proposed changes, to say that we do not think it-wise that they should be adopted.


Mr. MACLEAN (York) :: Does the statement the minister now gives apply to items like the stamp duty?


William Stevens Fielding: Yes.


William Findlay Maclean: Because we are receiving telegrams about that duty.


William Stevens Fielding: My hon. friend will receive telegrams no matter what rates are affected-the most flourishing industry in the country, during the last two or three

weeks, is the telegraph office. Of course, what I have said is a suggestion from my own viewpoint, and is only a request. I cannot prevent any hon. member commenting upon these resolutions, and, if he feels it his duty, moving against them.


Mr. MEIGHEN:: I understood the hon. Minister of Finance in his statement of policy to refer to the resolutions which we have gone over, as to which some amendments have been suggested. I do not understand him to refer to those we have not yet touched in committee.


William Stevens Fielding: Even as respects
those, what I said would apply, from my own viewpoint. I admit there is room for criticism on those points, and hon. members can make their own comments, and, if they find it necessary, can move against them, but I am expressing the hope that, with a view to facilitate the business, the committee may come to the conclusion that they might do worse than accept the resolutions as they stand, with a protest or with discussion if they desire; hut I want to discourage change in so far ias I have the power to do so.


Arthur Meighen: I hope the statement is not regarded by the hon. minister as final, as relates to matters that have not yet been under discussion in committee.


William Stevens Fielding: We will see how matters develop. I am always ready to receive suggestions, hut I. think we have reached a stage in the session when we should be patient-to "rather bear those ills we have than fly to others that we know not of." I desire to move the first resolution of the Customs Act, which reads:
1.	Resolved, That it is expedient to amend The Customs Act and Amending Acts, including The Department of Customs and Excise Act (chapter twenty-six of the Statutes of 1921), as follows:-
1. By repealing section six of The Department of Customs and Excise Act, heing chapter twenty-six of the Statutes of 1921. and amending section thirty-one of the said Customs Act accordingly.
The clause referred to was enacted last year, and contemplated the appointment of a number of officers in various parts of the country-shall I say, of the world?

who would give certificates on every invoice of export for more than $100. The act was passed a year ago, and the Government provided that it should only go into operation by Order in Council. The Government, apparently for their own reasons, did not bring it into operation, and we thought it better to repeal it.

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Sir HENRY DRAYTON:: That is the first resolution.


William Stevens Fielding: Yes, and the first subsection. It will be remembered that last year there was some discussion in the House, and it was enacted that officers representing the Government of Canada might be appointed with a view to giving certificates, and that every invoice of more than $100 would require a certificate by the Canadian officials. That provision has not yet been called into operation; we think it has been found inconvenient and we propose to repeal it.
Section 1, resolution 1, agreed to.


William Stevens Fielding: I move the adoption of section 2, which reads:
2.	By repealing section seven of The Department of Customs and Excise Act aforesaid, and amending section forty of the saia Customs Act accordingly.


Henry Lumley Drayton: Carried on
division.


The CHAIRMAN :: Carried on division.
Resolution 1, section 3, subsection (1):
3.	By amending section fifty-nine of the said Customs Act, as follows:-
(1) By striking out subsection three thereof, and substituting therefor the following:-
''<3) Whenever the value of a currency has not been proclaimed, or whenever there is no fixed standard value, or whenever from any cause the value of a currency has become depreciated or appreciated, there shall be attached to the Invoice of the goods imported the certificate of some Consul or Canadian Trade Commissioner, resident in such place or country, or the certificate of a bank showing the extent of such depreciation or appreciation, or the true value at the time of the exportation of the goods of the currency in which such invoice is made out, as compared with the standard dollar of Canada: Provided that the Collector of Customs and Excise may compute the value for duty at the rate of exchange certified by the bank through which the same is drawn as current at the time and place when and whence the goods were exported to Canada."


William Stevens Fielding: This clause has reference to depreciated currency; but it is not the Depreciated Currency clause which we have been more than once discussing. The object of this is to enable the collector of customs to ascertain more easily the current rate of exchange, instead of going through the more difficult process which at present prevails. It is entirely to facilitate the work of the officers in the Customs Department in that regard. It introduces no new principle, but it makes it easy for the Customs Department to determine the value in this case.
Section 3, subsection (1), agreed to.
(2) By amending subsection 4 of the said section 59 by adding after the word ''Consul's" in the second line thereof the words ''or Canadian Trade Commissioner's".


William Stevens Fielding: This provides that
where a certificate is required under the law from a consul, if there is a Canadian trade commissioner there, his certificate shall be accepted.


Mr. MARCIL (Bonaventure) :: We heard a great deal about treaties in this House yesterday, and this might be an opportune time to ask a question in regard to treaties. In what shape is the French treaty at the present time, and is any action being taken towards entering into a trade treaty with Belgium or any other country?


William Stevens Fielding: The situation as regards France is this. A year or two ago a treaty was adopted which seemed to contemplate further negotiations. I believe negotiations were begun, or the French authorities endeavoured to begin some negotiations, but it was deemed at that time inexpedient or inconvenient to the Government of the day and no action was taken. The French Consul General at Montreal has recently approached us on the subject, and we have intimated our willingness to enter into negotiations at a convenient time, but no further action has been taken. I anticipate that one of these days the French government will take some further action; that they will give us some information as to what they suggest, and our desire is to have again with France a comprehensive treaty, as we had a few years ago.


Charles Marcil: As regards Belgium and other countries?


William Stevens Fielding: I do not think we
have had any direct approach from Belgium on the subject.


Mr. LADNER:: Does not the minister
think it is expedient to have negotiations with Belgium along the same lines, seeing that France and Belgium have corresponding 'industries, in relationship tq our country?


William Stevens Fielding: France has always
been treated as a unit in any negotiations. I have not had before me the suggestion that we should at the same time deal with Belgium. Indeed, I do not think there has been any approach by the Belgian authorities. I believe there has been an
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approach by the authorities of Greece with a view to some negotiations, but no progress has been made.


Henry Lumley Drayton: I hope the
minister wil not wait for the French government to aproach us. The matter is in such a shape now that it is entirely open to Canada to make her representations to France. If the minister will look over the files, I think he will agree with me that this ought to be done at the earliest possible moment.


William Stevens Fielding: We have indicated
our willingness to undertake negotiations at a time which will be agreed upon. The matter is at present in such a condition that it would almost naturally call for some approach from the French government. The question, however, who makes the first approach, is not important. A comprehensive treaty such as we had a few years ago is very desirable if we can obtain it.
Section 3, subsection (2), agreed to.
(3) By repealing section 8 of the Department of Customs and Excise Act aforesaid and amending said section 59 accordingly.


Mr. STEVENS:: This is the clause regarding depreciated currency. In this clause we are repealing clause 8 of the Customs and Excise Act of last year, 1921. We have in resolution 5, I think, what the minister proposes to substitute for this. Am I correct in that?


William Stevens Fielding: No, my hon. friend in that respect is hardly correct. The purport of this resolution was correctly stated by me in the earlier discussion; but the wording of the resolution is, I think, capable of improvement, and I will send to my hon. friend a copy of what is proposed by way of amendment and which reads:
That it is expedient to amend section 40 of the Customs Act by providing that in the case of importations of goods, the manufacture or produce of a foreign country, the currency of which is substantially depreciated. *he value for duty shall not be less than the value that would be placed on similar goods manufactured or produced in the United Kingdom and imported from that country, if such similar goods are made or produced there. If similar goods are not made or produced in the United Kingdom,
' the value for duty shall not be less than the value of similar goods made or produced in any European country the currency of which is not substantially depreciated.
The minister may determine the value for duty of such goods, and the value so determined, shall, until otherwise provided, be the value upon which the duty on such goods shall be computed and levied under regulations prescribed toy the minister.

That is substantially the same as the resolution on the Order Paper. It was not clear in the first draft of the resolution whether it would apply to goods of a foreign country coming, say, by way of Great Britain. It is so worded now' that it distinctly applies to goods of a foreign country no matter where they may come from. That is the material change in the wording. In substance it is exactly as it stands to-day.


Henry Herbert Stevens: I should like to be perfectly clear as to the minister's intention. If I remember rightly, in his speech of last Monday, when he suggested that amendments would be made he intimated that the contention was to bring the value of goods of a country whose currency was substantially depreciated, up to the level of the price of the goods from Great Britain.


William Stevens Fielding: That is correct-


Henry Herbert Stevens: That is the impression that has gone abroad and is, I think, correct. While my former remarks, perhaps, went a little further than that, I would be quite wdlling to accept such a provision as I have stated. But I do not think my hon. friend's amendment will accomplish that end. In the absence of applying the full dump, I do not think it is possible for that end to be achieved by this [DOT] resolution. I do not wish to presume too much upon the good nature of my hon. friend; but I have gone into the matter very carefully, and I have in my hand a wording which I should like to submit to him. I was not quite sure of his viewpoint, although I read Hansard carefully and it appealed to me as he stated it and as he has now confirmed it. If it is the intention to put the German exporter into the Canadian market on the same basis as the British exporter, allowing the British exporter, the legal preference, then I submit that this wording wrill not do. In order to accomplish the desired end, it will be necessary to apply the full dump. I appreciate very highly the value of the dump doctrine as introduced into our legislation in 1907 in section 40, I think it is, by the present Minister of Finance. I suggest to my hon. friend that this wording be used:
That in the case of importations produced in a foreign country whose currency is depreciated the value for duty shall not be less than the value that would be placed on similar goods produced in the United Kingdom and imported from that country if such similar goods are produced there. If similar goods are not produced

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in the United Kingdom, the value for duty shall not be less than the value of similar goods produced in any European country in which the currency is not depreciated; if the purchase price, or the exporter's sales price, is less than such value for duty, there shall be levied, collected, and paid, in addition to the duties imposed thereon by law, a special tumping duty in an amount equal to such difference.
That, I think, will completely cover exactly what my hon. friend has in mind, which he has intimated to the House and country, and which has been accepted as satisfactory, namely, the placing of the German trader on the same level as the British trader. I submit it to my hon. friend for his acceptance.


William Stevens Fielding: My hon. friend is
associating two things which to my mind are separate, one the value for duty and the other the dumping duty. The dumping duty remains exactly as it is now; it is not changed in any way. Whatever protection it gave to any manufacturer he still has. If the hon. member desires it, I will reflect on the question; but I am inclined to think that what he wants to accomplish will be attained by the resolution as it stands. If at the close of any discussion which it is thought proper to have on the subject my hon. friend still presses his point, I shall be glad to let the matter stand over until a later period of the day. In the meantime I can take it up with the customs authorities. The hon. member has correctly stated my purpose. The object is that the valuation of any goods-not German goods in particular but those of any country where the currency is substantially depreciated-shall be exactly on the same basis as the valuation of similar goods of British manufacture coming in at the same time; and if similar goods are not made in Great Britain we shall look for the standard of value to, say, Holland or Switzerland, where the currency has suffered little or no depreciation. I think that what my hon. friend is aiming at will be accomplished by the resolution as it stands. But if he urges the point he has raised I will let the matter stand for the present and take it up at a later stage. In the evening I shall have a consultation with the customs authorities.


Arthur Meighen: I think it is well that the committee understand the very great difference between the law as it will be, if amended by the amendment submitted now, and the law as it will be if passed as the minister commended it to the committee just a moment ago. The valuation for duty purposes, under the minister's proposal, will be the British valuation; consequently the duty will be the same as the duty against Great Britain, save for any advantage, small though it might be, that Great Britain will have under the preference. But under the amendment submitted there will be a special dumping duty, as I understand it,-I have not seen the amendment before-on the difference between the German price and the British price. Let us take by way of illustration the case that has so often been before the House in connection with this subject; I refer to the question of the knives. The British valuation is about $3.75 per dozen, ours about $4, and the German valuation about 55 cents. On the goods imported from Great Britain there would be a duty at the preferential rate on $3.75, on the goods imported from Germany there would be a duty at the ordinary rate on $3.75; but under the amendment there would be in addition a special dumping duty on the difference between the German valuation of 55 cents and the British valuation of $3.75. The difference is very great and I submit it is essential if the British trader and the German trader are to be put on an equality, an equality barring, of course, the ordinary preference afforded to British goods.


William Stevens Fielding: I do not wish to stop the discussion. I have already suggested that I am willing to reserve the item for later consideration in order that I may discuss it with the customs authorities. The main difference between the resolution as worded to-day and as it has appeared on the Order Paper is in the matter of direct route. That is to say, the resolution as it stood on the Order Paper before was open to the interpretation that foreign goods might be imported by way of another country, from Great Britain, for example, and so escape the penalty, if it was a penalty, provided by the resolution. The amendment now provides that German goods, or for that matter the goods of any other country whose currency is considerably depreciated, whether they come direct or by way of some other port, shall be subject to the same regulation. That is the main purpose of the resolution. But I will consider later in the day whether the point raised by the hon. member for Vancouver Centre (Mr. Stevens) is well taken.


Henry Herbert Stevens: I do not wish to delay the committee, but before an adverse decision is arrived at by the minister I should like to have an opportunity to
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argue the point, if I might use that term. I am accepting at full face value the minister's statement that we desire to put the German exporter on the same level and in the same position as the British exporter.


William Stevens Fielding: As to valuation.


Henry Herbert Stevens: I did not so understand my hon. friend the other day, and certainly the country does not so understand his position. The understanding has gone abroad throughout the country- and I have had considerable information from various sources on that point-that the minister by his amendment is placing the German exporter in the same position as the British exporter, only, of course, giving the British exporter the advantage he has legally by the preference. Perhaps I had better make a brief argument before the minister decides the question.
There was one point which I am sure escaped the minister's mind the other day, and considering the multitudinous questions that have been thrust upon him in the last few days it is not to be wondered at. That point is that the German principal price is not a fair competitive price. It is not fair for certain reasons. It is necessary that I should repeat something of what I said the other day, and I shall try to be as brief as possible. The artificial methods by which the German government is maintaining a low cost of production in Germany to the extent of three times the value of their mark on the exchange is, I contend, an absolutely unfair competition and justifies us in putting the dumping regulation upon their goods. We are not alone in taking that position. I have here the Congressional Record, and while I will not weary the House by reading extensively from them, I can assure the committee that many illustrations are given by Mr. Fordney and others in which they show, perhaps from a slightly different angle from that from which I argued the matter, that the Germans are entering goods for duty purposes at New York and other American points at figures that are not true value figures. Let me give my hon. friend one illustration to show that the German is really receiving in gold value to-day a very much greater value than would appear by the figures submitted in Canada at the point of entry. Take the same illustration I took the other day, which is applicable to any article, although there might be variations in

prices-let us take knives. Fifty-five cents, at the exchange rate, is equal to 165 marks-now, this is the crux of my whole argument, and if the minister will get this point I think he will agree with me absolutely; 165 marks at gold value is $39.60, or approximately $40.


Mr. McMASTER:: Is that old par value?


Henry Herbert Stevens: A hundred and sixty-five marks at par value is $39.60 gold value. So, the German is getting to-day, say, $40 for one dozen knives. The cost of living and production in Germany, according to their best experts, has increased sixteen-fold. Divide $40 by that increase and it gives $2.50, which the German receives in Germany to-day for that article-I am figuring it at pre-war rates. So that, in entering that knife in Canada to-day at 55 cents the German is subjecting us to an utterly unfair competition. It does not make much difference how one reasons out this low price that exists in Germany. I am quite confident that my processes are accurate, although I do not wish to be dogmatic about it. But this point I am making now cannot be gainsaid, that that value represents at prewar rates, $2.50. Taking the advanced cost of production in Canada, we would be entitled to double that value in assessing duty. What I am asking by this resolution is to simply take the German price, add to that the British duty on that price, and then add to that again the difference betwen the German principal price and the British principal price.


William Stevens Fielding: Between what?


Henry Herbert Stevens: We add to that a dumping duty equivalent to the difference between the German principal price and the British principal price. My argument in defence of that is, that the German principal price is maintained at an exceedingly low level by artificial methods, not by ordinary methods that are fair to competitive trade. Let me put it in a slightly different way. Are we not going far enough if we ask the Canadian to compete against normal countries such as Great Britain and the United States? I think in putting it that way I am saying what everybody will admit to be fair. Therefore, if any other country with an abnormally depreciated currency cuts under, say, the British figures, which is the lowest usually in most classes of goods, then we will be doing what is fair and right to raise the abnormally low

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prices of goods from the country with depreciated currency to a level with the prices of goods enjoying the British preference. That is exactly what will be done by my suggested wording of this amendment. If my hon. friend will simply acept the position that we are going to ask the Canadians to compete against the British price, then my wording will achieve that end; whereas his wording will put us in a position where the Canadian would ; have to compete against half that price.


Andrew Ross McMaster: Mr. Chairman, I trust that the Finance Minister will not be influenced by the arguments advanced by gentlemen sitting across the way from him to make trade more difficult in this country. It seems to me that a knife-blade is a very narrow basis on which to found an economic argument, and I think that most members will agree that there can be no permanent industrial prosperity based upon the fact that the currency of a country is depreciated. As a matter of fact, I have in my hand a letter which I received the other day from some clients of mine who import goods from Germany, saying that the German prices are such that they find it difficult with these goods to meet American competition. I have also in my hand a dispatch from Washington in which an American commercial attache by the name of Herring states that:
In Germany production costs are affected by rising coal prices and wage increases and by the 25 per cent freight rate increase of June 1st.
The dispatch goes on to say:
As time progresses any advantage which they ever had by a rapidly depreciated currency has been offset by the inevitable result of a depreciated currency, which is an inflation in prices and wages.
I do not propose to quote the whole article, but it states that German prices, as we might know would inevitably happen, are gradually rising to the same level as world prices. As to the somewhat abstruse reasoning along lines of figures, I confess that I am somewhat like the Oxford undergraduate, who, when plucked in arithmetic, said that he had not the low cunning necessary to understand figures; I am afraid I have not that sort of cunning to understand the figures placed before the House by the hon. member from 'Vancouver Centre. But, let me say in conclusion, that a depreciated currency cannot for any substantial period of time give an advantage to the nation which has it. That nation has to go out into the world's markets to
buy its raw materials to make up into goods and ship them out, and to have a depreciated currency in that regard is a direct detriment rather than a benefit.


Henry Lumley Drayton: I do not
desire to enter into a lengthy argument largely reiterating what has been said in the House not only this year but last year. I suppose the best answer to the observations of the hon. member for Brome is to point out that despite these things not happening they have happened-that Germany is about the only place to-day where there is very little, if any, unemployment; and to draw his attention to the further fact that, stating the case in his own way, it always takes some time for the depreciation in a nation's currency to be reflected in its domestic market. It would not be so bad if the depreciation of the German mark reached the point of saturation and stopped there long enough; for then there would be a great deal in what the hon. gentleman argued; but it has not stopped there, and the fact is that much more can be obtained for the mark in Germany than elsewhere. I do not think there is any doubt about that.
Further, we are in the position to-day that this opposition has not to debate the question. We took issue on the general argument that the effect of the hon. minister's resolution was to create free trade with Germany. And the hon. gentleman himself has realized the situation, for he has turned around and said: "No, something has got to be done about this; it is absolutely wrong to give the Germans that great advantage in the Canadian market which my original proposition gave them over the British." That, in effect, is what my hon. friend has done.
I want to point out just one other matter to him-the position he is in unless he accepts the amendment of the hon. member for Vancouver Centre (Mr. Stevens). The hon. minister will remember that he said there were two things wrong with the currency question. The first was, it was altogether unnecessary and should be swept aside. The hon. gentleman has reconsidered that view, I think very properly, and has reached the conclusion that it is something which cannot be swept aside. But there was something else wrong with it. I think he said that to a large extent it was unworkable because German goods were being sent to Great Britain and other countries and invoiced from there. For that reason again the
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provision had to be set aside. Now, unless the declaration of my hon. friend meant just exactly what the hon. member for Vancouver Centre says, he is by law simply putting the position back to the case of the man who was evading the former regulations which he said were no good. Indeed, he is doing a little better. Because, where you have your exporter from Germany at the disability of having to ship from England, he is at some extra cost; has to export to this country on the British valuation, but he is at the inconvenience and the extra cost of the broken transit, broken billing, broken accounting, and the like. The effect of my hon. friend's amendment, unless it means what the hon. member for Vancouver Centre says, is simply to tell the German, who is in a position to undersell here: "I am going to relieve you of all the trouble you were put to in the past for the purpose of evading Canada's currency regulations; I am going to let you ship direct from your own place to Canada upon the same footing as if you had gone to all the trouble to ship by way of Great Britain." I am satisfied that the Minister of Finance had no such idea, but I fear that is the effect of his amendment unless it means what the hon. member for Vancouver Centre suggests it means.


Mr. GOOD:: There seems to be a good deal of confusion in regard to this matter. The Finance Minister seems to have given up entirely the position he took when he delivered his main budget speech; he has gone much further in the direction of prohibiting German importations than the hon. member for Vancouver Centre asked him to go. As I understand the situation now, German exporters will have to invoice their goods into Canada at the British price. In the case of the knives referred to, no German manufacturer may invoice these goods into- Canada at less than $3.75 a dozen, on which duty will be paid under the general tariff. If that is the situation, and British goods come in under the preferential tariff, does it not mean a prohibition against those German goods? I do not see how any German manufacturers, if they are compelled to invoice goods at the British price and pay a higher duty than the British have to pay, can do any trade here at all. Now, according to the hon. member for Vancouver Centre, the cost of production in Germany of these knives is about $2.50 a dozen, and it seems to me they ought to be allowed to come into this country at that rate, if we are to get any advantage of the cheaper 
production in Germany. If, of course, we determine on a policy of absolute exclusion of German goods, we might as well confess it and prohibit their entry. In regard to the suggestion which has been made by the hon. member for Vancouver Centre, it seems to me there will be two duties levied against these knives-one of 30 or 35 per cent on the $3.75, the British price, and in addition a dumping duty on the difference between [DOT] 55 cents, the German valuation, and the $3.75. If it will be difficult for the German manufacturer of knives to export his product to Canada at the British price, it will be rendered impossible if, in addition to the duty on the basis of the English valuation, he has to pay another duty on the difference between the German valuation and the British valuation. I would like to see this matter cleared up before the item passes.


Mr. HUGHES:: I just wish to present this thought to the hon. member for Vancouver Centre. The only advantage the German manufacturer and exporter can have is that which is involved in the difference between the domestic value of the mark and its foreign value. He has not all the advantage of that, but that is the greatest advantage he can have, because in what he imports he has to suffer the disadvantage of paying the foreign price. In other words, if the domestic and the foreign value of the mark were exactly the same, he would have no advantage no matter what the value of the mark was, because he would have to pay so much more for what he imported-so much more for transportation-so much more for overhead expenses-and so on. And his advantage in the case where there is a difference favourable to him between the domestic value and the foreign value of the mark is minimized to the extent that he has to import the material, or part of the material, that enters into the article he produces.


George Newcombe Gordon: Subsection
4 p.m. 3 of section 3 has not yet been adopted.


William Charles Good: I understood the minister to say that he would leave this matter over until after 8 o'clock.


Henry Herbert Stevens: That has reference to a later clause. Subsection 3 is to repeal the original clause.


William Stevens Fielding: The new clause will stand as suggested. The hon. member for Brant (Mr. Good) has suggested that the German exporter must invoice his goods

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at the British price. I do not think that is correct; he may invoice them any way he likes, but the customs authorities must deal with the valuation. I do not think it is important to determine how the German exporter shall invoice his goods; the great question will be, on what principle are they to be valued? In that respect the Customs Department will have to apply whatever the decision of the House is.


William Charles Good: Would the minister illustrate his point in reference to the case of the knives?


William Stevens Fielding: My point is that I do not think it is important how the exporter invoices them. The value to be ascertained by the Customs Department is the English value of a similar article. If the invoice is made out in marks, the customs officer at the proper port will deal with the value, not with the invoice at all; he can brush aside the invoice. Of course, if an invoice is fraudulent, that is another matter.


George Newcombe Gordon: Does subsection 3 stand?


Henry Herbert Stevens: Carried on division.
That is the subsection which repeals section 8 of the act.


George Newcombe Gordon: Subsection 3 carried on division.
Resolution 5, with amendments, allowed to stand.
6. Resolved, That It is expedient to amend the said Act by adding at the end of section one hundred and one thereof the following proviso :-
"Provided, however, that upon the entry outwards of wines and spirituous liquors to be exported from a Customs warehouse either by sea or by land or inland navigation, as the case may be, the person entering the same for such purpose shall give security by bond of an incorporated Guarantee Company authorized to do business in Canada and whose bonds are acceptable to the Dominion Government, such bond to be in form approved by the Minister, in double the duties of importation on such goods, that the same shall, when the entry aforesaid is for exportation by sea, be actually exported to the place provided for in said entry, and when the entry aforesaid is for exportation by land or inland navigation, shall be landed and delivered at the place for which they are entered outwards, unless in either case the said goods were after leaving Canada lost and destroyed, and that such proof or certificate that such goods have been so exported, landed or delivered, or lost and destroyed, as the case may be, as shall be required by any regulation of the Minister, shail be produced to the Collector or other proper officer within a period to be appointed in such bond. This proviso, however, shall not apply to wines and spirituous liquors in a Canadian port, without entry thereat for warehouse and for no other
purpose than their transportation in transitu on a through bill of lading, from a port outside of Canada to another port of destination outside of Canada via a Canadian port or ports."


William Stevens Fielding: The object is to ensure, when wines and spirits are sent from a port in Canada to another port, that they have actually gone to that port, and for that purpose bond is required. Sometimes it is suggested that they do not go to the intended port. This provision is to ensure that these wines and spirits really go to their actual destination.
Section 6 agreed to.
7. Resolved, That it is expedient to amend section one hundred and two of the said Act by inserting the words "or in such bond" between the word "exportation" and the word "there" in the second line thereof, and by adding at the end of the said section the words "and if security by bond is given, the said bond may be cancelled."


William Stevens Fielding: That deals with the
same thing.
Section 7 agreed to.


CUSTOMS TARIFF ACT 1907 AMENDMENT
William Stevens Fielding: That brings us down
to the schedule of duties, several items of which were reserved.


George Newcombe Gordon: The first of these
is:
Customs tariff 446b:-Ploughs and complete parts thereof: British Preferential tariff, 10 per cent; Intermediate tariff, 15 per cent; General tariff, 15 per cent.


William Stevens Fielding: The suggestion was
offered by some hon. gentlemen oposite that the duty provided for here should be reduced. I may say, referring to that item, that the manufacturers- we are not bound to accept them, I suppose, as absolutely unbiassed witnesses - the manufacturers are very much alarmed at the proposal and have given me all sorts of assurances that if that reduction is made it will be disastrous to them. In framing all these changes our desire has been to move in the right direction, but not to make such changes as would disturb business. I think, on the whole, it would be wiser if we are content to accept the measure of reduction that has been given. If my hon. friends opposite think it is necessary to divide the House on that, I should regret the fact; but, of course, it is their right to do so.


George Newcombe Gordon: Mr. Johnston of Last Mountain has .moved an amendment to this item, 446b, that the duties be: 7i per cent
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under the British Preferential tariff; 10 per cent under the Intermediate tariff; and 10 per cent under the General tariff. The question is on the amendment.


Some Hon. MEMBERS:: Lost.


Mr. KNOX:: 
George Newcombe Gordon: The question is on
the amendment. Those in favour of the amendment please say "Aye".


Arthur Meighen: Before the vote is
taken, we should have some discussion on the real merits of the amendment. The Minister of Finance has stated his position. He believes that any further reduction would be disastrous to the industry. He states that it is the policy of the Government not to reduce the duty where to reduce would be disastrous to business. That is the Minister of Finance's method of declaring his fidelity to the protective principle; he prefers that method to the method that I adopt. I do not think it really makes much difference. I feel very much like the Minister of Justice (Sir Lomer Gouin), that the matter of expression means nothing at all; it is what is done, it is the principle voiced. The principle that the Minister of Finance has just expounded is the principle to which I adhere. He should have information that would guide him in this decision; he is simply giving his judgment in accordance with the best information that he has now. I really think that, unless hon. members of this House have different information, the tariff item is what they should accept. I do not know any hon. members who were in the last House who

are in a position to dispute the principles that the Minister of Finance advances, because all in the last House-both of the party to my left and the party opposite- voted for a resolution which declared that any reductions made should be so made as not to injure busines. That is, the resolution declared for the principle of protection and also declared against it. In that, of course, it was quite consistent with the tactics adopted at that time and throughout the campaign-there was a plank for everybody Now the Minister of Finance advances the principle upon which he stands. If hon. gentlemen to my left can show that he is wrong in his premises, that would be ground for their motion; if they cannot show it they cannot have any ground unless they want to break from the resolution their own party accepted in the last House. In this connection I think we should hear from the hon. member for Brantford (Mr. Raymond). I do not know any place in Canada so much interested in this particular production as his constituency. He may have facts that the Minister of Finance has not; he may be able to help the committee on this subject. I know that he adheres to the principle the Minister of Finance has enunciated. I know that because he has expounded it in most eloquent, must persuasive, and .most convincing terms. I really have been at a loss to know why he fought the principle and at the same time supported it; but now no doubt he will have to support the principle involved as he has done since he reached this House. I would like to hear what facts he can adduce in support of the position taken by the Minister of Finance. I assure him that if he can show that the producers of these goods will be in a position fairly to compete with their competitors across the line in the case of a further reduction, I will support a further reduction.


Mr. RAYMOND:: With regard to the matter that is under discussion, I would like to say that I think it has been discussed in this House on a previous occasion-that is as to the difference in the duties upon mowers and binders and ploughs. It is hardly worth while now, when we are all endeavouring to save time, to enter into a lengthy discussion of the question as to the difference that appears in the tariff schedule, and has always existed in that schedule, between the duty on binders, for instance, and the duty on mowers and ploughs. Briefly stated, however, it is

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this: That in the manufacture of ploughs more materials are used upon which a duty is placed in order that raw materials of Canadian production may be utilized That is the position stated in brief. As I stated on a former occasion one of the arguments used for the creation of a Wheat Board was the amount of Nova Scotia steel and iron that figured in the agricultural implements the farmers used. That would not be the case if there was not a duty on these goods, the object of the duty being to cause the manufacture of our own Canadian materials. Now, I think, with regard to the matter of ploughs, the gentlemen opposite who favour the amendment have not fairly considered the question. It was hoped that they would be pleased when the reduction of 2\ per cent was made. At that time those who felt interested in seeing the old duties maintained did not press their side of the case. But the reduction made does not seem to satisfy some hon. gentlemen opposite, and they are now pressing for a still further reduction of 5 per cent in the duty on ploughs. The point I would bring to the attention of the committee is this: Whether the position of my hon. friend is right or wrong, the present is exactly the wrong time to press for such a reduction, when we have a balance of trade against us from the United States, and when we have all the plough factories in our own country idle, with their warehouses filled; and when the same condition obtains in the United States; when all the plough factories are stocked up, and some of them have recently gone into liquidation, and are selling off their stock at a sacrifice. I say, unless it is the deliberate intention of this committee to sacrifice that industry, now is not the right time to take off the 5 per cent. Therefore, I would ask the committee with all the strength I possess, to oppose the amendment.


Mr. JOHNSON (Moosejaw) :: The hon.
member says that now is not the proper time to reduce his duty


William Gawtress Raymond: To propose the amendment.


Robert Milton Johnson: Which
means, to reduce the duty-now is not the proper time, in the estimation of my hon. friend. Does.he think the proper time will ever come?


Andrew Knox: I would like to say, in reply to what the leader of the official Opposition (Mr. Meighen) has said in regard to
injuring business, that there are other businesses in the country besides manufacturing ploughs. The plough is one of the first implements to be used on the farm, and one of the first things to be considered in the effort to encourage farming, and I again state my position in support of the amendment.


Mr. HALBERT:: 
Robert Milton Johnson: I am not
going to offer an amendment yet. I said about all I have to say on the subject the other day. Considering the fact that the one suggestion has been turned down, it would be useless to waste time proposing ar. amendment on the other. I wish to place myself on record as opposed to a tariff on these goods as being vicious in principle, and I trust that when the Finance Minister another year brings forward his budget, he will have the advice of people on this side oi the House, and we will look for some reduction.


[Stage Direction]
Item agreed to.
Customs tariff-Blankets of any material: British Preferential tariff 22 £ per cent; Intermediate tariff, 30 per cent; Geneial tariff, 35 per cent.
Mr. BRETHEN:: I listened to the statement of the Finance Minister at the opening of the House to-day, and I am quite willing to grant that his experience and wisdom are superior to my own in these matters. His argument is that we can gain more by barter in our trade relations with the United States than we can by concession. I must submit to his judgment in these matters. But I believe that under this item-and there are several others like it, for instance, the items in regard to boots and shoes and in regard to automobiles

the protection afforded the Canadian manufacturer is out of all proportion, and does not do justice to the average man in this country. If it is unwise to reduce the customs duty between this country and the
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United States in these matters, I would suggest, as a source of revenue-and I consider it only just-that the Canadian manufacturer who is protected up to the hilt in these matters, should pay an excise tax to the Dominion treasury. I feel very strongly on this matter, just about strongly enough to move an amendment that an excise tax be imposed on these articles. I would like to hear this matter discussed, and to understand the justification for the Government not placing an excise duty on the Canadian manufacturer in order to increase our revenue and compel the manufacturer to pay into the Canadian treasury something of the protection that the Canadian people as a whole give him. I believe it is unfair to tax the residents in East Peterborough, and give the credit of that tax to a resident in Toronto. We do not increase the tax on the wealth of Canada thereby.


Mr. BROWN:: We have some wonderful anomalies in our system. A few evenings ago we voted a subsidy to a line of steamers carrying on trade with New Zealand. If I understand the situation aright, a considerable portion of that trade is in carrying agricultural products between New Zealand and Canada, and one of these agricultural products is wool. The Finance Minister in the late administration the other night referred to the question of wool, and seemed to intimate that we would be in a much better position if we had a duty on wool. My recollection goes back as far as the election of 1878, when the national policy came into force, and one of the great arguments for protection at that time was that we would have a market for our wool. Forty years have gone by and we are still in the same position-we are paying high duties, and we have a high protective duty on manufactured woollen goods; we are still in that deplorable position, as regards the sale of our raw products.
There are some strange anomalies in the situation, as I have said. I would like to give some consideration, as the hon. Finance Minister has often advised us, to the question of revenue, and I believe the tariff may be reduced to the advantage of the revenue. The leader of the official Opposition used a very strange expression the other night, and I have been wondering what he meant. He said he did not believe in tariff for revenue nonsense, or free trade nonsense. I do not know what is in the minds of men when they say they do not believe in tariff for revenue

nonsense, when we hear so much about the necessity of getting revenue from customs duties. I know the right hon. member's Finance Minister (Sir Henry Drayton) did not take that position, for I had the privilege of appearing before him when he was conducting that tariff commission in the fall of 1920, when he had a little advantage over us in the position he occupied-we were not on equal terms on that occasion, adn when we would make protests to him touching this question of reduction of duty, invariably he asked the question "And where do you get the revenue?" Yet his leader talks about tariff for revenue nonsense. We may very well admit that the tariff is not, perhaps, the ideal way of collecting revenue; but we are all agreed that for many years we must collect revenue through tariffs; so why talk about this " tariff-for-revenue nonsense?" I also noticed that, in regard to the former tariff commission when the Minister of Finance in the late Government was approached by representatives of the manufacturing interests, he would put to them such questions as these: "Yes, if we increase the duty as you desire, that will mean that it will be a little more difficult for outside competitors to compete?" Yes, that was conceded. But never once did he ask them: "Where will you get the revenue?" I would like to consider this question from the standpoint of revenue; we have been considering it long enough from the standpoint of protection, and I am one who believes very thoroughly in the idea that it is possible to reduce our tariffs and at the same time to increase our revenue. As regards this matter of woollens, I say avowedly, that we would like to encourage importation; and if our tariff is going to have the effect we would like it to have, that of producing a revenue that will help us to solve the financial problems of our country, I believe we could reduce not only this item but many other items to the advantage of the revenue. I am afraid, however, we are always going to be in this trouble so long as we insist on tangling up our taxation problems with our " encouragement-of-industry " problems.


Henry Lumley Drayton: I am afraid I have to say one or two things in connection with this woollen matter. The hon. gentleman (Mr. Brown) made some reference to what I said the other night, and I have been looking up the figures in connection with the matter.

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Some hon. MEMBERS:: Louder.


Henry Lumley Drayton: Hon- gentlemen can hear me very easily if they want to. It was pointed out that the price which the farmer got for his wool was entirely out of proportion to what he had to pay for blankets. I told hon. gentlemen the reason why that was so, and I am going to give them a little more information upon the same subject. An analysis of the wool industry of 1920 discloses that our local plants manufactured $41,000,000 worth of finished goods-I am merely giving the round numbers-and that the cost of materials to them was $22,000,000. I think the price the farmer is now getting for wool is 17 cents; of course that seems to be ridiculous, but if you turn to the last page of the analysis as made by the Bureau of Statistics, you will see the reason at once. We imported $15,-
667,000	worth of wool into this country. I think I told the House the other night that this anomaly had occurred to me in connection with the tariff investigation that my hon. friends are laughing about and imagining questions in connection with, and I took it up. As a result, one company has been incorporated which, I hope, will give the farmer a proper market for his wool. I just refer to that for the purpose of showing my friends, who apparently did not believe me the other night, how absolutely true my statement in regard to the situation is. I read from the prospectus:
Dominion Combing Mills, Limited, will fill the missing link in the worsted end of the textile industry in Canada, that of combing the wool.
That is the one end the farmer is interested in.
There is no mill combing for the trade in Canada. Dominion Combing Mills, Limited, has been organized to develop the rapidly increasing wood growing industry in Canada. Statistics published by the Department of Trade and Commerce show that all but a very small percentage of the wool grown in Canada is exported in order to be combed into tops for the spinners. At present there is not a wool combing plant in Canada combing for the trade.
And so on. There is a gentleman who lives in Bradford who has very much the same position in the newspaper world in connection with the great Bradford industry, which is combing wool and the manufacture of worsted tops and noils, that Miss Hind has, for example, in connection with the Winnipeg Free Press and the grain business. He is referring to the fact that Canada is now going into this business and is going to have a plant. He says:
There should be a most useful field for topmaking in Canada, and this is the beginning of an industry which should lead to a big development of the textile trade in the not distant future.
For the benefit of my hon. friends who cannot understand this tremendously wide spread in cost, I am going to read what he says about the advanced prices in the tops that our manufacturers have to buy and what has happened to costs in free-trade England. He says:
Apart from the question of tariffs, the cost of combing in Canada will have to be taken into serious consideration, otherwise Bradford houses will still be able to export big weights of tops and undersell the Canadian combed article. The combing .tariff in operation here in Bradford today is very high; in fact, some think it is a crying scandal, for whereas a tear of 5 top to 1 of noil-
The noil is the short; the top is the proper worsted top.
-in pre-war days cost 4j cents per lb., to-day's charges are 125 cents per lb., and although the top-making section of the British Wool Federation have approached the master wool combers about reducing their charges, they frankly say that they have no need to do so because they have at least six months' work in hand with top-makers everywhere clamouring to get the wool through the combs. However, apart from financial considerations, we think that before long Bradford commission combers wil-l have to face their moral obligations, and make a slight reduction.
That affords the reason why we have this spectacle which we have to-day in Canada, of cheap wool and expensive manufactured products.


Mr. LEWIS:: I am not all interested in this item as regards revenue. There is a more important consideration in regard to blankets than getting a revenue, so far that reason I am not altogether in favour of what my hon. friend (Mr. Brethen) said, that it would be a good plan to put an excise tax upon blankets, because that will not make it any easier to the consumer, and I believe blankets in this country of extreme climates are an absolute necessity for the family. I might give the committee one or two vivid experiences in order to bring the matter home to them. This is a matter upon which I do not wish to speak; but when the case is one of the poor getting blankets, I think it is time somebody spoke about it. In 1918, I had the opportunity and privilege of looking after many families during the 'flu epidemic, and I want to tell the committee that I came across family

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after family where there were two, three and four children in bed with no blankets at all upon them, simply a few old coats thrown over them, because the blankets which they needed were too high in price and too highly protected for those poor families to buy them. I could cite instance after instance in the hundred families that I visited during that time, where the poor people had no blankets at all to cover them. So, for that reason, I am not in favour of placing an excise tax upon this as well as a tariff, simply because it brings no benefit to the individual family, and since in Canada our extreme climate demands that we shall have blankets to cover the children, to guard them against cold and disease. I, therefore, want to second an amendment that will be moved by the hon. member for Battle River (Mr. Spencer) that as far as the British tariff is concerned, it shall be reduced to 15 per cent.


Mr. SPENCER:: I spoke on this matter some nights ago and I do not intend to take up the time of the House to-day following up the remarks I made then. I said that blankets were an absolute necessity and should be made available to the people at the very lowest possible prices. In accordance with that statement I beg to move, seconded by the hon. member for Swift Current (Mr. Lewis), that the British preferential tariff on blankets be reduced to 15 per cent.


Mr. FORKE:: I endorse the sentiments expressed by hon. gentlemen who have already spoken. The two commodities which should be made as cheap as possible in this country are coal and warm clothing. The coldness of our climate is one of the drawbacks in this splendid country, and no obstacle should be put in the way of the people in meeting the difficulties that are encountered by reason of climatic conditions. I might say a word in regard to what the hon. member for West York (Sir Henry Drayton) has stated. I cannot see why we should have high duties on blankets when we have no mills in this country that can take over our wool and weave it into cloth. That, I think, should be a forceful argument for lowering these duties. I know something about the woollen industry and the production of wool, and possibly it might interest the House for me to tell them that last year, getting my sheep shorn I did not receive enough money from the wool to pay the shearer and the freight on the wool, and

if there were any method of taking the wool off the sheep without the expense that is now attached to that unprofitable process I should be glad to try it and let the wool go. That, at any rate, is the way the people who raise sheep feel about this matter. I appreciate what my hon. friend has said in connection with the combing of wool, and I hope we shall get some industry started here that will prepare our wool, since the duty has gone up under the Fordney tariff and we have nowhere to dispose of our product, if something is not done in the immediate future we shall have no market at all. But I cannot see how hon. gentlemen can find in this any argument in favour of a protective tariff on woollen goods. I honestly believe that if the minister took the matter into consideration and made due allowance for all the circumstances he would accept the amendment. As the hon. member for Swift Current (Mr. Lewis) has said, poor families in this country are unable to buy warm clothing, and we should be very careful how we put on protective tariffs.


William Stevens Fielding: There is already a
very substantial reduction in the duty on blankets of the class most generally used. When hon. members talk about the severity of the climate, especially as it bears upon the poor people, it is only natural that they should want such commodities as blankets to be made as cheap as possible. But I would point out that we have already made a reduction of 11 per cent as respects the largest class of blankets. There is a pure wool blanket that is not widely used, because pure wool goods are scarce. There is also a class of blankets, chiefly cotton. The third class is designated "not otherwise provided", or, in the language of the tariff, "n.o.p." That is the class that is most largely used. It is commonly spoken of as a woollen blanket, although it is not all wool; and that class has been reduced by 7| per cent. That is a big reduction, and my hon. friends should realise that we are not unmindful of what has been said regarding the severity of the climate and the necessity for blankets at a fair price.


William Charles Good: Notwithstanding the fact
that the duty on this particular line has been reduced 7i per cent, the duty still remains at 22 per cent, and it strikes me that the Government is more solicitous for the manufacturers of blankets than they

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are for the poor shivering people who want blankets. The amendment should carry.


William Stevens Fielding: I am very apt sometimes to see things from the point of view of my hon. friend, but I do not think the farmer would have a better market for his wool if the factories that we have got were closed down. In what has been done there has been a desire to be fair to the consumer without destroying the manufacturer.


Mr. SUTHERLAND:: The remarks of the hon. member for Brandon (Mr. Forke) are important. You cannot leave the wool on your sheep in the hot weather, or the animal will die. You simply have to take it off. And if, as the hon. member states, the expense of shearing the sheep amounts to more than the value of the wool, and in view of the statement of the ex-Minister of Finance (Sir Henry Drayton) that we have not a combing factory in Canada to handle Canadian wools, there is certainly something wrong somewhere. I thought I heard the Minister of Finance make some reference to the closing of factories. My information is that there is not a factory in the Dominion for the combing of Canadian wool. The hon. member for West York (Sir Henry Drayton) pointed out that negotiations are on foot for the erection of a factory. Could the minister inform the House what duty there is at present on wools imported into Canada of a similar quality to our Canadian wools, and what quantities of such wools were imported during the past year? The member for West York quoted figures showing that worsted to the value of $15,000,000 was imported into Canada. That, I take it, would be wool such as is grown in Australia.


William Stevens Fielding: The importations of the class of wools to which my hon. friend refers are not very large.
Amendment (Mr. Spencer) negatived on division: Yeas 46, Nays 117.


[Stage Direction]
Item agreed to.
Customs tariff-Fabrics, manufactures, wearing apparel and ready made clothing composed wholly or in part of wool, worsted, the hair of the goat, or other like animal, n.o.p.; cloths, doeskins, cassimeres, tweeds, coatings, overcoatings and felt cloth, n.o.p.: British Preferential tariff, 27J per cent; Intermediate tariff, 35 per cent; General tariff, 17J per cent.
Mr. JELLIFF:: In this item, which relates to the clothing of the common people, I think a more substantial reduction should be made than is indicated. If there ever
207i
was a time in the history of Canada when the duty on the clothing of the common people should be reduced it is now. It is only about a month ago that our attention was called to a serious coal strike in Nova Scotia; in Alberta we have another serious coal strike on our hands; all over the western prairies there has been difficulty during the last winter in obtaining sufficient clothing to keep our people warm and their children comfortably clad to attend school. This Government itself has been called upon to disburse tens of thousands of dollars to assist in relief work on the western prairies during the past winter, and the provinces themselves have voted hundreds of thousands of dollars for the same purpose. In the face of these circumstances can we stand silent and fail in our duty to these people by not placing in their hands the ordinary clothing requirements of life at the cheapest possible price? I would not be doing my duty if I did not protest with the utmost vehemence against this schedule. I do not think that gentlemen opposite, for whom I have the utmost sympathy, are doing their duty under their own declarations in maintaining this schedule. I have in my hand the "Message from Liberalism" of August, 1919. I think I first read a similar treatise on the principles dealt with in this pamphlet in a book that was gotten out by the Canadian Council of Agriculture in 1916. After the Liberal convention of 1919 I read it again in this pamphlet. Cannot we do something for the poor people of this country in carrying out this "Message from Liberalism"? Let me quote one passage:
That a revision downward of the tariff should be made whereby substantial reductions should be effected in the duties on wearing apparel and footwear, and on other articles of general consumption (other than luxuries), as well as on the raw material entering into the manufacture of the same.
Now, Sir, I am very deeply in earnest in this matter, because I know that all through the towns and cities of Alberta last winter relief clubs and societies were collecting cast-off clothing, renovating it and distributing it among the poor people so that they and their children could have some protection against the intense cold. I do not want to interfere with the collection of revenue by my hon. friend the Minister of Finance. I have known him for only a short time, but after the two or three occasions it has been my pleasure to meet him I have come to love him. When I first came into his presence I thought: Here is the kind of man to whom
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I should like to say, "Well, I want to go home and spend a couple of weeks with you." I really think it is the duty of this Parliament, which duty I hope will be implemented by the Finance Minister himself, to make a further cut in the tariff on the articles covered by this item so that the clothing necessary to meet the absolute requirements of our people can be brought to them cheaper than at present. I am sure it will not hurt the manufacturing interests of this country if such a reduction is made.
I do not want a single member to leave this House with the impression that the farmers represented on this side of the Chamber have aught against our manufacturing interests. I want to see them succeed just as much as I want to see the men on the farms succeed. Farmer and manufacturer must go hand in hand together if this country is to be as prosperous as we want it to be. I do not think that our manufacturers are looking upon our farmers in the right light. They must look to us for a market. You talk to us farmers about the "home market". Well, we appreciate the home market, but the fact of the matter is that the farmers of the prairies have not a home market for their products. I wish they had. I wish we had that country filled up with manufacturing towns which would consume our agricultural produce. I have always wished that we had plenty of mills out there The hon. member for Marquette (Mr. Crerar) said a few nights ago that he did not think the West was adapted for manufacturing. I disagree with him on that point; I believe that the western country is the greatest place within the Dominion of Canada for the carrying on of manufacturing. Think of the millions of tons of coal that are stored up in the hills of Alberta, a source of wealth that has scarcely been touched. Think of the power available for all kinds of manufactures; think of our other natural resources. In the district which I represent we are shipping out 1,750,000 pounds of wool every year. Alberta's wool production has trebled and quadrupled. There should be woollen mills out there manufacturing that raw material; we should not have to bale it up and send it to Boston to be put in such shape that it can be used, with resulting extra cost. Every additional set of hands it passes through adds to the price, and the wool required for the manufacture of a suit of clothes is multiplied ten, fifteen or twenty times in [Mr. Jelliff.l
value by the time we obtain the suit. I do think that the relationship between the manufacturer and the farmer is misunderstood:	Think of the city of Chicago,
for instance; there you get a very good example of the relationship between the manufacturer and the farmer. Chicago in 1830 was a little town of one hundred souls; since that time it has become a city of two and three-quarter millions. Why? Because it is located on the edge of the great American wheat and corn belt, where it has the advantage of all the great stockraising industries of central United States. The result has been that in ministering to the wants of the farmers of western United States the manufacturers of Chicago have grown until their annual output is six billions of dollars-far more than we put out in this country altogether. We must not forget these things. We farmers owe a lot to the manufacturers; the manufacturers owe a lot to us for the market they enjoy in Canada to-day. I should like to see them show their appreciation of it in respect to this one itme 'at least, by allowing the people of the West, the women and children of the West, to get these manufactured wool products at prices which will enable them to provide for their needs.


[Stage Direction]
Item agreed to.
Customs tariff-Boots and shoes, pegged or wire fastened, with unstitched soles close edged, British Preferential tariff, 15 per cent; Intermediate tariff, 22\ per cent; General tariff, 25 per cent.
Mr. SHAW:: I regret that the Finance Minister has not seen fit to grant a further reduction in the customs duty on this very important article, which is a necessity for every one, rich or poor. It seems to me that the conditions in respect to the boot and shoe industry should afford cause for reflection on the part of members of this Parliament, especially in view of evidence which was produced before the tariff commission of which the ex-Finance Minister (Sir Henry Drayton) was chairman. It is a rather interesting fact that, in the year 1900 for every dollar invested in the boot and shoe business there was produced or earned $1.68, whereas in 1918, the last year for which I have any figures, for every dollar of capital invested in the business, only $1.40 was produced. There are, perhaps, several explanations for that. It is due either to manufacturing efficiency having decreased, or to labour efficiency having decreased; or perhaps there is some other reason. I do not want to have to

Customs Tariff
deal with the first point, but as to the second-whether or not the efficiency of labour decreased in that period-I should like to point out that in 1900, according to figures given in the Year
5.	p.m. Book, each workman produced goods worth $1,345, and in 1918 each workman produced goods of the value of $3,297. This is not entirely explained by the increase in the values of the articles, because according to the figures I think there has been an increase in values of something like 118 per cent. But, to my mind there is a very cogent reason, and it is the watering of stock which has taken place in connection with this particular industry. I want to quote one illustration to indicate the truth of what I say. I take it from Hansard of 1921, page 3484, in which the hon. member for Marquette (Mr. Crerar) directed the attention of the House to certain facts which, so far as the records show, were not disputed. He said:
Take the boot and shoe business-an article of vital necessity to the whole Canadian people, because even if we were disposed to do so, the rigours of our climate would not permit us to go barefooted _or lightly shod. We And that in 1911 there was a merger of shoe manufacturing concerns in Canada. In that year the Ames-Holden-McCready Company, Limited, was formed, absorbing Ames-Holden, Limited, and the James McCready Company, Limited. The capital issues of these two concerns-capital stock and bonds-amounted to $3,500,000. That was their actual worth as disclosed by their bonds and capital stock. What was that turned into? $3,500,000 of common stock, $2,500,000 of preferred stock, and $1,000,000 of bonds, or a total issue of $7,000,000. One cannot speak with definite knowledge because one has not access to the records of this company, but I believe that I am not beyond the mark when I make the statement that practically every dollar of that common stock was watered.
If this tremendous amount of watered stock must earn dividends, then of course we have some explanation.


Mr. CHAPLIN:: Is the hon. gentleman aware that the company referred to has not earned any dividends? Does he know anything about the state of the company to-day?


Joseph Tweed Shaw: Oh, I thank the hon. gentleman for his gratuitous information; I am speaking of the period up to the year 1918. I have no doubt it will be urged by my questioner that protection is something that not only gives employment to men but also increases their wages. It is a peculiar fact that if you compare the figures for the period I have mentioned-or you may go further back if you like-you will find that * there has been no increase in the number of
establishments engaged in the boot and shoe industry. On the contrary, there has been an actual decrease, and there has been a substantial decrease also in the number of men employed. I want to draw the committee's attention to one further matter and it is this: If you examine the wages paid to working men in that industry you will find that although the product has increased in price on the average by something like 17 per cent per year during the last six years, during the same period there has only been an average yearly increase in wages paid of something like 7 per cent; and, as a matter of fact, if you consider the matter on the basis of the ability of the labouring man to buy the product which he has manufactured, you will find that it has decreased from 25.13 per cent in 1900 to something slightly over 20 per cent in 1918.


Henry Herbert Stevens: Is my hon. friend basing his figures upon the boot and shoe industry upon the speech of my hon. friend from Marquette (Mr. Crerar) in 1921?


Joseph Tweed Shaw: No, I am not. I am basing my argument on figures that were produced before the tariff commission of which the ex-Minister of Finance (Sir Henry Drayton) was the Chairman.


An hon. MEMBER:: In 1918?


Joseph Tweed Shaw: No, 1920. There is also
another very interesting fact in connection with this industry and that is, that in the year 1918 it was able to ship to the United Kingdom and compete with the boot and shoe industry there goods to the extent of over half a million of dollars-to be accurate $534,000, and to the United States- where they have, I believe, a free market -goods amounting to about $347,000. If the boot and shoe industry can compete in the foreign market why should this continuous protection be accorded them? For they are thereby enabled to exploit the Canadian consumer to substantially the amount of the tariff. Therefore, Mr. Chairman, with due deference-


Mr. WHITE:: The hon. member gave
the amount of exports from Canada to the United States and Great Britain. Can he state the volume of imports from Britain and the United States to Canada?


Joseph Tweed Shaw: I regret that I cannot give that information. I can only say, that, speaking from memory, the imports from the United States that year amounted to something like $2,000,000.
Customs Tariff


Henry Lumley Drayton: That is about right.


Joseph Tweed Shaw: With due deference to the request of the Minister of Finance (Mr. Fielding), I think that, in view of the fact that these articles form a vital necessity for every person in Canada, there should be a further reduction beyond the amount indicated in the item before us. I would therefore move, Mr. Chairman:
That item 611 he amended by reducing the duty under the British Preferentia tariff to 10 per cent; the duty under the Intermediate tariff, to 15 per cent; and the duty under the General tariff to 20 per cent.


William Stevens Fielding: If there had never been a duty-call it, if you like, a high duty- upon these articles I could find it easier to agree with my hon. friend from West Calgary (Mr. Shaw); but there have been duties on these goods for a long time, and under these duties business has been established, employment has been given- many things have happened 'which prevent our having absolute freedom of action in this case. We approached the consideration of all these questions from this viewpoint: Can we make reductions on these articles, giving some degree of relief to the consumer, without endangering the manufacturing interests? Whether or not we are pleased with the idea of having these large manufacturing industries in Canada, the fact remains that they are here and that they have an important relation to every community in which they are found. If, by any hasty action, we should make trouble in that industry and close up the fcatories-even though it may 'be only a question of scare, even though perhaps they do not really suffer; if the manufacturers get it into their heads that by these changes we are creating serious diculties for them-we would certainly be adding to the troubles of the community in a way that hon. members do not desire. Now, what we have done in this matter is to make o small reduction in the duty under the British Preferential tariff. We dto not at present import any very great quantities of these goods from Great Britain, but I believe that under this change we will increase our imports from the United Kingdom. For reasons which have been given in connection with other matters, we have not deemed it desirable to reduce the duty on the goods coming from the United States. A few years ago American shoes were very much in evidence all over England, and "The American Shoe Store" was a comr.Mr. Shaw.]
mon sign. The last time I had the privilege of being in London, which was not very recently, I did not meet the sign of "The American Shoe Store" very often, and I made inquiry as to the reason for that. I found that while John Bull is sometimes slow to grasp an idea, yet when he once gets a grip upon it he holds. I was advised that the British manufacturers had sent out their experts to the United States. They had studied American methods and had adopted American ideas in the matter of patterns and styles; and the result is that to-day the British manufacturer is holding and controlling his trade, and very few American shoes, as compared with former years, are imported into Great Britain. I believe that under this small reduction there will be a considerable increase in our imports from Great Britain. In that way a measure of relief will be given to the consumer, and I think that a larger measure of relief-while well intended, I am sure, Iby my hon. friend- would put in peril the manufacturing industries, and I am sure that on reflection none of us would wish to do that.


Mr. IRVINE:: In figuring how large a tariff was necessary to protect the shoe industry of Canada, did the Minister of Finance consider the amount of watered stock as stated by the hon. member for West Calgary, or did he not allow for that?


William Stevens Fielding: It may not be possible to answer my hon. friend but if it has any bearing let me mention this fact,-it is not conclusive, but the fact is-that the shoe industry in Canada to-day is rather depressed, several of the largest shoe factories 'in Canada are financially embarrassed and some- of them have suspended altogether. It may be that in times past much money was made-I hope it was- but the fact is to-day that the shoe manufacturing industry is not a prosperous industry, and II do not think there is much money being made in it.
Amendment (Mr. Shaw) negatived.


George Newcombe Gordon: Shall item 611 and item 611a, which is related to it, carry? [DOT]


William Charles Good: 
William Stevens Fielding: Of course, every item in the budget is subject to consideration. It is true that I stated that the Government would be prepared to consider the matter in committee, and we have been considering it. Iln each case when a motion has been made we have endeavoured to give good reasons why it was not expedient to adopt it. My hon. friend is not bound to accept these reasons, hut I hope he does not think that any discourtesy is intended to any hon. gentleman here. We have considered these things and we have come to the conclusion that it was not wise to make redactions and whether they are good or bad, we have given reasons therefor.


Mr. COOTE:: Has there been any reduction made under this item?


William Stevens Fielding: Yes, the present rate on the British Preference in Canada is 20 and it is reduced to 17i. The Intermediate and General tariffs remain the same.


George Gibson Coote: Do felt boots come under this item?


William Stevens Fielding: Yes, they come under the item now in question.


Robert Henry Halbert: Does the minister think, when there is no protection on leather, that there should be a protection of 30 per cent on insoles required by the manufacturer?


William Stevens Fielding: I am afraid I cannot answer that.


George Gibson Coote: So far as the felt shoe industry in Canada is concerned, I simply wish to state that I think it needs a little protection. In December 1919 I was in a retail store when the salesman for a felt shoe manufacturing concern endeavoured to sell some shoes to the retailer. That was in the beginning of the winter, when the retailer's trade in felt shoes had only started-the salesman was soliciting orders for delivery a year later. The retailer protested that he could not intelligently order his felt shoes for the following winter at that time. He said his trade had only started. It might be a mild winter, and he might not need any felt shoes, and the traveller said if he did not order his felt shoes in December he could not get any felt shoes any time that year for trade the following winter. After the salesman had gone out, the retailer told me that was the third salesman who told him the very same thing that month-that he must order his felt shoes one year ahead, and before he had any idea of how many felt shoes he would sell that winter. When our felt shoe manufacturers can dictate to the retailer to that extent, I think it is time they were subjected to a little more competition and that some of the protective tariff should be removed.


[Stage Direction]
Item agreed to.

[Stage Direction]
1. Resolved, That it is expedient to amend The Inland Revenue Act, as amended by chapter six of the Statutes of 1914, and chapter twenty-eight of the Statutes of 1918 by repealing subsections (e), (f), (g) and t.h) of section two hundred and seventy-nine thereof and substituting therefor the following :-
279 (e) On cigars of all descriptions, made from raw leaf tobacco, three dollars per thousand ;
(f)	On all cigars when put uo in packages containing less than ten cigars each, four dollars per thousand;
(g)	On cigarette® made from ra,v leaf tobacco or any substitute therefor, weighing not more than three pounds per thousand, seven dollars and fifty cents per thousand ;
(h)	On cigarettes made from raw leaf tobacco or any substitute therefor, weighing more than three pounds per thousand, twelve dollars and fifty cents, per thousand ;
William Stevens Fielding: This resolution was explained before in relation to the cigarette duty. I explained we had made a jhange in the excise duty on cigars, and v,his was changed to correspond with it. The net result is that the duty is increased on the more expensive cigar; the duty on the medium cigar remains about where it was; and the duty on the cheaper cigar is reduced. That, in short, is the whole story of the duty on cigars.


Arthur John Lewis: I brought this matter up on the debate on the budget, and I still think there is a great discrimination between the cigarette and the cigar. I can fully appreciate the value of taxing the cigarette, because it has been said in a great many ways, and in a great many places, that cigarette smoking is detrimental to the youth of Canada. That may be, but I do not believe that by putting the tax on cigarettes you can eliminate it altogether. There are ways and means of


Mr. JACOBS:: There seems to be no relation at all between the excise on cigars and the excise on cigarettes, under the resolution. As I understand it, the excise on cigarettes now amounts to about 1 cent per cigarette. That seems to me to make it almost prohibitive to smoke cigarettes, when they are sold in packages, as is the practice now. I am quite in favour of putting on the traffic as much as it can bear, particularly as I am not a cigarette smoker myself, but it seems to me that we reach a point where we practically make the traffic prohibitive. Those who smoke cigarettes will tell you that, after two or three puffs, it is thrown away, whereas a person can smoke a cigar for half an hour and sometimes for an hour.


Mr. GRAHAM:: It depends on the cigar.


Samuel William Jacobs: Yes, that is quite true.
I fear, if we impose this very heavy excise on cigarettes, it will drive people into what

is known as "rolling their own." For 15 cents, I am advised, you can buy a little package of tobacco and rice paper out of which you can make forty cigarettes. That being the case, it seems to me that instead of increasing our revenue on cigarettes, we shall simply decrease it. I am intimating to the Minister of Finance (Mr. Fielding) what, I think, will happen; I am not here to propose any amendment by way of reduction or anything of that kind. I want to point out that we have passed the margin of safety and reached the danger zone when we tax this article practically out of existence.


William Stevens Fielding: Every country taxes tobacco in its various forms rather more heavily than other things, and particularly are cigarettes taxed. We proposed to get a considerable revenue by increasing the duty per thousand from $6 to $9, and then upon representations that we were likely to lose revenue, we compromised and made the tax $7.50. As regards rolling cigarettes, I think that will happen for the first week; but after a very short time, people will get tired of rolling cigarettes; they will go back to the merchant at the corner shop and buy the cigarettes, and we shall get the duty. I hope my hon. friend is wrong about the duty, because I am anxious about that. We shall, however, see how the year goes on; and if the revenue is reduced, my hon. friend will have a strong case next year.


Samuel William Jacobs: At present, there is
brought into the coffers of this country between $20,000,000 and $25,000,000 a year from cigarettes alone, and we cannot endanger the receipt of such an enormous sum by over taxation. If you compare the excise on cigarettes in Canada with that in the United States, I think you will find that cigarettes in the United States are about half the price they are in Canada. A situation may arise whereby we may be boot-legging cigarettes into Canada and exchanging our liquor for cigarettes. This tax would make such a business quite attractive. As I say, the amount which the Government receives from this excise duty is so large and lucrative that I would warn the Government to be careful and to go slow in this matter, because, after all, a person is as much entitled to smoke a cigarette as he is to smoke a cigar. Why tax the cigar an ordinary sum and make the cigarette pay practically four or five times what you have to pay for the cigar in the matter of excise?

Inland Revenue Act


Mr. RYCKMAN:: I am not specially interested in the consumption of cigarettes; but some manufacturers and dealers in cigarettes have made representations to me. They have told me that when the resolution was in the form in which the Minister of Finance (Mr. Fielding) first brought it out, there was at least a two-third reduction in the sale, and they say that there will be as least a one-third reduction in the consumption of cigarettes during the coming year. I know how necessary it is to raise revenue, and I am not asking for the alleviation of any tax; but one year hence, judging from the information which I have received, I think we will find that, by reason of this heavy impost, we have collected less revenue in 1922-23 than we got last year. I really think the matter is of such importance that if the Minister of Finance has advisers, men whom he would care to consult on a matter of this kind, the opinion of these men should be sought. I hesitate to press the matter; but it is because, from information which I have received, so much hangs upon it, that I have had to say what I have said, and I wish to go on record in this regard.


William Stevens Fielding: We had representations from gentlemen interested in the matter; those representations impressed us to some degree, and we made a reduction accordingly. It is quite possible that my hon. friend is right, but I hope he is not. If, however, we live to see next year, and if we find that his judgment and prediction are right, we shall be obliged, for the sake of the revenue, to make the reduction. I am quite aware that this is a debatable question. I hope it is going to turn out more favourably to the avenue than the hon. member suggests-


Robert Forke: In all humility, I should like to ask the Minister of Finance: Would it be a calamity if the consumption of cigarettes were to fall off?


Samuel William Jacobs: It would be a calamity to the revenue of the country.


William Stevens Fielding: Representations have been made to us that what we ought to do is to make the duty even higher. There may be a great moral issue in the matter, but we have not got down to that to-day.


[Stage Direction]
Resolution agreed to.
2. Resolved, That it is expedient to amend The Inland Revenue Act by striking out of the said Act section three hundred and twenty-eight A, as enacted by chapter twenty-eight of the Statutes of 1918, and by striking out of said
Act section three hundred and twenty-eight B, as enacted by chapter fifty-two of the Statutes of 1920.
William Stevens Fielding: This resolution
abolishes the duty on Canadian raw leaf tobacco.


[Stage Direction]
Resolution agreed to.
4. Resolved, That it is expedient to amend The Inland Revenue Act as amended by chapter six of the Statutes of 1914 and chapter thirty-four of the Statutes of 1921, and tc provide:_
That when any druggist is licensed by the Minister of Customs and Excise to prepare prescriptions for medicines and pharmaceutical preparations in the manufacture or preparation of which spirits are used, where such spirits are purchased for such purposes by a druggist so licensed the following duties of excise shall be imposed, levied and collected, that is to say:-
On spirits testing not less than fifty per centum over proof in such limited quantities as may be prescribed by the Minister of Customs and Excise-
(a)	When the material used n the manufacture thereof consists of not less than ninety per centum, by weight, of raw or unmalted grain, or when manufactured from sugar, syrup, molasses or other saccharine matter not otherwise provided for, on every gallon of the strength of proof by Sykes' hydromter, two dollars and forty cents and so in proportion for any greater strength than the strength of proof, and for any less quantity than a gallon ;
(b)	When manufactured exclusively from malted barley, taken to the d'isi'llery in bond and on which no duty of customs or excise has been paid, or when manufactured from raw or unmalted grain, used in combina'.ion, in such proportions as the Department prescribes, with malted banley, taken to the distillery in bond and on which no duty of customs or of excise has been paid, on every gallon of the strength of proof by Sykes' hydrometer, two dollars and forty-two cents, and so in proportion for any greater strength than the strength of proof and for any less quantity than a gallon ;
(c)	When manufactured exclusively from molasses, syrup, sugar or other saccharine matter, taken to the distillery in bond arid on which no duty of customs has been paid, on every gallon of the strength of proof by Sykes' hydrometer, two dollars and forty-three cents, and so in proportion for any greater strength than the strength of proof and for any less quantitv than a gallon.
(d)	Where such spirits are purchased from a Government vendor or other person lawfully authorized to sell the same and where the duties imposed by law have been paid thereon, the said druggist may be entitled to a drawback of all such duty in excess of the rates of duties set forth in this resolution.
William Stevens Fielding: There are quite a number of paragraphs in this resolution which all relate to the one subject. This is an effort to extend the privileges of alcohol at a moderate rate of duty to the druggists of the country. This requires certain regulations, certain stipulations to be made and certain bonds to be given. This covers all the machinery which, our officials ad-
Inland Revenue Act

vise us, will protect the revenue while giving the druggists this privilege, and preventing abuse.


Henry Lumley Drayton: When we had this question up before, there were other matters which were also to be covered and which we were desirous of covering. Is the country doctor not just as much interested in this question? He puts up his own prescriptions. There is also the question of pure alcohol for rubbing for home treatment. Pure alcohol is required just as much for home treatment as for hospital treatment. Why should the country doctor not get the same privileges as the druggists?


William Stevens Fielding: I must confess that it was the druggists who made application and who presented the matter to us in various forms. I do not want to be too positive, but I do not think the country doctors made any representations at all. That, of course, is not a conclusive reason why they should not be included. This question may be well worthy of consideration at the next session; but it was not pressed upon us in the same manner as the question in regard to the druggists was.


Mr. HANSON:: Would there be any objection to the minister including duly qualified and regularly registered physicians with druggists in this resolution? The matter is an important one, and I know that in the constituency which I represent, there are many qualified physicians who live a long way from a drug store and who make up their own prescriptions. I suppose the charges are passed on to their clientelle, but I think they might very well be included. They are a very reputable class of the community, quite on a par with the druggists and quite as much to be trusted.


William Stevens Fielding: I think quite a number of country doctors are conducting drug stores at the same time, although this practice is not extensive; and if they receive a license from the minister, they could be supplied in that way. Any privilege, however, of that character must be surrounded by regulations to guard against abuse, and I would not like to make a change in the matter at the present time. AVhile the matter is deserving of consideration, we would have to make regulations accordingly.


[Stage Direction]
Resolution agreed to.

7. Resolved, That it is expedient to amend The Inland Revenue Act, chapter fifty-one of the Revised Statutes, 1906, as amended by chapter six of the Statutes of 1914, and chapter thirty-four of the 'Statutes of 1921, by adding the following:-
There shall be imposed, levied and collected on all sugar produced in Canada from sugar beets, the following duties of excise:-
Sugar, sugar drainings, melado, sugar concrete and molasses testing over fifty-six degrees and not exceeding seventy-five degrees of polarization, per one hundred pounds, 12 cents.
And for each additional degree over seventy-five degrees, per hundred pounds I cent.
Provided that fractions of five-tenths of a degree or less shall not be subject to the duty and that fractions of more than five-tenths shall be subject to the duty as a degree. Provided that such duty of excise shall not be payable when such sugar is exported.
William Stevens Fielding: I propose that this
provision shall come into effect on the 1st of January, 1923.


Henry Lumley Drayton: I would suggest if that course is taken, that instead of definitely fixing that date the minister should provide that the clause shall come into effect on the passing of an Order in Council after that date.


William Stevens Fielding: No.


Henry Lumley Drayton: I make this proposal for certain urgent reasons. As things stand now the sugar beet industry is depressed to quite an alarming extent. We are growing to-day less than 50 per cent of the sugar beets we grew last year, and having worked the business up to a total of something over $5,000,000 we are falling off rapidly. The tax, even as reduced, if put on amounts to 52.8 cents on every ton of sugar beets grown, and I do not think the industry can stand it. Why is it that this industry, of all things, is picked out? I do not speak at all for my hon. friend's platform; I do not profess to be able to say anything about it. But there is no question that the Farmers' platform, if it stands for anything, stands for the production of the natural resources of the country. And surely sugar beet is a natural resource. I could take a long time in speaking on this question, but if my hon. friend would simply say that this clause is not to come into effect until the passing of an Order in Council I would not ask anything more.


William Stevens Fielding: That would only
create an additional embarrassment. The situation must be viewed from the standpoint of the tariff. We must have regard to the degree of protection this industry

Inland Revenue Act
enjoys; and it so happens that it has had an exceptional degree of protection. When the sugar beet industry was established in the days when I first had the honour to hold the position of Minister of Finance, the highest duty there was on refined sugar was $1.24 per hundred pounds. That was all protection for the sugar beet industry, which has no duty to pay on raw material; and under that protection the industry was built up and flourished. From time to time additional duties have been imposed on refined sugar, by reason of the necessities of war and one thing and another, until the rate is to-day $2.39 per hundred pounds. Every cent of that beyond the original duty of $1.24 is so much additional protection to the sugar beet industry, because the industry does not pay a penny into the treasury on importations of raw material. In the case of refined sugar made from sugar cane it was thought years ago that a duty of half a cent per pound over the raw sugar was sufficient to cover the cost of manufacture and protection, if you like. From time to time substantial increases were made, and to-day the cane sugar industry injoys a large measure of protection- from fifty to eighty cents per hundred pounds, I believe-in the difference between what is paid on the raw material and the duty on the refined sugar. The earlier duty of $1.24 on refined sugar, which was protection for the beet industry, is now $2.39, and we thought it not unreasonable that out of that large increase of protection this small tax might be paid. There is no need for any alarm. Considering the favoured position of that industry the small duty we are asking is a very reasonable one.


Henry Lumley Drayton: The situation is not quite what my hon. friend has stated it to be. There is a great difference between the sugar beet industry and the production of sugar from cane. In the first place, it takes 9.9 tons of sugar beets of good saccharine quality to produce a ton of beet sugar; and in the second place, the whole process of manufacture must be carried out in this country. There is absolutely no comparison between the cost of producing beet sugar in Canada and the cost of producing refined cane sugar here. In the production of beet sugar we have a twofold activity. There is the extraction of the saccharine matter, and in connection with the refined cane sugar industry in Canada that process is all done outside of this country. The raw cane sugar
is imported. Whatever my hon. friend may think about the tremendous profits that have been made out of the beet sugar industry, from the investigation I made during the tariff inquiry I came to the conclusion that the profits in this industry were not very great. Such profits as were made were secured by reason of successful purchases of sugar raws on the market. My hon. friend's view was certainly not the view of the farmer. In the beet sugar industry the farmer goes hand in hand with the factory. They have practically to be partners. Beets are not a thing that can be shipped very far, because they are bulky, and there must therefore be a fairly close relationship between the farmer and the factory. The farmers are now getting themselves together to put up a co-operative sugar plant, but I do not think they will do so with this tax. One farmers' association appeared to ask for a bonus in connection with sugar beets. I will not say they were entitled to it; frankly, I do not think they were. But the position taken by the farmers, as represented by the district organizer of the United Farmers of Ontario, Mr. Gilroy, was that as the price of beets was falling the production of sugar beets was becoming unproductive in Canada. It was contended that there was no money to the farmer in producing sugar beets at a lower price than $9 per ton. The price to-day for the lower saccharine content of 14 per cent is $4.50; and I again point out to my hon. friend that this will work out as a tax on sugar beets to the extent of 52.8 cents per ton. I hope I am not right, but before the minister pledges himself to carry out something that may, and I think will, prove highly detrimental to western Ontario, I think he should satisfy himself by a thorough examination of the facts in connection with this industry and resolve not to bring the act into force until an Order in Council is passed.
Mr. LeSUEUR:	I wish to support the
suggestion of the ex-Minister of Finance (Sir Henry Drayton). The proposal of the Government to place an excise tax on the sugar beet industry has been a matter of great concern to the people of southwestern Ontario, especially to the growers of sugar beets. The industry is of considerable importance there and practically every farmer in Lambton and parts of Kent is engaged in it. The industry was bonussed by the Ontario government for a while until 1906, and
Inland Revenue Act

later it was encouraged by various regulations of the federal House. The result is that to-day I am advised we have from 25,000 to 30,000 acres devoted to sugar beet cultivation in southwestern Ontario. The market for the product of that acreage has been largely the local factories, and to some extent Michigan factories; but the Michigan market is to-day completely cut off by reason of the increased duty on beets imposed by the Fordney tariff.
The placing of this excise tax on the industry would, I believe, be very detrimental and would possibly mean its complete elimination. The tax must be borne by the consumer or the refiner, or the producer. If the sugar beet product set the price it would of course mean that this duty could be spread out over the consumers and so thin and light that it would not be felt by the consumer; but I submit that under present conditions this tax must be borne by the producer. In Cuba the production of sugar has doubled, which, coupled with the fact that the sugar producing countries of Europe are also coming back into the market, means that there is a tremendous supply of raw sugar available. Then we have reduced the preferential tariff which, as I understand, lets in raw cane sugar from the British possessions in the West Indies, and last year they exported to this country about 130,000,000 pounds of raw cane sugar. Consequently the outside cane sugar is more than ample to supply our local demand, and it is being produced at a very low cost and sold very cheap. Now, as we produce only about ten per cent of. the sugar consumed in Canada, and ninety per cent is imported raw cane sugar, it will be seen that the price must naturally be controlled by the source of big production, that is. by the cane sugar. In other words, the price of sugar in Canada is controlled by the sugar refined from cane. The result is that this tax on sugar derived from sugar beet would have to be borne either by the refiner or the grower.
The ex-Minister of Finance has explained the differences in the processes of manufacture of sugar from beets and from cane. I am advised that the refiner of sugar beets claims he will not make a dollar on this year's crop, and offers his books for inspection to prove his claim; and that he has not made a dollar on the sugar beet end of his refining business for several years. Now then, if, as he says, he is bound

under this tax to lose about $150,000 this year, he is either going to shift as much as he can of that burden on to the grower, or to confine his energies to the refining of sugar from cane.
The grower, I am advised, this year is getting $4.50 per ton for his sugar beets. This is practically a deflation of price to the pre-war level. Sugar beet production requires a large amount of labour, and the growers advise me that they cannot produce beets commercially at a figure lower than $4.50 per ton, and if they are bound to absorb this excise tax they say the sugar beet industry must cease as far as they are concerned.
I am not a sugar beet grower, but the views and the facts I have submitted, I believe, are correct. They are given to me by sugar refiners and sugar beet growers, and by various chambers of commerce who have taken the trouble of looking into the question and gathering the facts. Therefore I submit that if the Minister of Finance thinks this tax should stand, it should at least not come into force until he has had an opportunity of examining the books of the refiners to see if their statements are right. Of course, if he finds they are right the tax should not be enforced. If he concludes-and we have absolute faith in his judgment

that their statements are not borne out by their books and they can stand the tax, all well and good. Otherwise, if the facts I have submitted are accurate, the imposition of this tax simply means defeating the very purpose for Which it is designed, namely, the gaining of revenue.


William Stevens Fielding: It is possible that the
results which my hon. friend fears may happen; we cannot see into the future. Much money is made at times and much is lost in the sugar business which has no relation to refining; it'is made in trading, in legitimate speculation, and an examination of the books might disclose interesting transactions of that kind.
But I am going to ask my hon. friend to come back to the vital question-the measure of protection which is accorded to the industry. Let me repeat, this business was established and made successful when the duty was $1.24 per hundred pounds on refined sugar. That was all protection for the sugar beet refiner; it was not protec-' tion for the cane sugar refiner, for he had to pay on his raw material 60, 70, and 80 cents duty. But the whole duty was protection to the beet sugar refiner because

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he had not to pay any duty on his raw material. The protection which any industry enjoys is the difference between what the duty on its raw material and on the finished article.
Now, in the earlier years this business was built up and made successful when the duty on refined sugar was at its highest, $1.24 per hundred pounds.


William Charles Good: Is it not true that at that
time there was a provincial bounty on sugar which added to that protection?


William Stevens Fielding: In the earlier days; my hon. friend is right, the province of Ontario gave a bounty, not the federal authorities. But still the simple fact to which - want to draw the attention of the House is this, that the whole duty on refined sugar is protection to the beet sugar man, because he does not pay any duty on his raw material. Let us absorb that fact. He had a protection of $1.24 per hundred pounds before. From time to time the duty has been increased until it has reached the high figure of $2.39 per hundred pounds, and the refiners of beet and cane sugar, I air. sure, take advantage of that, as they have a perfect right to do, because the price to the consumer is governed,by the rate of duty. If I could do so, I would like to reduce the duty on sugar and take off a cent or a little more and bring the industry back to where it was in the period to which I have referred, but we cannot afford to do that. If we take off one cent from the duty on sugar we will lose a great deal of revenue. If we did that I do not think that even my friends who are interested in the beet trade could object very much; they would simply say: "We are back where we were before when the rate was $1.24 per 100 pounds, we prospered." But since they have this abnormal protection; since they have now the $2.39 where before they had only $1.24, I think they [DOT] can pay the small fraction of 24 cents per 100 pounds. I think they are magnifying the trouble unduly.


Mr. LESUEUR:: The preferential tariff to-day on raw sugar of 96 degrees is only $1.49, as I understand it.


William Stevens Fielding: I am taking the general tariff at its highest point. If you take it off the one you take it off the other.


Mr. KENNEDY (Glengarry) :: There is just one feature of this question that I think the Minister of Finance has not really
taken into consideration. He is discussing it altogether from the standpoint of the protective tariff that is already afforded to the sugar industry in Canada. The excise duty will undoubtedly fall ultimately upon the grower of beets. Now, I am not interested in beet growing, but I think it has hitherto been a well established principle in this country that excise duties should be applied to articles which are in the nature of luxuries, such as tobacco, liquor and things of that kind. I feel that the minister is making a departure from that principle; he is establishing a precedent in placing excise duty on an article which is not a luxury, but which is a necessity. That may be just or may be unjust; I would simply like to present that feature of the case. He is selecting a necessary article of food and is placing upon it an excise duty which will afford a certain amount of revenue and which will not likely increase the price of sugar. But to a certain extent it may be unjust to the grower of beets, the man who will have to stand it in the end. If the minister had, as he said he would like to have done, taken the duty off sugar or lowered it in some degree, I should be inclined to support him, because the consumer of sugar in Canada would get the advantage. The consumer of sugar in Canada is not benefited at all by the arrangement proposed.


William Stevens Fielding: If the duty were reduced as my hon. friend suggests-or rather, as I suggested and he approves.- might that not involve a reduction in price to the beet grower in the same way? It makes no difference whether you put it on one or take it off another.


Donald MacBeth Kennedy: But the consumer would get the benefit.


Richard Vryling LeSueur: I do not want to be importunate, but I believe that the Minister of Finance misunderstood me on one point. He stated, if I understood him, that the duty on sugar to-day was $2.39.


William Stevens Fielding: Under the general
tariff.


Richard Vryling LeSueur: And that that had been increased over a period of years from $1.43.


William Stevens Fielding: 


Richard Vryling LeSueur: What I wanted to point out was that the same duty under the preferential tariff to-day is $1.59, which is a very small increase over $1.24, and that that preferential tariff applies to the Bri-
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tish possessions in the West Indies which are large producers of sugar cane and raw cane sugar. Therefore that sugar will come in in increasing quantities, without doubt, to supply the market and to meet the preference given under this tariff.


Henry Lumley Drayton: There are just two figures I would like to give my hon. friend in order to show how prosperous this industry is. In 1920 the farmers produced 340,875 tons of beets, and with all this preference this year they are producing only 154,530 tons.
At six o'clock the Speaker resumed the Chair and the House took recess.
After Recess
The House resumed at eight o'clock.


PRIVATE BILLS
[Stage Direction]
Bill No. 155, (from the Senate) for the relief of Eva Florence Heavens.-Mr. Rankin.
Bill No. 156, (from the Senate) for the relief of Dorothy Lillian Jewitt.-Mr. Ross (Kingston).
Bill No. 157, (from the Senate) for the relief of Gladys Mae Larivey.-Mr. Ryck-man.
Bill No. 158, (from the Senate) for the relief of Gladys Caroline Hilton.-Mr. German.
Bill No. 159, (from the Senate) for the relief of Eva McRae.-Mr. Ross (Kingston).
Bill No. 160, (from the Senate) for the relief of Warren Garfield Young.-Mr. Stewart (Hamilton).
Bill No. 161, (from the Senate) for the relief of Benjamin Charles Bowman.-Mr. Hocken.
Bill No. 162, (from the Senate) for the relief of Ivy Elsie Myron-Smith.-Mr. Ryckman.
Bill No. 163, (from the Senate) for the relief of Lillian May Maybee.-Mr. Rankin.
Bill No. 164, (from the Senate) for the relief of Phoebe Levina Simpson.-Mr. Ryckman.
Bill No. 165, (from the Senate) for the relief of Thomas Preece.-Mr. Stewart (Hamilton).
Bill No. 166, (from the Senate) for the relief of Frederick Greenhill.-Mr. Ryckman.

Bill No. 167, (from the Senate) for the relief of Hazel May	Dillon.-Mr. McQuarrie.
Bill No. 168, (from the Senate) for the relief of William Arthur Parish.-Mr. White.
Bill No. 169, (from the Senate) for the relief of James Hayden.-Mr. Clark.
Bill No. 170, (from the Senate) for the relief of Bertha Plant.-Mr. Church.
Bill No. 171, (from the Senate) for the relief of James Murray Johnston.-Mr. Rankin.
Bill No. 173, (from the Senate) for the relief of Thomas Leonard Armstrong.- Mr. Macdonald (Pictou).
Bill No. 174, (from the Senate) for the relief of Henry Hardy Leigh.-Mr. McMurray.


[Stage Direction]
The House in committee, resumed consideration of Resolution No. 7, respecting duties of excise, on beet-root sugar.
Mr. FANSHER:: per acre. Preparing the land and planting the seed costs $2 per acre. Cultivating the crop, which, being planted in rows, has to be cultivated throughout the growing season, costs $3 per acre. Then the beets have to be lifted with a plough and this costs the farmer at the rate of $2 per acre. The average yield of beets is about nine tons to the acre. Hauling a little over two tons or about two and a half tons to a load and hauling four loads in a day, a farmer would haul an acre of heets to market in a day, and I put the cost of hauling at $5 per acre. That makes a total expense, not considering anything for the value, use, wear and tear, of machinery, or interest on investment, of $37.75 per acre. The average yield is nine tons, and the contract price this year was $4.50. That gives a return of $40.50 per acre, leaving for the farmer, besides paying him for the work, a profit of $2.75 per acre. This resolution simply imposes a tax of $5 per acre, and that would wipe out the profit of $2.75 and leave a deficit of $2.25.
Let me give some figures in connection with the amount of sugar beets produced in this country. During the past ten years more than 20,000 acres have been planted on an average; in one abnormal year, 1920, the number was 34,000. I give these figures to show that this is no inconsiderable industry in the province of Ontario. Now, of the six companies refining and selling sugar in Canada the only one that produces sugar made entirely from a product of this country is subject to an excise tax. The Minister of Finance stated in his budget speech that he favoured the encouragement of native industry in this country. Well, here we have an industry that gets its raw product right in the country, and employs labour in Canada in the preliminary stage of extraction, as well as in the refining. It has to pay an excise tax. On the other hand, the other five companies that do merely the refining fh Canada have no excise tax to pay. When beet sugar was first produced in Canada the manufacturers had a hard time trying to induce the wholesalers to handle the product, largely because the cane sugar men did not want the wholesalers to have anything to do with beet sugar. As a result the beet sugar manufacturers were driven to establish a retail marketing system, and beet sugar to-day is not marketed through the wholesalers at all. The Dominion Sugar Company have had at one time over 30,000 different accounts of various retailers, to

whom they market direct. I think this is an argument in their favour because it reduces the cost of getting the product to the consumer, which would be increased if it passed through the hands of the wholesalers. If we are to have a protective system surely some equality should he observed. It is not equitable that one company should be penalized by an excise tax while other companies engaged in the same industry are exempted from,that impost. I am thoroughly convinced that if this resolution carries the revenue derived by means of it will not amount to a very great deal. In fact, I believe it would gradually diminish and probably the industry would be put out of business. If the beet sugar industry were put out of business the consumers, far from benefiting by any reduction in the price of sugar, would stand to suffer, because the cane sugar manufacturers would have the situation in their own hands and the price of sugar would go up to the full extent of the protection now afforded it. The cane sugar manufacturers have not always benefited to the full extent of that protection, and to my mind that is largely due to the existence of this native industry in the province of Ontario, which has offered competition. I hope that this resolution will not be put into effect until a thorough investigation is made of the beet sugar industry. If after a full and complete investigation it is decided that that industry shall be taxed in the way proposed while the others shall be allowed to go free, then I shall have nothing to say. But I believe that if the business is investigated it will be found that the beet sugar manufacturers have no more right to pay an excise tax than any of the other refineries located in Canada. In this connection I move that the resolution be amended by adding thereto the following:
Provided that this amendment shall not come into effect until a thorough investigation of the beet sugar industry shall have been made and proclamation has been issued by the Governor in Council and published in the Canada Gazette.


William Stevens Fielding: I am afraid my hon.
friend from East Lambton (Mr. Fansher) has failed to see the point-and I thought there was a point-of my explanation this afternoon. He has made three points in his speech to which I take the liberty of replying. In the first place, he says that the excise tax should be imposed only on luxuries. Now, repeatedly in this House, and especially from the group in which my hon. friend sits, the argument has been

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advanced, and it is advanced even to-day, that wherever there is a high protective duty on articles there ought to be a corresponding, or partly corresponding, excise duty. That view has been advanced over and over again by my hon. friends in the Progressive ranks, and to-day it was put forward very prominently by one hon. gentleman. We are doing that very thing in this case. Beet sugar happens to be fortunate enough to have a very large protection, and in consideration of that exceptional position we are going to impose a small tax on the industry, the very thing my hon. friends have been advocating. Hon. gentlemen, of course, may isay that we should go further and extend that principle more widely. Well, perhaps that contention is right. But this is an exceptional case. The protection is larger than it was before; it is larger than seems to be necessary; and we are trying to get a small sum back in the way of this little excise tax. That is one point. There was another point my hon. friend raised in this question: Why not reduce the duty on sugar? If we were to reduce the general duty on sugar 50 cents a hundred, or a half a cent a pound-and I gather from my ihon. friend's remarks that he would approve of that-it would strike the beet sugar business twice as hard as we are striking it here. It would take half a cent off the protection that is afforded the industry, whereas we are taking only a quarter of a cent or less under the present proposal. The suggestion, if carried out, that we should reduce the duty on sugar would, I repeat, strike the beet sugar industry much harder than we are doing here. True it would benefit the consumer, and that point might well be taken. But under all the circumstances we feel that we cannot afford to reduce the revenue, and thi is one way of making the industry pay a small amount. It is exactly What my hon. friends have been arguing.


Andrew Knox: Why should the excise tax
not be levied on cane sugar as well?


William Stevens Fielding: I am coming to that.
My hon. friend from East Lambton asked the same question. The answer is, because the cane sugar refiners pay into the treasury of Canada on their raw material $9,000,000, while the beet sugar pays not one cent on its raw material. Is not that a satisfactory reply? In the year 1921, and about the same the year before, $9,000,000
was collected from the cane sugar refiners and they have a very modest protection as compared with the beet sugar industry. Surely my hon. friends will appreciate the difference. Of course, the beet sugar industry must pay the cost of production, management, and so forth. But so must all other industries; all industries have to bear that cost. The great difference is that the cane sugar industry, with a moderate protection in comparison with the other, pays $9,000,000 into the treasury, whereas the beet sugar industry pays not a Single cent. Surely my hon. friend from East Lambton (Mr. Fansher) will see that his argument in that respect is altogether inadequate to the occasion. It is mistaken.


William Findlay Maclean: I firmly
believe in Canada's ability to grow enough beets to supply the whole sugar market in competition with the other class of sugar. I know some of the men identified with the development of the sugar industry in this country, both beet and cane, and I also have an idea as to the state of public opinion on this subject. There is a feeling in the country that sugar, being one of the most essential foods, should if possible be made in Canada. Beet sugar is being made in the United States. It was the foundation of the national policy of Napoleon and it also made Germany great. Between France and Germany they largely captured the sugar market of Europe and the Americans followed and developed a great industry. I should like to see Canada do the same, and I am sure we have the land that can grow sugar beets. The farmers are well acquainted with' that branch of agriculture and they should, receive some encouragement. I am not unmindful of the Canadian consumer, who is entitled to some relief in the matter of sugar prices. We have a sugar industry here, but what does it cost the country? How many millions of our money have been lost in connection with the sugar refining business? Was there ever such an exploitation by Canadian capitalists, especially those of Montreal, as took place within the last twelve months in connection with the sugar refineries? I believe we can produce the highest class of sugar, and we ought to be able to supply our home market. I do not like the record of the beet sugar business so far, but I am convinced that with a little encouragement we can supply all our domestic requirements. Our banks are advancing millions of dollars to the



Inland Revenue Act
cane sugar producers of the West Indies. It may be a good place to invest our money, but no one knows yet how much capital we have invested there or how sound the investment is. We ought to be able to do what France and Germany have done, produce sugar at the lowest price for our own consumption. I do not think that either this Government or the past government has had the right solution of the sugar question. It is a question that comes home to every household, and especially to every woman. When our sugar refiners come to us to be taken care of we ought to know what they did with their shareholders' money in exploiting the sugar market, and when the facts become known I think the public will exact a strict accounting. I cannot suggest to the Minister of Finance to-night the correct solution of this question, but I want to tell him and the House that it has got to be solved, and solved satisfactorily for the people of this country. Next to wheat, sugar is one of the greatest foods that we use, indeed, it can be classed as one of the absolute necessities of life. In the States they have built up a great sugar industry, and I am convinced that with the help of our farmers we can do the same. I am not speaking from a party point of view for the moment when I say that the sugar question is with us, and the people will never be satisfied until we get the inside story of the exploitation of Canada by the cane sugar refiners.


William Charles Good: The condition of the beet sugar industry at the present time is a very good example of the mischief that comes from the adoption of the protective system. Twenty or twenty-five years ago, under the stimulus of tariff protection and provincial bounties, this industry was established in Ontario. I remember the time very well because I had something to do with the business then. The history of the industry has been very unfortunate. It has stagnated, and I question very much whether there is any possibility of maintaining it permanently (without a state subsidy. We have not, and I do not know that I hope we ever shall have, the same amount of cheap labour that is available in Europe for the cultivation of sugar beets, arid I submit that without a large supply of cheap labour it is impossible for the sugar beet industry to compete with the sugar cane industry.

Now, what are we going to do? A good many farmers in Ontario are more or less tied up to the sugar beet industry, and we find that we cannot maintain it without a permanent subsidy. For my part I think the country would be very much better off if the industry disappeared. It will be hard on those who have invested their money in the factories and on some of the farmers* but ultimately I think it will be 'better for Canada if the sugar beet industry disappears, and in this respect I must differ from the opinions expressed by the 'hon. member for South York (Mr. Maclean). I think if he will look into the comparative cost of production in the sugar cane and sugar beet industry he will find it is practically impossible to consider competition on a fair basis in this country.
I do not know that I would care to recommend any definite policy to the Minister of Finance in this connection, but I want to state the situation as I see it. We have got ourselves into a very awkward position by adopting a foolish policy in the past. Just how we are going to get out of that position I do not know, but I do think that although, as the Minister of Finance has stated, the sugar beet industry has a protection of $2.39, which is ostensibly the protection under which the industry is carried on, it has so very many natural handicaps that that is not going to be of very much assistance to it, and it may very well be that the imposition of this small excise tax will lead to the disappearance of the industry. Whether that is wise or not I cannot say, but personally I would very much prefer and urge upon the 'House that instead of putting this excise tax of 24 cents per 100 pounds on beet sugar we put it on all sugar, or reduce the duty by that amount, and in that way we will reduce the price of sugar to the 'Canadian consumer. The member for East Lambton has stated that only about one-tenth of the sugar consumed in Canada is made here. Then if we can reduce the price of sugar to the masses, surely that is worth while. I do not know offhand the difference in the duty between raw sugar and refined sugar, but I do not think it is less than 24 cents per 100 pounds. So if the duty could be cut to that extent on refined sugar, the same amount would come into the treasury on the raw sugar importations, and the Canadian public would get their refined sugar that much cheaper. Then we would let the beet sugar industry look after itself.

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Mr. (LeSUEUR: The hon. Minister of Finance in reply to the member for East Lambton laid considerable stress on one argument, that the sugar cane industry paid a tax of $9,000,000 while the sugar beet end of the industry paid nothing. Is it not true that under the economic conditions at present surrounding the sugar industry that $9,000,000, owing to those conditions would naturally be spread over a large area that is among all consumers; but in consequence of the same economic conditions surrounding the sugar industry today, the excise tax which would be imposed on beet sugar would rest largely on a comparatively small number of sugar beet growers situated in a few counties of south-western Ontario? That, I believe, is the danger in the excise tax, that it is going to fall heavily on a small proportion of the population, and therefore is dangerous to the existence of the industry itself.


Mr. DRUMMOND:: The minister has emphasized the fact that these taxes are imposed for the purpose of raising revenue. Now, the method of applying this tax is such as to enable the beet sugar refiner to evade the tax for this year-from now until the first of January. The imposition of a tax of $5 per acre upon the grower of sugar beets-because the refiner will undoubtedly pass it on to him-will have the effect of preventing the grower from operating, and if that is the case, where is your revenue to come from next year? The minister is by this means defeating the very purpose for which the imposition of the duty is intended.


Mr. MILLAR:: I am inclined to think that the minister misunderstood the hon. member for East Lambton (Mr. Fansher). That hon. gentleman said, as I understood him, that it had been the policy of the Government to levy excise taxes on luxuries, and that is the respect in which the minister, I think, misunderstood his remarks. Stress has been laid by the minister on the fact that the five cane sugar refineries have paid $9,000,000 into the public treasury. I think a moment's thought will teach all of us that every cent of that was passed on to the consumer. No industry can be given very much credit if they simply pay out a sum of money and then collect it-or collect, as in this case, a considerably greater amount- from the consumers. We know what is done when a sum of money is paid by way of customs duty; every time it is turned 208J
over-to the wholesaler, to the retailer or otherwise-a profit is added on the amount of duty paid. So that this $9,000,000, by the time it reaches the consumer, is nearer $12,000,000. This would seem to me to be a move in the wrong direction. If only one-tenth of the sugar output is produced from sugar beets, the revenue derived from this tax will be very small. It would seem, according to the hon. member for East Lambton, that this tax will greatly endanger the sugar beet industry, and if there is anything we need in this country it is a policy that will encourage work on the land. How much revenue does the minister expect from this tax?


William Stevens Fielding: I think we shall get something approaching $200,000 from it.


Burt Wendell Fansher: It is said that $9,000,000 has been paid into the treasury by the cane sugar refineries. I understand that a good portion of the amount paid by those refineries is refunded in the form of drawbacks. Has the minister deducted the amount so refunded by way of drawbacks? A total of over $10,000,000, I believe, has been paid in drawbacks, and a considerable amount of that has gone to cane sugar refineries.


William Stevens Fielding: A portion-I have not the exact figures, but I think it 9 p.m. is about a million and a half-has been paid by way of drawback. As to the suggestion that the $9,000,000, or whatever the amount is, has been passed on to the consumer, I would say that that is certainly the case; all these taxes in the end reach the consumer. I do not for a moment pretend that these cane sugar refiners have been actuated by benevolence in respect to the $9,000,000 they paid into the treasury; it is passed on to the consumer, and I would not be surprised if they added something more than the $9,000,000. That is the way taxes are passed on.


Donald Sutherland: This industry
which may be considered as natural to this country, has suffered possibly more than any other as the result of the scarcity of labour during the past six or eight years. We hear a great deal about unemployment in this country and the necessity for providing work for the unemployed. Now the growing of beets and the manufacture of these beets into sugar requires a great deal of labour. Although sugar beets are not grown to any extent at the present time in the county from which I come, I appreciate
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the difficulty which confronts those who are engaged in that industry in some of the adjoining counties. I think it would be a very unfortunate thing indeed to saddle a tax of this nature upon this industry when those engaged in it are just at the turn of the tide, as you may say, as a result of which they might naturally expect to get sufficient labour to carry on this work. I say that it would be a very unfortunate thing if this industry, which is struggling so hard to exist, should receive a blow of this kind when it is now so much in need of a little encouragement.


Burt Wendell Fansher: I would just like to say a word in connection with the amount of revenue derived from the Canadian cane sugar industry. According to a return presented to Parliament there was a million and a half paid in drawbacks to one company, and about half a million paid to another company. There are five companies in Canada which import raw cane sugar. I have no doubt that at least one-third of the $9,000,000 derived in duties from this industry,if it were figured out, was handed back in the form of drawbacks. Let me point out that the employment furnished by the Canadian cane sugar refineries is in no way to be compared to the amount of employment that the beet sugar refinery gives, and it must be remembered that the latter industry is in operation throughout the winter months when employment is scarce. At that time of the year in the towns and cities where the cane sugar refineries are located bread lines are known to exist. No such bread line is to be seen in the district where the beet sugar factory is located. What is observed, is a steady stream of employees on their way to work in the factory which is running throughout the winter when other kinds of employment are scarce. I fully appreciate the need of revenue but I believe that this tax will in a large degree defeat its own object and that the revenue derived from it will be very small. On the other hand the con-summer will pay the same price for his refined sugar as heretofore and, in the event of the beet sugar industry being put out of business, will even pay a much higher sum than he does at present.
Amendment (Mr. Fansher) negatived.


[Stage Direction]
Resolution agreed to.
8.	Resolved, That it is expedient to provide that no person shall produce sugar in Canada from sugar beets without a license and that a fee of two dollars per annum he paid for such license and to further provide that all the provisions of Part II of The Inland Revenue Act

respecting licenses and the obligations of persons holding them, the keeping of books or accounts, the payment of duties and making returns and the general regulations as to bonding and warehousing, so far as applied by departmental regulations, and all provisions respecting penalties, so far as applicable, shall have full force and effect with respect to the manufacture of sugar made from sugar beets.
Mr. FIELDING This is part of the same matter.
Section agreed to.
9.	Resolved, That any enactment founded on the preceding resolutions numbered seven and eight shall be deemed to have come into force on the twenty-fourth day of May, one thousand nine hundred and twenty-two.
George Newcombe Gordon: It is moved by Mr. Fielding in amendment to Resolution No 9:
Resolved that any enactment founded on the preceding resolutions numbered seven and eight shall be deemed to have come into force on the first day of January, one thousand nine hundred and twenty-three.
Section as amended agreed to.
10.	Resolved, That it is expedient to amend The Inland Revenue Act, chapter fifty-one of the Revised Statutes of Canada, 1906, by repealing section one hundred and ninety-nine of the said Act, which provides that beer (brewed for private use shall not be liable to any duty under the said Act; and to provide that section two hundred1 and four of the said Act be amended by striking out the words ''except for use of himself or his family, as by this Act provided" in the third and fourth lines thereof.
Resolution No. 10 dropped.
Resolutions reported.
SPECIAL, WAR REVENUE Mr. FIELDING: I move that we take up the resolutions to amend the Special War Revenue Act.


[Stage Direction]
Motion agreed to.
1. Resolved, That it is expedient to amend The Special War Revenue Act, 1915, as amended by chapter forty-six of the Statutes of 1918, chapter seventy-one of the Statutes of 1920, and chapter fifty of the Statutes of 1921, and to provide:-
1. That subsection two of sect.on five of the said A?t be amended by removing purely mutual companies from the class of companies exempt from the tax imposed by said subsection, and by adding to said section five the following subsections :-
(11) Every person resident in Canada, who insures his property situate in Canada, or any property situate in Canada in which he has an! insurable interest, with any British or foreign company or British or foreign underwriter or underwriters, not licensed under the provisions of the Insurance Act, 1917, to transact business in Canada, or with any association of persons formed for the purpose of exchanging reciprocal contracts of indemnity upon the plan known as in'ter-insurance and not

Special War Revenue Act
licensed under the provisions of the Insurance Act, 1917, the chief place of business of which association or of its principal attorney-in-faet is situate outside of Canada, shall on or before the thirty-first day of December in each year pay to the Minister lor the Consolidated Revenue Fund, in addition to any other tax payaible under any existing law or statute, a tax of five per centum of the total net cost to such person of all such insurance for the preceding calendar year, and for the purposes of this section every corporation carrying on business in Canada shall be deemed to be a person resident in Canada.
"(12) Every person to whom this section applies Shall on or before the thirty-first day of December in each year make a return in writing to the Superintendent of Insurance stating the names of the companies, societ * s of underwriters or associations with whom the insurance was effected by him or on his beha.f, the amount of such insurance and the net cost thereof in each case.
"(13) Every person who fails or neglects to make such return or pay to the Minister within the time limited by subsection (11) hereof the tax hereby imposed, shall incur a penalty of fifty dollars for each and every day during which such default continues."
Mr. BAXTER:: In common with a great many other members I presume, I have received telegrams and letters with reference to this particular section. No doubt the Minister of Finance has also had representations made to him on behalf of those interested. I would like to ask the minister if any consideration has been given to the matter, and if it has been found possible to make any alterations in the proposal?


William Stevens Fielding: I have received, as my hon. friend suggests, many telegrams on the matter but I really think there must be a misapprehension as to the purpose of this resolution. I think the idea must be abroad that we are trying to prevent these reciprocal and other companies from doing business in Canada. This is simply to levy a small tax upon the premiums that are paid. These companies do a considerable business in Canada, although they are located in the States, and they pay no tax here in any shape or form. This is not a proposal to levy any tax upon the insurable property; it is simply a small tax upon the premium. For example: I saw a letter written by one of these policy holders who was complaining of the high rates of the old line companies and he said: "I am now getting for ten cents per $100 what I had at one time to pay a dollar and a half for." Perhaps the dollar and a half was an exaggeration, but he is getting a low rate of insurance, and where he paid 10 cents before he will now have to pay 10i cents. Of course all
taxation is unpopular; nobody wants to be taxed. Every one of these resolutions is taxing somebody and naturally they all want to avoid it if they can. This tax is an exceedingly small one. All our Canadian companies are taxed in one form or other; and if these people are able to do business in Canada, although their headquarters are in the United States, surely it is not excessive for us to impose this little tax of half a cent which is added to the ten cents' to which I referred. I think there must be some misapprehension of the purpose of this resolution. It does not seek to drive these companies away, it imposes no burden upon them; but the individual policy holder, who boasts that he is getting very cheap insurance is asked , in these days of hard times to contribute the modest tax of five per cent on his premium. I do not think that is an alarming thing at all.


Mr. PARENT:: I do not know exactly what the effect of this legislation will be upon the insurance business, but I have had a little experience of my own with American insurance companies doing business in Canada. Under the law of the United States the estate of a person resident in Canada and insured in an American company is required to pay a succession tax upon the amount of the insurance policy which had been held by him. So that if the Minister of Finance to-day finds a means by which he can tax an American company in return for the taxation the Canadian pays to the United States Government it would seem to be a very proper thing.
I have a case in mind. Suppose an estate has to transfer stock held in an American company by a deceased person, you are called upon by two or three states of the United States, and also by the Treasury Department at Washington, to make a full report of your estate. If you happen to have an interest in an American company, the trust company will refuse to transfer your shares, unless you notify the two or three states of the United States, and also the Treasury Department at Washington, what your estate is valued at, with the result that you cannot have your shares transferred, unless you divulge the amount of insurance you may possess in an American company. And when you have given them the details, and have told them that you are insured in one of their companies, they will impose a succession tax upon you, and tell you that you will have to pay so
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much on the amount of insurance you possess in the United States, and this on the ground that the insurance companies have their head offices in the United States. It seems to me it is time for Canada to take some action in the matter, when our country gives the American companies the right to do business here. The American companies have practically the same right as a Canadian insurance company doing business in this country, in the way of securing premiums and getting money out of Canadians. It seems to me those companies should be compelled to conduct business independently, and some provision should be made to relieve from taxation Canadians who are insured in these American companies. I have called the attention of the Department of Insurance to this matter on a good many occasions, without any result whatever. It is a very important matter, and I am sorry that this question has come up so suddenly, for I am not prepared at this moment to discuss it fully. I called the attention of the department to this matter, and I am sure, that if the minister looks into it, he will find it is unfair to our Canadian citizens to be put in such situation by the government of the United States. Canadians insuring in American companies have to pay succession taxes over there, whereas, if they were insured in Canada, they would pay succession taxes in their own country only.


Mr. CALDWELL:: Looking into this
matter, I find each individual who carries an insurance policy must make a return on or before a certain date in December of each year. He is liable for a penalty of $50 a day for every day he is in default, if he fails to make the report by the time specified. I think it is imposing a hardship on the policyholders. How many people in Canada will know the law is in effect?


William Stevens Fielding: That remark applies
to all the laws we pass.


Thomas Wakem Caldwell: I think this is going a little beyond the realm of reason, almost, when we impose such a tax. If you are able to impose a tax on the company which effected the insurance, you would be able, from one central point, to get a report of the insurance carried by the company, but I understand we cannot impose a tax on an American company doing business outside of Canada. The tax is imposed personally on the policy holder. I think our people have had quite a scorching in mak-

ing income tax returns, but when they are compelled to make a sworn insurance return, and are liable to a fine of $50 a day for every day after a certain period, if the return is not made, when they possibly do not know the law is in effect, it is going rather far and it is much worse than I thought it was when I first read the act. I would like to urge upon the minister the advisability of reconsidering this, and to consider the wave of indignation which would sweep over the country among the insurance policy holders when it became known that this was the law. I think it would be a good thing for the Government if the people did not become aware of it. It would be a bad thing if the policy holders woke up, and found they were liable to a fine of $50 a day for the time they were in default.


William Stevens Fielding: When a duty is imposed it is our habit to impose a penalty, so that it is not a peculiar thing. The whole purpose of the provision is simply to tax the individual who is getting, as he believes, and, as I think, very cheap insurance. If I buy cotton in the United States, the law penalizes me by imposing a tax of 35 per cent. In this matter we are exceedingly moderate. If a man wants to pass over our Canadian companies, and insure in the United States, we do not tax him 35 per cent, but simply 5 per cent. He is getting cheap insurance, and is being asked to contribute, in a very small degree, to the business of Canada. There is nothing serious about it. I am sure there is nothing in this resolution to prevent these companies from doing business in Canada. The hon. member from West Quebec (Mr. Parent) suggests there are difficulties in insuring in American companies. There may be. We are not dealing with that at all. We are not dealing with the right to do business. We simply say that, as these individual policy holders are doing business, and getting cheap insurance- and we have no objection to that in these hard times-it is not a very severe thing to ask them to pay 5 per cent on the amount of their premiums.


Samuel William Jacobs: This is an entirely novel scheme, whereby it is sought to tax your expenditure. You might as well tax your rent roll, or your pay roll, as to tax insurance. This whole matter has been very clearly, and distinctly put in a letter addressed to me by a well known Montreal firm, who asked me to read it to the committee. There are only a few paragraphs

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and perhaps the committee will bear with me while I read it. The letter reads:
First. Insurance premiums are not and ought not be taxed any more than any other expense that a company may have in the conduct of its business. It would be just as reasonable to tax the pay-roll of a company or its rent bill or any other expense item.
Second. The straight Line Companies do not and will not write the kind of policies that are necessary in many businesses. The result is, that the Canadian firms are driven to apply to outside concerns, such as Lloyds, New England Mutuals, Reciprocals and others.
Third. These companies do not seek risks in Canada. If we wish to insure with them, we must make application to them for protection and for this reason, they do not ooen offices nor do they maintain staffs here.	.
Fourth. It is highly important that we should be able to secure insurance with these companies as otherwise, there would be no competition, and we would have no protection against excessive rates.
Fifth. The fact that these companies invariably write risks at reasonable rates, enables the average concern to carry an adequate amount of fire protection, and thereby aid and assist in stabilizing business and protecting business. It is estimated that the average concern in Canada is under-insured to the extent of anywhere from 25 to 40 per cent. This practice of under-insuring is a serious one, and leaves business houses without adequate protection for their accounts in case a customer has a fire loss. The effect of this tax would be to further increase this practice of underinsuring, and which will lead to serious financial loss and embarrassments.
Sixth. The companies mentioned above have a very rigorous and close inspection organization. The result of their attention to this detail has resulted in the improving of factory and ware houses' fire risks by 50 to 60 per cent, owing to improved class of build'.igs, improved fire protection equipment, etc.
Seventh. The amount of revenue secured by the minister by the imposition of this tax, will be so small as to be almost negligible and it is conceivable that one serious fire loss due to failure to properly insure, may wipe out all the revenue thus secured.
Eighth. At the present, business in Canada is labouring under many handicaps and this is an additional burden which helps to make more difficult, the successful conduct of affairs.


Andrew Ross McMaster: That letter was written by a Nova Scotian.


Samuel William Jacobs: An intelligent gentleman, nevertheless.	-


Mr. McBRIDE:: Was it an insurance agent who wrote that letter?


Samuel William Jacobs: The letter was written by Mr. A. Kirk Cameron, vice-president and managing director of the Metal Shingle and Siding Company Limited of Montreal, which is associated with the A. B. Ormsby Company, Limited, of Toronto.


James Dew Chaplin: I would like to inquire from the minister in respect to what is
known as mutual insurance. The first premium paid on mutual insurance is much larger than the net cost. Is it intended to collect this percentage based up the first premium cost, or is it the net cost of the insurance when the losses are ascertained?


William Stevens Fielding: On the net cost.


Charles Wallace Stewart: I want to point out to the Minister of Finance (Mr. Fielding) the entire inequality of the 'bearing of this tax upon those who come under it. As he has already shown us, there are certain industries that cannot obtain adequate fire insurance protection in Canadian companies, unless they come under what they deem exorbitant rates, and which he has, by comparison, shown us are exorbitant rates. 3 think those rates are known in the trade as board rates and hear some such relation as $1.25 to ten or twenty-five cent rates which they can obtain in American companies for the same class of insurance. Two of our industries are particularly affected by this. Those two are the small flour mills up to a certain size, say about 75 barrels of flour a day, and the ordinary lumber mills which are poor risks and which under any policy would have to pay a heavy rate of insurance. They cannot obtain adequate insurance in Canadian companies, unless they come under those board rates which make insurance prohibitive to them. Therefore, they are forced to go to American companies. Those companies are complaining, not that the tax should be imposed, but that it bears unfairly upon them in that their premiums are very large and, therefore, they have to pay a very large tax on the same amount of capital investment as that of companies, for example, a textile company, which has a good factory equipped with a sprinkler system, can obtain a rate very much lower than that which flour or lumber mills can obtain under any circumstances. That is the point that I want to bring out, that this tax bears unfairly upon those two industries particularly. There may be other industries which come in the same class; but those are known as bad fire risks; the rate is higher, therefore, the premium is higher, and the tax is going to make the whole cost to them unfairly high in proportion to the cost to those other companies with similar capital investment.


William Stevens Fielding: I think from what has been said by the hon. member for George Etienne Cartier (Mr. Jacobs) that there
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ip a misapprehension as to the effect of this resolution. My hon. friend said that the revenue to be derived was quite negligible. If the whole thing is so small and unimportant as that, why make a fuss about it?


Samuel William Jacobs: It is the principle of the thing.


William Stevens Fielding: The principle of the thing is sometimes of importance in insurance in this country as well. Canadian insurance companies in one form or another have to pay taxes. My hon. friend (Mr. Stewart, Humboldt) refers to textile companies as being penalized in connection with this. They are amongst those companies which insure with outside concerns. .


Charles Wallace Stewart: I said that textile companies pay this tax, but that it would not be a heavy matter with them because most of them are equipped with sprinkler systems, and, therefore, their rates are low. But the flour mill and the saw mill cannot be equipped with sprinkler systems; therefore, their rates are higher; their premiums will be higher, and the tax will accordingly be higher.


William Stevens Fielding: Therefore, they are driven to insure with these outside companies-is not that the argument? The rates are too high at home. If we were doing anything to interfere -with business at home or their rights, I could see some force in the objection. We are not dealing here with regard to their right to do business in Canada. We simply say that out of the cheap insurance which they are getting, they shall pay the small tax of 5 per cent. I believe this tax is almost negligible; I do- not think there is any ground for the agitation that has been raised against it. I know telegrams have been sent throughout the country asking policyholders to send telegrams to members. I am pretty familiar with that method of agitation now; but I am sure, from the communications that have been received, that there is a misapprehension. Let me give the illustration which I gave a moment ago. A man who is getting cheap insurance, rwho is Ipaying only ten cents where, in former times, _ he paid $1.50, is now going to pay 10i cents. Nobody is going to make a fuss over that. The thing has been magnified. It is only a small thing; but despise not the day of small things.


Richard Burpee Hanson: This resolution on the face of it purports to be a revenue measure.


William Stevens Fielding: Yes.


Richard Burpee Hanson: But it will be observed
that this tax is restricted to companies not licensed under the Insurance Act of 1917. I am opposed to the resolution for many reasons given in the letter read by the hon. member for George Etienne Cartier (Mr. Jacobs). I should like to point out to the committee that the policyholders of any company may escape this tax if the company comes and becomes licensed in Canada. It seems to me that this is a lefthanded method of attempting to compel these companies to become licensed under the Dominion Insurance Act. Most of these companies-and I am familiar with the New England mutuals-have no desire to do business in Canada; but our people have sought business with them on account of the service which they give to them for a proper premium, and the people have not been sought after by New England mutuals. I believe this is a clear instance of a method adopted by the Insurance Department to attempt to drive these companies into becoming licensed in Canada, and that it is not in any sense a revenue measure.


George Perry Graham: As a matter of fact,
these companies do solicit business in this country.


Richard Burpee Hanson: I do not think so.


George Perry Graham: There is no question
about that. I know; I have been solicited. They have their agents in Canada who go down regularly to the cities of the United States and get their instructions.


Samuel William Jacobs: Why not tax the companies?


George Perry Graham: How can you tax a company in the United States and go over and collect the tax?


Samuel William Jacobs: That is the point.


George Perry Graham: 
Richard Burpee Hanson: May I ask a question?
If the companies were to pay this tax, I would say: "All right;" but the companies are not paying this tax; it is a tax on a resident policyholder, a man who, in many cases, is obliged to go to the United States to get insurance.


George Newcombe Gordon: The hon. member
has a right to ask a question, not to make a statement.


William Stevens Fielding: If the tax could be imposed on the company, we all know they would pass it right on to the policyholder. But we cannot reach the company in the United States; we reach the policyholder in Canada.


George Perry Graham: I was going to remark
that this ismall tax will not stop the issuing of one policy in the Dominion of Canada. We forget, perhaps, in discussing these matters, that every person who is taxed objects, of course, on general principles. One thing we all hate to do is to pay taxes. It is like going to prayermeeting-a lot of us are willing to go on our wife's side. We are willing to pay taxes through our neighbours, but when the tax comes to us, we say: Take it away. Does it not strike hon. members that the companies who object to this little 5 per cent tax are companies who are doing business under a 35 per cent protection themselves? Some high protectionists are protectionists when they are selling; but when they want to buy anything, they are absolute free traders. We find many of them are free traders at night when they are protectionists in the day time. This is such a small matter that no objection should be raised to it. If a policyholder in the Dominion of Canada says to the company that comes to hiim soliciting insurance. "This will cost me 5 per cent more," if the company wants business very badly, it will give the policyholder the 5 per cent. To my mind, this tax can be carried on to the company through the policyholder in this instance. It is time that we asked these people to pay a little into the treasury of Canada. We must not forget that we have a debt of two billions and a half, the interest on which somebody must pay, besides our pension=, besides all our extraordinary expenditures on account of the war, taking care of widows, orphans and maimed men. If every one gets out of paying taxes where could we get the money? And you get a little money from these Americans that do business here.


Andrew Ross McMaster: You are not going to get this money from Americans doing business here; you are going to get it from men who are carrying on business in this country, who have sought and obtained the best form of insurance that they can find anywhere.


Georges Parent: And get nothing in return.


Andrew Ross McMaster: You are going to tax them on their wisdom, their forethought and their capacity by taxing them on the premiums they pay. It is only a small tax,
I admit but when I heard the Minister of Militia (Mr. Graham) appealing to patriotism, I confess I did not think of Johnson's statement that patriotism is the last refuge of the scoundrel; I thought of the theory that patriotism is the last refuge of those who wish to promote or advocate something economically unsound. It is economically unsound to tax people upon their expenses incurred in doing business. I grant you that these manufacturers, who are protected to the extent of 25, 30 and 35 per cent, are the last people in the world who should complain. But, let me say, that does not apply to the member for Brome when he speaks on taxation principles. I respectfully urge up on the Minister of Finance that this is a mistaken way of raising a very small amount of money. It is opening the door to an unsound system of taxation. I do not think a man should be taxed on the expenditure incurred in carrying on his business.


George Perry Graham: The statement has been made that no taxes have ever been imposed on expenditures incurred in connection with business. If you build a store in a municipality are you not taxed on that? You are immediately taxed on the amount of money expended in carrying on that business.


An hon. MEMBER:: And there is the business tax.


George Perry Graham: Yes, but I am trying to answer the statement that no taxes are imposed on expenditures.


Andrew Ross McMaster: I never said that. I simply said that this is not a sound economic system of taxation. And one of the greatest objections to municipal taxes is that at present all improvements are taxed, whereas under a proper system you would tax the land values and not the improve* ments.
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Mr. HARRIS:: Under the present system the tariff companies just sit down in their offices in the large centres and strike a rate which the man seeking insurance must pay. Practically all tariff companies, it is well known, are licensed companies. On the other hand, a very large number of unlicensed companies are non-tariff companies. One hon. member just now had a good deal to say in regard to the manufacturers who wanted insurance. Well, they are not the only people that want insurance; there are other people looking for insurance, and they invariably go to nontariff or unlicensed companies. In my humble opinion, if the Minister of Finance deems it necessary to levy a tax on the premiums from these non-tariff or unlicensed companies, the tax should apply to all companies. The unhappy experience of practically all manufacturers in the Dominion is that the underwriters association send out a deputy to look over the risk, who comes back and reports to his seniors that the rate for the institution shall be such-and-such. What redress have the manufacturers? They have none at all, unless they go to the unlicensed companies; and by instituting this small tax against these companies you are establishing, in my opinion, a wrong principle which will tend to put another big club into the hands of such organizations as the Canadian Fire Underwriters' Association and similar institutions.


George Gibson Coote: I protest against the resolution as a matter of partiality to the Fire Underwriters Association of Canada, which is without doubt the worst trust that exists in the country. I wish to utter a protest on behalf of a man who does not enjoy any protective tariff. The constituency in which I live has very few men who get any benefit from the tariff, and this man says that he carries insurance in unlicensed insurance companies, and considers the proposed tax unjust in view of the high rates charged and the excessive profits made by the licensed companies. I suggest to the Minister of Finance that if he is going to impose a tax on insurance premiums it should be on all premiums and not only on those in unlicensed companies.


William Stevens Fielding: All the other companies, in one form or another, pay taxes. These people pay none, and we are trying to get something from them.
Resolution agreed to

3. Resolved, That it is expedient to amend section 12 of the said Act by str:king thereout subsections two anid four and substituting the following:-
(2) No person shall issue a cneque payable at or by a bank unless there is affixed thereto an adhesive stamp or unless there is Impressed thereon by means of a die a stamp of the value of, if the amount of money for which the cheque is issued
(i) does not exceed $50	two cents
(ii)	exceeds $50, for every $50 or
fraction thereof	two cents
but not to exceed in any case two dollars and every adhesive stamp affixed to a cheque be cancelled by the bank at which the cheque is payable at or before the time of payment.


William Stevens Fielding: I move that Resolution No. 3 be amended by adding after the paragraph respecting stamp tax on cheques a provision that:
The minister may make regulations under which there may be impressed on a cheque words indicating that stamps to the requisite value in respect thereof have been duly paid together with such further regulations as may be necessary, and to provide that only persons licensed by the minister shall be entitled to the benefit of such regulations.
It has been suggested that we take power to the Governor in Council to make regulation, not varying the amount of taxation but facilitating the method of collecting. I have no doubt something can be done along these lines to make the matter less objectionable than heretofore.


Henry Lumley Drayton: On what basis will that be worked out? Will it be on the basis of the amount of money checked out of each man's bank account?


William Stevens Fielding: I do not care to commit myself on the question. Any suggestions that may be offered will be fairly considered. We want the money; that is the foundation principle. But whatever can be done by way of regulations tc facilitate the collection of the money with the least possible inconvenience to business we shall be glad to do.


Henry Lumley Drayton: Has the minister thought over the question of having a flat rate again for cheques under a given amount, and a flat rate for larger sums?


William Stevens Fielding: I have thought of it.


Henry Lumley Drayton: It does seems to me that unless that course is adopted ;there is no reasonable way of collecting the tax. Obviously if a $500 cheque is to pay 20 cents, and a $5,000 cheque $2, a $50,000 cheque ought to pay $20. The reasons which have no doubt actuated my hon. friend in making the changes only go to

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show how unworkable these things are. In certain lines, such as the grain trade and the bond business, trading is done on such a small margin that this tax will seriously eat into the profits. But, after all, does not that merely show it is an illogical kind of tax? Would it not be better to make the tax five cents for cheques over $100? I think the treasury would get just as much money. But again we have the stamp tax brought in on receipts.


William Stevens Fielding: The next clause.


Henry Lumley Drayton: The receipt tax seems to be put on because my hon. friend has abandoned a graduated scale of duty on cheques above $5,000; because it is an inconvenient tax he substitutes a two cent tax on every receipt over $10. I would venture to suggest to my hon. friend that after all they do some things very well in Great Britain, that they have been years in the banking business where we have been days, that they thoroughly understand the necessities of revenue, and that they have found in connection with cheques- things which have to be written out so frequently-that it is impossible to make all these calculations, and therefore they have simply a flat tax of two cents. If there is to be a graduation, why not have it on the receipt rather than on the cheque? Should not the man who gives the receipt be much readier to pay on a higher scale than he who makes out the cheque? I know my hon. friend needs the money, but it seems to me he might adopt a very much better principle than this.


William Stevens Fielding: If we are dealing with principles, I am afraid the first principle to be considered is that we need the money, and I would like my hon. friend to read that principle into every one of these resolutions. Even if some tax seems to be absolutely illogical, it must be remembered that we still need the money. With regard to a flat rate, undoubtedly there would be an advantage, except in regard to the amount of revenue that would result from it. If we could make a large flat rate, say 10 cents, on every cheque, we would get a lot of money, possibly as much as we will get this way; but my own information is, speaking not of the big offices in Montreal, Toronto, Quebec, St. John and Halifax, but of the ordinary businesses in the smaller communities, that 60 or 70 per cent of the cheques are under $50. The small cheque that we all issue for household expenses and so on is still to pay a small
tax; we do not want to change that. But if you adopt the principle of a graduated scale without a limitation you get into trouble, as I found in actual communication with parties interested. There are very large transactions handled on a very small margin indeed; then there are some classes of transactions where as a matter of fact each transaction passes through two or three stages, necessitating two or three and sometimes three or four cheques; that is notably so, I am \old, in the bond business. If we had to have a graduated scale without limitation, that tax would be very oppressive on that class of business, indeed I think it would probably destroy it. I am frank to say that on a fuller investigation I came to the conclusion that a graduated tax without some limitation would be very disastrous to some lines of business. We cannot adopt a flat rate because it will not give us enough revenue unless we make it so high as to be oppressive on the small cheque givers. I do not want to interfere with cheques given by small householders for ordinary small transactions. So as respects a very large percentage of these cheques there is no change whatever in the tax. But if we go on without limitation I am afraid we would make the tax oppressive. We are prepared to admit the principle is illogical, but again I say: We need the money.


William Findlay Maclean: The main
grievance of our business men, as set out in the telegrams received to-day, is that they do want a flat tax if it can possibly be arranged, say a 5 cent tax on all cheques above $100. It might reduce the revenue, but it would give a certainty in the carrying on of business which a complicated proposition such as that now before the House does not give.


Henry Lumley Drayton: I do not see that my hon. friend the Minister of Finance covers the question of cheques drawn on provincial banks. Has the hon. gentleman considered that question?


William Stevens Fielding: No doubt some details will have to be worked out more carefully in the bill, and I will bear in mind my hon. friend's suggestion. There is no such thing as a provincial bank, except the very excellent bank of that name in the province of Quebec, which has that title. But using the word broadly, there is no such thing as a provincial bank; there cannot be.

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Henry Lumley Drayton: There are two.


William Stevens Fielding: My hon. friend is
wrong. He is a lawyer and I am not, and he knows that no province can do business under the name of a bank. Only a chartered bank authorized by the Parliament of Canada can use the word "bank", and if anybody in this country attempts to do business and put a sign over the door containing the word, "bank", he is liable to prosecution, even the Premier of a province would not be exempt.


Henry Lumley Drayton: I would point out that offices are maintained' by the Ontario government for the deposit of moneys which can be withdrawn by cheque. We do not call our postoffice a bank, but we carry on a savings bank business. I want to know whether the resolution applies to these provincial activities.


William Stevens Fielding: You cannot prevent a province receiving money from people who are willing to lend it. That is what the people are doing, they are lending money to the provinces, and we do not want to prevent that.


Henry Lumley Drayton: Certainly not.


William Stevens Fielding: Whether or not it is a wise policy for those provinces to do that is a matter of controversy upon which I offer no opinion. But I do not think we can prevent them receiving public money from those who want to lend it.


Henry Lumley Drayton: I agree absolutely that the provinces have that right. But when they cheque the money out will they have to put a stamp on the cheque? That is all I want to know.


William Stevens Fielding: They are not chartered banks.


Mr. GARDINER:: When we consider that provincial and municipal bodies will have to pay this tax on their cheques I am afraid it is going to be quite a burden on public business, and I would ask the minister to please take that matter into consideration.


William Stevens Fielding: It is a hardship to have to pay taxes, but we have to have the money.


James Dew Chaplin: Whether they are banks or not we have institutions in the province of Ontario that are soliciting deposits from the people. Must stamps be placed upon cheques that are made out for withdrawing money from those banks?


William Stevens Fielding: You cannot tax the Crown. If these are to be regarded as ordinary banks, the cheques would be liable to the tax. I would not like to give too definite an opinion; we will have to look into that closely. You cannot tax the Crown, but you may tax an individual who has money in the possession of the Crown. In the preparation of the bill, which will come before the House later, I will promise to have this matter looked into.


Robert Gardiner: I just want to enter a protest against the taxing of municipal and school board cheques, other than at the flat two-cent rate. The minister says we need the money; I admit we do need it. But he has exempted a lot of people who are in a position to pay and he is taking it out of these public institutions. If he would look over the whole field of available taxation I am sure he could find plenty of opportunity to impose taxes without taxing the cheques issued by these institutions.


William Stevens Fielding: They are taxed now; we are simply turning the screw a little more, that is all.


Mr. SPENCE:: I have a number of telegrams here with respect to this matter.


Thomas Wakem Caldwell: We all have them.


David Spence: I suggest that there
should be a specific tax on each cheque. If we employ the method proposed, a good deal of hardship will result. This looks to me like playing to the large interests; the man who issues cheques for very large sums will not pay any more than the man who issues cheques for $5,000. The man who issues 150 to 200 cheques a week will have to pay a very considerable sum as a result of this tax, and great loss and inconvenience will ensue. It will entail more work to keep track of the different denominations of stamps that will have to be used on the cheques, and from this point of view it would be much better to impose a straight tax of five or ten cents on cheques amounting to $5 and upward. It seems to me that the whole tendency is to get as much as possible out of the man of business, to take from him every dollar he makes. I know that is the case with me. I am interested in a business in connection with which 150 cheques a week are issued. We have no other way of paying the accounts to different growers all over the country. We have 200 accounts in connection with which we send men out to make

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collections every week; these men will have to carry a bunch of two-cent stamps in their pockets and put a stamp on every receipt. This tax is certainly an injury to the man who is carrying on business. I hope the time will soon come when this thing will stop; it is getting worse all the time.


Mr. STEWART (Hamilton) :: I am very much opposed to this tax, and I know that a large number of citizens take the same view. I suggest that the minister should allow this item to stand in order that ho may see whether some different method cannot be arrived at of getting the necessary revenue. Upon further consideration it may be found possible to devise some tax that will be more equitable in its effects I certainly hope the minister will consider the matter.


William Stevens Fielding: If it is any comfort to my hon. friends, I can tell them that there is not one of these proposed taxes concerning which I have not had sheaves of telegrams.


Mr. THOMPSON:: Take the case of the cheese and butter industry. When a man buys a shipment of butter, he pays stamp duty on the cheque he issues for it, which means a stamp for every $50. Then, the salesmen of the different companies in their transactions with their patrons, have to put a stamp on every cheque or draft amounting to $50 or a fraction thereof. So that on transactions in connection with cheese and butter this tax will be applied four or five times; in the end it comes out of the price of those products, and is therefore a hardship on the dairy farmer. For this reason I am opposed to the amendment.


Robert Gardiner: The minister says he has received many telegrams in respect to this tax. Has he received any telegrams protesting against the imposition of this tax on cheques amounting to more than $5,000?


William Stevens Fielding: I have had telegrams protesting against the stamp tax in any shape or form.


Robert Gardiner: Will the minister please answer the question more directly? Has he had telegrams protesting against the stamp tax on cheques exceeding $5,000?


William Stevens Fielding: Since that limitation was put on I have had representations along the line of what has been suggested to-night-that we had better have a flat tax.


Mr. BOIVIN:: Will this tax apply to cheques upon trust companies?


William Stevens Fielding: Yes.


Georges Henri Boivin: I notice that in the resolution the word " bank " only is used. There are a great many corporations in Canada and a great many persons who receive deposits from the general public, and I suggest that some words be added to cover that. It might read:
-or any person or corporation receiving deposits from the general public.


William Stevens Fielding: I think it will be found that the bill will cover all these points.


[Stage Direction]
Resolution agreed to.	[DOT]
7.	Resolved, That it is expedient to amend section 13 of the said Act by striking thereout subsections 2 and 3 and substituting the following :
[Stage Direction]
"(2) Every express company carrying on business in Canada shall before the issue of a money order or traveller's cheque affix thereto an adhesive stamp of the value of, if the
amount of money for which the money order or traveller's cheque is issued
(i) does not exceed $50	two cents
(ii)	exceeds $50, for every $50 or
fraction thereof	two cents
but not to exceed in any case two dollars and the company may charge the amount of the stamps so affixed to and collect the same from the purchaser of the order or cheque or from the payee thereof. The company shall before delivery of the order or cheque cancel the stamp by writing on or across the stamp initials or other identification of the company together with the date of the issue of the order or cheque."
"(3) No money order shall be issued under the provisions of the Post Office Act until there is affixed thereto or to the relative advice a postage stamp of the Value of, if the amount of money for which the money order is issued
(i) does not exceed $50	two cents
(ii)	exceeds $50, for every $50 or
fraction thereof	two cents
but not to exceed in any case two dollars, to be paid for by the purchaser of the order The postmaster or other officer of the Post Offioe Department Issuing the order shall cancel the stamp by impressing thereon when affixed the date stamp of the post office at which the order is issued."
"Any enactment founded on paragraphs three, four, five, six and seven of these resolutions shall come into force on the first day of July, one thousand nine hundred and twenty-two."
William Stevens Fielding: I want to move an amendment to the last paragraph of this resolution, to provide that any enactment founded on paragraphs three, four, five, six and seven of these resolutions shall come into force on the first day of August instead of the first day of July, so as to give a longer time for the making of the necessary arrangements consequent upon the new taxation.
Resolution, as amended, agreed to.
Special War Revenue Act

8.	Resolved, That it is expedient to amend the said Act by providing that no person shall give a receipt unless there is affixed thereto an adhesive stamp or unless theie is impressed thereon by means of a die a stamp of the value of two cents, which is to be cancelled by the person by whom the receipt is given before he delivers it out of his hands; that the expression "receipt" shall mean any note, memorandum or writing whereby any money amounting to $10 or upwards, or any bill of exchange or promissory note for money amounting to $10 or upwards is acknowledged or expressed to have been received, deposited or repaid or whereby any debt or demand or any part of a debt or demand of the amount of $10 or upwards is acknowledged to have been settled, satisfied or discharged or which signifies or imports any such acknowledgement and whether the same is or is not signed with the name of any person; and to provide that any person who violates any of the provisions of any enactment founded on this resolution or who refuses to give a receipt duly stamped, shall be liable to a penalty not exceeding $100 ; and to provide for certain exemptions from the foregoing; and to provide that any enactment founded on this resolution shall come into force on the first day of January, one thousand nine hundred and twenty-three.


Mr. SIMPSON:: I think the Minister of Finance should give some explanation before this resolution carries because it is one thing that is likely to have considerable ramifications. For instance, if a customer goes into a store and purchases goods exceeding $10 in value for which he pays cash, that cash is put into the cash register and a little ticket is given to him which is the receipt for that purchase. Will it be necessary to attach a stamp to that kind of a receipt where the purchase exceeds $10? Furthermore where a customer pays a bill exceeding $10, the bill is receipted and handed back to him; it is virtually a cash transaction. Will it be necessary in that case also to attach a stamp to the bill. Moreover, many orders are given to stores over the telephone. For example, a housewife will call up a grocery store and may leave an order, exceeding $10 in amount, asking that the goods be sent C.O.D. The delivery man comes round and delivers the goods, hands in the bill, and receives the money. Will it be necessary for that delivery man to carry stamps with him and attach a stamp to the bill in such a case when he receipts it?


William Stevens Fielding: I think, perhaps, that in the great majority of transactions in the retail business the amount is less than $10 and no receipt is given at all. We are applying the English act in this respect, but I confess that I have some hesitation in giving a definite answer to my hon. friend at the moment. However, we are not go-

ing to bring this act into operation until January 1, next, We will thus be able to investigate the English practice in the matter and to adapt the regulations we will make to conditions here so as to try them out, our chief object being to get money with the least possible embarrassment to business. The receipt stamp tax is a very old tax in England. We are adopting it in the words of the English act, and we will try to find cut what the English regulations are, and what the practice is, and conform to that as far as possible. I think there will be ample time in which these matters may be carefully considered and due consideration given to suggestions such as my hon. friend has offered.


Charles Marcil: In Paris a stamp tax is put on every receipt or invoice for goods purchased in a store, as all who have visited that city know. The purchaser pays the stamp.


Thomas Edward Simpson: I would suggest to the minister that instead of fixing the amount at $10 it be raised to $25, which will fully answer the purpose and cover the majority of transactions in a retail store.


William Stevens Fielding: I am afraid that would have a restrictive effect for revenue purposes.


[Stage Direction]
Resolution agreed to.
9.	Resolved, That suhseotion one of section sixteen A of the said Aot as enacted by chapter forty-six of the Statutes of 1918, be amended by adding thereto the following:
Providing that when matches are put up in parckages containing not more than sixty and not less than thirty matches each, the tax shall be payable at the rate of one-half of one cent for each package, and when matches are put up in packages containing less than thirty matches each, the tax shall be payable at the rate of one-fourth of one cent per package.
Richard Burpee Hanson: I would like to point out to the minister that under this resolution the matches used by the well-to-do will bear a lower rate rate of taxation than the matches used by the poor man. I do not think this is a proper method of distributing taxation. If there is to be any favour shown in this matter it ought to be to the poor man rather than to the rich.


William Stevens Fielding: This tax is certainly in favour of the small consumer because we provide a smaller rate in the case of a small package.


Richard Burpee Hanson: At first blush that might appear to be so but I call the attention of the minister to the fact that in the ordinary country districts, and small communi-

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ties these small packages of matches, as a rule, are not sold at all. There they buy a box of five hundred matches, and they do not use the safety matches, so-called, that the people in the cities use.


William Stevens Fielding: Owing to the tax being rather severe we are not now making, I am told, that class of matches in Canada, although they are used widely in the neighbouring States. No doubt under this resolution smaller packages of matches will be made.


[Stage Direction]
Resolution agreed to.
10.	Resolved, That section nineteen A of the said Act as enacted by chapter forty-six of the Statutes of 1918, be amended by adding thereto the following:
Provided that in computing the "duty paid value" of tea purchased in bond :: the United Kingdom the amount of the customs duty payable on tea for consumption in the United Kingdom shall not be included in the value of such tea for purposes of this Act
Resolution agreed to.
11.	Resolved, That Order in Council 2031, dated the thirteenth day of June, 1921, shall cease to have force or effect and that subsection one of section nineteen BBB of the said Act as enacted by chapter fifty of the Statutes of 1921, be struck out and the following substituted therefor:
(1) In addition to any duty or tax that may be payable under this section, or any other statute or law, there shall be imposed, levied and collected an excise tax of two and one-quarter per cent on sales and deliveries by Canadian manufacturers or producers and wholesalers or jobbers, and a tax of three and three-quarters per cent on the duty paid value of goods imported, but in respect of sales by manufacturers or producers, to retailers or consumers the excise tax payable shall be four and one-half per cent and on goods imported by retaiiers or consumers the excise tax payable shall be six per cent on the duty paid value.
Provided that in respect of lumber an excise tax of three per cent shall be imposed, levied and collected on sales and deliveries by the Canadian manufacturer and of four and one-half per cent on importations, and that no further excise tax shall be payable on re-aale.
Provided also that the taxes specified in this section shall not apply to sales or importations of:-
Bread; flour, oatmeal, rolled oats and corn-meal ; rolled wheat, buckwheat meal and pea meal; animals living; live poultry; meats and poultry, fresh; milk, including butter-milk; cream; butter; cheese; oleomargarine, margarine, butterine or other substitutes for butter; lard, lard compound and similar substances! made from animal or vegetable stearine or oils; eggs; vegetables, fruits, grains and seeds in their natural state; bran, shorts, middlings, alfalfa meal; oil cake, oil cake meal; grains mixed or crushed for cattle or poultry feed; hay; straw ; hops ; nursery stock; chicory, raw or green ; bees ; honey; sugar; molasses; salt; other farm produce sold by the individual farmer of his own production ; ice; fish and products thereof not canned or medicated; ores
of metals of all kinds; fuel of all kinds; gold and silver in ingots, blocks, bars, drops, sheets or plates unmanufactured; British and Canadian coin and foreign gold ooin; logs and round unmanufactured timber; fence posts, railroad ties, pulpwood, tan bark, and other articles the product of the forest when produced and sold by the individual settler or farmer; newspapers and quarterly, monthly and semi-monthly magazines and weekly literary papers unbound; materials for use only in the construction, equipment and repair of ships; ships licensed to engage in the Canadian coasting trade; calcium carbide; radium; electricity; gas manufactured from coal, calcium carb.de or oil for illuminating or heating purposes: materials for use solely in the manufacture of oleomargarine or any substitute for butter or lard; artificial limbs and parts thereof; artificial eyes; donations of clothing and books for charitable purposes ; settlers' effects; War Veterans' badges; memorials or monuments erected in memory of soldiers who fell in the Great War; articles imported for the use of the Governor General [DOT] articles imported for the persona! or official use of Consuls General who are natives or citizens of the country they represent and who are engaged in any other business or profession; bibles, missals, prayer-books, psalm and hymn-books, religious tracts, and Sunday school lesson pictures; articles admitted to free entry under Customs Tariff item 682; manila fibre for use only in the manufactuie of rope not exceeding one and one-half inches in circumference for the fisheries; boats bona fide purchased by individual fisherman fo [DOT] their own personal use in the fisheries; articles and materials used in the manufacture of boats bona fide built for individual fishermen for their own personal use in the fisheries; fibre for use only in the manufacture of binder twine [DOT] job printed matter produced and sold by printers or firms, whose sales of job printing do not exceed three thousand dollars per annum; fertilizers; dried beet pulp, and the Governor in Council shall have power to add to the foregoing list of articles exempted from the excise tax on sales, as he may deem it expedient or necessary to exempt from the said excise taxes Provided further that the excise taxes specified in this section shall not be- payable on goods exported, or on sales of gocds made to the_ order of each individual customer by a business which sells exclusively by retail * and provided that the tax as specifle-d in this section shall be payable on sales of goods manufactured for stock by merchants who sell exclusively by retail.
arawoaok may be granted of ninety-nine per cent of the said taxes paid on materials used wrought into or attached fo articles exported, provided thait payment of a specific sum in lieu of such drawback may be authorized by the Governor in Council In cases where specific rates of drawback of Customs duties are granted under the provisions of section 288 of the Customs Act.
Henry Herbert Stevens: I rise to make two requests of the Minister of Finance. He will notice among the exemptions that there are a large number of articles, for instance, milk, including buttermilk, cream, etc. I was going to ask the minister if he would include there preserved milk, powdered milk, and condensed milk because it

seems to me there is no reason why, for instance, oleomargarine and butterine, which are substitutes for butter, lard, and so on, should be exempted and not condensed milk, an article of food of very great value. On the next page among the exemptions there is an exemption applying to "job printed matter produced and sold by printers or firms whose sales of job printing do not exceed three thousand dollars per annum." Let me point out to the minister what I think is the weakness of this particular provision. Here is a job printer doing, let us say, a business of i$3,000. Across the street there is another job printer doing a business of four, five, or six thousand dollars; one is taxed and the other is not. Or if the job printer was only doing, say, a business of $3,500 he is taxed while the other man who is doing a business just under $3,000 is not taxed. I do not think there is-what shall I say?-any sound reason in logic in this method of exemption regarding the printing business. I submit that condensed milk should foe added to the exemptions, and I would also suggest that the provision regarding job printers, which is a comparatively small matter, should be struck out all together.


Mr. WOODS:: I would like to call attention to the latter part of clause 1, which reads:
But in respect of sales by manufacturers or producers to retailers or consumers, the excise tax payable shall he 4$ per cenit, and on goods imported by retailers or oonsumeis, the excise tax payable shall be 6 per cent on the duty paid value.
It looks to me that there is an added 11 per cent customs duty, in favour of the manufacturer. The retailer or the consumer, if he goes direct to the manufacturer in this country, and buys his goods, pays 41 per cent of an excise tax on those goods. It all comes off the consumer. If that same retailer or consumer goes to a foreign country, buys goods and brings them to this country, he is taxed 6 per cent, he being a retailer or consumer. So that, in buying goods from a foreign country the consumer is taxed 6 per cent, whereas if he buys from the home manufacturer he is taxed 41 per cent.


William Stevens Fielding: The manufacturer
would have to buy his raw material. In this resolution we have not changed the machinery of the sales tax at all. I assume it was carefully worked out in due proportion by my predecessor. At all events, all we propose here is to get $1.50 instead of

$1.00. We have not changed the machinery at all. These are the figures which we found in the act of a year ago, and, I think, they were worked out with a due sense of proportion. In regard to the resolution generally, I would be very glad to have the discussion proceed for a few minutes, so that we may have the opinion of the committee. I do not intend to ask judgment on this to-night. Representations have been made in regard to it, and I want to make a further study of it. We can all, from the point of view of our own community, suggest the exemption of something, but once you commence with exemption, and you open the door, you get into trouble in nearly every item. One gentleman says canned milk should be made free because fresh milk is free, and another member suggests something else should he made free, and so on. Each one of these things may have some relation to other things, and if you look at it from the point of view of one particular thing that interests your own community we will have all kinds of difficulty. I do not wish the clause to be finally passed to-night, but I will be glad to have the discussion, so that we may ascertain the minds of the committee.


Mr. STANSELL:: In support of the statement made by the hon. member from Centre Vancouver (Mr. Stevens), I may say that milk and all products of milk, except condensed milk, are exempted from this tax. Most of you who know anything of the condensed or canned milk industry know that since the war they have been labouring under very severe difficulties. Their markets have been greatly restricted, so much so that two of the most important and best equipped factories in Canada, one in Tillsonburg, Ontario, and one in Huntingdon, Quebec, have closed up and, I believe dismantled. They were last year subject to a sales tax which, in the opinion of the manufacturers under existing conditions, was as heavy as could possibly he borne by the industry. I would like to suggest to the minister that, if possible, this matter should be taken into consideration, and, if it is not decided to relieve the industry from taxation, that they should, at lest, not be taxed further than they have been in the past. It has been explained to me by some gentlemen with whom I am acquainted, and who are engaged in this business, that they have been able to absorb most of that tax, hut not all of it.

Special War Revenue Act
Under present market conditions, it would be practically impossible to pass it on to the consumer; therefore, the whole tax falls on the farmer producing the milk for the factory while the other farmer, who produces the milk for ordinary sale, goes free of tax. For this reason I suggest respectfully that this tax should be on the basis of last year if the Finance Minister is not able to remove it altogether.


Andrew Ross McMaster: I wish to place before the minister a question of general interest in connection with the sales tax. Looking at the matter from the point of view of revenue, I apprehend that the imposition of sales taxes, sometimes 3f per cent and sometimes 6 per cent, on top of very high import duties, may have a result upon the revenue the reverse of beneficial. It may mean that the aggregate duty imposed on the goods coming in may be raised so high that it will keep the goods out, if that is not a Hibernianism. There is another point I wish to bring before the Committee. These sales taxes are based upon the duty paid value of the article, not the invoice value of the article; therefore, the higher the duty the higher the sales tax. The sales tax of 6 per cent on produce coming in from a foreign manufacturer directly to a Canadian retailer, on goods which carry a customs duty of 35 per cent, is not a sales tax of 6 per cent, but a sales tax of over 8 per cent. I would like the minister, if he could, to provide that, after the duty borne by goods coming into the country reaches a certain level, the sales tax be not imposed at all. That, I think, would be sound legislation. If the minister does not feel that he can do that, I would urge upon him the advisability of having the sales tax estimated, not upon the duty paid value of the article, but upon the invoice value of the article, because, I think, it is something of a compound duty, the higher the duty the higher the sales tax, and if you run up the duties too high where, I think, the revenue will suffer. I quite realize the difficulties with which the minister is faced in his desire not to open the door.
I wish to refer now to the question of flour. That is one of the first articles mentioned in this list as being free from sales tax. There has been in Montreal, for two generations, what used to be called a small milling partnership, now a small milling company, who make and put upon the market a brand of self-raising flour.
It is made of wheat. There is restored to the wheat a certain amount of chemical, which modern milling processes take frqm it, and this mixture is used by the poorer people. It is put on the market in small packages. It is not a fancy article. It competes with ordinary flour, and has certain baking powder or chemical ingredients in it. I hope that the minister will be able to regard that as a staple article, such as it is, and that he will have no objection to adding to the definition of flour, the words "including self-raising wheat flour". There has been a doubt in the Customs Board whether this flour faille under the general terms of flour or not. I should be glad if this could be put beyond all question.


Mr. PUTNAM:: If we may revert for a moment to the question of the proposed increased tax upon condensed milk, I am sorry that I have to find myself, even on one item of the budget of the Minister of Finance (Mr. Fielding) in disagreement therewith, when it falls upon the very day when I, in a humble manner, was helping with pride and great joy to celebrate the fortieth anniversary of the entry of the Minister of Finance into public life in this country. I am sure everybody in the House joins in the spirit of congratulation that we, of his own particular side, extend to him to-day.
As regards this item, I have listened to so many arguments and the answers to them, that I am going to make my remarks very brief because, while I could adduce a variety of arguments which, I think, are sound, in opposition to this proposed increase, I know, on the other hand, that they would be met by the other side of the question in the same manner as has fallen to the fate of many similar arguments adduced by hon. gentlemen all around me this evening. I have, I may say, submitted to the Minister of Finance a brief upon this, and I took the liberty of placing that same brief before a majority, at least, of his colleagues. Therefore it is that my remarks of to-night shall not be lengthy. I should like to emphasize the fact that when you come to tax condensed milk, you are taxing a staple food for children and a food which is becoming more and more of popular use amongst the children of the poor. It is wonderful how nearly those who manufacture condensed milk can approximate the real milk of the cow; they can come to within less than one per cent



Special War Revenue Act
of the actual natural milk. There is some little difference after all, I daresay, in the benefit of it. It is said that scientists can make a grain of wheat, to all intents, appearances and human analysis, an exact grain of wheat; but if you put it into the ground, of course it will not grow. While I admit that there is possibly some natural benefit in the natural cow's milk over condensed milk, it is a fact that condensed milk can be reduced and diluted until, in appearance and in substance, it is within less than one per cent of real milk. It comes a great deal cheaper than real milk, and it goes into a great many localities where it is not feasible to keep a cow. It is a fact that in the larger cities this is becoming more and more a means of promoting the philanthropic work of child welfare. Our larger cities in Canada are as yet few, and yon may contend that the question is in an academic stage as yet; but even some of the Canadian cities and the larger cities of the United States are teaching us the possibilities of this very use of condensed milk as an indispensible factor in the life of the young child. When we come to that consideration we are on delicate ground. The Minister of Finance said a few moments ago that as good an argument could be made against the taxing of canned fish as against the taxing of condensed milk. But with due respect, I must urge that milk has a unique place in the sense that it is a food for children. Meat for strong men, says Scripture, and milk for the babes, and it is a food for which there is, I believe, scarcely any substitute when you come to the case of small children.
An hon. member on the other side mentioned that whilst trying to cope with the outbreak of a certain disease he found a scarcity of blankets amongst the poor; but even in that case you may get other woollen goods; you may get even old clothes, and if you get the proper degree of weight, and the proper heat, you may have a substitute for blankets, a clumsy and inconvenient one, I admit. But when you come to the question of milk for the children of the poor man, you cannot get that substitute. In addition to the considerations which I have already in documentary form addressed to the Minister of Finance, in addition to the propaganda which, I know, he has already received and which he is carefully digesting, from various sources on this very question, I would, as a final word, leave with him and his colleagues this question of the welfare of the children

of the poor. I am in hope that the mill of human kindness will prompt them to set that they should not increase the present tax upon the human kindness of milk.


Donald Sutherland: cent, as well as the Inland Revenue tax, while all substitutes for dairy products and for lard are being exempted. I can scarcely credit any government or any minister of finance advocating a policy of that kind. The minister may say that the present system was in effect last year. That is true, but it does not justify its continuance. And it was not in effect in 1920. I fully expected that these articles would have been exempted along with the others last year, and I was under the impression that the customs authorities would regard this commodity as milk. The conditions to which I have referred are so serious to-day that the doors of the factories are being closed, and the whole industry seems to me to be in jeopardy. I therefore move that the taxes proposed in this section shall not apply to sales or importations of condensed milk, milk powder or evaporated milk.


William Stevens Fielding: I regret that the hon. member has deemed it necessary to move this amendment. I had already intimated that while I invited discussion this evening it was not my intention to ask for a final vote on this question. I propose to hold it. I am not sure that my hon. friend has advanced the cause he has in mind by his speech. His zeal is great, but he did not display it when his friends imposed the tax. I regret that he did not bring his enthusiasm and energy to bear upon it at that time. We found the tax and we are adhering to it. I have intimated that I am prepared to let the matter stand, but since my hon. friend is pressing the question, I presume we shall have to deal with it.


Donald Sutherland: I have evidently misunderstood the minister, but in view of the statement the minister has made I will gladly withdraw the amendment for the present.


William Stevens Fielding: I do not want the resolution to finally pass; there are other phases of the matter which will be discussed.


Donald Sutherland: I pointed out, also, Mr. Chairman, that I did challenge this matter last year.


William Stevens Fielding: With the same energy that he has displayed to-night?


Donald Sutherland: I was assured that the matter was to 'be given consideration, just as we are assured to-night.


William Stevens Fielding: Then if I can relieve my hon. friend by promising consideration with the same result, I suppose he will not complain.


Mr. NEILL:: If, as I understand, the hon. Minister of Finance is open to accept a suggestion for another item to be added to the exemptions from the sales tax, I should like to refer to what I have already briefly mentioned to him in writing, that is, stumping powder, fuses and caps when used by farmers in clearing land', and more particularly soldier-farmer settlers. In British Columbia the need for cheap powder is so great that the provincial government make a special arrangement with the powder companies to let settlers get it at wholesale prices. This tax presses somewhat heavily on farmers who are clearing their land, because stumping powder has gone up in price almost 100 per cent beyond what it was before the war. The applications I have, come almost entirely from soldiei settlers, men struggling to make homes on bush land. The cost of clearing this land is extremely high, running from $300 to $450 an acre, and when cleared it is only second-rate land. The timber is heavy Douglas fir, very different from the deciduous trees you have here in Ontario, where if you cut the bush down you can kick the stumps out ten years later. 1 have seen stumps blown out in British Columbia from which the trunks had been cut down sixty-five years ago, and the roots had not rotted more than a quarter of an inch, and it took as much powder practically as to blow up green stumps. This will not be a precedent because it will apply to only a very few people. And, further, the exemption will not be abused, because there is a system in vogue now, which the hon. Minister of Public Works will no doubt be familiar with, by which men who get powder under these conditions have to be affiliated with farmers-institutes, and have to produce a certificate that they are bona fide farmers and will not use the powder for any other purpose than clearing land.
Of course, we must raise money and make sacrifices, and in order to make up for the loss of revenue by inserting the exemptions I have suggested, for my part I would cheerfully agree, as I think would a number of other hon. members here, to the Minister of Finance striking out from these exemptions oleomargarine and its byproducts. We in this quarter of the House would even be willing to see taxes imposed

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on the vegetable oils which are now imported free in order to manufacture this article that I have already designated.
Another point I would like to refer to is this. I see that the sales tax varies from 21 per cent to. 31 per cent. Many of these raxes have to be collected by small retail stores where they do not keep actuaries to make out the sales slips, and I would suggest to the minister that a not too well educated clerk who in the rush of business is called upon to figure what 31 per cent on, say, $19.64 amounts to is likely to make a wrong calculation. If I might suggest, it seems to me that the returns would probably average up much the same if the minister made some of the duties 4 per cent and others 2 per cent, and it would be much easier for the general retailer to calculate and perhaps more convenient to the general public.


Mr. McQUARRIE:: I wish to support hon. members who have asked that powdered, condensed, and evaporated milk be placed on the list of exemptions. We have had a number of reasons given to-night why these articles should be exempted, and with very many of those reasons I agree. I hope the minister after further consideration will decide to grant the exemption.


William Charles Good: I endorse very heartily the sentiments expressed by the hon. member for Colchester in respect to condensed and powdered milk. When the matter was first brought to my attention, I concluded that the omission was an oversight, and I was rather surprised when told that that might not be the case. Certainly the argument in favour of including condensed and powdered milk in the list of exemptions is overwhelming, and I hope the minister will adopt the suggestion which apparently is favourably entertained in all quarters of the House.


Edmond Baird Ryckman: When the minister is giving further consideration to this resolution I would ask him to take into account what seems to be a novelty and will perhaps work out unfairly in a way that is not intended. Section 1 provides that wholesalers or jobbers may sell to retailers and consumers at a duty of 24 per cent, but if manufacturers or producers sell to retailers and consumers the duty is 4i per cent, or a difference of 24 per cent, which, as the minister well knows, would be a handsome profit for the manufacturer and wholesaler. But certain manufacturers and wholesalers sell direct to retailers
and consumers, and I submit that the channel of business, so well known and so often followed, should not be disturbed to the extent of giving the jobber a lead of 24 per cent on the turnover. I do not think the manufacturer or wholesaler selling to the retailer should be penalized to that extent.


William Stevens Fielding: I can assure my hon. friend that it is not our purpose to disturb the arrangement at all. As I pointed out, these rates were in the act as it now stands, and I have no doubt they were considered carefully and balanced with due proportion one to the other. We have adopted the machinery, but we have tried to get more money. If the machinery is bad, I do not say that is a reason to continue it, but on the whole I think these rates were selected with due regard one item to the other, and we have simply increased the tax 50 per cent.


Edmond Baird Ryckman: Before the tax was as high as it is now it was increased by 50 per cent, and the consumer absorbed it; but when it is increased by another 50 per cent the manufacturer cannot get the consumer to absorb the further increase.


Mr. SPEARMAN:: I should like to say a word on the resolution as a whole from a slightly different angle; that is, in regard to the sales tax. I am not going to attack it because I think the principle was settled when the budget was passed. I recognize the need for money, and therefore I do not wish to embarrass the Government. But there is one point of view which I think should be given attention. The sales tax or excise tax, whichever it may be called, when added to the duty paid on imported articles reaches a height which we consider at least is unnecessary from a protective standpoint. I would like to see the sales tax apply only, in those cases where the duty has reached the point at which it is as high as necessary for protection purposes, to the home produced article, thus becoming an excise tax pure and simple, a tax which would in the nature of things be absorbed by the manufacturer in all cases where he was utilizing to the full the protection afforded him by the tariff. If it is in order, I move that resolution No. 11 be amended by inserting after the second proviso the following words:
Provided also that the taxes specified in this section shall not apply to importations of any articles which are dutiable under the general tariff at a rate of 30 per cent or a rate exceeding 30 per cent.

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I had thought of setting the rate lower than that but I have set it fairly high, for two reasons. One reason was that by fixing it at that amount it does not apply particularly to articles used by agriculturists. I want to take a broader view of it. The amendment would apply not to articles exclusively used by farmers, but to articles in common use in every household throughout the country-clothing, boots, shoes, and so on. I believe, rightly or wrongly, that when a manufacturing industry is protected to the extent of 30 per cent or over, it received sufficient protection to enable it to afford to absorb a small extra tax on these internal sales. The minister may not accept that principle; I am sure it will not be accepted by some hon. members of this House. But it is exactly in line with the ideas which I have been brought up to believe in-ideas which I think the minister would believe if he realized that it was possible to work them out. This matter has been thoroughly gone into during the budget debate; I leave it with the minister and ask him to give it consideration.


Donald Sutherland: May I ask why the hon. member (Mr. Speakman) confines these exemptions to articles on which a duty of 30 per cent and over is collected?
I would like to direct his attention to some things that are exempted in the provision that is now before us. Last year we imported into this country butter to the extent of 6,078,882 pounds. These importations from the United States, New Zealand, and elsewhere are to be exempt under this resolution; they would be exempt also under the motion of my hon. friend. Last year w'e imported from the United States
1,332,000	pounds of butter, all of which is to be exempt from any tax except that provided under the customs tariff, which is 4 cents per pound. Now, the Finance Minister himself, when the motion of the hon. member for Comox-Alberni (Mr. Neill) regarding oleomargarine was before the House, recognized the fact that Canada is a great dairying country. He said:
1 have always understood that Canada was a dairying country. I have been down in the eastern townships of Quebec and have heard eloquent speakers declare that there was no finer agricultural, grazing, or dairying country in the wide world than those eastern townships of the province of Quebec.
I agree with the minister's statement in that regard. But we have been subjected to the competition of countries in which labour is cheap. We have been using

milking machines in an effort to overcome this labour difficulty. Were they placed on the free list? They were not, though they are not manufactured in Canada. There is a substantial tariff duty on these machines.
I believe in having a reasonable duty on all things we can manufacture here, but it is unfair to permit dairy products to come in untaxed from foreign coun-11 p.m. tries under present conditions when thousands of people are out of employment in our country. We need the revenue; yet we are providing work for people in foreign countries by importing their dairy products. In fact, we are doing everything in our power not to assist but to retard those who are struggling under the handicaps which now exist.


Thomas George McBride: I would like to correct one statement made by the hon. member. He says milking machines are not made in Canada. Perhaps he thinks British Columbia is not in Canada, but I may tell him they are made in that province.


Donald Sutherland: I was not aware of that. Last year we imported 4,630,000 pounds of oleomargarine. Why should this product not be subject to a tax of this kind? These are some of the inconsistencies we find in the tariff all the way through. It appears to me that our present customs tariff was made with a hatchet and a pitchfork; they struck out something here and something there wherever it suited them or wherever pressure was brought to bear. The Minister of Finance illustrated that this afternoon pointing out	that the	druggists were very insistent in the presentation of their claims, and that the doctors were not pressing theirs and did not receive consideration. If the tariff was ever suited to the conditions of this country, it is by these methods being made unsuitable. The exemptions included in the resolutions now before the committee are most injurious to this branch of agriculture and when I say agriculture I do not mean growing of grain but of agriculture in a real sense. The carrying on of agriculture as it should be carried on is the only way to maintain the fertility v/hich has for centuries been stored up in the soil and which in some sections of the country was being rapidly depleted.
I wish to call the minister's attention also to the matter of tile for drainage purposes. For six or eight years little or no draining has been done, on account of

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the scarcity of labour. I would ask the minister to consider the advisability of adding to this list of exemptions tile used for reclaiming wet lands. There is an abundance of labour to be had now, but the price of the material is very high and if you impose another tax you make the difficulty all the greater. It is possible that the minister's attention may not have been called to this matter, and I suggest that he consider it. But it is about the dairy products that I am particularly anxious, because if the tax goes into effect as proposed, millions of dollars will be lost to this country and you will defeat the object in view and not obtain the revenue you expect.


Alfred Speakman: May I ask the hon. member to repeat his question? I have lost the gist of it.	_


William Stevens Fielding: The hon. member for Red Deer (Mr. Speakman) was kind enough to send me a copy of his amendment in advance, and I have therefore had opportunity to consider it. From his viewpoint I can quite understand the arguments he advances, I think, however, I have to take exception to the amendment, for two reasons-certainly for one. The main objection is based on the question of the need for money. My hon. friend would exempt from the sales tax all articles imported on which the duty is 30 per cent or more. Now unfortunately, as many are probably aware, there is a very large part of our imports which bears a duty of 30 per cent or more-a very large part-and if you are going to exempt all these from the sales tax you are going to make a very big hole in the budget; you are going to exempt all spirits, wines, cigars and tobaccos of all shapes and forms. All these things are dutiable at a rate which works out at more than 30 per cent and therefore you are going to exempt from the sales tax a wide range of goods and, from a revenue point of view only, that is to my mind regrettable. Therefore I could not support my hon. friend's motion. There is another fact of which some hon. members may not have thought. My hon. friend from Red Deer has thought of it; he wants to exempt imported goods but not to exempt the corresponding articles made at home. His purpose is to deprive the home industry of that degree of protection which it may have. That opens up the pretty broad question of whether or not there is too much protection. However, I dwell with greater emphasis on the revenue side of
the subject. I think if there is going to be this large exemption from the sales tax we will have to find some other scheme of getting additional revenues because it will be a very serious drawback to our programme.


Mr. STEWART (Leeds):: I want to add a word to the volume of protest and argument that has been so well presented for the consideration of the Finance Minister in connection with the sales tax and excise tax on powdered milk, condensed milk and evaporated milk. I do that because there is an industry of that character in the constituency which I have the honour to represent, and I base my very brief argument on the very long list of articles which have been exempted by the present resolution. I submit that the principle underlying this long list of exemptions applies almost irre-sistably to the product which I have mentioned. In the imposition of a tax one has to consider who pays that tax, whether it is the consumer or the producer. In this particular case I think it makes little difference because if the producer of milk pays the tax then, I think, we all agree that under existing conditions it is a hardship. On the other hand, if it is the consumer who pays this tax, then when we recall the fact that this article is consumed by children, that it is consumed by the people in outlying districts where they cannot get fresh milk, that it is consumed largely by the poor in cities, I think the argument is equally strong against asking the consumer to pay this tax. I hope the Finance Minister will not find himself hampered or bound by the fact that this tax was imposed by the late government. Surely that should not be very embarrassing to him, but in any event the conditions then were altogether different. At that time this product was marketed very largely in a foreign country and perhaps there may have been a very good reason why, under those conditions, a sales tax should be imposed. Such is not the case to-day. The producers of these products are forced to seek a market in our own country and they have large stocks on hand which they experience great difficulty in finding a sale for. I submit, therefore, that the conditions under which the tax was first imposed do not apply at the present time. For these reasons, briefly stated, I hope the Finance Minister will be able to exempt this product from the sales tax and from the excise tax.
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Thomas Edward Simpson: I have one suggestion to make before this resolution is adopted. We have heard, particularly from hon. gentlemen to my left the argument that the increase in the sales tax is going to bear pretty heavily on the families of the working men in this country. With that I agree, but I cannot agree with the proposal my hon. friend from Red Deer (Mr. Speak-man) has advanced to remedy that. I want to offer the suggestion to the Finance Minister that he exempt from the sales tax a few of the articles worn by working men. I would suggest that he exempt workmen's overalls, men's work shirts and smocks, and workmen's boots and shoes- that is, boots and shoes of the class designated in the customs tariff as " pegged or wire fastened with unstitched soles ",


Mr. MARTELL:: Is my hon. friend in favour of taking the tariff off these particular things?


Thomas Edward Simpson: We are dealing with the sales tax just now. My hon. friend has not declared his own position on this question yet, and probably he had better do that before asking where I stand.


Lewis Herbert Martell: I am in favour of the resolutions.


Thomas Edward Simpson: I do not care to elaborate the matter further. I make this suggestion in the hope the minister will give it careful consideration and see if he cannot add the articles I have mentioned to the exempted list.


Lincoln Henry Jelliff: I am very much in sympathy with what was said by the last speaker. I hold in my hand a petition from a co-operative society of working men in my district. This co-operative association was formed by men who constitute the miners and other labour unions of the Lethbridge constituency, and they oppose this increase in the sales tax very strongly just as they strongly opposed the sales tax as it appeared in previous budgets. I have had the feeling ever since the sales tax was initiated in this country that it was an unjust tax, and that it laid a burden upon the shoulders of those Who are least able to bear it. I am glad that my hon. friend from West Algoma (Mr. Simpson) made the suggestion to the minister that he place on the free list in this budget a number of the articles of clothing which the workingmen of this country must use in their everyday labour. I do not believe that I could present the case for this co-operative

society of labouring men in any better way than reading the petition they have forwarded, and have it placed on Hansard.


Some hon. MEMBERS:: Dispense.


Lincoln Henry Jelliff: I would like to read a part of it anyway. The petition reads:
Whereas it is proposed by the federal government to increase the sale tax by one half the percentage now levied.
And whereas taxation based on the purchases of the consumers is oppressive and unjust because
(1)	It has no regard to the adequacy of the income of the purchaser to bear the burden.
(2)	It virtually involves discrimination against the citizen who is under the necessity of providing for the maintenance of a large family in favour of people with no families which are self-supporting, thereby increasing the burden of people who are not only least able to carry them but are contributing to the welfare of the state.
They make two or three other representations, the reading of which I will dispense with, at the request of hon. members, but I wish to refer to the correctness of the principles contained in this petition. I do not believe in the principle of this sales tax, nor do I believe it is going to secure for him the results he desires. I would not wish to see the minister embarrassed in his effort to raise the necessary revenue to meet the needs of the country, but at the same time I entertain the fear that the increase in this sales tax is going to result in a decrease, rather than an increase, of the revenue and, for that reason, I protest against it. I am going to send this resolution over to the minister, in the hope it will have his careful consideration.
Item stands.
12. Resolved, That there shall be imposed, levied and collected upon goods enumerated in schedule I to this Part, when such goods are imported into Canada or taken out of warehouse on and after the twenty-fourth day of May, one thousand nine hundred and twenty-two, on the duty paid value in addition to any duty or tax that may be payable under The Special War Revenue Act, 1915, or any other statute or law, the rate of excise tax set opposite to each item in said schedule I; and there shall also be imposed, levied and collected when any such goods are manufactured in Canada and sold on and after the twenty-fourth day of May, one thousand nine hundred and twenty-two, in addition to any duty or tax that may be payable under The Special War Revenue Act, 1915, or any other statute or law the rate of excise tax set opposite to each item in said schedule I on the price for which the same is sold.
There shall be imposed, levied and collected upon all goods enumerated in schedule II to this Part, when the goods are imported into Canada or taken out of warehouse or when any such goods are manufactured in Canada and sold on and after the twenty-fourth day of May,

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one thousand nine hundred and twenty-two, in addition to any duty or tax that may be payable under The Special War Revenue Act, 1915, or any other statute or law the rate of excise tax set opposite to each item in said schedule II.
Where the goods are Imported such excise tax shall be paid by the importer and where the goods are manufactured and sold in Chnada such excise tax shall be paid by the manufacturer ; provided that if an automobile is, on the twenty-fourth day of May, one thousand nine hundred and twenty-two, in the handls of a dealer and not sold to a bona fide user the tax shall be paid by such dealer when such automobile is sold.
The Minister may require every manufacturer to take out an annual license for the purposes aforesaid, and may prescribe a fee therefor, not exceeding two dollars, and the penalty for neglect or refusal shall be a sum not exceeding one thousand dollars.
Provided that such excise tax shall not be payable when such goods are manufactured for export, under regulations prescribed by the Minister of Customs and Excise.


William Charles Good: This is the resolution that
deals with the tax on automobiles. That being so, I wish to speak to it.


William Stevens Fielding: That comes later.


William Charles Good: I understand there is a reference in this resolution, in schedule 1, to automobiles. If the schedule is to be taken up again, I will reserve my remarks, but if the schedule is part of this resolution, I wish to make my observations now.


William Stevens Fielding: There is no reason
why the hon. member should not proceed now.


William Charles Good: The hon. Minister of Finance (Mr. Fielding) has stated to-night that we need money. He spoke of putting on the screws a little harder to get more money.
Now, there is, I understand, a duty on automobiles of 35 per cent, and I wish to deal with the situation as revealed in connection with the Canadian Ford Company. According tq my best 'information, the difference between the Canadian and the United States prices of Ford cars last year was about $263, on the Sedan car, $175 on the touring car, and other smaller differences on some of the other kinds. I think it is admitted that the Canadian Ford touring car is a little better than the United States Ford. At all events, it costs $30 more in the city of Toronto, and we may assume that it is a little better car. If I am to be permitted to speak, I desire to take the opportunity, but if I am to be interrupted by calls of "Question," I will sit down. I do not wish to speak, if I am not within the rules of the House, but if I have the privilege of speaking, I wish to speak without interruption. I
think it is a fair assumption, so far as I have information, that the difference between the United States price of a Ford car and the Canadian price is $125, and that is solely due to the protective duty which is imposed on United States cars. As for the Canadian Ford Company, in the years 1920 and 1921, their output was over 100,000 cars. I have here also a statement issued by the same company, to the effect that one-third of the Canadian production was export business and two-thirds home business. If we deduct the one-third export business, we find there were sold by the Canadian Ford Company in Canada in the years 1920 and 1921, about 70,000 ears, and 70,000 cars at $125 per car brings $8,750,000, which the Canadian purchasers of Ford cars put into the pockets of the Canadian Ford Company.


Mr. BELAND:: How does the hon. member make that out?


William Charles Good: I shall repeat the argument. There were 70,000 cars sold to Canadian consumers by the Canadian Ford Company in these two years, at a difference in price due to the tariff of not less than $125 per car, which is a very conservative estimate-


James Dew Chaplin: How do you figure at
$125 per car?


William Charles Good: I quoted the difference
between the (Canadian and the United States prices, and I stated that there was a difference of about $263 on the Ford Sedan car, and $175 on the touring car, and I think, after making all necessary allowance for some slight difference in the cars, that $125 per car is a very conservative estimate of the difference in price or the excess price which the Ford Company is able to charge the Canadian purchasers of cars, by reason of the tariff. That amounts, on the 70,000 cars, to about $8,750,000.


Henry Herbert Stevens: Does the hon. member
suggest that that is "sort of illegal and unfair profit secured by this company?


William Charles Good: I do not suggest anything
of the sort. They take advantage of a protective tariff which we have given them. I am not accusing them of doing anything illegal.


Henry Herbert Stevens: Is it an excess profit?


William Charles Good: It is certainly a larger
profit than they would get if the tariff were not there. In that respect, it is an excess profit.
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Henry Herbert Stevens: Has the hon. member
made 'any allowances for the very large amount of taxes paid to the treasury by the company, whereas imported cars pay nothing except the duty?


William Charles Good: I think I have made all
necessary allowances for the duty on raw material which enters into these cars. I think it is a very small matter, so far as that is concerned, and, in reducing the price from $175 to $125, I think I have made all necessary allowances. If not, there might be some further small allowance to be made, but it would not alter the nature of the argument one whit.


James Dew Chaplin: I am informed that, in the matter of' upholstering and tops alone, the difference in the actual Cost price between the American car and the Canadian car is more than double the amount that the hon. member has allowed for al! the difference.


William Charles Good: I cannot accept the statement at all from the information that 1 have received. I have, in my hand, as supplementary to the statements that I have made, a table giving the output of the Canadian Ford Company from 1904 to last year, starting out with 117 ears in 1904-1905, and running up to 46,000 cars in 1920-1921. I shall not read the table; but in addition to the cars mentioned therein, in the year 1919-1920, 2,335 tractors were produced, and in the year 19201921, 3,063 tractors were turned out. 1 want to submit to the committee some other figures concerning the Canadian Ford Company. Here is a table showing how the original investment of $125,000 in 1904, grew in the years between 1904-1905 and 1921. Here are the dividends that were
paid by the	Canadian Ford	Company inthose years:	Cash	Bonus stockYear	dividend	distribution1905	... $ 7,488	1908 	1909	1910	1911	$ 625,0001912	250,0001914	1915	. .. 1,100,000	1916	6,000,0001917	. .. 350,000	1918	1919	. . . 350,000	1920	700.000 700.000 700.000 . .. 1,050,000	1921	1,050,000	
Making in that period total cash divid. ends realized of $7,951,238 and a' distribution of bonus stock of $6,875,000. So the Ford Company has certainly done well. It is not one of those concerns spoken of today by the Minister of Finance (Mr. Fielding) so solicitously lest any decrease in the duty should thrust them into bankruptcy. This is one concern at all events as regards which we may have no feai that a slight reduction in the protectior which they now enjoy would thrust them over the precipice into bankruptcy. In tha1 connection, the net profits as stated by this concern for the years 1920 and 1921 are:
1920	?5,664,834
1921	 2,368,407
Making a total net profit for those two years of $8,033,241. That confirms the calculation which I submitted to the committee a few minutes ago in regard to excess profits, if we might use that term, which this company are enabled to secure by reason of the tariff. It will be remembered that I stated that 70,000 cars at $125 per car mean $8,750,000. In these two years, according to the company's own statement, they made a net profit of $8,033,241. That shows pretty clearly where the extraordinary profits which this company have made came from, profits which are derived from the excess price which they are able to charge Canadian purchasers of Ford cars by reason of the duty which we impose. I have here a further . statement showing the assets of this company and showing, as I have already stated, the amounts which have been paid in dividends and bonus stock distributions. This is the way in which the assets of this company have grown during this period. There has been issued, as has already been stated, $6,875,000 worth of bonus stock which, with the original $125,000 worth, makes $7,000,000 worth of stock. This stock has been sold in recent years, so my information goes, at from $300 to $380 per share. The company admit, in their balance sheet, total assets of $19,000,000; but if you figure up the cash dividends that they have received and the present value of the stock, you will find that the dividends amount to some $7,900,000, and this
70,000	shares of stock at a price of $326 amount to $22,820,000, making total assets, if you like, a total valuation of this company at the present time of over $30,000,000. That has grown in this very short period from an original investment of $125,000. I submit that it has grown

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very largely because we have enabled them to overcharge Canadian purchasers of Ford cars.
Now, in this connection I want to submit to the Minister of Finance some suggestions: The effect of the proposed sales tax on automobiles will leave the protection which the Canadian Ford Company and other manufacturers of automobiles enjoy, exactly the same as it is at the present time, and it will enable this company, which has already piled up millions and millions of dollars out of the Canadian purchasers of cars, to continue this process. The proposition which the Minister of Finance has made will simply add to the cost of automobiles. But if the sales tax were replaced by an excise tax of 35 per cent, the price of cars would not rise, but the profits of the manufacturers would go into the public treasury. In this particular case, covering the two years, 1920 and 1921, if instead of the sales tax which is now proposed, we had had an excise tax of 35 per cent, it would have neutralized the 35 per cent protection in toto, and the $8,000,000 odd which this company have put into their own pockets out of the Canadian people would have come into the federal treasury.
The Minister of Finance has said repeatedly that he is after money. Here is money galore that we have enabled, and are enabling, an American concern to take out of the pockets of Canadian purchasers of cars. We have not got one cent of it into the federal treasury, nor are we going to get one cent if the present proposition of the minister is adopted. I would suggest that if he is not disposed to go the limit of the 35 per cent excise duty, which would work no hardship on this concern at all, he might at least go halfway. If he would consider the adoption of a 17i per cent excise duty the result would be, based on the business of these two years, that of the $8,000,000 profits $4,000,000 would go into the public treasury and the Ford company would still be left with a handsome profit of $4,000,000. I do not know the situation with respect to other manufacturers of automobiles, but I understand that some, perhaps, a good many, of them are largely American in their origin. I want to ask the minister to justify, if possible, the continuance of the present conditions and the increase in the price of automobiles through imposing a sales tax of 5 or 10 per cent, as the case may be, on top of the protective tariff which we already have. What we
ought to do from the standpoint of revenue is to make the excise duty as heavy as possible on cars made in Canada. In that way we should get very much more revenue, without increasing the price of cars at all to the Canadian consumers. The facts I have submitted show that this company has got fabulously rich at the expense of the Canadian consumers in a very short time, and has done so by reason of the protection which this country has given it. I think it is an outrage that this condition of things has been allowed to continue in this country. Now, if we impose the tax I suggest we shall greatly increase the revenue from this particular line of goods without increasing the price of automobiles to the Canadian public. And the Canadian manufacturers of cars, particularly the Ford company, are well able to stand all possible screws that the Minister of Finance can put on.
Som hon. MEMBERS: Carried.


William Charles Good: Surely my question is entitled to some reply.


William Stevens Fielding: The burden of my
hon. friend's complaint is against the customs duty. If we were dealing with the question of duties on American products generally I think it highly probable that some reduction might be made in the duty on automobiles. But inasmuch as we have determined for the present that we are not going to reduce the duty on American products, it is not wise to make the change. What my hon. friend suggests in regard to the excise duty is very much in line with what was proposed in another form at an earlier stage. While his argument applies with some force against the customs duty, he has not made out a good case in regard to the excise duty.


William Findlay Maclean: I want to answer the minister to this extent, that there has been excessive profiteering in this country as a result of conditions brought about by the war. That profiteering has not stopped and the public have a right to expect some remedy. The revenue can be increased by some such method1 as my hon. friend (Mr. Good) suggests, and representations to this effect should be heeded. This excessive profiteering Cannot be allowed to continue.


Mr. MEWBURN:: Question.


William Findlay Maclean: My hon.
friend had better allow me to speak. He has sat here for several hours doing nothing

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but shouting "question," and I am not going to stand it. I want hon. gentlemen to listen to what I have to say. Henry Ford is a great manufacturer in the United States and has devoted his time and talents successfully to reducing the prices of automobiles in that country. The Canadian Ford company, however, I regret to say, are still profiteering to a great extent by reason of the tariff. Now, it is the duty of this Government to remedy this state of affairs. The present Government is in office to-day on the strength of promises, among others, to combat profiteering, and the people have the right to expect that they shall take vigorous means of curbing the profits of these concerns, at the same time increasing the revenues of the country. Let it be understood throughout the country that excessive profiteering shall cease. There is no reason why these concerns should make excessive profits simply because we happen to have had a war. The war is over and the conditions that it cieated have passed. I have always been a protectionist, but I do say that it is high time that there should foe some change in this respect and that these profits should be curtailed.


William Stevens Fielding: We had an excess profits tax which was found to foe restrictive in business operations, and it was repealed. I think my hon. friend helped to repeal it, but I do not know that it is worth while getting angry now because of that fact. I did not help to repeal it. Now, the income tax reaches the Ford Company as well as the others. We have no special legislation for the Ford concern. Evidently it has been a pretty good thing, but if that company makes a great deal of money it will be reached in one form or another by the present system of taxation. As to excess profits, I would remind my hon. friend that while in the case of a company like the Ford concern it might work all right, it was found to be embarrassing to business generally, and the late government, with my hon. friend's assistance, repealed it.


William Findlay Maclean: That is no answer at all to my remarks. Excess pro-fiteeering is continuing to-day, and the evidence has been submitted to the House tonight. Automobiles are becoming as useful as tractors, and every man in Canada who fouy3 an automobile has to contend with this profiteering. If the manufacturer in the United States can sell an automobile at a certain price, why shouldn't

the same car foe (sold in Canada at about the same price? You may call me protectionist or whatever you like by reason of what I have done in the past, but I again say on behalf of the Canadian people that they are being unjustly treated in this matter; and the Government that committed itself to a pledge to remove the unfairness should take proper steps to carry out that promise, and not justify the present condition of things as the Minister of Finance is attempting to do.


William Charles Good: The Minister of Finance has stated that my argument does not appeal to him. Well, it stands before the House and the country for what it is wortli, and if the facts I have submitted and the argument I have based on those facts do not appeal to certain members of this House, it may be taken that those members are not going to be here very long.


William Stevens Fielding: My hon. friend may make out a good case with regard to the Ford Automobile Company, but there are a number of automobile companies and it is quite possible that they have not all been so fortunate as the Ford Company. We must frame legislation not for the Ford Motor Company alone, but for the industry generally.


John Babington Macaulay Baxter: There was a very clear declaration in the last campaign on the part of my right hon. friend the Prime Minister that if excess profits were being taken or monopolies were burdening the people it would be the business of his government to alter that condition of affairs. It was a perfectly proper and courageous declaration. Has the Government found that there are no monopolies increasing the cost of living, and no excess profits being taken, or has it discovered that these abuses exist but it does not dare deal with them?


William Lyon Mackenzie King: The Government has not finished its work; it is only beginning it.


George Gibson Coote: In regard to the automobile tax, as the tariff stands now I certainly think we have an instance of protection gone mad.


George Arthur Brethen: I beg to enter my protest against this item. In the case of a particular car, which I can name for the benefit of the minister, this protection does not work out to the extent of 35 per cent, but because of the system of valuation-, unless it has been changed in the mean-

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time-it works out at 48 per cent. So the manufacturers of the American car, which is identical with the car manufactured in this country, are taking advantage of a protective tariff up to 48 per cent because the valuation has been made on the Canadian instead of the American basis. I fail to see why, when the hon. minister was putting on this duty he did not allow the automobile manufacturers of Canada-who, it has been shown, are making such large profits-to shoulder some part of it, instead of allowing it in every case to be shifted back to the consumer. This so-called excise tax is nothing more than another sales tax, with the undesirable feature that it is always passed back to the consumer. Out of a total of 79,000 cars manufactured in this country in 1920,
23,000	were exported in competition with American and other foreign cars. So it shows that Canadian cars made by Canadian workmen under Canadian conditions can compete with foreign built cars. Then why should they be protected to this extent? The Canadian public are paying this protection to our manufacturers. We are not asking that our money be refunded, but we believe it is only fair that the manufacturers, in lieu of that protection which the Government is giving them, should pay the excise duty instead of shifting it back to the consumer.


George Perry Graham: Out of justice to the memory of the late Gordon MacGregor, who was president of the Ford Company of Canada, and who knew every detail of the business, let me say that a few months ago I heard him make an explanation of practically every item brought forward by my hon. friend from Brant, and he put a far different face on the supposed excessive profits when he deducted the immense sums the company paid into the treasury in various ways. I do not hold a brief for the Ford Company, but I do not think we ought to rush to the conclusion that wholesale robbery has been going on.
In answer to the hon. member for East Peterborough, I may say, I heard the late Mr. MacGregor state that the Ford Company of Canada under the contract between it and the Ford Company of the United States had a certain foreign territory allotted to it that the Detroit company does not enter at all.
I want to ask my hon. friend from Brant this question. Of course it is difficult to handle this tax; we all admit that. It was thought that the automobile industry
would be a fair field for getting some revenue. Now, suppose the Government had done as my hon. friend suggested, that is, left the tax off the cheaper cars and placed it on the dearer, that looks well at first glance, but what would be the charge immediately? We would be told that we were "standing in" with the Ford Motor Company, which already has been held up as a company making excessive profits. While the Ford Motor Company has made good profits-I go that far; perhaps it has made better than good profits-it is probably the best conducted concern in the Dominion from the point of thorough organization, and while that company has made good profits, the other motor companies in this country have lost money during the last two or three years. Is it not fairer to all classes that there should be a small tax imposed on the cheaper car so the manufacturer or purchaser will contribute something? In the figures given by my hon. friend to-night the Ford Company would be let off altogether on the 5 per cent tax. That is the question we have under consideration, whether they should be taxed or not.


William Charles Good: I am afraid my hon. friend has entirely misunderstood me. I never advocated the removal of the tax on the cheaper cars and the imposition of higher taxes on the dearer cars. I simply advocated a change in the incidence of this tax -an increase of the tax on cars made in Canada with the taking off of the sales tax or excise tax, or whatever you like to call it on imported cars.


George Perry Graham: A great many cars that we call Canadian cars are largely assembled in the Dominion, and if my hon. friend were to carry out his view, while the Ford Company might be able to stand it the other companies would not be able to. As the Finance Minister has pointed out, we cannot in legislation, no matter what the conditions may be, select any one industry and say that simply because one firm enjoyed in it is making a lot of money, the output of that industry should be taxed. That would ruin other industries of a similar kind which have not been making money for the last four or five years- many of whom, in fact, have gone through the bankruptcy courts.


George Arthur Brethen: I have here the preliminary report on the automobile industry in Canada for the year 1920, issued under the authority of the Minister of Trade and
Income War Tax

Commerce (Mr. Robb), and, in respect to the point raised by the hon. Minister ' of Militia (Mr. Graham), I submit the following figures from it with regard to the automobile industry of Canada. Seventeen companies paid wages in 1920 amounting to $13,331,184. They paid out for fuel, $703,736; miscellaneous expenses, $11,539,079; cost of material, $67,157,045, a total of $92,731,044. The total value of products was $101,465,846, leaving a profit of $8,734,802 on a capital of $54,000,000, which would figure out at about 16 per cent.
12 m. This is in respect to the whole automobile industry of Canada and is based on their own figures. The hon. minister says that several of these companies are working at a loss; it appears that on the whole they were doing fairly well.


[Stage Direction]
Resolution agreed to.

[Stage Direction]
Resolved, That it is expedient i >
amend subsection five (a) of section four of The Income War Tax Act, 1917, as enacted by chapter fifty-five of the Statutes of 1919, by providing that the provisions of the said subsection five (a) shall not apply to a bank as defined by section three of The Special War Revenue Act, 1915.
William Charles Good: Would it be in order to suggest any changes in the income tax rates? They are not dealt with in these resolutions.


William Stevens Fielding: I expect to have a bill before the House within a day or two, the purpose of which will be to make a few changes in the Income Tax Act. My hon. friend will then have an opportunity of discussing the matter.


Charles A. Stewart: Mr. Chairman, do you say that schedule II. has been carried?


George Newcombe Gordon: Schedule II has been carried.


Charles A. Stewart: I do not think we are fairly treated in that regard; we have not had an opportunity of discussing it. I can not allow that schedule to be carried without raising my objection.


George Newcombe Gordon: It is carried. The item now before the committee is the resolution with respect to the Income War Tax Act. Shall the resolution carry?


Charles A. Stewart: I object to this procedure. I appeal to the Finance Minister and ask him if he thinks it is fair that the Chairman should declare that schedule carried.


George Newcombe Gordon: Shall the resolution carry?


Charles A. Stewart: If this is the way the business of Parliament is to be done, I prefer not to be here.


William Stevens Fielding: The hon. member will agree that I have not made any attempt to force these resolutions through the House. At every stage I have desired to afford the fullest opportunity of discussion, and I have no objection to doing so now.


Charles A. Stewart: If I may be permitted, I desire to say something in reference to this tax on mineral waters. I am in the business myself, I am free to admit, and I know something about it. If the minister insists on that five cent tax being paid he is going to put half the people engaged in this industry out of business. Now, they pay 40 cents a dozen for their soft drinks, and they lose from 7 to 10 cents on every case that they send out to their customers from bottles broken and not returned. The proposed tax of 5 cents per gallon leaves the man who is handling the stuff a net profit of 9 cents. Now, you know as well as I do that no man can handle that stuff at 9 cents. I have before me the results of experienced men in the United States, where a tax of 10 per cent was imposed in 1921, with the result that nearly all the mineral water people were practically put out of business. The tax has since been reduced to 2 cents on the syrups used in the manufacture of these drinks. Last year I gave a cheque for over $500 sales taxes for one month; with the increased taxation proposed that amount will be increased to nearly $1,100. I may say that this affects about 800 people in this country, and I think the present proposal is unfair. I do feel that the result of this tax will be to put the small manufacturer out of business. Take the case of the man who paid $200 as against the $500 or $600 paid by others last year; his revenue is such that he cannot exist if this 5 cent tax is insisted upon.


William Stevens Fielding: This matter was well considered. I think there is needless alarm with regard to it. It was thoroughly gone into in an effort to meet the views of gentlemen who take the stand that my hon. friend now takes. I am hoping that his expectations of disaster will not be realized.


George Newcombe Gordon: The resolution before the committee is the proposed amendment

Business of the House
to the Income War Tax Act, 1917. Shall the resolution carry?


John Babington Macaulay Baxter: May I ask the minister to explain precisely what the amendment is?


William Stevens Fielding: There was tax of one per cent on the circulation of the hanks, but provision was made that any tax paid under that section should be deducted from the income tax; consequently it was of no effect. We are removing the exemption so that the one per cent on the circulation of banks shall remain as a tax.


[Stage Direction]
Resolution agreed to.
Resolution reported.

[Stage Direction]
On the motion of Mr. Mackenzie King for the adjournment of the House.
Henry Herbert Stevens: What business will
be taken up to-morrow?


William Lyon Mackenzie King: It is not
intended to go on with the budget to-morrow-at least not until evening, and possibly not until the following day-but we will take up the resolutions and bills that appear under Government Orders, and I understand that it is the intention of the Chairman of the Committee on Pensions, Soldiers' Insurance, and Civil Re-establishment to move the adoption of the report which the committee have brought in. I had intimated that time would be set apart for the discussion of the Conference of Premiers of last year, but I have been told that the hon. member who had requested that opportunity should be afforded for this purpose is very much occupied with committee work and has requested that the subject should not be brought up at the present time. Hgwever I will leave that to his wish, and to the wish of other hon. members of the House.



HON. MR. FIELDING CONGRATULATIONS UPON FORTIETH YEAR OF PUBLIC LIFE

William Lyon Mackenzie King: Mr. Speaker, I am sure the House will permit me the privilege at this moment of congratulating our honoured Minister of Finance (Mr. Fielding) upon celebrating to-day the fortieth anniversary of his entry into public life. It is a source of happiness not less to us than to him that on this day
we should see him in the midst of his labours, hale and hearty, piloting through this House of Commons his sixteenth budget. To us the day will be as memorable as it has been to him. Indeed it is an inspiration to every hon. member to have the privilege of witnessing what we have witnessed to-day-a gentleman of his distinguished name and years, standing here through continuous debate from three o'clock in the afternoon until the morning of the following day, meeting every question that has been asked, and setting an example in resourcefulness, in forbearance and tenacity, in courtesy and chivalry, and others of the arts of parliamentary discussion in a manner we would seek in vain to emulate. I but speak the mind of every honourable member of this House when I say that we hope he may be spared through years to come to give, with his wide experience and profound knowledge of public affairs, continued service to his country in these halls of parliament which his presence so greatly adorns.


Henry Herbert Stevens: Mr. Speaker, I am sure that the right hon. leader of the Opposition (Mr. Meighen), had he been here, would have discharged this duty very much more gracefully than I could hope to do, but let me, in all sincerity and earnestness, offer the congratulations of myself and the other hon. members on this side to the Minister of Finance on this, as I may call it, memorable occasion. It i* a great inspiration to those of us who are so much younger in years to realize that one can go through a long period of stress and trial in public affairs and maintain a purity of character and display a devotion to the public service such as we find exhibited in the hon. gentleman who has so ably and- as the right hon. the Prime Minister has so well said-with almost youthful vigour, discharged such onerous duties to-day. We on this side most heartily tender our congratulations to the hon. gentleman on this most auspicious period in his life.


William Stevens Fielding: Mr. Speaker, I will not do more at this hour than express my very warmest thanks to the right hon. the Prime Minister, Mr. Mackenzie King, and to my hon. friend from Centre Vancouver (Mr. Stevens). I appreciate very sincerely and deeply the great kindness they have shown to me.
Motion agreed to and the House adjourned at 12.08 a.m., Wednesday.

Immigration-Criminal Code
Wednesday, June 21, 1922.