STANDING ORDERS

[Stage Direction]
Mr. A. U. G. BURY (East Edmonton) presented the third report of the select standing committee on standing orders.
Mr. BURY moved that the report be concurred in.
Motion agreed to.

[Stage Direction]
On motions:
Mr. T. H. STINSON (Victoria, Ont.):: With the unanimous consent of the house I desire to move:
That for the remaining period of the present session all private bills when ready for presentation be read a first and second time and referred forthwith, and -also that standing order 105 respecting the posting of all private bills referred to the committee of the house be suspended.


Mr. LAPOINTE:: Is this the usual motion towards the end of the session?


Thomas Hubert Stinson: Yes, it is to facilitate the passage of bills that are late in being presented to the house. One bill that we have in mind is that of the hon. member for Eenora-Rainy River (Mr. Heenan).


Mr. GARDINER:: Will the motion apply to bills now on the order paper?


Thomas Hubert Stinson: To any private bill now on the order paper, yes.


[Stage Direction]
Motion agreed to.

Hon. ARTHUR SAUVE (Postmaster General) (Translation):: Mr. Speaker, at the request of the hon. member for Gloucester (Mr. Veniot), I beg to lay on the table of the house the circular as well as the written statement which I forwarded yesterday to the hon. member for Winnipeg North Centre (Mr. Woodsworth).



UNEMPLOYMENT AND FARM RELIEF

Hon. W. A. GORDON (Minister of Labour):: I desire to lay on the table of the house the following orders in council passed pursuant to the Unemployment and Farm Relief Act, 1931, and the Unemployment and Farm Relief Continuance Act, 1932, all relating to payments of money, namely: Nos. 447, 817, 863, 864, 865, 866, 867, 868, 869, 876, 877, 878.	'



PRIVATE BILL


[Stage Direction]
Bill No. 46, -to incorporate the Lake of the Woods International Bridge Company.-Mr. Heenan.
SALES TAX-CONTAINERS On the orders of the day:
Mr. T. M. CAYLEY (South Oxford):: I
would like to direct a question to the hon. Minister of Finance based on a number of telegrams that I have received to-day, similar no doubt t-o those that the minister has received, from -cheese factories and dairy men in Oxford county asking that they be relieved of the sales tax imposition which they find affects the price of what they call dairy containers, containers for cheese and butter. I would strongly urge upon the minister that he view this request favourably because he well knows the hard times which the dairy interests along with other branches of agriculture are experiencing these days. I trust tha-t the minister will accede to this request.
Manitoba Savings Office

Hon.. E. N. RHODES (Minister of Finance): The hon. gentleman has succeeded, Mr. Speaker, in making a speech rather than in submitting a question. His remarks would be more appropriate if we were in committee on the resolutions where the matter can be discussed at length and where only can we appropriately make any announcement with respect to the matter.


Thomas Merritt Cayley: I shall be pleased to repeat my question when we are in committee.


Mr. A. L. BEAUBIEN (Provencher):: May I ask the Minister of Finance if he will likewise give consideration to the producers of honey, regarding thie sales tax on their containers?
MARKETING BOARD On the orders of the day:


Mr. JOHN VALLANCE (South Battle-ford) :: In view of the announcement appearing in the western press, particularly in the Saskatoon Star of April 15, which in big red letters says "government to create marketing board," I would like to ask the Prime Minister or the Minister of Agriculture if it is the intention of the government to bring down legislation this session for the creation of such a board.


Right Hon. R. B. BENNETT (Prime Minister) :: The matter is under consideration.
TECHNICAL EDUCATION On the orders of the day:


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: I would like _ to ask the
Minister of Labour whether it is the intention of the government to implement legislation Of last year with regard to grants to the provinces on account of technical education.


Wesley Ashton Gordon: The question of appropriating moneys for that purpose is under consideration and the provision that may or may not be made will be made known, I expect, in a very short time.
MANITOBA SAVINGS OFFICE On the orders of the day:


Richard Bedford Bennett: I intimated, Mr. Speaker, to the hon. member for Winnipeg North Centre (Mr. Woodsworth) that I would endeavour to-day to communicate to him such information as I had with respect to the Manitoba savings office and the difficulties that were experi-
enced in connection with the payment of depositors.
I was absent during the early part of the month of December last, but so far as I can ascertain, on the sixth day of December last Mr. Bracken, the premier of Manitoba, with Mr. Pearson, one of his officials, saw the Acting Minister of Finance (Mr. Rhodes). And I am informed that on the succeeding day Mr. Bracken and Mr. Pearson saw the general manager of the Royal Bank of Canada in Montreal.
Of my personal knowledge, on my return to Canada a few days before Christmas, on the twenty-second day of December, I saw Mr. Bracken and Mr. Pearson. So far as my memory serves me, it was the first occasion upon which I knew of the serious position of the savings office in Manitoba. It was explained to me at some length; I was told of the number of depositors, the extent of the liabilities and the assets with which claims could be met. My memory is that the Premier of Manitoba concluded to remain in eastern Canada over the Christmas season. On December 28, having returned to Ottawa I again saw the premier and we discussed certain obligations of the province of Manitoba which were about due or shortly would be due in New York, and arranged for a renewal by the payment of a million dollars which we agreed to advance to the province of Manitoba.	_
On January 18 I addressed a communication to the premier of Manitoba which I shall read. This is one of the personal letters concerning which privilege has been removed: Ottawa, January 18, 1932. Hon. John Bracken, M.L.A.,
Premier of Manitoba,
Winnipeg, Manitoba.
Hear Mr. Bracken:
Referring to our many discussions regarding deposits in your savings office, our departmental officials have directed attention to the advertisement that has been appearing in the press, looking towards the increase of these savings. In view of the statements of yourself and Mr. Pearson when you were here, I would think this might lead to ia very complicated situation.
Yours faithfully,
R. B. Bennett.
The advertisement in question reads as follows:
The Province of Manitoba Savings Office Invites you to open a Savings Account and offers
Safety, Security and 3i per cent compounded half-yearly.
One Dollar opens an account Hours: 10 a.m. to 6 p.m;
Saturday 9.30 a.m. to 1 p.m.

Manitoba Savings Office
Offices: Donald and Ellice, Winnipeg,
984 Main Street, Winnipeg,
23 Tenth Street, Brandon,
Portage la Prairie, Carmen,
Dauphin, Ethelbert and Stonewall.
Mr. Bracken sent a reply dated January 21, 1932, as follows:
Dear Mr. Bennett:
I have your letter of the 18th instant in reference to provincial savings office. I appreciate the thought which prompted you in writing me about it.
When the advertisement to which you refer came to my notice I immediately got in touch with the trustees. Apparently a number of malicious rumours were being circulated, and having come to their notice the trustees thought the advertisement might have the effect of stopping them. On my suggestion at the time, the advertisement was discontinued.
Yours sincerely,
John Bracken.
On January 26 of this year Mr. Bracken, accompanied by E. K. Williams, K.C., who was acting as his legal adviser, visited the city of Montreal and saw the general manager of the Royal Bank of Canada. I know that from what they told me, because on the succeeding day, namely, January 27, Messrs. Bracken and Williams visited me in the office of the Minister of Finance in the east block of the government buildings. Both made statements regarding the savings offices. They stated they had concluded that under present economic conditions they would close the offices. I must say in view of the information they gave to me I told them I heartily agreed with the action they were taking. They explained to me that all the assets they had with which to meet depositors' claims consisted of exchequer bills and bonds of the province of Manitoba, some bonds of the city of Winnipeg, some Dominion of Canada bonds which were no longer in their .possession but which had been hypothecated by way of option sale to the Canadian Bank of Commerce, with which the account was being carried. They also intimated to me the resources in cash borrowed on Dominion bonds which they had on deposit in the bank with which to meet the claims of those who had made deposits in the savings office. They expressed the fear that a situation might develop which would require action being taken very speedily on their part. They explained that .the banks would lend the money to the Dominion of Canada if we in turn would lend it to them to enable them to meet the claims of depositors which might 'be made. 'I declined to consider that suggestion at the moment, but suggested that they return to Winnipeg; and I have a clear recollection of indicating the character of the statement which I thought
they might well make, first indicating that the serious economic conditions prevailing warranted action being taken to close the offices, and secondly that they would take advantage of the provision of their law which enabled them to ask for notice before payment. I suggested that thirty days' notice should be asked. They both expressed the fear that such action might precipitate calls being made unduly upon the deposits of the office. However as a result of our discussion, which was somewhat extended, no final or decisive action was taken. It was open to them either to make the statements I have suggested or to take such other action as might be desired.
The records indicate that on January 29 Premier Bracken saw Mr. Rhodes whom I had called in at one of the discussions, because he had been acting Minister of Finance and it was fairly clear that he would succeed me in that department. On the same day instructions were given to send S500,000 for the relief works to the province of Manitoba, and if vouchers came in quickly it was intimated that the government would send another $500,000. On January 30, Mr. Bracken wrote a letter to Mr. Rhodes and among other things stated that the savings office matter was giving him much cause for consideration and worry, and he trusted that the matter would not be overlooked. In consequence of a return requested by the hon. member for Lisgar (Mr. Brown) that letter has been placed upon the records. However, in order to make the record complete, I shall read that paragraph of Mr. Bracken's letter to Mr. Rhodes which has reference to the savings office.
1. Provincial Savings Office: In view of certain rumours being circulated that this institution is unsafe, there may develop such a demand for deposits as cannot be met at once. To allay any possibility of this happening, the banks have advised that they are prepared to loan to the dominion any amount of money that may be necessary in this connection, providing the Dominion will reloan it to the province. This will enable the province to assure depositors that their deposits are fully available at any time, and thus avoid a possible "run" on this institution. If something like this is not done, a difficult situation may arise, one that might be embarrassing not only to the savings office but to trust companies and banks, as well as to the general credit structure.
This matter has been the subject of discussion with the banks and with Mr. Bennett during the past few weeks.
Yours very truly,
John Bracken.
P.S.-While the above matters are all more or
less pressing, No. 1-
Manitoba Savings Office

And many others-
-are of immediate concern.

Hon. members will observe that that communication is dated January 30, 1932. Then, on February 4 I received an urgent message reading as follows:
Confidential message being transmitted to you through Bank of Montreal. Would appreciate sympathetic reconsideration of matter referred to.
John Bracken.
The message decoded and forwarded to me by the Bank of Montreal, read as follows:
Please say to Prime Minister of Canada from Premier Bracken-"Unusual demand for money borrowed by province of Manitoba under Province of Manitoba Savings Act makes it necessary to raise by way of loan under Provincial Loans Act amount needed to meet demand. Will be compelled to make public announcement to this effect and also to require notice of desire to withdraw funds which at present is fixed at 30 days but that period will likely be extended from time to time until loans can be raised at best terms possible. We are doing this very reluctantly but no other way is now available. Banks still agreeable to lend the province of Manitoba money to meet this demand but only on additional security of Dominion government which you felt could not be given. Urge your government reconsider situation as we must act by February 6th noon at latest. If joint action of banks and Dominion government could make it possible to issue statement that depositors can be paid in full the present unusual demand would at once cease. Believe if it becomes necessary to take stand above indicated not only credit of province of Manitoba but of other provinces and the Dominion government and many loan and trust companies will be adversely affected. From January 23rd to yesterday inclusive 527 accounts were closed 207 opened with net loss of deposits of over $200,000 only partly offset by revenues from investments received at first of month. Eighty-eight were closed yesterday and withdrawals are continuing to-day.
John Bracken."
The manager of the bank intimated his willingness to send in cipher any reply that I might desire. I immediately replied in these words:
Message received. Have been in communication with banks. No action should be taken until Monday. Meantime advise number of current accounts; total deposits, with full statement of securities held against same.
Immediately upon receipt of the message and before I sent the reply, I communicated with the banks by telephone and realized that the position was one of very great difficulty and calling for immediate action if we were not to precipitate a situation which was certainly undesirable at this time. I received a reply to my telegram dated the next day, namely the 6th of February. 'It was received

through the Bank of Montreal in cipher, decoded, and sent forward to me. It read as follows:
Say to Prime Minister of Canada: "Message received. Will delay action until Monday as per your request. As of yesterday's date number of accounts 42,168 demand deposits $12,736,968 plus interest from December 1st last. Securities held follow: province of Manitoba exchequer bonds and treasury bills at par $8,463,470, province of Manitoba debentures and registered stocks at par $3,084,203, city of Winnipeg debentures and registered stocks at par $532,392, other municipal debentures at par $73,558, Dominion of Canada direct obligation at par $119,000. Stocks and bonds guaranteed by Dominion of Canada at par $2,473,130. Total at par $14,745,755. The total of last two items is pledged for a loan of $2,000,000 of which $1,700,000 has been used. If more details desired will gladly furnish. Would appreciate decision early as possible.
John Bracken."
A message asking for further delay having been sent, Mr. Bracken on the 8th of February wired:
Message received. Quite willing to accede to your request. No improvement in situation.
During the intervening hours-because time was running very rapidly-I took this matter up as best I could through the banks, advised them that the securities were as I indicated, which corresponded with the records of the banks in that regard, and found that the only available securities were those of the province of Manitoba and of the city of Winnipeg and of other municipalities of the province to meet these demands, which were increasing in number.
I disliked assuming responsibility in the matter. The saving offices had ho cash beyond what they had borrowed from the Bank of Commerce on the $2,000,000 of Dominion government securities, direct and guaranteed, which sum had been practically exhausted on the night of the 9th. But the banks intimated that if we would assume ultimate responsibility they would supply the necessary funds to enable the province to meet the claims of the depositors, and on the 9th day of February I sent to Mr. Bracken this message:
You will be advised by code telegram tomorrow the terms on which your proposals will be accepted.
The negotiations between the banks and Mr. Bracken were not carried on through the government or any member of it, they were carried on directly in Winnipeg through the western supervisors of the banks doing business in that city, who were in direct contact with their principals at Toronto and Montreal. In due course we were advised of the conclusions at which they had arrived, and it

Manitoba Savings Office
was dependent entirely upon our action as to whether or not they would provide the money to meet the depositors' claims. On the 17th day of February therefore, it having taken some time to get the information in detail, the following letter was sent to the general managers of the chartered banks doing business in the city of Winnipeg:
Dear Sirs:
Referring to the proposals from the government of	Manitoba	(as	per copy	attached)which I	understand	the	banks are	ready toaccept and under which the chartered banks doing business in Winnipeg are about to assume the deposit liabilities arising under The Provincial Savings Act, 1924, of the province of Manitoba, and amendments thereto, the government of	Canada agrees	with the	banks, inconsideration of the assumption of such liabilities, to indemnify them from all loss in connection therewith; and	on	the other	hand the
banks, in consideration of the agreement to indemnify, agree to transfer to the government of Canada the treasury bills received from the province of Manitoba and all collateral securities received by the banks from the province, pari passu with the making of advances of cash by the government of Canada, or giving of its treasury bills by the government of Canada as hereinafter provided.
The government of Canada hereby further agrees, because of the assumption of such liabilities by the banks to place a deposit in cash in each bank in Winnipeg to meet any withdrawals of deposits so assumed, and upon exhaustion of such cash deposits as may be made from time to time, to recoup the banks in lieu of cash, at the option of the government of Canada, for such withdrawals and interest thereon, and interim interest on any uncovered advances made by the banks, by the giving of one year treasury bills of the government of Canada bearing interest at the current rate, not to exceed 5 per cent per annum, payable half yearly, the liability of the government of Canada to supply cash or its treasury bills to continue until the deposit liabilities assumed by the banks as herein mentioned and all interest thereon are completely discharged.
Yours faithfully,
R. B. Bennett,
Prime Minister.
The copy of the letter referred to is dated Winnipeg, Manitoba, February 16, 1932. It is directed by the premier, Mr. Bracken to:
S. H. Logan, Esq. (representing the chartered banks in Winnipeg).
General manager of the Canadian Bank of Commerce, Toronto, Ontario.
Dear Sir:
For some time, as you know, the government of the province of Manitoba has been giving careful consideration to the position of the provincial savings offices. We have now reached the conclusion that if adequate provision is made for the taking over of all deposit liabilities in connection with the provincial savings offices operated under chapter 174 of the Consolidated Amendments of Manitoba and amending acts, the public interest and the interest of the depositors, under existing conditions, would
be best served by the closing of the offices. On behalf of the government I therefore submit the following proposal:'-
If the chartered banks represented in Winnipeg are willing to take over all outstanding accounts of depositors in the offices operated under the provisions of said chapter 174, the government of the province of Manitoba will at once issue to the banks treasury bills of the province, payable one year after date and bearing interest at the rate of 5J per cent per annum, payable semi-annually, to the extent of such liabilities, and will ratify same at the ensuing session of the legislature.
Pending such ratification by the legislature such bills will be issued by the province to an amount equal to such liabilities as and when assumed and will be delivered, together with, as collateral security, all securities now held by the said savings offices to such chartered banks, these collateral securities to be held, less any realizations therefrom, until the treasury bills are paid, and any realizations therefrom to be applied in reduction of the treasury bills.
If this proposal is accepted by the banks the government will discontinue receipt of deposits in such or any other offices.
Yours very truly,
(Signed) John Bracken, Premier and Provincial Treasurer.
The transaction ended there so far as we were concerned. We were not at the moment called upon to place any cash in the hanks, and as I understand the matter the accounts of depositors were divided among the chartered banks doing business in Winnipeg. I have merely this further observation to make in answer to the question that was propounded by an hon. member upon the orders of the day. The province of Manitoba having concluded, for reasons in my judgment good and sufficient, to discontinue its savings offices, I was not anxious that we should assume responsibility for the accounts which it had itself taken and for which it had acquired the securities that I have indicated. The banks pointed out that they had already too many Manitoba securities in their portfolios to enable them unprotected and unsupported to deal with the situation alone. In view of that circumstance I gave, of course with the concurrence of my colleagues, the letter which I have just read. I am entirely in the judgment of the house with respect to it, but one of two things had to take place: Either a situation that had developed was to become very much worse by reason of the continued pressure of depositors for their money, or something had to be done that would support the situation to an extent that would prevent further demands being made. In view of the fact that the province had concluded to withdraw from the business, I decided that the request indicated, being the only method that was available, should be acceded to for the purpose of saving the situation which had
Manitoba Savings Office

become very acute and the repercussions of which would be injurious not only to the province itself but to the other provinces of the dominion as well as to the credit of Canada.


Arthur-Lucien Beaubien: For information, may I ask the right hon. gentleman a question? Did not Premier Bracken come to the conclusion to close the provincial office after the Dominion government had refused to guarantee the deposits,. which guarantee the government gave to the chartered banks afterwards?


Richard Bedford Bennett: That is not my understanding of the situation. Premier Bracken and Mr. Williams attended at my office and the statement they made clearly indicated that they concluded it was not wise under existing economic conditions to continue their savings offices.


Arthur-Lucien Beaubien: They had no alternative. The government refused to give them the guarantee.


Mr. BROWN:: Do I understand the Prime Minister to say that it was not through him the terms were sent to Premier Bracken that they were to call the legislature within a certain time and to repeal the statute under which the savings office was formed?


Richard Bedford Bennett: I have read to the hon. gentleman the documents that passed between Premier Bracken and myself. As regards the agreement with the banks, that was a matter of negotiation between the banks and Mr. Bracken.


Arthur-Lucien Beaubien: After the federal government had refused assistance.


Richard Bedford Bennett: As I understand the
matter, Premier Bracken was in Winnipeg and they were in Toronto. The inspector general of banks informed me that an agreement had been reached and he told me in a general way what the arrangement was. As a matter of fact, if my memory serves me aright, no such agreement was arrived at as that suggested by the hon. member for Lisgar (Mr. Brown). I do not think there was in the agreement-and I have read it here to-day as I received it-anything that would indicate that the legislature was to be summoned. That is not in this document that I have read.


John Livingstone Brown: Those terms were certainly submitted to Premier Bracken by the government or directly from the banks.


Richard Bedford Bennett: I assure- the hon. gentleman it was from the banks direct; it was not

from the government. Might I, without being thought censorious, say this: It does seem rather hard, when pressed on every side with problems of great magnitude, when this dominion was not only providing money for the obligations of the province of Manitoba maturing in New York, but advancing money to enable it to meet its obligations to municipalities and cities as well as its own as a government, that when the steps I have indicated were taken, we should be the subject of abuse and the target for criticism in our effort to improve the situation. This is something I find rather difficult to understand.


Arthur-Lucien Beaubien: May I ask the Prime
Minister if he is laying this correspondence on the table of the house?


Richard Bedford Bennett: I have put it on Hansard.


Ernest Lapointe: May I ask my right hon. friend whether any orders in council were passed to ratify those guarantees or undertakings?


Richard Bedford Bennett: No order in council has
yet been passed and perhaps my hon. friend will realize just why that is the case. When one has a problem of this magnitude to deal with, involving nearly $13,000,000, it is not desirable, until the appropriate time comes, that being the necessities of the time limit, to advertise by order in council or otherwise that the situation has reached the point that it has. In any event the action taken was only as against ultimate loss, as the hon. gentleman will observe.


Ernest Lapointe: Is there anything binding on the government at the present time?


Richard Bedford Bennett: The good faith of this
administration.


Ernest Lapointe: Peace, order and good
government.


Mr. HANSON (York-Sunbury):: The honour of the country.


John Livingstone Brown: Don't you talk to us about honour.



THE BUDGET


[Stage Direction]
The house resumed from Monday, April 18, consideration of the motion of Hon. E. N. Rhodes (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, the proposed amendment thereto of Mr. Ralston, and the proposed amendment to the amendment of Mr. Gardiner.

The Budget-Mr. Reid
Mr. THOMAS REID (New Westminster):: Mr. Speaker, before saying what I have to say on the amendments to the 'budget, I want to make a few remarks regarding statements that were made in the house on Thursday last in connection with unemployment relief works in British Columbia last fall. I did not intend again introducing this subject as, first, I thought enough had been said in the house to show the great need there was for having an unpartisan committee handle relief matters, and also, second, that the mere fact of discussing the matter does not help the present situation in British Columbia. I would not again introduce this were it not for the fact that the hon. member for Nanaimo (Mr. Dickie) saw fit to bring up the matter in this house, when he read a report which purported to emanate from Victoria- a report in connection with a committee that had been appointed iby that legislature to inquire into affairs affecting the unemployment situation in British Columbia, and in which reiport my name is three times mentioned.
I think it is only fair that I should make some reply. I do not propose to allow those statements to go unchallenged. Before proceeding, however, let me say that I am indeed sorry that so estimable a gentleman as the hon. member for Nanaimo, one who is universally liked on both sides of the house, should have seen fit to introduce in this house what at that time must have been either an advance copy of the draft report or a telegraphic copy wired to him the night before, and which I claim was introduced in this house in an endeavour to discredit statements which I and others had made, and with a view to bolstering up his friends in Victoria. It is true, as the hon. member for Nanaimo stated, that a committee had been appointed to investigate the charges that had been made with reference to the handling of unemployment relief in British Columbia. That committee was composed of members from both sides, Liberals and Conservatives, the Conservatives, being, according to custom, in the majority. I may say that both the draft report and the final report as presented to the house in Victoria were prepared by the Conservative members of the committee, and that report was presented to the Legislature of British Columbia only on Wednesday, the day previous to its introduction in this house. The draft was prepared on the 11th. In support of that statement I will quote from the Vancouver Sun of April 11, which was the Monday:
After Major Brown was dismissed from the committee, the members went into camera to consider the draft report which had been prepared by the chairman. The Liberal members withdrew along with Mr. Pattullo. T. D. Pattullo announced that he had taken the stand that the terms of the resolution calling for a full investigation had not been carried out in any degree. The evidence was not before the committee and he did not consider he could be of any assistance in drafting a report under those circumstances. The other Liberal members withdrew along with Mr. Pattullo.
As a matter of fact, the full inquiry closed only on Monday of last week, which was the 11th, and which was just three days previous to its introduction in this house. Now I intend to deal a little later with the contents of that report, but for the moment I will discuss the investigation which was held. Perhaps it would be well for me to read an impartial opinion with reference to this investigation. I quote also from the Vancouver Daily Province of the 11th, the following:
Twigg probe "shameless spectacle."
Mr. Twigg was the chairman of that committee.
Harold Brown, trade board president, slams inquiry. Investigation into relief camp expenditure in British Columbia, carried on recently by a select committee of the provincial legislature was "a spectacle of shameless evasion and distortion of the truth," Mr. Harold Brown, president of the Vancouver board of trade, told members of the real estate exchange at a luncheon in Hotel Georgia at noon Friday. "I 'sat in' on some of the sessions of the so-called probe," Mr. Brown declared, "and can draw my own conclusions from what I saw and heard, "if anyone told the truth they would have been crucified.". . . "The gorgeous spectacle in Victoria of the so-called probe-at $200 a day-in which if anyone spoke the truth he would be crucified," exemplifies the policy "to drift," he contended.
Mr. Brown is a very prominent citizen of Vancouver. He holds the important position of president of the Vancouver board of trade and is a well known business man who is held in high regard. I believe that he was formerly Conservative, but at the moment he declares that he has no use for either party. He is therefore just now a non-partisan, and he was, I believe, speaking impartially. In support of that statement, I will show later on the attitude he took when he appeared before that committee.
Such statements, Mr. Speaker, could not be left unchallenged, coming as they did from so important a personage as Mr. Harold Brown, and so Mr. Twigg at once asked him to come to Victoria and explain to the committee the statements he had made, namely, that the whole investigation was a shameless spectacle, etc. He appeared before that committee, and I am going to read here one or two quotations with regard to what he had said, and the statements he made. He was asked
The Budget-Mr. Reid

whether he would take back or apologize for what he had said. He said, no; he would not take back one word; everything he had said had to stand. I quote:
"We are not satisfied that the details have been developed," he said. "We know funds were eaten up wholesale. My knowledge is based on details that have been given to me personally."
"Gossip?" suggested the chairman.
"No, I do not gossip," retorted Major Brown. "My information is from responsible business men."
He stated the inquiry had been a farce, inasmuch as a timekeeper who had been called from one of the camps to give evidence had been there from fifteen to twenty days and had not been summoned before the committee to give any information regarding the expenditures in connection with those camps. From accounts that have been received since, I may say, Mr. Brown is being generally complimented upon his courageous statements.
Now, regarding the statements made by myself, on March 16 last in this house, I intend to take a few minutes discussing these. On that date I made fourteen definite assertions with regard to the handling of the unemployment relief situation in British Columbia. Out of those fourteen assertions the committee have seen fit to embody only three in their report as submitted in the legislature in Victoria and as presented to this house on Thursday of last week. As I have stated they dealt only with three of the fourteen assertions. However, I will discuss those three because my name has been brought in, and statements have been made regarding what I had said. The first statement made was with reference to a statement which will be found in Hansard of March 16, and which was quoted here on Thursday of last week. Let me read from the report:
The suggestion made by Mr. Thos. Reid, member of the House of Commons for New Westminster (at page 1283 of Hansard. 1932), that one manufacturer had "sold 50.000 blankets and it took him out of the red," is without any foundation in fact.
Regarding that statement of mine, I have only this to say, Mr. Speaker, that the information was given me just before I left for Ottawa by a prominent business man in Vancouver, and one who is in the wholesale line in a large way. I accepted it from him in good faith. The second reference to myself in the report reads:
(g) Mr. Thomas Reid (at page 1283 of Hansard 1932), stated:
"I counted in one camp 450 steel wheelbarrows. They had so many that a man was to be appointed to regulate their use." The evidence before your committee indicated that there might be 450 steel wheelbarrows in one 
camp but it would be in the nature of a depot or warehouse camp for a group of camps, and that the man referred to would be for the purpose of distributing wheelbarrows and other tools and supplies among the various camps requiring them.
They admit that the second allegation was correct, notice that they say there- might have been 450 steel wheelbarrows. I am glad they do admit that because I counted them. They then say it was a distributing camp, but, Mr. Speaker, this camp was miles and miles away off by itself and almost on the boundary line between the United States and Canada. It could not have been a distributing camp because it was not near any other camp and was off the lines of communication or traffic. In connection with the third charge the report of the committee reads:
Mr. Reid further stated: "I have no comment to make regarding the construction camps except to criticize the loose way in which they were run." The evidence before your committee indicated that the camps were conducted in an efficient and economical manner.
What other finding could the committee make when they would not hear the evidence available? They refused to hear the timekeeper who was available as well as other witnesses who could have given information regarding the camp. Mr. Brown, an impartial witness, testified, and it might be as well to quote from his testimony because if I were to make the statements it might be said they were partisan. The newspaper report of this inquiry reads as follows:
Mr. Loutet again asked for one specific instance. "You cannot get evidence in a political inquiry which is accurate," Mr. Brown continued. He asked why a Mr. Brian, who was in Victoria for some fifteen or twenty days, was not called. He was a timekeeper in a North Okanagan camp. "He could have given information on some vital points."
The chairman, Mr. Twigg, then said: "Name another case." To my mind that was practically admitting that this charge was correct. The report continues:
"Then you -are attributing to all the witnesses a careful plan of distorting the truth unless you will exonerate some of them," General Clark insisted. "You decline to exonerate any witnesses."
"You can draw your own conclusions," Mr. Brown replied.
And again:	[DOT]
Mr; Brown then asked the right to put some questions of his own to Mr. Twigg.
"Do you consider the inquiry perfect as to details of wasteful expenditure?" He asked.
Mr. Twigg replied that the committee had gone as deeply into these matters as it could.
"I am perfectly satisfied," Mr. Twigg added.
"There has been no extravagance?" Mr. Brown insisted.

The Budget-Mr. Reid
"I wont say that," Mr. Twigg answered. "There must be extravagance when you put thousands of men into camps at short notice. The average cost of camps and of feeding the men compares satisfactorily with the cost ip lumber and other camps in this province."
I need not go into this matter any further because from the evidence I have submitted I think it has been shown that this committee did not go very fully into the matter of the running of the camps, in fact they refused to hear witnesses who could give them this information. This demonstrates that the whole inquiry was simply, as Mr. Brown publicly stated, a farce.
I am sorry that all the assertions which I made on March 16 were not gone into. I made serious charges, some in connection with provincial cabinet ministers, and these were never brought out. Only three were dealt with. One was admitted; in the case of the other it was stated I was absolutely wrong regarding the 50,000 blankets, and in connection with the third charge they say that the camps were run in an economical manner. I think it is a mighty poor average when out of fourteen assertions and charges only three were dealt with. This would seem to indicate that, generally speaking, all my statements were accurate or eleven of them would not have been left unchallenged.
I have a copy of a provincial paper in which the premier makes a crack at the Liberal members of this house. He states that investigations had been made necessary by the spreading of propaganda to injure the government. I can assure the house that we do not need to say anything here to injure the government in British Columbia. The premier states that the disgraceful statements made by two British Columbia Liberal members in the House of Commons had been proven to be false. That is not exactly correct because, as I say, I made fourteen assertions and only three were dealt with, one of which was admitted to be correct. If there was anything disgraceful, it was the manner in which this whole matter was carried out, especially as some cabinet ministers were involved.


Richard Bedford Bennett: Is the hon. gentleman referring to cabinet ministers in this government?


Thomas Reid: No, I was referring to cabinet ministers of the provincial government.
The hon. member for Nanaimo (Mr. Dickie) would have done his party and his countrymen much more good had he read the full report submitted to the legislature. This report contains many recommendations, but the hon. member saw fit to deal only with the
unemployment charges and did not refer to what is also an important portion of the report. I think the hon. member would have done considerable good for the people of British Columbia by advocating the adoption of the suggestions submitted by this committee. I shall read one or two of the recommendations, which are as follows:
That negotiations be opened with the Dominion government with a view of starting on the Peace river outlet and thus give employment to many men. That investigation should be made to the end that suitable men engaged upon such work would be assisted to a reasonable extent in taking up land in the Peace river district.
That members of the militia unemployed be cared for by their respective units.
That arrangements should be made for representatives of basic British Columbia industries to attend the Imperial conference as observers to assist the Dominion government in recapturing empire. markets.
I am glad it is admitted that empire markets have to be recaptured. The recommendations continue:
Direct relief being wasteful and demoralizing be discontinued in favour of work for remuneration.
I might say, Mr. Speaker, that in British Columbia camps have been established, machinery has been purchased and considerable money spent and, apart from the demoralizing aspect of the dole, it would be too bad if these facilities were not utilized any further. As I said before, the hon. member for Nanaimo would have accomplished much more had he read all the recommendations submitted to the provincial legislature on April 13.
During the short time at my disposal I shall discuss a few matters touching upon the amendments to the budget and the budget speech, as well as general affairs. I listened last evening to an hon. member throwing out accusations that the Liberal party had changed its attitude. It is rather amusing to hear such accusations, because if there ever was a party which changed its attitude, it is the party sitting to the right of the Speaker. Although not then a member of this house, I well remember, when the Dunning budget was brought down, the pooh-pooh that went up all over the country against what was called the gesture in that budget of extending a preference to Great Britain and raising the tariff against foreign countries. The hon. Minister of Trade and Commerce (Mr. Stevens) called it a meaningless gesture, and generally speaking the budget was ridiculed by hon. gentlemen opposite. But they have since changed, Mr. Speaker, and changed very fast. As a matter of fact, if the Liberal party does
The Budget-Mr. Reid

gold standard, and not accepting silver money, I am in a position to draw this comparison. When silver was on a parity with gold every dollar the Chinaman had was equal to the dollar of ours. But to-day however when we sell a case of salmon worth, say, S4.75 or $5, the Chinaman has to give us practically four times that value in his money before we will accept it. Undoubtedly we cannot do business under those conditions. If business is to be on a mutual basis, then there must be a mutual basis either of silver or gold. If business is to be continued the symbol c-r unit of value has to be equal throughout the various countries of the world, or very nearly so.
I have listened with a great deal of attention to the Minister of Trade and Commerce who spoke a few evenings ago concerning interest, and who was very careful to put the figures at ten per cent. He said neither industry nor agriculture could survive or prosper with that interest rate. Why did he not say six per cent? With our declining wages I believe we will never get out of our present difficulties if the rate of interest on government securities, either municipal or provincial, continues at six per cent, coupled with decreasing wages. I have one little criticism of the government. It was bad enough to take ten per cent off the smaller salaries, but I hope the government will not go any further. They have given the lead in regard to wage reductions ahd I hope they will not begin to increase the hours of labour. Only to-day I received a telegram from postal workers who are alarmed because of the notice which has been issued stating that they will be called upon to work overtime and longer hours without further recompense. I hope this government will not be a party to a policy of lower wages and longer hours. As one coming from the industrial field I know the great fight waged in past years to bring about the eight-hour day and increase the standard of living. I trust this government will not be a party to cutting wages and increasing hours of labour, especially at a time such as the present, and after so many years of endeavour on the part of workers to bring about better working conditions.
I should like to have seen the government go a little further in connection with the income tax. We are always being told about activities in the United States, and wre have been told that in that country the income tax is much lower. In the old country the income tax is almost twice the tax in this country, but from reports we learn that it is paid cheerfully. I should like to have seen the govern-

ment go after the larger incomes, because although I will not say greed is an inherent quality in all people yet it is in a great many. That greed has to be held within bounds, and to my mind proper taxation would be one way of bringing about the desired effect, and curbing greed to some extent. The words of the poet Burns: "Man's inhumanity to man makes countless thousands mourn" are more true to-day than when they were written, and the fact that the wealth of the world is in the hands of a few should be considered most seriously by the government in power.


Mr. J. LOUIS BARIBEAU (Champlain) (Translation):: Mr. Speaker, it is perhaps
bold on my part to participate in this debate. I am fully aware that I shall not be able to maintain the discussion on the high level where my hon. colleagues have placed it. Therefore, acknowledging my boldness I rely entirely on the proverbial indulgence of the house.
I deem it my duty, however, to congratulate the hon. Minister of Finance (Mr. Rhodes), on his splendid speech on the budget, so greatly welcome in all provinces of the dominion. The expenditure of the administration have been so distributed that each ratepayer contributes according to his means and the luxuries he can afford.


Mr. BARRETTE (Translation):: Hear,
hear!


Jean Louis Baribeau: May I,
sir, quote the views of the leading business men of my district and province. Mr. W.
G.	E. Aird, manager of the Wabasso Cotton Company, states:	*
That the general opinion among financiers is that the budget is a moderate and reasonable one.
Mr. Bromley Smith, manager of the Canada Iron Foundries, has this to say:
I think we are still privileged in not having to contribute more, when we compare our position with that of other countries.
Mr. Beaudry Leman, general manager of the Banque Canadienne National, states:
The balancing of the budget is an essential condition of the financial stability of the state and the maintenance on satisfactory basis of the national credit.
Workmen and employers, wage earners and those with independent means: briefly, every body is interested that the finances of the Dominion government should be on a sound
basis.
The only possible way to reach this end is that each person should contribute his reasonable quota.
On the other hand, the state must, under present circumstances, cut out useless expenditures and those which are in the luxury class.

The Budget-Mr. Baribeau
Mr. Taggart Smyth, general manager of the Savings Bank, states:
The measures adopted are governed by the needs of the hour and seem best adapted to the present circumstances. Nobody is astonished and I think that the public will welcome them.
Mr. T. J. Tibbutt, president of the Tibbutt Shoe and Leather Co., has this to say:
It is the best budget we have had for a long time past and it is much less burdensome than the United States budget. Canada, however, is less affected than most of the other countries, by the present economic crisis.
Mr. Frank I. Ritchie, manager of the Wayagamack Pulp & Paper Co., states:
The present budget is fair and equitable.
I deem it also my duty to express my thanks to the people of Champlain who have honoured me with their trust by electing me to represent them in this house.


Mr. DENIS (Translation):: It will be
otherwise at the next election.


Jean Louis Baribeau: The constituency, sir, which I represent, besides bearing the name of the father of the whole country, which places it among the most venerable, owing to its seniority, is still one of the most important counties in old Quebec. Extending from the shores of the St. Lawrence river across the Laurentian mountains; to the west, bounded by the St. Maurice river which is the source of so much electric energy; and to the east, by the charming St. Ann's river, the county of Champlain maintains a population of 75,000 people, 99 per cent of whom are French Canadians; it comprises three towns of 10,000, 6,000 and 4,000 people respectively, and thirty rural parishes.
This means that I shall relieve the fears of the young men in making known to you the conditions prevailing in such an important section of the country. The house will derive some information which will allow it to judge better of the situation in Quebec, as well as the excellent results of the government's policy; as I intend to sound the optimistic note, notwithstanding what the hon. members opposite may think, for they have all become pessimists since the people of this country have so sadly left them in the lurch.
Let us examine what is the prevailing situation of industries in cities. Indeed, at Cap-de-la-Madeleine, as everywhere else, the economic depression weighs heavily on the good working classes. Two large pulp and paper industries, the Canada Power and Paper Co. and the Wayagamack are the source of the main activities of the workmen.
The former closed its doors a few months ago, while the latter is still working but with a decreased output.
An hon. MEMBER (Translation):	What
a fine government!


Jean Louis Baribeau: Does this mean that work is completely stopped and that nothing was done to relieve unemployment? This is where I wish to congratulate the right hon. Prime Minister (Mr. Bennett) on the success of his policy as regards unemployment. At a time, sir, when the improvident policy of excessive industrialization inaugurated by the Taschereau government brought about, in the paper industry, the present crisis, the Dominion government, thanks to its wise policy to relieve unemployment, helped the heretofore prosperous working population of that town to ward off poverty-owing to the mills closing down- by undertaking public works and thus giving work to those whom a prolonged state of unemployment might have placed in dire circumstances.
Beside this pulp and paper industry, there is also a natural silk factory lately established in that town. The latter has already given marvellous results, and will further develop as the effects of the protective tariff are felt.
What I have just stated as regards Cap-de-la-Madeleine, may also apply to Grand'Mere, where there is located a branch of the Canada Power and Paper Co. Again there, while the mills were only working part time, the unemployment act gave great relief. There is also located in that town a very prosperous boot and shoe industry. In the town of St. Tite, is to be found a factory making leather goods, which also is doing well. These facts induce me to state that the situation is greatly improving and that the future is very promising. That is why the working classes, believing in the intelligent efforts of the government are not dismayed, and close their ears to the fanciful theories of a diabolical communistic propaganda. For my part, I shall not cease asking the government's protection for the good working classes of Champlain.
The Three Rivers district, one of the largest producing centres of paper and pulp in the world, is undergoing a severe crisis; and I would suggest to our distinguished representatives, at the Imperial conference, to continue their efforts with the British Government so as to obtain for Canadian pulp and paper a special preference. If our pulp and newsprint were given a preference of 10 per cent,

The Budget-Mr. Baribeau

it would greatly benefit this industry, as pulp and paper are amongst our great assets, they are, however, enjoying, at present, but a relative prosperity. A Canadian preference of ten per cent on pulp and paper exports would improve the lot of the numerous workmen engaged in that industry.
May I, sir, read a resolution to that effect adopted by municipal council of the town of Cap-de-la-Madeleine:	.
Canada, Province of Quebec,
Municipality of the town of Cap-de-la-Madeleine.
Resolution No. 4554.
At a regular meeting (special) of the council of the town of Cap-de-la-Madeleine, held in the ordinary place and chamber of the sessions of the council, at the City Hall, on Monday this twenty-ninth day of February, 1932, at 7 p.m.
At which meeting were present: His worship the mayor, J. A. Nadeau, Messrs, the councillors: Ernest Arseneau, Ernest Houle, Henri Thiffault, Armand Lera ire and Francois Cour-teau, constituting a quorum under the chairmanship of the mayor.
Moved by councillor Ernest Houle, seconded by councillor Ernest Arseneau,
Resolved, whereas the pulp and paper industry is in a precarious state in our province and throughout the country.
Whereas in July next an Imperial Economic Conference will be held at Ottawa to discuss an economic scheme of mutual preference for the British Empire.
Whereas the National government in England has adopted a protective tariff policy and that this same government is committed to a policy of preference on products of the nations which comprise the British Empire, until and in provision of the mutual and reciprocal results which this economic conference will foster.
Whereas the Canadian government is in favour of a mutual preference policy within the empire.
Whereas England purchases millions of dollars worth of pulp and paper, yearly.
Be it resolved that the council of the town of Cap-de-la-Madeleine takes the liberty of suggesting that the Dominion government continue its endeavours with the Imperial govern-men in order that a more substantial preference be granted to the Canadian pulp and news print.
That the clerk be requested to forward a copy of the present resolution to the hon. Henry Stevens, Minister of Trade and Commerce, to Mr. J. L. Baribeau, M.P., for Champlain and to Mr. Charles Bourgeois, M.P., for Three Rivers-St. Maurice, praying them to give it their attention and support.
Carried unanimously.
Certified copy.
Raoul Rocheleau,
Clerk.
I have just drawn a rapid sketch of the workman's condition in the county which I am privileged to represent. Allow me now to introduce to you the finest rural people in Canada.


Mr. DUBOIS (Translation):: Hear, hear!


Jean Louis Baribeau: This statement may appear contrary to the general belief, but it is a fact, since everywhere, in the new parishes as well as in the older ones, agriculture maintains the place where the Creator wished it to be and constitutes a great nucleus of high moral ideals and physical welfare. Come to our country side along the shores of the St. Lawrence river, visit the inland parishes, penetrate even into the back sections, victorious of the forest, and the same vista will meet your eyes searching for the charms of landscapes, and the same happy life will fill your patriotic heart with joy.
What is meant here is that our compatriots are at work; as always, they are part of the land, they love it and toil over it. They do not farm for the time being, satisfied with what each year brings, like those lacking foresight, neither with the simplicity of certain farmers who, believing that the resources of a wheat farm are inexhaustible, live at a rate that only a gold mine could permit, but they farm wisely and scientifically like heads of industries, in view of a permanent success. Let economic crises then come, let meagre returns be obtained, they are inured to the hardships and can await normal times without crying famine nor face ruin and death.
This does not signify that everything runs smoothly. Unfortunately, in Champlain, as in other counties, farmers have deserted the farm for the city, in a race for prize money, which manufacturers offer in the shape of high wages. Furthermore, yet sad to state, quite a number of our farmers having purchased properties at too high a price, are today unable to meet their liabilities. The returns of their farm products are too small...


Lucien Dubois: Hear, hear!


Jean Louis Baribeau: ... but they know that such prices prevail everywhere; municipal taxes are high, as well as school taxes.


Mr. BOUCHARD (Translation):: Not everywhere.


Jean Louis Baribeau: Our farmers have heavy burdens to bear, and if the former government succeeded in reducing the national debt as stated by the hon. member for Sherbrooke (Mr. Howard), it was perhaps, at the expense of our farming classes, for we note that the farmers are those who suffer the most in the present crisis, that their properties are mortgaged, that they have had to resort to promissory notes and contracted obligations which date back to the former regime.

The Budget-Mr. Baribeau


Lucien Dubois: Things are not running smoothly in our country.


Jean Louis Baribeau: The farmers realized this situation and proved it eloquently on July 28, 1930. Do they now regret having acted so energetically against their oppressors? They certainly do not regret the New Zealand treaty, nor the generosities of the former government towards the United States, nor the former tariff which afforded very little protection and was the ca-use of their distress. Now, under the impulse of the new policy, equilibrium will be restored, thus dissipating the nerve wrecking nightmares of a year of depression. I made the suggestion, a few moments ago, to those who will represent us at the Imperial conference which is being held in Ottawa-a great honour for Canada- to do everything possible in order to obtain a preference on newsprint and pulp so as to help our working Classes. I shall further add that such a preference would tend besides to aid numerous farmers, for most of them are owners of woodlots, and the sale of their wood would allow them to realize appreciable profits. We must protect our industries, and farming, being the main industry of this country, deserves the greatest protection.


Lucien Dubois: Hear! hear!
Almaville	 $ 9,000
Cap-de-la-Madeleine	 86,000


Jean Louis Baribeau: When the purchasing power of farmers is high, all classes of society 'benefit.


Lucien Dubois: Hear! hear!


Jean Louis Baribeau: Our hon.
colleagues in the opposition state that there are more unemployed this year in Canada than last year, but they forget to add that this crisis is world wide in extent. I shall content myself with inserting in Hansard the following
figures, taken	from the International		Labour
Review:			
			Per
1930	1931	centGermany.. ..	.. 4.300,000	5,600,000	30Australia. ..	.. 104,000	118.000	13Austria.. ..	.. 294,845	329,627	12Denmark. ..	.. 74,000	91,000	23Great Britain	, 1,853,000	2,262,000	22United States	. 5,526,000	7,770,000	39France .. ..	.. 22,879	117,294	5Italy	.. 642,169	982,321	53
I am pleased to submit to the house a list of the undertakings in connection with the unemployment and Farm Relief Act, 1931, in the county of Champlain and the advantages offered by our governments to the municipalities:
Dominion
Mun.	Prov.	Dom.	Proportion20%	40%	40%	$ 3,60010%	45%	45%	34,605


Joseph Arthur Barrette: Hear, hear!


Jean Louis Baribeau: Grand'-
Mere $160,000 30 per cent, 35 per cent, 35 per cent, $56,000.


Joseph Georges Bouchard: It is a sign of prosperity.


Joseph Arthur Barrette: It is a sign that they have an energetic member.


Lucien Dubois: How much did the workmen draw out of that amount?


Jean Louis Baribeau: I shall
point out to the hon. member for Nicolet (Mr. Dubois) when this sum of money is divided
Notre-Dame-de-la-Presentation	$	1,200
Parent	 6,500
Saint- Jacques-des-Piles	 5,500
Saint-Louis-de-France	 3,500
Saint-Roch-de-la-Mekinac	 3,500
Sainte-Thecle	 3,000
Saint-Theophile-du-Lac	 3,500
Saint-Tite	 5,000
Canton Bourgeois Mailhiot	 5,000
Canton Langelier	 6,000
Saint-Georges	 6,500
Sainte-Genevieve de Batiscan-Department of Public Works

by the number of hours during which the workmen laboured, the result is $10 per hour...


Joseph Georges Bouchard: Per day.


Jean Louis Baribeau: ...per day, it does not strike him that for all the work performed by the Dominion government, the wood was cut by our farmers, we had the stone drawn, our blacksmiths were given work, we also found work for all those who had a trade in each locality, and the amounts thus disbursed do not appear under the item "hours", however these payments helped numerous
workmen.			Dominion
Mun.	Prov.	Dom.	Proportion10%	45%	45%	$ 540....	60%	40%	2,60020%	40%	40%	2,20020%	40%	40%	1,40010%	45%	45%	1,57530%	35%	35%	1,05020%	40%	40%	1,40020%	40%	40%	2.00050%	50%	2,50050%	50%	3,00020%	40%	40%	2,600....	8,000



$123,070 41761-136J

[Stage Direction]
The Budget-Mr. Baribeau
Joseph Arthur Barrette: Hear, hear!


Lucien Dubois: This does not acquaint us with the amount received by the workmen.


Jean Louis Baribeau: I proceed.


Joseph Arthur Barrette: There are no more unemployed.


Joseph Georges Bouchard: The
country is ruined.


Mr. LAFLECHE (Translation):: That is your work.


Jean Louis Baribeau: There is another class of people to which I want to draw the attention of the house, the navigators many of whom reside in my county. We have a number of associations of navigators, among these a branch of the National Association of Marine Engineers of Canada, also numerous pilot associations. May I therefore make a few suggestions to the hon. Minister of Marine (Mr. Duranileau) who, I feel certain, will lend a kind ear to my remarks. I think the government should interest itself especially in the young men who wish to become pilots. No government, up to now, have taken -any interest in these young men and yet this profession is a necessary one, even indispensable. These apprentices are destined to replace the pilots as the latter disappear. Most of them are obliged to make great sacrifices to become pilots. A large number belong to families that are poor, as those who have means are not attracted to the hardy life of a sailor which they must undergo to reach their goal. These apprentices find it practically impossible to earn anything in other trades.
They are, on the contrary, obliged to make an outlay of almost $200, each season to complete their apprenticeship. Generally their parents are not in a position to help them, so that you can easily realize their sad lot. According to regulations laid down, these young men have to undergo an apprenticeship of 5 or 6 years before obtaining their officer's certificate. This consists in travelling on ships to and fro between Quebec and Father Point, and between Quebec and Montreal. They must have to their credit at least 50 trips during each season. They are therefore kept busy during the whole season. During that time they receive no salary; on the contrary they must pay their board and travelling expenses, except when on service on the ships. When the trips stipulated by the regulations are over, the season of navigation closes, they have not the opportunity of serving on vessels crossing the ocean. They are idle all winter. Those whose families have

certain means are less to be pitied, however, most of them are in straitened circumstances. I think it is the duty of the government and especially that of our worthy Minister of Marine to help these young men. Why should they not be given the preference in working on the government's ice 'breakers in winter? While thus helping these young men, the latter could complete their naval instructions and become familiar with the difficulties of winter navigation. There is a tendency to further prolong the navigation season, this almost makes it necessary for pilots to have a better knowledge of the difficulties of winter navigation. Where is there a more appropriate school for our future pilots than that of passing a few winters on our ice breakers? They would certainly discover hidden difficulties that perhaps they would never find out during the summer months.
Previous to closing my remarks, sir, I must inform the house that I had the honour of being invited to call on His Excellency, the Governor General, Lord Besslborough-


Lucien Dubois: We also.


Jean Louis Baribeau: -and I would consider it amiss if I did not thank, in the house, the representative in Canada of His Majesty, the King, both on behalf of my fellow-citizens in Champlain and mine, for the cordial reception I received. I felt some pride in being welcomed by words spoken in the language of my forebears and, I think, I am giving expression to the French Canadians' feelings, in quoting, in this respect, a letter addressed to His Excellency, the Governor General by the President of "L'Institut Canadien-frangais d'Ottawa":
To His Excellency, the Earl of Bessborough, Governor General of Canada,
Rideau Hall, Ottawa, Out.
Excellency,-
The Institut canadien-frangais of Ottawa, the oldest French society in Ontario, founded in 1852 and incorporated by an act of parliament in 1865, having since its foundation, been the purest expression of French self-respect and determination, in Ottawa, is pleased to express to Your Excellency, the deepest feelings of gratitude and heartfelt thanks for the wise counsels that you had the kindness and courtesy of extending to the Canadian people, since your arrival in Canada, on the importance of learning the French language.
To those sentiments we add the testimonial of our proverbial loyalty to the British Crown.
Your Excellency possibly does not realize to what extent the interest you take in the French language is appreciated by the French Canadian population.
I beg of Your Excellency to accept, as a source of information, a copy of the constitution and rules of our society. You may thus judge for yourself what is our aim and what are our means of action.

The Budget-Mr. Spencer
On behalf of all the members of the Institute and on behalf of all my compatriots, Your Excellency, will allow me to express to you again our sincere and cordial thanks.
I have the honour to be, sir,
Your obedient and faithful servant,
H.	Beaulieu.
President.
Allow me also to congratulate, perhaps somewhat late, the hon. member for Toronto Northeast (Mr. Baker) for the splendid speech he delivered in the French language, in the house, last year. So long as the two great races of this country will understand and admire one another, we may depend on them to elect legislators who will realize what are the best interests of Canada, and I believe that the 'harmonious cooperation of these two great races constitute one of the surest guarantees of the respect of the constitution and one of the most powerful factors to solve our national problems, whatever they may be.


Mr. H. E. SPENCER (Battle River):: In rising to take part in this debate, Mr. Speaker, I wish to congratulate the hon. Minister of Finance (Mr. Rhodes) on the very able way in which he presented his first budget. We have, however, to condole with him on having to present a budget in this time of crisis, for it could not be a pleasant task. I desire also to congratulate him on paying the courtesy to this house of remaining in his seat while the debate is in progress. It is a courtesy which we very much appreciate, as we have not received it from some of his predecessors in office.
The budget contains figures that cannot be very pleasant reading for the people of Canada. For instance, our exports and imports are much lower than they have been for several years. Our expenditures and revenues are down. As far as our reduced exports and imports are concerned, we can expect nothing else, for the policy of the government-carried out, I know, in good faith-could have had no other result even in good times. The government have been putting into effect the policy on which the Conservative party were returned to power, and they have done their level best to interfere with trade, to stop imports wherever they could-with the natural result of checking exports. One pays for the other; and if we stop goods coming in, we are bound to affect adversely the selling of our goods in the markets of the world. This year unfortunately we have a deficit of about $119,505,000. We might have had a deficit under any circumstances, but the situation has been aggravated by the trade policy of the powers that be. For instance, the revenue from customs this year is about
$77,000,000 less than it was two years ago. Admitting that we are passing through a depression, the customs revenue would not have been as low as this had we encouraged trade with other countries. The interest on the national debt this coming year is estimated at $121,163,000. I am glad to see that this is a little less than it was a year ago, brought about no doubt through the refunding of large blocks of bonds last year.
Reference is made in the budget to the $11,000,000 paid out in respect of the wheat bonus. Canada did not lose by taking this course. Never in the history of the western provinces was that amount more needed than it was a year ago, and every cent has gone into the circle of trade. If the amount had been even greater I feel the dominion generally would have benefited considerably, and I am sorry that the budget contains no announcement as to a continuation of the bonus.
I regret the Minister of Finance has found it necessary to impose a lot of nuisance taxes -stamp taxes, taxes on telegrams, long distance telephones, and so on. These taxes have a detrimental effect on business, and I should be glad to have seen the Finance minister get his additional revenue through a more steeply graded income tax rather than by this means. Those of us who from time to time happen to come under the income tax legislation would, I am sure, have been only too pleased to pay the additional taxation in that form rather than in the form of these vexatious nuisance taxes.
I was glad to notice that the action taken by the government a year ago in guaranteeing the bankers against loss on their advances to the wheat pool, has not involved the country in any liability. I hope the newspapers that at one time so loudly proclaimed the large amounts that the government would have to make good on this guarantee, will please note that their doleful foreboding were quite uncalled for.
Reference is made in the budget to the Canadian farm loan board. Of all the legislation that has been passed in the house with the idea of benefiting agriculture, I think the Farm Loan Act has been the greatest disappointment. When it was going through the house we hoped it would be of real help to agriculture, particularly at such times as these when the farmers are in great need of having some means of carrying them through for a few years until the situation improves. I find, according to a return given to me some time ago, no less than 14,432 applications have been made under this act for loans.
The Budget-Mr. Spencer

Of those, however, only 4,119 loans were granted, the total sum lent amounting to $7,500,000, and the cost of administering the act being $338,788. These figures are up to December 31, 1931. First of all, they prove that there is a great need in Canada of more loans to help the farmers carry on and, second,. it seems to me it must be on account of the very low value of farm property that the board has seen fit to grant only a little over
4,000	loans as against about 14,500 applications. When one realizes that in Saskatchewan alone, according to some figures given me last year, $216,000,000 was taken out in farm mortgages, the fanm loan board has had very little effect when it has advanced only $7,500,000 in the whole of the dominion.
This year the Dominion government has considered that the most important thing it has to do is to balance its budget. There are more important problems than that to-day. If you are going to balance your budget at the cost of the people of the country by taxing them heavily and by cutting down public expenses when we need more purchasing power instead of less, then it is not a good thing to balance the budget. We would have been ahead if we had for the time being added to the national debt the amount by which we were short or issued currency directly to meet the deficit, collecting, through taxation in better times, enough to make up the difference. To increase taxation at this time and to cut down salaries and wages in the civil service, an action which naturally has been followed throughout the dominion in commercial life, will have the effect only of cutting down purchasing power all along the line, and next year we are likely to be in a worse position than we are now. In support of my suggestion that it would have been better not to balance the budget this year but to add the deficit to our national debt, I should like to quote from Mr. D. M. Garvin, economist of the Royal bank, who made this statement when he was speaking to the Canadian Club at Toronto, on February 22, 1932:
The first influence of an unbalanced budget may be to injure confidence to such an extent as to destroy part of the outstanding volume of credit, but sooner or later the borrowing to make up these deficits must tend towards producing the larger volume of credit necessary for expansion.
I wish to congratulate the government on the change which they have made in the income tax, and which was much overdue. I regretted to see .the government of the day in 1927 and 1928 reduce the income tax by ten per cent. If it had not been reduced; if even it had been increased at that time, we

would be in a .position now to make the tax less on smaller incomes. I am sorry, however, while on the one hand the government have seen fit to cut down wages and public expenditures, on the other they have deemed it wise to pay higher rates on borrowed money. I should like to quote from an editorial in the Vancouver Sun a few words which express very well my thoughts in this respect. It reads:
If it is right for the government of Canada to reduce the wages of civil servants ten per cent, is it not right that the wages of money should also be reduced?
What right has any government to protect a dollar rather than a man?
What right has Canada to protect and actually increase the interest rate on her five billions of federal and provincial debts, and at the same time decrease the earning power of a man?
What right has North America to make a fetish of past performance and at the same time refuse to protect present employed and find work for North America's seven million unemployed? Real industry and labour are working together to get conditions back to normal. Should capital be allowed to hold itself aloof?
The present government came into power with two main promises: first, to raise the tariff and, second, to cure unemployment. We have to give them credit for carrying out the first. They raised the tariff on over four hundred different schedules. We all know, however, this has not been a cure. As regards curing unemployment, it has been a hopeless failure. The public, in regard to the raising of the tariff, is to be blamed, first of all, for putting the government into power with a promise to increase tariffs and, second, for expecting that that would solve the problem. A high tariff, when all is said and done, is no protection. Surely we are beginning to realize that an opposition next door to a factory^ is much keener than when it is on the other side of the international boundary or across the ocean. When under a prohibitive tariff factories are forced into this or any other country, the new factories must be keener competitors of the older ones that have already been established. If we have brought into this country one hundred new factories, as I believe we have, then those that were already here must be suffering' in consequence, because during the last two years, not more, but less money has been put into circulation. This can easily be discovered by following the bank statements. If there is less money to be spent and more goods are being made; if the newer factories are getting the business, then this must be at the expense of some of the older ones.

The Budget-Mr. Spencer
I believe I am safe in saying that to-day our unemployed in Canada number over five hundred thousand. The government having failed, first, in its trade policy and, second, in its unemployment policy, it is trying the third method, and that is, to practise drastic economy. But while drastic economy may be all right for the individual, it is very bad for us collectively, and if anybody can afford to spend at this time it should be the government because it has all the credit of the nation at its back. While we have some five hundred thousand unemployed largely in the cities, it is well to remember that on the farms of Canada we have nearly half our population very much over-employed and very much under-paid. To follow out its policy of drastic economy the government has reduced its estimates by $55,000,000 and increased taxation to an equal amount. This, in my opinion, is bound to fail, and when we come back here a year hence I quite expect to see a deficit in the next budget. I say this regretfully.
I take this opportunity of directing the attention of the house to the railway situation in the south end of my constituency. Between the two points of Bulwark and Airways there has been great need of a railway for many years. The last time the Canadian National program was put before the house it was agreed to build a line between these two points to meet the great need of the large farming community in that area. A year ago, after some delay, the grade was built. There was time, I may say, to put the rails on, and had they been put on there would have been opportunity to haul from that country an enormous amount of grain which to-day has to be hauled a very considerable distance to other railways. For reasons best known to the railway management, when the grade was made and everything was ready for the rails, no rails were placed thereon. It has not only been a great disappointment to the country itself, but it must be an entire loss to the railways, because they have gone to half the expense and can receive no revenue. They cannot receive any revenue until the rails are laid. When the question is asked why the rails have not been laid, the answer is simply that the railways have not the money. What would be thought of a farmer who built half a house and then, when asked why he did not go on with it, replied that he had not the money? The first thing people would ask him would be, "Why didn't you think of that before you began to build the house?" We might ask the same question with regard to this railway. Only twenty-five miles of steel
is needed to give service to 800 square miles, but the people are left with this white elephant and while waiting patiently for the rails to be laid they have to haul their produce a great distance, as they have been doing for a number of years.
Reference was made in the budget to the Imperial conference which will take place in Ottawa next July, and great hopes have been expressed that something worth while will be done. I sincerely hope, for the sake of Canada, that something will be done for the benefit not only of this country but of the empire at large, but I want to warn those who are feeling too optimistic about it that there are going to be great difficulties. For instance, they are going to talk a great deal about empire trade. Now, looking up the figures with regard to British trade, I find at page 498 of the Trade and Commerce Journal that in 1931 British import trade outside the empire was 71-2, while exports were 56-2 to outside countries, showing that they are doing the greater part of their trade outside the empire. According to the figures given to us by the Minister of Finance, the major portion of the trade of Canada is also done outside the empire. Naturally, therefore, the delegates from the various parts of the empire who will come here looking for. benefits, will find that they are facing considerable difficulties in the matter of trade. As regards the wheat quota, the offer from Great Britain will not help Canada in the slightest, so far as I can see, because Britain cannot take the whole of Canada's crop, yet she will pay for Canadian wheat on a basis of world price, and we shall have to sell the rest in other markets, with the result that we shall have to meet competition just as keen as we are meeting to-day.
Of all industries that are suffering in this deflation, there is none that is suffering more than agriculture, because, in the ups and downs of price levels, whether it be inflation or deflation, agriculture is the last one able to take advantage of the rise and the first one to suffer from the drop. The deflation that was brought on in 1930 and 1931 had the effect of halving, and more than halving the values of farm prices. This, in turn, had the effect of doubling debts; and when you consider that most of the larger farm debts were incurred during the war, that since that time these debts have about doubled, and that the farmers have paid in interest rates an amount equal to the debts-because, at the interest rates the farmer pays, in ten to fourteen years he pays as much in interest as his total debt- you can readily understand why agriculture is in difficulties at the present time. We must
The Budget-Mr. Spencer

realize that agriculture is the basic industry of Canada. There are other very important industries, but that is the basic one, and the general business of Canada is not improving and cannot improve to any extent at all until agriculture is again on its feet.
I will put on record now a few figures taken from a government publication to show the difference between the prices of agricultural commodities and freight rates. When wheat was worth SI.25 per bushel, the freight rate was 5i per cent, and when wheat dropped to 60 cents, the freight rate was 12 per cent. When potatoes were SI per sack, the freight rate was 10 per cent, and when potatoes were
increased from 4 to 6 per cent, because it is a consumer's tax and will fall upon the family man.
It is claimed that if the western farmer would only go into mixed farming, all would be well, but this statement is made only by those hon. members who know very little about the matter. I have before me a statement giving the percentages of the different mixed commodities raised on farms in eastern and western Canada. The quantity of cattle on farms in eastern Canada is given as 10-65 per farmer, while for western Canada it is 13-62. The figures for hogs are 4-44 for eastern Canada, and 5-85 for western Canada.
Tff ccnTsr pe'f

bns-lml- the-freight raj-ie. wag 9d-i The production of butter in eastern Canada
per cent. When hogs were Sll per hundred, the freight rate was It per cent, and when the price dropped to $5 the freight rate had jumped to 3t per cent. When eggs were 40 cents a dozen, the freight rate was It per cent, and when the price was 20 cents, the freight rate had increased to 2} per cent. I may point out here that these prices are a good deal higher than we are getting to-day. For instance, wheat is lower than 60 cents and the price of hogs has dropped as low as $2.40, while eggs have dropped to 8 cents a dozen. I might say that during last December and January, turkeys-an item which does not appear here-sold in western Canada for less than one dollar each.
There are no financial institutions in Canada which can properly give the aid required by agriculture. The private banks are not giving the service needed. I shall not deal with this matter at any length because I have dealt with it before, but I do contend that interest rates are far too high, terms of loans far too short and renewals far too uncertain. Agriculture finds itself to-day in a very difficult position, so difficult that if something is not done a still larger number of people will be driven from the farms, where they cannot make a living, to the cities, there to join the ranks of the unemployed. I am told that 85 per cent of the farmers of Saskatchewan would be bankrupt were it not for the generosity of their creditors, and I believe the farmers of Alberta and Manitoba would be running them a close second.
I appreciate the fact that the Minister of Finance (Mr. Rhodes) did not see fit to increase the tariff on repairs to farm implements, although the increase of the excise from one to three per cent has the direct effect of a tariff. To-day the tariff on repairs ranges from 6 to 17j per cent, and to that duty will have to be added the 3 per cent for the so-called excise tax. I am sorry the sales tax has been 
is 345 pounds per farm; whde that for western Canada is 355 pounds per farm. The egg production for eastern Canada is 291 as against 345 for western Canada. These figures should be an answer to those who say that if western farmers would go into mixed farming, all would be well. I know that those who are carrying on mixed farming in eastern Canada do not want the western farmer to enter that line of farming to any greater extent because he proves to be a keen competitor, but the fact remains that at this time there is no money to be made in farming of any kind, mixed or otherwise. At the present time, farming is not a business; it is a pastime, and the land is a liability.
I should like to say a few words in connection with the debt situation. Canada, like all other countries, is facing a serious problem in connection with debts. We must recognize the fact that we are carrying on a debt-creating system. A debt carrying 5 per cent simple interest doubles itself in twenty years, and at the rate which agriculture has to pay, the debt is doubled in about half that time. When this house realizes, as it must realize, that interest in the aggregate can never be paid, then we shall realize why debts accumulate to such a degree. These debts are necessarily increased very rapidly during a change from inflation to deflation, such as we have passed through during the last few years. According to figures furnished by the Bureau of Statistics, the interest-bearing debts of this country amount to no less than over nine billion dollars and this figure does not take into consideration the mortgages on farms or urban property, which some people estimate would bring the total to over seventeen billion dollars. I shall not go into the details of this larger amount; I am perfectly willing to base my argument on the other figure, which proves that Canada, with her small population, is faced with an enormous debt. How long can it continue?

The Budget-Mr. Bertrand
We have not done the best we could for the internal and external trade of Canada. Because of the rash and foolish policy adopted with regard to Russia, orders have been refused which would have proven to be beneficial to many of our manufacturers, particularly the implement manufacturers. Hundreds of thousands of men might now be employed had we not taken what I consider to be a very foolish stand in connection with Russia. I should like to quote from the Vancouver Sun of July 18, 1932. After referring to the fact that the government had started backdoor trading with Russia by admitting Russian furs into Canada, the article continues:
If Premier Bennett would think a little more of history and a little less of his own pride, he would realize that finally Canada will have to do business with Russia. Why not now?
In 1792 England implored world powers to have nothing to do with bloody revolutionary France. "France would wreck world thrones and imperil civilization," etc., etc. For twelve years the Pitts and others hurled against French revolutionists the identical language that, until the last few months, one heard against Russia. Finally, in 1804, British statesmen admitted that Britain's stand against France had been childish, and Britain's twelve years' loss of French trade was a blot against British diplomacy and common sense.
And again:
Standing on the floor of the British house of commons more than a century ago, Charles Fox said: "After twelve years of futile experience we are compelled to recognize the Republic of France which we refused to do business with twelve years ago." Only six years ago Mr. Asquith said:	"England's experience with
France in 1792-93 was a fearful mistake. Let us not repeat that mistake in regard to Russia."
Apparently Canada has seen fit to make that mistake, and no doubt we shall regret it in the years to come.
Canada is not a poor country, as sometimes I think the budget would lead us to believe. According to the Bureau of Statistics the national wealth of Canada amounts to nearly $31,000,000,000. When we realize that in this country we have goods in abundance, that we have everything that man needs or wants, that our greatest trouble to-day is not to produce goods but to get rid of those that we have produced, surely we must see that a cog has slipped somewhere. When we are living in an age of plenty, in a country with surpluses in everything except the budget, surely we should find ways and means of seeing how these goods and services that we possess can be distributed among the people. Purchasing power is needed, and needed in greater amounts, to enable the goods that we have produced in abundance to be transferred to those who want them. The difficulty apparently is in our monetary system.
If our monetary system as it is to-day does not work, and we know that it does not, surely it is not beyond the capabilities of mankind or of Canadians to find ways and means to make it work. That system is man-made, and if it has not been made properly it surely can be man-mended. To-day man is a slave to an incomplete invention. I was much interested in reading the other day a letter by W. F. C. Devlin, printed in the Ottawa Journal of April 15. In the course o>f that letter on the monetary situation the writer says:
Our country is loaded with the physical necessities of life, but we find the circulation of our means of exchange slowed down or withdrawn, so that we cannot freely exchange our goods and services with each other.
Never before were we so physically healthy, yet, on account of our "book-keeping" having gone out of kilter, we are allowing ourselves to believe that we are sick. Our difficulties are therefore of "book-keeping"-not of physical fact. We are allowing our "book-keeping" to control us-instead of we it. There is a strongly growing feeling that the present state of affairs is not only unsatisfactory but unnecessary, and it is high time we set about controlling conditions instead of letting conditions control us.


Mr. SPEAKER:: The hon. member has spoken forty minutes.


Henry Elvins Spencer: In conclusion, if I may be permitted, Mr. Chairman, I am entirely in sympathy and in full accord with the subamendment which has been moved by the hon. member for Acadia (Mr. Gardiner).
Mr. ELIE O. BERTRAND (Prescott) (Translation): Mr. Speaker, in rising in this house to speak on the budget and its amendments, it is certainly fitting to congratulate the hon. Minister of Finance (Mr. Rhodes) on the delivery of his well prepared speech. Before indulging in too many compliments, it is well to go over and seriously consider the various matters pertaining to the budget, and while the preparation and delivery of the speech might be worthy of praise, that is as far as we should go.
The hon. member for Shelbume-Yarmouth (Mr. Ralston), in reviewing the budget, analyzed and criticized each one of its various features, and in every instance, he proved that far from making for the welfare and prosperity of this country, this budget was conducive to stagnation and a more acute depression. Later on, the hon. member for Acadia (Mr. Gardiner) moved an amendment. I do not quite see how the hon. member for Acadia could explain to this house and to the country what he means, for instance, by stabilized currency. We actually believe that there is no stabilized currency in Canada any more than in any other part of
The Budget-Mr. Bertrand

the world. However, that is one of the remedies which he has to offer to solve our problems and to get over our present difficulties.
Before dealing with the matters to which I desire to call the attention of the house in the course of this debate, I wish to refer to some of the speeches from hon. members opposite. They have read numerous letters to show how their constituencies had benefited by the tariff, as revised since the coming into power of the Conservative party, that is at the special session of 1930 and the session of 1931. The hon. member for Stormont (Mr.' Shaver) told us to what extent Cornwall had become prosperous, thanks to its silk industry. The hon. member for Shefford (Mr. Tetreault), read several letters, and endeavoured to show how prosperous his county was; he even said: "There are no unemployed in my constituency that we know of." The hon. member for Pontiac (Mr. Belec) told us of the prosperity obtaining in certain parts of his county and many other hon. members opposite attempted to show all the benefits derived from the tariff and asked the members from this side to give them credit for all the good things that the Conservative policy had afforded the people and the country since their party is in office. What impressed me most in their speeches, was the statement that they would not have fulfilled their duty had they not spoken of the condition of the farmers. Agriculture being stagnant, we were wondering what arguments they could put forth in that regard. They claimed that if farm products could not be disposed of, it was due to world conditions; that, of course, we have to compete with world prices, that the other countries are actually suffering from the depression which is particularly detrimental to this class of the community, and, therefore, they were not to blame.
On each occasion, however, they read letters asserting that the tariff had helped some particular industry or increased the profits of some individual.. In each case, they said: "Do us at least the favour to acknowledge what we have done for the country." And then, they turn to the fa'rmers, just as the hon. member for Shefford (Mr. Tetreault) did and said: "Do not blame us for the bad conditions obtaining in your districts, as we are not responsible for them." On the one side, they claim credit for what they have done, and, on the other, they do not want to take the blame for the uneasiness that might exist among the farmers.
It is a fact that a certain class of our population is still enjoying, at the present time, 
rather fat revenues, and that some individuals are more particularly benefited by the protection afforded in the tariff. This very protection, which favours certain industries and trades, is detrimental to other industries that are compelled to pay more for the products they have to buy from the favoured ones.
I regret, Mr. Speaker, to be obliged to make such a dismal picture of the condition of agriculture in Ontario. After what we have heard about the conditions in the west and the maritime provinces, it would seem that our position is not worse than elsewhere. If, as several hon. members have stated in this house, agriculture is the foundation upon which all our economic system is resting, the government should surely protect it and help it to survive.
In my constituency, the farming industry is not lagging in progress. We have fine herds which won the first prizes at the Toronto exhibition and also at international fairs. I would like to add just a few words about the growing of red clover. In Toronto, at the seed exhibition held in November, the county of Prescott got seven prizes out of the first ten. In Ottawa, during the same month we were awarded seven prizes out of the first nine for red clover, and we had the great honour of winning the world championship at Chicago. The winner, on that occasion, was Mr. Remi Lamarohe, of St-Isidore de Prescott, who had the best improved red clover seed in the whole world. Nevertheless, much to my regret, we must admit that farming in my county is not a paying proposition. And since we admit that fact, surely we must consider what the future might be and what will become of the farming community.
I would like to say a few words about the hay growing industry. Some might say that it is a thing of the past, but when I am through with my remarks, I think you will admit that you cannot change your farming methods as easily as you change clothes. Some years ago, we were growing hay in the eastern Ottawa valley. Many of our farmers have given it u.p for the raising of -cattle and the dairy industry. However, to carry out the change, you have to erect new buildings and incur a large expenditure which -the farmer is unable to bear. Consequently, the farmers who still get some hay out of part of their farm, have to sell it, at present, for $4 a ton. When you know that the cost of the pressing, the wire, the food for the men, the rent and the wear of the machinery, amounts to $2 a ton, you will realize that it leaves only $2 to the farmer. -Let us -consider the awkward position in which our farmers are now. Last

The Budget-Mr. Bertrand
year, the crop averaged one ton per acre. Municipal and school taxes vary from $1.50 to S2 an acre, or an average of $1.75. Take off these different amounts, and you will see
that 25 cents is all the revenue that the farmer gets out of one ton of hay. That shows without any doubt what are the conditions we have to face, and I think that the whole country should know it. You must also figure out how many years it would take to effect the change, in order, as I said a moment ago, to go into the cattle or dairy industry.
Let us see now what is the position of those who choose to go in the cattle raising. I have been preparing statistics on that subject since my arrival at Ottawa; consequently, they apply to the month of February. Allow me to tell you what were the prices of live stock delivered by the farmers on the Montreal market. These figures are taken from the price lists of the companies and jobbers who buy live stock on the market. Here are the prices for the week of February 15th: steers, grade one, $6; grade two, $4.50; grade three, $3; cows, grade one, S3; grade two, $2.50; cutters, $1.75; canners, $1; bulls, grade one, $3; medium grade, S2.25; lambs, $6; bucks, $4; sheep, grade one, $3; grade two, S2; lower grades, $1.
In each case, the price is quoted on a hundredweight for live stock on the hoof, and the commission of the seller as well as the freight must be deducted from the already low price that the farmer is receiving for his cattle. Hon. members who are familiar with farm products know that it is very hard to ship first class live stock in February, on account of the cattle having to remain indoors. Consequently, live stock sold in winter are nearly always of the second grade. Take pigs weighing from 150 to 225 pounds, that is selects which are being sold at $4.75 to $5; the second grade is worth only S3.25 per hundred. Deduct the freight and you will see that a farmer cannot raise pigs at that price. The same may be said of second grade cows which are being sold at $2.50 per 100 pounds. In our district when a cow weighs about 1,000 pounds, we consider that it is a nice cow. It would yield about $25 to the farmer, less the freight costs, the commission to the buying agent and then the commission on the sale in Montreal. That would leave an average of $18 or $20 per head for the best cattle that we have for sale.
I stated, a moment ago, that hon. members opposite, whenever mention is made of the condition of the farming industry, did not want their party to be blamed for it. They say: Give us all the credit for what we have
accomplished with the tariff which helps a
few privileged interests, but do not blame us for the farming situation! Let them read the statement issued by the leader of the Conservative party on July 15, 1930, in which he said:
We pledge ourselves to promote and develop agriculture, the live stock industry and the dairy industry, that are presently so badly neglected.
Thus he spoke when the products which I have just mentioned were bringing more than double the present prices.
Here is another statement made by the right hon. Prime Minister during the last campaign, when, as leader of the Conservative party, he delivered a speech at Ormstown. He was reported by the Morning Citizen of June 30th, as follows:
He said it was necessary for the farmers to receive for their efforts a remuneration equal to that which is afforded in other occupations. We must see to it that this profession be made as remunerative as any other.
And we hear hon. members opposite say: "Give us credit for helping the industries and the financiers to better their position; as to the farmer, do not speak about them."
He also said:
We of the Conservative party pledge ourselves to see that farming becomes again as remunerative as in the past.
Have we not a right, Mr. Speaker, to tell the party in power to-day what we think of their achievements as regards the farming class and the results thereof?
In order to show more clearly to what extent the prices of farm products have fallen down, I shall compare the prices of the week of January 28, 1930, that is a few months before the Conservatives came into office, with those of the corresponding period in 1932, after eighteen months of Conservative administration. In 1930, cheese sold at 18 cents; in 1932, 10 cents; butter, 36 cents in 1930 and 17 cents in 1932; wheat, $1.20 a bushel in 1930, and 56 cents in 1932; oats, 55 cents in 1930 and 27 cents in 1932; steers, $9.50 per 100 lbs in 1930, and $5.75 in 1932; pigs $1255 per 100 lbs in 1930, and $4.50 for selects, in 1932; sheep, $7 in 1930, and $3.50 in 1932; and I could keep on naming many other prices. The leaders of the Conservative party and those who supported the Conservative policy were then asserting that the 1930 prices were not in keeping with the needs of the farming class and that the farming industry had to be made as remunerative as in the past. They said: "We pledge ourselves to promote agriculture in order that our farmers may receive

The Budget-Mr. Bertrand
a remuneration equal to that of other professions. What was the result? Prices fell by more than 50 per cent since 1930.


Mr. ROSS:: Go ahead.


Mr. BERTRAND:: I will surely go ahead, my friend.
In his budget speech, the hon. Minister of Finance, who, I think is very clever, mentions public debts, railway revenues, and taxes; but we find nothing in this budget concerning agriculture which might be of any future assistance to the farming class and the country as a whole. I hope that future budgets will contain measures beneficial to all classes of the community. The farmers, like any other class of people in this country, were expecting some relief from the budget of 1932; they were hoping for a few privileges to recover some measures of prosperity and to enable them to balance their own budget.
It is said that a broken morale may cause a lot of harm. Well, Mr. Speaker, I must say that the farmers have certainly lost confidence in their own profession, and they are wondering how to get out of the depression in which they are now.
Protection is in force since two years. During the last election there was no question of our country being affected by the world crisis. At that time, the people simply thought that the government should avert the crisis,
in order that this country may not suffer from it. What changes have occurred since then and what is the attitude of hon. members opposite toward the farming class? That is where the tariff policy of the government is calling for criticism. They tried higher tariffs which did not protect the Canadian industries during this period of depression. They could not maintain the standard of wages, nor the standard of living in Canada.
They tend to deprive the treasury of revenues, thereby obliging the government to increase the burden of taxation by raising the income tax, sales tax. and all kinds of annoying taxes, which contribute, the more and more, to restrict the purchasing power of Canadian consumers on the home market. The tariff has been raised unreasonably. They had faith in such a policy. They can no longer plead ignorance as to the result of high protection. They now realize that tariff is not the supreme remedy to all the ills. The experiment tried by this government has clearly shown the meagre success which high protection gives. The prices of farm products are now at a lower level than we have seen them for a great number of years past.


Mr. POULIOT (Translation):: Shame!
shame!


Elie-Oscar Bertrand: To clearly show how the Canadian farmer stands, I shall quote the prices of the various farm products, for the past 20 years.

Top Closing Prices and Comparisons
-	Cheese Boards No. 1 Coloured	Cream Butter Solids	Eggs Extra	Ontario Wheat Mixed	Ontario Oats	Butcher Steers	Hogs	Choice Butcher Sheep	Spring Lamb EwesJan. 28/32	cents	cents	cents	$ cts.	$ cts.	t cts.	$ cts.	$ cts.	$ cts.10	17	17	0 56	0 27	5 75	J4 50	3 50	7 001931 	141	32	25	0 70	0 28	7 00	8 50 112 25	6	25 7	00 7	00 6 00 6	50 8	00 8 50 8 00 7	50 6 00 7	00 12 50 10 00 15 00 10 50 8	75	8 50 12	25 14 50 13	50 12 251930 	36	50	1 20	0 55	9 50	1929 	41	38	1 32	0 52	9 50	til 75	1928 	37J	40	1 27	0 58	11 75	f 9 15	1927 	411	48	1 28	0 50	7 50	11 50	1926 	45	46	1 40	0 43	7 50	13 85 11 10 7 75 10 50 12 75 15	25 19 25 16	50	1925 	32 J	58	1 85	0 60	7	25 6 75 8	25	16 251924 	43*	42	1 00	0 43	1923 	411	38	1 13	0 47	1922 	35	45	1 00	0 35	7 00	1921 	551	65	1 70	0 45	10 50	1920 	65	70	Nom	1 02	14 75 16 75	1919 	51*	50	2 13	0 68	1918 	47	55	2 14	1 00	11 90	18 50 14 75 10 45 8	30 9	65 9 10 6 90	19 001917 	40	50	1 70	0 70	11 50	1910 	32*	31	1 15	0 49	8 29 8 25 8 50 7 00	31	30	1 60	0 70	0 dO	1914 	29	34	0 93	0 41	6 00 5 00	29*	27	0 97	0 40	1Q12 	35	40	0 97	0 52	6 90	
>
"d



to
1923-6 Hog quotations are for thick smooths.
tHog quotations are for selects weighed off cars. tHog quotations for bacons, f.o.b.
The Budget-Mr. Be
Bankruptcy Act

As you can see, the 1912 prices were as much as 100 per cent higher than at present, and taxation 100 per cent less.
Allow me to inform the house, before it rises, of the various municipal and school taxes in Prescott, for a hundred acre farm: In 1901 the taxes amounted to S38; in 1914, $60; in 1930, $175; therefore an increase, from 1914 to 1930, of 300 per cent. The Dominion government, in 1901, levied $8.72 per capita; in 1914, $16.56; in 1930, 836.01; therefore an increase, from 1914 to 1930, of 120 per cent. The provincial tax amounted in 1901 to $1.85 per capita; in 1914, $4.49; in 1930, $17.50; therefore an increase, from 1914 to 1930, of 400 per cent. Such taxation greatly increases a farmer's overhead charges.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



BANKRUPTCY ACT AMENDMENT


[Stage Direction]
Mr. MAURICE BRASSET (Gaspe) moved the second reading of Bill No. 36, to amend the Bankruptcy Act (Locality of a debtor).
He said; The purpose of this bill, Mr. Speaker, is to compel creditors in the province of Quebec to take bankruptcy proceedings in the district where the debtor resides. Last session a similar bill was withdrawn on the representation of the hon. Minister of Justice (Mr. Guthrie) that this year a general revision of the Bankruptcy Act would be undertaken, which revision would very likely cover this point, but I fail to see that anything has yet been done in this direction. Last session it was objected that such an amendment would make it more expensive for creditors, but on the contrary I think that the procedure proposed would be less expensive in the long run. At present debtors in outlying districts have to come to Montreal or Quebec when bankruptcy proceedings are taken against them, and in many cases the expense is very burdensome. I hope the bill will be given second reading.
Hon. HUGH GUTHRIE (Minister of Justice):: Mr. Speaker, I have no objection to this bill being read a second time and referred to the special committee which is now considering the question of amendments to the Bankruptcy Act. The committee was appointed in connection with a general bill to amend that act, and this is one of the subjects under discussion before that committee.

My advice to my hon. friend is that he lay his case before that committee, when I am sure it will receive the fullest consideration. In fact the matter is already under discussion in that committee. Therefore I suggest that the bill be read a second time and referred to the special committee.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the special committee considering the Bankruptcy Act.
Pierre Édouard Blondin: Business under the heading of private and public bills having been completed, the house will resume the adjourned debate on the motion of the Minister of Finance.



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. E. N. Rhodes (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, the proposed amendment thereto of Mr. Ralston, and the proposed amendment to the amendment of Mr. Gardiner.
Elie-Oscar Bertrand: Mr. Speaker, I shall continue the comparison which I was making previous to the house rising at 6 o'clock. In 1914, the Canadian farmer could purchase a six-foot mower for $43.50; in 1930, $96.50; a six-foot binder cost in 1914, $102; in 1930, 8225.50; a six-foot hay loader, in 1914, sold for $60; in 1930, S122; a fifteen-disc sower, in 1914, cost $69; in 1930, $166. This is, therefore, an increase of 125 to 150 per cent between 1914 and 1930, on implements which are needed on the farm.
It is very difficult, under such circumstances, for the Canadian farmer to earn a livelihood, should conditions not improve, the farmer will be bankrupt; we wonder whether the government will come to the rescue.
The time, perhaps, is well chosen to offer a few suggestions, since our opponents contend that we only offer criticisms, which can have no good results. I am glad to point out to the house that I made very practical suggestions at the session of 1930; suggestions covering eight different features of the question and which had been studied by the Ontario Farm Association and accepted by a number of farm associations. I shall again suggest them to the house since they are still of actuality and should be taken under consideration by the government in the in-

The Budget-Mr. Bertrand
terests of the farming class, in order to assist them in their distress.
I may quote a paragraph from the Department of Agriculture, to be found in the Economic Annalist of January, 1932, issued under the direction of the hon. Minister of Agriculture (Mr. AV'eir), and showing, in the following terms the failure of the activities of his department:
We are thus faced with an economic situation in which probably about one-third of our population find that for every dollar of income which they received in 1929 from produce sold they are now getting only 58 cents, and that when they in turn enter the market as purchasers, the goods for which they paid $1 in
1929,	far from being offered them at a price commensurate with their 58 per cent ability to pay, are selling at 90 cents. The result is that the farmer purchaser either declines to buy at all or buys less than two-thirds of his requirements. The retarding effect of this lowered purchasing power on general business is already too familiar to require further amplification.
In the foregoing you may see, condensed in few lines, what the conditions are at the present time in so far as the farmers are concerned. The most startling feature of it all is that such conditions are noted by the hon. Minister of Agriculture himself, for the statement I have just read is published under his authority in the January issue of a pam-plet entitled The Economic Annalist. Such a statement is indeed quite astonishing since it points out the inability of that department to give assistance to the farming community at the present time.
The present level of prices for farm products, when compared with that of the year 1914, may be seen in the following trade index numbers: In 1914, 100.0; in 1929, 104.0; in
1930,	61.8, and in 1931, 53.0. This means that, at the present time, the farmer only receives 53 cents instead of the dollar he got for the same products in 1914. Therefore the conditions are worse that in 1914, and once more, we urge the government to come to the assistance of the Canadian farmers.
Our people, and particularly the farmers in Canada, are overburdened with debts and taxes of all kinds. A comparison between our public debt and our exporting trade shows how difficult it is for us to cope with the supreme folly of a Canada First policy, because of the tendency of high protection to restrain trade through higher rates of duty. A nation, as well as an individual farmer, gets into debt when the expenditures exceed the receipts, and debts thus incurred can only be paid through the sale of their products, the value of services rendered and of their
trade. A farmer who should attempt to settle his own accounts with the bank in trading his butter for eggs would obtain no practical results; the same may be said of a nation that would attempt to pay its own foreign debts through the exchange of wheat from a certain section of the country for other commodities of the same country; such a method of paying national or commercial debts, is a sheer impossibility.
Where is Canada being led to by that policy of trade restraint with its consequent high tariff that prevents the marketing of our production? A policy of that kind is bound to lead us to almost complete disaster.
A few days ago I came upon a most interesting report in connection with the income tax. In 1927, there were 594 individuals whose income exceeded $50,000; in 1930 the number increased to 603; the number of incomes of between $25,000 and $30,000, which was of 403 in 1927, has grown to 674 in 1930; for the incomes of $35,000 to $50,000, the number which was 574 in 1927, had increased to 1,106 for the year 1930. These figures show that the big interests are enjoying constantly increasing incomes while the remainder of the people are suffering from the depression; it shows also that a protection policy has enabled that particular class of people to earn more money, to add to their incomes, at a time when the mass of the community, the farmers and the workers are in dire need and can not secure employment to earn their living; it means that, while the unemployed and the farmers are crushed under the weight of depression, a certain class of taxpayers are profiting thereby; it shows that our national wealth is far from being properly distributed among the various classes of our population.
Before concluding, I may say that the government might very well look into the real situation in every class of the community; ascertain as to where is centered the wealth which our national resources have enabled these people to accumulate; find out in whose hands such private fortunes are now being held and to levy on same, in order to try and help our population to weather the present crisis and to bring order out of chaos.
An hon. MEMBER (Translation):	Hear,
hear.


Elie-Oscar Bertrand: As a result of the decrease in the buying power, unemployment has increased, and so have the hardships and sufferings of the people.
The Budget-Mr. Sauve

In the main, what are we to expect from the budget proposals? We are offered an increase in taxation to the extent of 155,000,000, and are led to anticipate a surplus of $4,300,000 at the end of the year. Such a statement is likely to create a false impression. No provision is made in the budget for any extraordinary expenditures which the government may be called upon to make; no provision for the relief of unemployment for which some 70 millions have been absorbed since 1930; no bonus for the western wheat, which has cost 11 millions this year; nothing in connection with the Canadian National the deficit of which reached 110 millions last year. Who is in a position to say that we shall not be called again, this year, to provide work or food for the unemployed? Who can say that the railways shall not require further assistance this year?
It is recognized by everybody that the government should, without any further delay, assist the farming class, and in concluding my remarks, I earnestly urge consideration for that particular class, whose welfare, may I say again, is essential to the economical reconstruction of our country, and it is the duty of the government to help agriculture, above all else, in order to preserve in its entirety the economic and financial structure of the country.


Arthur Sauvé: Mr. Speaker, if I feel
bound to add a few words to this debate, it is not because my remarks may be necessary for the vindication of the government, but merely because I wish to correct certain false representations made in connection with the present economic conditions and the policy of the government, as well as to reply to attacks launched in this house in terms both abusive and regrettable. I shall not use the same tone of language but the same language. I wish to apologize to the majority in this house if I do not express myself in a language with which they are more familiar.


Mr. BOULANGER (Translation):: There
is no apology to offer; we are entitled to speak French in this house.


Arthur Sauvé: It is also
a matter of courtesy.
In the course of my twenty-five years of political life, I never once thought that abuse and excess of language could be seemly in a man of education or add anything worth while to the standing of a parliamentary debater indulging in the same against an opponent.
Before proceeding with my remarks, I should like to say to my hon. friend the member

for Prescott (Mr. Bertrand) that my criticism is not levelled at him, for I congratulate him on the high plane of his speech as well as on the great effort he displayed in order to find fault with the government.
May I also extend my congratulations to my genial colleague whose first speech as Minister of Finance (Mr. Rhodes) was such a success.
I must at the same time congratulate my hon. friends from Shefford (Mr. Tetreault), from Kent (N.B.) (Mr. Arsenault), from Pontiac (Mr. Belec), and from Champlain (Mr. Baribeau), from St. Ann (Mr. Sullivan), who, in their maiden speeches, have made a most interesting statement of the facts, thus showing their high sense of duty.
Two years will soon have elapsed since the leader of the Conservative party was elected and authorized to form a government empowered to apply their policy during the five-year term of the new parliament. That policy, which is one of adequate protection, he has been preaching for more than half a century. More than at any other time previously, that policy is called for, since all the other nations in the world have also made it their own in order to safeguard their interests. In Canada, when the Liberal party was in power, they were forced to submit to that same policy, although they disliked it and attempted to cause it to foe scorned. Their lack of sincerity in connection with tariff matters impeded our economic education and gave rise to hurtful prejudices. Tariff protection should not foe considered as an ideal step towards the fraternity of the human race, but as an economic necessity and as a means of achieving national unity. International fraternity must not be carried out to a point where it may destroy patriotism or compel a nation to weaken itself, to ruin itself in order to be on good terms with its neighbours. Did the government do its best to respect and fulfil the program it submitted to the people in 1930? That is the pertinent question which must be answered by every good Canadian. I think that every honest citizen well informed on our economic and political situation will answer in the affirmative.
The Bennett government came into power at a time when the depression was at its climax. Depression prevailed in this country as well as in other lands. It is a condition both domestic and external. As the hon. member for Labelle (Mr. Bourassa) rightly pointed out, we are now paying for our extravagance, our excesses of the past, and because we waited too long to open our eyes to facts, to reason

The Budget-Mr. Sauve
and justice, because we have, for too long a time, fostered a delusive speculation, because we have denied the existence of a crisis and concealed its causes, we are paying the price now. As far as I am concerned, I have no cause to be ashamed of the policy I favoured in the past, for I am of those who, since the world war, have foreseen the impending depression, denounced those responsible for it, and insisted upon more vision in the government of the people, more caution in legislation and a greater rational economy in the management of various public affairs.
Unpleasant as it may be for me to be the butt of rather abusive attacks, I see in them a redeeming feature because, in their attempt to reach me, my opponents are compelled to ascribe to me words that I have never uttered and promises that I have never made.
The government are doing their utmost to follow their policy and to secure good results from its application in spite of the difficulties arising from the blunders of the past, the poor crops in western Canada, the speculation in wheat and the depression obtaining in other countries with which business could be transacted in normal times, difficulties considerably aggravated owing to present conditions.
Mr. ST-PERE (Translation):	A futile
attempt.


Arthur Sauvé: The government can not be held responsible for the present world-wide depression.
Mr. ST-PERE (Translation): They made promises.


Arthur Sauvé: The government has decreased our imports to a lower level than our exports. Our people now consume a much larger proportion of Canadian products, these products selling at moderate prices.
Mr.POULIOT (Translation): Shame,shame.


Arthur Sauvé: The ramblings
of the hon. member for Temiscouata (Mr. Pouliot) do not anger me. Although the producers may be now selling some of their commodities at a loss, one must bear in mind that we are now going through a process of reorganization, of readjustment. Our methods of production shall undergo a change for the benefit of both the producer and the consumer. If the prices of some farm products are too low, the fault does not lie with the government, but it is due to the depression now prevailing in every country. According to my hon. friend from Prescott, it is appalling to note to what extent the government is to be blamed for allowing such conditions to endure.


Joseph Oscar Lefebre Boulanger: As you were saying three years ago.


Mr. LARUE (Translation):: You said so before.


Arthur Sauvé: I am fond of
any echo from my hon. friend from Belie-chasse (Mr. Boulanger), but I would rather listen to his speech after mine.


Joseph Oscar Lefebre Boulanger: You shall hear it.


Arthur Sauvé: What country
could, at the present time, offer to us a better market, if my hon. friends were in power? What country, were they in office, would offer them higher prices for our farm products and manufactured goods? Can you name a country where, at this moment, the depression is not more keenly felt than in Canada?
An hon. MEMBER (Translation): Hear, hear.


Joseph-Arthur Denis: That statement is not on all fours with your pledges.


Mr. DORION (Translation):: You have already made promises yourselves. Answer the minister's questions.


Arthur Sauvé: I shall reply
to my genial friend from Saint-Denis (Mr. Denis), who, I must give him credit for it, always pays particular attention to me.


Joseph-Arthur Denis: That will take some time.


Arthur Sauvé: Yes, to answer my questions. Nobody foresaw in 1930 that the crisis would last as long or that such great depression would be world-wide. Where is there a country whose products fetch a higher price than ours? There is not one. And, that is why my opponents do not answer my question. We are told that in the last couple of years, although many new industries have been established in this country, several old ones have closed their doors. That may be, but it is due to the inflation of the war period. In certain lines, there are too many factories. For instance, I ask my hon. friend for Temiscouata (Mr. Pouliot) who is a good Quebecker, whether there are not too many shoe factories in our province?


Jean-François Pouliot: I do not admit that.


Joseph-Ernest-Henri LaRue: You never will admit anything.


Arthur Sauvé: The hon. member for Temiscouata will only admit when in the other world. The equipment of these

The Budget-Mr. Sauve

manufactures is too costly for the present requirements.
Our butter and cheese exports show an increase of hundreds of thousands of pounds, and our exports are down to a minimum. In all of that, one may see a good organization for the future, as well as a medium to profit by the return of prosperity. It is a matter of regulating, of simplifying our production, rather than of complicating matters.


Jean-François Pouliot: That is rather complicated.


Arthur Sauvé: Yes, it was
so much so in past years.
The government has cut down expenditures to the very limit. In the Post Office Department alone, expenditures have been reduced by .more than four millions of dollars. We are told that we increased the public debt and, along with a Quebec newspaper, our opponents say:
Under a Conservative government, our debt and expenditures are increasing, and when the Liberal party is in power, they are decreasing.
They overlook the fact that, from 1896 to 1911, they increased the national debt by over 80 millions and the expenditures by more than 78 millions.


Mr. RHEAUME (Translation):: It was in order to pay for the Langevin building.


Arthur Sauvé: What in the
world does the hon. member for St. John's know about the Langevin building?


Pierre Auguste Martial Rhéaume: I know something about it.


Arthur Sauvé: Our opponents also forget to mention that, under their administration, in 1905, farm products were selling at lower prices than at the present time.
Pork was then selling So per hundred pounds; hay $4 and 85 per ton, while poultry fetched 50 cents per pair.
In 1922, they pledged themselves to a fair trial of the Canadian National and that trial proved to be a ruinous extravagance.
If the public debt has increased, it is due to the statutory commitments of previous governments, to unemployment, to the general depression of business over which the government has no more control than they can exercise over the world-wide crisis responsible for the weakening of demand and prices in foreign markets; over the stock exchange disasters and the speculation which, as a result of too optimistic a publicity, made so many victims among capitalists, business men and investors.
The government boldly faced the unemployment problem. If the Unemployment Relief

Act was improperly applied, the fault does not lie with the Dominion government whose part is simply that of an endorser to the provincial governments, the latter giving their approval to such works as were requested by the municipalities. The act, although national in character and in every respect a patriotic move, cannot be perfect. There are some who claim that relief works directly undertaken by the government would have been preferable. Such an opinion is not to be ignored and is worthy of consideration.
The local legislatures, who are rightly solicitous to preserve their autonomy, should not take an undue advantage of the Dominion government's participation in their own affairs and thus uphold those who are in favour of legislative union. The impression should not be created among the people that with the federal authorities lies the responsibility in matters that are within the scope of provincial and municipal governments.
We have not broken our pledges, but have done our utmost to keep them. If the result was not all that was expected, it is due, may I say again, to circumstances over which the government have no control. We undertook to put an end to imports of goods ruinously competing with our own products. We have been successful in reducing these imports to a minimum. We have passed more than twenty-five orders in council in order to protect the farmers in the east, and especially the truck gardeners, thus closing the door, during seasons of plenty, to the products of countries enjoying a better climate than we do. For the protection of the western farmers we have established a bonus of five cents per bushel on wheat. We have concluded with Australia a trade treaty that was praised by the leading members of the Liberal party in this house and also met with unanimous approval on the two sides of the house. We have done away with the system under which Canada imported thirty million pounds of butter from New Zealand. Of course, the price of butter is very low at the present time and that makes for quite embarrassing and painful conditions as far as our farmers are concerned. But, what would the price of butter be to-day, should New Zealand export to Canada as much of that commodity as in the past? What are the prices of butter and cheese in the foreign countries? Our opponents are reluctant to give us that information. We never pledged ourselves to cause the price of butter to reach fifty cents per pound, but we undertook to put an end to competitive imports, and we have kept faith.
We have been told that, during the last provincial election, I promised the butter in-

The Budget-Mr. Sauve
dustry a bonus of two cents per pound. When I was. sitting in the legislative assembly of my own province, I moved that the local government should grant a bonus of two cents per pound and that they should come to an understanding in that connection with the Dominion government. The motion was not accepted by the Taschereau government. I have been charged with having made that promise throughout the province of Quebec during the last provincial electoral campaign. In the first place, I must say that I never addressed a meeting outside of my own constituency. During the last provincial election, in a speech I delivered in my constituency, I said that the Dominion government were willing to discuss the matter with the provinces if requested to do so by their respective governments. That statement was confirmed by a telegram from my colleague, the Minister of Agriculture (Mr. Weir). The Quebec government were openly opposed to such a policy which was criticized by their prime minister and their Minister of Agriculture. The members who in this house are the most insistent in their demand for that bonus are staunch supporters of the Quebec government who so strongly oppose such a policy. The hon. member for Bellechasse praises the Quebec government who are against the granting of a two-cent bonus for the exportation of butter, and yet we hear him loudly proclaim in this house: "That bonus must absolutely be granted-''


Joseph Oscar Lefebre Boulanger: Will the hon. gentleman allow me a question?


Arthur Sauvé: As long as
you do not make a whole speech.


Joseph Oscar Lefebre Boulanger: Should
this government grant a bonus for the exportation of butter?


Arthur Sauvé: When representations from the Quebec government and from the other local governments are made to us, then we shall be in a position to give an answer to the hon. member for Bellechasse. The hon. Minister of Agriculture in the province of Quebec, Mr. Godbout, also stated that he was opposed to such a bonus, just as he did in connection with the establishment of a rural credit at the expense of the province.


Joseph Oscar Lefebre Boulanger: Is the
hon. minister for or against the bonus at the present time?


Arthur Sauvé: At certain
times the hon. member for Bellechasse has evinced a desire of being considered as a man in earnest; why then should he alter the goal 41761-1371
of his ambition to-night? Would it be merely in an attempt to annoy me?


Joseph Oscar Lefebre Boulanger: You
would be better advised in answering my question.


Arthur Sauvé: The amendment moved by Mr. Ralston does not ask that bonus for the farmers. Why then, did not those who so loudly insist upon it, request their leaders to have it included in the amendment introduced by the opposition? Where is their consistency? Where is their sincerity? I am of the opinion that the matter is primarily of a provincial character, owing to the fact that conditions in agriculture and dairy farming are different in every province. It is imperative that production of a particular kind be assigned to special districts. Would it be, may I ask, in the interest of agriculture, at the present time, to have the western part of the country engaged in mixed farming or in intensive dairying? Our market conditions do not, at this moment, warrant an increase in production. One must bear in mind that overproduction is the chief cause of the present depression. Overproduction in agriculture must be avoided, and so must we guard ourselves against an unscientific and unconsidered industrialization of agriculture.
The hon. members opposite are in favour of a rural credi t system. When they were in power they established one, but now that they sit on the other side of the house that system no longer suits them. In the legislative assembly at Quebec, I always contended that such legislation was a matter for the local governments, owing to the particular requirements of each province. I urged the Quebec government to come to an understanding with the Dominion government in order to secure a better rural credit system. My request was not acceded to. The Minister of Agriculture, Mr. Godbout, opposed a scheme of rural credit, stating that at the present time such system would bring disaster to agriculture and to the province itself. In the amendment moved by the Hon. Mr. Ralston no change is advocated in the existing rural credit legislation. Why did the Liberals not request this bonus in their amendment?
A great many things could be done in normal times, but just now we are struggling against adverse conditions. As was the case in the days of the Bourbons and of the Ligue, are we told by a distinguished French writer, parliaments in every country are now appealing to their respective governments and their cry is: "Eripe nos de luto." "Drag us out of that pestiferous mire through which we
The Budget-Mr. Sauve

are floundering." In support of my argument and of the policy followed by this government, I may quote from economists who have no connection whatever with the government or the Conservative party. They are Mr. Ohlin, professor of economics, and Mr. Maurice Guenard, of the Revue de France, both unbiased and keen observers. Mr. Ohlin has this to say:
Beginning with the fall of that remarkable year, the world trade has continually been decreasing and the wholesale prices of all internationally exchangeable commodities have declined in proportions such as to frequently cause dismay among the producers. During the first quarter of 1929, industrial production was on the decline in every country. The New York stock exchange crash in 1931, followed by similar collapses on the leading exchanges of other countries, remarkably aggravated the trend of affairs and added to the intensiveness of depression.
In 1930, as well as in 1931, over-production in agriculture did not cease, in spite of still lower prices. Acreages of wheat were reduced by only a trifling percentage, as also was the case in connection with agricultural foodstuffs (wheat, sugar, coffee, hops) and other farm products grown for industrial purposes (textiles, oleaginous materials, rubber). The depression in agriculture, the results of which were felt so keenly by Canada, was largely brought about by the fact that the yields of crops varied in the last few years, in Europe as well as in America and Australia. As a sequel to the difficulties with which these countries were faced, enormous stocks were accumulated. In 1930-1931 the world had another heavy crop yield, with the exception of the United States- On the other hand, Russia is increasing its wheat acreage by approximately 20 per cent. Result: a disturbed market with protracted instability.
Such a state of affairs will no doubt retard the development of mixed farming in Canada owing to the competition already being felt.
In Canada the wholesale prices of raw products showed a decrease of 33 per cent between June, 1929, and June, 1931, while the decrease in the prices of manufactured goods was only of 19 per cent. With the exception of Sweden, because of special reasons, the same decrease is reported in other countries.
In the United States, between June, 1929, and June, 1931, the wholesale prices of foodstuffs decreased by 26 per cent, and the retail prices, by 24 per cent. In Sweden, the wholesale prices of foodstuffs of agricultural and animal origin decreased respectively by 17 and 23 per cent, while retail prices for the whole decreased by 16 per cent.
In the United States the profits of 1,900 corporations reporting to National City Bank for the year 1930 were 40 per cent less than for the previous year. The decrease in profits was of 90 per cent, in the rubber industries; 70 per cent in the iron and steel industries; from 50 to 60 per cent in petroleum industries, railroads and automobile plants, from 40 to 50 per cent in the case of banks and insurance companies. In Germany, the total profits of financial and industrial undertakings show a decline of 25 per cent and in Great Britain, the loss of about 15 per cent.	,
In Germany, the market prices of industrial stocks showed a loss of 61.7 per cent, while the decrease percentages in the United States,
IMr. Sauve]
France and Great Britain were respectively 59.7, 55.7 and 45.	.
As a result of the decrease in their national revenue, (taxation, customs, railroad receipts, etc.) and of increasing public expenditures (unemployment relief, etc.), several governments were compelled to borrow. In that respect, the situation has not materially changed in most of the countries.
With the exception of France, Belgium, Spain, Lithuania, Uruguay and Russia the amount of notes in circulation is on the downward trend.
After having been a capital exporting country from 1923 to 1928, Canada had to import foreign capital in 1929. That reversal is accounted by a decrease of over 40 per cent in the Canadian wheat crop of 1929 and by the enormous demand of capital required by Canadian industry and for the carrying-over of the large crop of 1928.
In his analysis of the Bennett government policy, Mr. Guenard says:
The situation in Canada does not differ from the conditions in other countries. The main difficulty is that of ridding oneself of the deterministic frame of mind induced by the trend of political, economic and social facts. Canada is powerless in the face of the economic disturbance now obtaining in the United States, the waves of which are unfurling themselves over the Canadian border similarly to the rushing waters of the great lakes on a stormy day. Canada is powerless against the weakness of the sickly English pound, or against the threats of the British tariff, which, in a porcupine like manner, keeps all imports at a distance. Canada,-the fourth largest producing (per head of population) country in the world-has no control over the plethora of markets where the peanut of Africa is left to rot on the docks, the Brazilian coffee used as locomotive fuel and the American wheat has become a food for cattle.
Practically powerless as Canada may be, the Canadians nevertheless face courageously their fate, watched as they are, but unimpeded, by an opposition conscious of the menace. They are struggling against unemployment^ are doing their utmost to prevent its aggravation by giving relief to the unemployed. They are economizing and their budget calls for a cut of 43 millions dollars in the expenditures; salaries of civil servants have been reduced, as well the indemnities of the members of parliament and of the cabinet. A favourable trade balance has been established. Canada also successfully floated sinking fund loans as a result of which the country's treasury is materially reinforced. A trade agreement has been entered into with Australia and negotiations are under way for another agreement with New Zealand. Canada has extended an invitation to all nations of the empire to take part in the Economic Conference that will meet on the 18th of July.
Thus, the Bennett government stops, one by one, such leaks as develop in the hull of the ship of state. But the speech from the throne clearly stated the truth: "World conditions are beyond the control of the Canadian people".
"The only thing they can do is to dig trenches and erect barriers in order to stem the menacing forces of economic distress."
Canada is not even in a position to profit by an opportunity that offers, an opportunity which might prove worth while or, at any rate, would have gratified national pride. The govern-

The Budget-Mr. St-Pere
ment of Newfoundland, whose budget was in a precarious condition, offered to dispose of their entire rights on Labrador, a geographically Canadian territory. The price was one hundred millions and Mr. Bennett had no other course but to reply: "As long as the world conditions are what they are, Canada cannot consider the proposal". One cannot help thinking of historical precedents, of Florida being purchased for 25 million francs and Alaska, for $7,200,000, the resources of which countries subsequently proved to enormously exceed the price of purchase.
Just as on a race track, every turn reveals a higher barrier than the previous one, so in a review of the activities of the Canadian people, one is faced with a higher wall or a wider river that must be oleared to reach the end in view. We have not as yet made any reference to the reorganization of the railroads, to the merchant marine, neither have we mentioned the state of dejection in which the Montreal and Toronto stock exchanges have sunk as a result of the epidemic that originated in New York and Chicago.
On the contrary, the nearer the world depression draws to an end, the factors at play in Canada for the recovery from its effects become more apparent: "at first a young and bold optimism, natural resources of astounding wealth, an inflow of foreign capital and that strength accruing from an unanimously favourable public opinion throughout the world."
Most undoubtedly, the time is at hand when Canada's hour shall be sounded. The only difficulty is to know how many times the hand will have to travel around the dial before we hear the joyful peal of the gong sounding that hour.
The foregoing is the answer of fair-minded men to the outbreaks of our opponents.
We are told of abuse of authority. I sat long enough in a house where abuse of authority was of frequent occurrence.
I will mention a ease in point.
I do not speak for my hon. friend from Temiscouata (Mr. Pouliot) who is sensible and who understands quite well, no doubt, any of my references to the government of the province of Quebec.


Jean-François Pouliot: Will the hon. Postmaster General allow me to ask a question.


Arthur Sauvé: Shortly; when
I am through speaking, you may put all the questions you wish.
The Liberals who are the most shocked at the acts of this government which they state is abusing of its situation, are the same ones, who approved of the Taschereau government, in 1922, when, pursuant to the provisions inscribed in the Quebec Statutes, chapter 91, article 74, the Quebec Liberal government secured authority to take from the consolidated funds, all the money which the Minister of Highways would need to improve the highways, etc. This measure was arbitrary because there was no emergency necessitating such a step. The improvement of highways was a permanent and regular policy, based on
plans prepared in advance and on the province's financial state.


Pierre Édouard Blondin: The hon. Postmaster
General's time has expired.


Arthur Sauvé: I regret that
my time has expired.


Joseph Oscar Lefebre Boulanger: May I put a question to the hon. Postmaster General? What has the Highway Act of Quebec-


Arthur Sauvé: I shall answer my hon. friend when he has obtained the Speaker's consent.


Joseph Oscar Lefebre Boulanger: Can the hon. Postmaster General inform me what the Quebec Highway Act has to do with the Dominion government's policy on agriculture.
An hon. MEMBER (Translation): A great find!
Mr. E. C. ST-PERE (Hochelaga) (Translation) :	Mr. Speaker, my first word will be
one of congratulation to our new Finance minister (Mr. Rhodes) on the clear-cut and, may I add, courageous, first budget he has presented to the house. The budget itself, however, brings none of that prosperity promised us by the Tories at the last Dominion election.
I wish to congratulate also my old friend, the hon. Postmaster General (Mr. Sauve) for having-ever faithful to his principles-persevered in the old protectionist policy which he has never ceased fighting for.
I believe that when he stated awhile ago that certain opposition speakers used abusive language he surely was not alluding to the member for Hochelaga who neither in his election campaigns nor in the federal parliament at Ottawa nor elsewhere, has ever struck his opponents below the belt.
This new budget is crammed with statistics which show that our country is in a pitiable state. Our new Baron Louis, the hon. Minister of Finance, asks for money in return for the bad policy, viewed economically, his government has followed up till now. He demands funds from this house repeating the request that the former Baron Louis was wont to make to his partisans: "Give me good politics, my dear friends, and in the future I shall give you good finance."
A moment ago, my good friend the hon. Postmaster General said that for years the members of the opposition have been asking for a free trade policy. At times my good friend can joke without displaying a smile. He well knows, since he comes from the province of Quebec, that the old Liberal party in our province has never asked for free trade, but was content with the economic policy put into practice by Sir Wilfrid Laurier and his sup-
The Budget-Mr. St-Pere

porters, based on a tariff for revenue which afforded protection at the same time to our large industries and to the general economic interests of Canada. Like all governments that are hard put to it-and our Canadian government finds itself to-day in the very same position as the governments of many other countries-our government first sets about practising certain economies: the ten per cent cut in the salaries of our civil servants. I am opposed to this false economy and my main reason is that I represent one of the largest workingman's ridings in Canada. I am against this reduction in salaries for the very good reason-and in this I am not moved merely by preoccupations of political expediency-many of our foremost economists take the same attitude-that a reduction in salaries is inevitably followed by* a weakening of the purchasing power of the country's citizens; and the Lord knows this reduction in purchasing power has, in the present instance, caused innumerable disasters in different parts of Canada and throughout the entire world. I quote Mr. James Klyne, Assistant Secretary of Commerce in the United States:
In the period comprised between 1921 and 1929, wages really increased by 13 per cent; during the same period the profits of industry rose 72 per cent; and these same industries gained in dividends 256 per cent.
I wonder, Mr. Speaker, if this discrepancy does not absolutely justify our large labour organizations who never cease protesting any reduction in wages.
I have never had faith in these plans of work for the unemployed as a solution of the economic difficulties of our population. Such works as have been undertaken have served, with certain exceptions, merely to enrich a large number of contractors, of partisans; and I even venture to say, representing as I do the opinion of the workingmen of my district, that our people would be better off if these relief works were stopped altogether. Direct relief will ensure far more improvement in the economic situation of Quebec, and the other provinces than have these undertakings for the benefit of the unemployed, which have cost $150,000,000.
These works, Mr. Speaker, should be replaced by direct relief. This latter, unfortunately, appears to be misunderstood by the public. This direct relief will not be a "dole" as applied in England; I consider that it will be simply returning to the workers a part of the wealth that industrial and other exploiters, thanks to high protection, have been despoiling them of for a number of years.

No more guarantees for wheat pools! We have there another false principle that has been applied for years. And direct aid, bounties and subsidies granted to industries are no more than another form of protection which puts these same industries in a very advantageous position when it comes to competing with the products of other countries in the markets of Europe. For the love of the Almighty, let us legislators have done with political prejudice, face the real situation, and understand our duty to enable Canada to compete efficiently with foreign products on the great European markets.
The reduction of the expenses incurred by the Canadian National-


Joseph-François Laflèche: Exactly.
Mr. ST-PERE (Translation):	Are you
willing that we should make a brief examination of conscience? What have we witnessed in this house within the last few years? Members, both Conservative and Liberal, have never ceased asking for branch lines in all parts of the country, supposedly to satisfy a public need. We have played politics with our national railways; and now we have to pay the cost, I will not say of the folly, but of this overzealous ambition to prove to the world that Canada had the greatest known railway system. This railroad problem is to-day a burning question in alii countries. In the United States it is the question of the hour and even in France the state railway is face to face with an extraordinary deficit. The statesmen of the latter country are striving their utmost to put an end to such an abnormal situation.
Now let us see what the government intends doing to remedy the present state of affairs. Yielding to repeated outcries in our large financial journals the government is thinking seriously of balancing the budget. The politicians of the neighbouring republic are inspired by the same thought. And, following the wake of Mr. Hoover's government, the government of the right hon. Mr. Bennett believes that the most tangible and the most economical way of improving the situation is to impose taxes. No doubt, taxes are always unpleasant. As an old saying has it: the most agreeable taxes are those that one is not called upon to pay. But there is one tax that strikes me as not only unworthy, that the worker, the consumer, the people of the middle class and even of the industrial class, will find it hard to pay: I mean the 6 per cent sales tax. A tax, like every other measure put forward, should in the minds of those responsible for it, bring about some tangible, some practical result. Can the government reasonably expect,

The Budget-Mr. St-Pere
conditions being what they are, with hundreds of thousands of people out of employment, that these people will continue to buy on the same scale as they did when times were pros-[DOT] perous? I say no. Can the government hope that the income tax, as now proposed, will bring the state more revenue than was paid in last year? I say no.
If I take this rather negative attitude it is after having consulted numerous friends, financiers, members of both parties alike. With them I have reached the conclusion that in view of the present depression the government cannot, logically and practically, hope to improve our economic situation.
I refrain from quoting the comments of the Financial Post in its issue of April 16th: it would take up too much time. Whoever wishes to read and study this article will find there a denunciation of the government's new fiscal policy and, further, which will be probably somewhat in the nature of a surprise, a prediction that the present fiscal year will show a deficit of 864,000,000.
Our friends across the way seem to have boundless faith in the coming imperial conference; the name by the way should be changed since, thanks to the recent Westminster Statute there is no longer any empire, but only a "commonwealth" of British nations. Let us, members of this house, read the latest comments of that great English review "The Nation", on the subject of the forthcoming imperial conference.
Of necessity this voice, I will not say of the British government, but of British opinion, expects benefical results from the conference. The article finds a clever way to introduce the idea that England is quite ready to grant the other members of the British commonwealth a certain preference in her markets; but to the reader who knows the use of "distinguo" and can analyse the author's thought it is clear that although England may be willing to make certain concessions, nothing in the world will induce her to adopt an attitude that might prove harmful to her government in its trade relations with foreign countries.
We are told that our industries have increased in number. As to that, I have not looked up the statistics; but concerning the latter I recall what was said by a great French economist: They are often lies published in figures. If this customs tariff adopted by the government, or rather modified by order in council at every meeting of the cabinet, if this tariff, I say, has met with so much success in attracting new industries to Canada, how are we to reconcile such a practical result with the fact, which is there for all to see in our large cities, that industries established for 20 or 25
years, are closing down? We would do far better it seems to me, to keep these factories going rather than try to attract American branch factories to Canadian territory, the profits from which will go to swell the fortunes of certain big American capitalists.
Now let us talk of Canada. It is a good thing as I said a while ago to look towards the past. I believe-and I am not alone in this belief-that we went ahead a little too fast, that we wanted to practise economic modernism at a time little suited to any such design: we have been seeking a rainbow. Certain speculators-and my friends to your right, Mr. Speaker, have heard something about this, particularly those who represent rural ridings- certain speculators, under cover of patriotism, overran our countryside selling worthless stock to our farmers; if the credit of the farmers in our province has suffered Slightly in consequence we must blame those who succeeded in making the farmers believe that their money would be more profitably invested in new industries, which had no prospect of success, rather than in lands which would continue to increase the family holdings.
It has been repeatedly stated that Canada is the granary of the Empire. What became of this granary when, after the Great War, the countries of Europe, Germany, Czechoslovakia, Transylvania, Hungary, determined to produce at home the wheat they had been buying from Canada?
We were in too much of a hurry, we forged too far ahead, and more than once we showed lack of discernment, of vision, of economic sense... Take another example: excessive immigration. What does it matter to me that both governments practised it? They sought to attract too many immigrants to our shores; why, only a few days ago I heard the hon. Minister of Immigration (Mr. Gordon) say that he hoped he would never see the day when a British citizen would be refused admission to Canada. Citizens of all countries should be welcomed here and, in Quebec province especially, we may say that we know how to receive them; but at a time like the present when the unemployed from all parts of the country are concentrating in our large cities we should, more than at any other time, close our doors to all immigrants, whether they come from England, France, Italy or other Nordic countries. "Canada First" should be the immigration policy of the new Minister of Labour in the cabinet of the right hon. Prime Minister (Mr. Bennett).


Charles Napoléon Dorion: Hear, hear.


Joseph Arthur Barrette: That's the policy we intend to follow.
The Budget-Mr. St-Pere


Jean-François Pouliot: You follow
it from a distance.


Lucien Dubois: With 500 immigrants on the way.	.
Mr. ST-PERE (Translation):	"Propheta
altissimi vocaberis." Our arm-chair economists talk of overproduction and underconsumption. To my mind what we are suffering from just now in Canada is overproduction. Why not make known to our people the true state of affairs? Why not admit the unrest that is found to-day among all classes of our population? Oh, the appeals to communism! I have lived my entire life among the workers, and those of the province of Quebec, be they English, Scotch, Irish, French, Canadian, Jewish, or of any other nationality, have no faith in the principles of communism. As I stated in a former speech, they are not even interested in finding out what the word means. Here is a typical example. Quite recently one of my worthy constituents asked me at the comer of Ontario and Davidson streets: "Will you tell me, my dear St-Pere, what the word communism means?" I thought I should try and explain to him, in my own way: "You see that house there that I built with my own savings? Well, if communism were put into practice I would have to share it with you." His good sense made him answer:	"What a
crazy idea!"
Let us have no faith in communism; but we must strive towards one end: improving the lot of the masses. From an economic standpoint the situation in our cities is distressing. At the present time a great many small owners of realty built with the savings of the working class, are wondering if to-morrow, with all this unemployment, they will still possess their property. Mention is made of a moratorium on mortgages. Since we talk of high finance in this house you will no douibt be interested to know that a certain prominent financier whom I met recently asked me to have a moratorium declared on loans due the banks-


Charles Napoléon Dorion: It would be a good thing.
Mr. ST-PERE (Translation): -with the understanding that the borrower would continue to pay interest. There you have the true situation, the uneasiness that is gnawing at our people to-day.
Quite frequently the United States are pointed to as an Eden, a terrestrial paradise, in the present crisis. The eldest of my brothers, who died last year, held a very important position with Western Electric in Chicago; and for the last four years he foretold the

muddle we are in to-day. When times were prosperous this great company employed some
45.000	people; only 12,000 are employed there now. It is rather odd that in the United States all economists, all university professors and all important industrialists are at one in blaming the present crisis on the high tariff that had been in force for a number of years. What are we to do? In the light of my own personal experience I, a Liberal, do not consider that the only way of reaching a solution is to declare, as the right hon. Prime Minister of Canada did recently, that in a protected world we must have a protected Canada. I say that, in a protected world we need governments with courage enough to espouse the cause of lower tariffs; I believe with M. T. Chadbourne, who organized and controlled southern trade, that the various countries should work in harmony, that a lowering of tariff barriers is imperative, that me must get away from economic nationalism, take a broader view, and acquire a more complete understanding of what the future holds.
We are told that in any country the only road to national well-being lies through a system of protection. I intend quoting certain statements made by Mr. Etienne Fougere, one of the foremost economists of France, in an article which appeared in "L'Europeen", issue of September 18, 1931. Speaking of the invasion of protectionism, he writes:
A new invasion, which it will be hard to withstand, threatens the World, and especially Europe; I mean protectionism. It has already penetrated everywhere and we are beginning to feel its ill effects. But up to now one great country, England, had withstood it and had fought against it at all international assemblies.
To-day our neighbour and friend has been almost won over to the protectionist cause; and like all neophytes, certain British statesmen have shown themselves overzealous. Indeed, Mi'. Runciman, a former liberal minister, and a champion of free trade at Geneva, wants to forbid the importation of all articles of luxury, which amounts to no less than an economic break with France, and a return to mediaeval ways.
For our part we do not expect things to reach such an extreme pass. However we must be prepared for a customs tariff in Great Britain.
What one might call fate has urged the nations along this road since the war. They had the choice of two ways:
A greater measure of freedom in trade which would have lowered customs barriers as political animosities died away; or else a policy of national isolation which would bring about the erection, around each country, of a sort of Great Wall of China, destined to rise higher and higher.
The second of these two roads was chosen. It has a steep incline and it is difficult to find brakes powerful enough to control what excess there may be- Hence the alarming progress of protectionism.

The Budget-Mr. Duguay
There is but one way, one, to limit or arrest this progress: economic agreement among nations. Can it be 6aid that we are headed in this direction? The dull and hypocritical debates at Geneva assuredly lend us no encouragement.
If we fail to reach some such understanding we are on the eve of an era of tariff insanity. Already Russia, Germany and other countries are evading established duties. The realization of this will provoke new restrictive measures, and so new sources of irritation and of conflict will be added to those already existing.
The end of the year 1931 will find France with an adverse trade balance of fifteen billion francs, while Germany will have a favourable balance of eighteen billions.
The mere mention of these figures suffices to show that France will have to adjust her tariff policy. But will this unavoidable necessity make for Peace?
Etienne Fougere.
In closing, Mr. Speaker, I ask the government to adopt Mr. Etienne Fougere's attitude.
During the debate which has been going on in this house for the past few days stfme of our friends on the other side have introduced provincial politics. I will add my own comment: my friend, the hon. Mr. Tasche-reau, has no need of my weak voice to defend his policies; but there is one thing that we must take notice of, and that is that the good old province of Quebec unlike other provinces of this dominon, has enhanced our adherence to the declarations made against confederation in olden times by Sir Antoine Aime Dorion, Liberal prime minister, elected from the constituency that I have the honour to represent in this house. The other provinces have appealed to the federal government for aid. The good old province of Quebec, which is not perfect but which strives to reach perfection, has this merit, during the present crisis, that it has not come to Ottawa to beg, neither for sympathy nor for federal funds. The province of Quebec, now a part of confederation will continue to be what it has always been, a broad-minded province, at times too open-handed in the matter of concession; but whose people, side by side with those of our sister provinces, will work for the return of that prosperity, that economic and social well-being whose loss Canada has had to mourn these last few years.


Mr. L. DUGUAY (Lake St. John) (Translation) :: Mr. Speaker, may I, in my own name and that of my constituents, sincerely congratulate the hon. Minister of Finance (Mr. Rhodes) on his .budget speech. I sincerely congratulate also the hon. member for Shelburne-Yarmouth (Mr. Ralston) on the extremely arduous task he accomplished with such imposing success. The hon. member for Hoche-laga (Mr. St-Pere) also may well be proud of
his magnificent examination of conscience. I am convinced that after such proofs of perfect contrition his constituents will not hesitate to give him absolution and will not hold against him the fact that he thought rather late of the remedy he should have suggested in 1926 or 1928. '


Joseph-Arthur Denis: Change the dates.


Joseph Léonard Duguay: Mr. Speaker, allow me to tell you a little about my riding which may not have been very much talked of in parliament but, on the other hand, has been discussed quite a lot elsewhere by numerous .people, mostly financiers. Perhaps it will interest you to learn how my county developed from 1921 to 1931. In 1921 Maligne Island was without electric .power; neither Riverbend nor Dolbeau had a factory. Its population was then only 35,539, while to-day it has attained 50,253; an increase of 14,714. This industrial development has left bitter memories in the hearts of the older settlers of Lake St. John county; the expansion forced a number of the oldest citizens of the county -the pioneers of the district-to leave their farms on the shores of lake St. John and settle further inland or to go and spend their savings in the little industrial towns which were springing up.
The hon. Prime Minister of Quebec province gave magnificent praise, from 1923 to 1928, to this industrial expansion of Lake St. John county; but he lost sight of the fact that this industrial expansion left in its wake a sorry state of affairs. To-day it becomes our duty to recall to the hon. members on the opposition side that their party is responsible, for the present severe crisis and that they should be the last ones to reproach the federal government for having loosened its pursestrings, especially in 1931-1932, in an effort to undo a little of the havoc wrought by these new industries.
Here are the amounts expended by the federal and provincial governments, and the municipalities, for unemployment relief work in Lake St. John county. The municipalities spent $279,100, of which the federal government advanced $122,575; federal and provincial undertakings, in which the municipalities had no part, cost $12,600; the provincial highway between Quebec and Lake St. John took $126,000, of which the federal government paid 40 .per cent, or $50,000. To these figures should be added the further amounts granted since parliament passed the bill extending to May first the operation of the Unemployment Relief Act. It is pleasant to recall in this house the large sums given by the federal and provin-
The Budget-Mr. Duguay

cial governments to help the farmers of my county in particular and the agricultural class in general; but we must inquire, too, how this money was spent. Let me say, first of all, that in some of the municipalities in my constituency-and I believe the same carelessness was evident in most parts of the province-the money was divided per capita, which means that a wealthy family, composed of the father, the mother, and eight children, received the same amount as the family of the poorest citizen in the parish, made up also of the father, the mother, and eight children. I leave it to the hon. members of this house to judge of the efficacy of any such distribution of funds. Other municipalities went about it in another way, giving the necessary money to those who were really in need of it. Now, certain municipalities which should have received money, got none. Why? Because the mayor was a Conservative and the provincial government had the power to distribute this money as they saw fit. The federal government never refused a cent to a single municipality in Quebec province; but I say that the government of the province took it upon themselves, not to give any funds to certain municipalities in my riding where the mayor was a Conservative. To-day our hon. friends of the opposition criticize the way this money was spent for unemployment relief. Well, I think that as far as Lake St. John county is concerned, the blame rests chiefly with the Liberal party of the province. I fail to understand how the hon. members to your left, Mr. Speaker, can preach this policy in the house, as they did before the people of the province during the last provincial campaign in 1931.


Joseph-Arthur Denis: -But that is false.


Joseph Léonard Duguay: I say that this industrial expansion led the government to try a new tack, to preach a new intensive policy; and that brings me to the subject of colonization. In Lake St. John county, from June to August, 400 new settler families had to be established. I simply call such a policy "electioneering colonization." Several members-I mention no names-have skilfully defended on the floor of the house, this colonization program in my district; but their attitude has not been justified by results. I visited several townships in my riding, and I tell these members that they have no right tc uphold any such colonization policy, the chief result of which has been to enrich the big lumber merchants. The settlers were set up in magnificent houses; and this colonization policy afforded to friends of the provincial

administration an opportunity to reap exorbitant profits. I am not opposed to colonization-quite the contrary-but the farmer who for some reason or other must abandon his farm, or the individual living in a small industrial town, should be able to settle on a farm where a proper income is assured.
On the first of November last year, 1931, several prominent citizens of my constituency held a meeting at Roberval and signed a petition asking the federal government not to advance one cent for settlement purposes in the county of Lake St. John, until a serious investigation had been held; and to ensure that the money be spent for a better purpose.
Besides this matter of colonization, Mr. Speaker, we must speak of our farmers. They comprise three-quarters of the population of Lake St. John county. I will take the liberty of reading to the house a letter sent me by the Mayor of St. Gedeon.


Mr. DUPUIS (Translation):: A Liberal?


Joseph Léonard Duguay: I do not think so: the Liberals of my county cannot be overfond of me when they write me letters like this one.


Charles Napoléon Dorion: It is the Liberals who do not like him.


Joseph Léonard Duguay: As I read this letter to you, you will realize how critical is the position of the farmers in my riding:
March 31, 1932.
Dr. L. Duguay, M.P.,
Parliament Buildings, Ottawa.
Sir:-
The Catholic Farmers' Union of Quebec forwarded, within the month, a petition to the federal members concerning the needs of the farmers of Quebec province. One of these needs is for borrowing facilities. At the last session of the provincial legislature fourteen thousand farmers signed a petition to the Tasehereau government asking for a rural credit system. \Ve had the painful experience to learn one fine morning that all action on this petition had been indefinitely postponed. And that's that. The banks refuse to loan us any money. . . .
Some may find the contents of this letter absurd.


Mr. FAFARD (Translation):: Hear, hear.


Joseph Léonard Duguay: We have not to do only with high finance; but wth small finance, also. This is small finance. "The banks refuse to loan us any money." That is true. The banks do not wish to make further loans to farmers, especially on account of the Bankruptcy Act as it existed, and still exists. That is the result: they do not believe the

The Budget-Mr. Duguay
farmer can produce enough to make a profit.
I repeat:
The banks refuse to loan us any money; the small lenders are without funds and our few Popular Savings Societies are inaccessible to the majority of people. What are we to do? Several of us have already been sold out by the sheriff and if conditions do not improve very shortly most of our farmers (I know whereof I speak) will be reduced to the same straits. What little knowledge I possess does not enable me to indicate the best way of avoiding such a financial disaster for our farming community; but I beg the members of parliament, who are in a superior position, to decide as soon as possible upon a practical way out. The farmers of our province are just as much entitled to consideration at the hands of the federal government as are those of western Canada; these latter receive a subsidy on the wheat they sell, or will sell. Could we not benefit by some such treatment for the sale of our butter and cheese? But, once more, our most crying need at the present time is undoubtedly for a rural credit system adapted to our wants and to our means of repayment. This is a question of life and death for the farmers of our rural districts. There is no getting away from it. The government of Quebec has deceived and discouraged us in this matter. It is really too bad.


Joseph-Fernand Fafard: He is not speaking of federal credit?


Joseph Léonard Duguay: That is exactly what I was coming to. To-day the hon. members of the opposition want this matter of rural credit to be simply taken over by the federal government, and this evening the hon. member for Laval-Two Mountains, the Postmaster General (Mr. Sauve), clearly explained the situation in the province of Quebec, as regards election promises. Last year these gentlemen promised,-and I -may say that in the county of Lake St. John the hon. Minister of Agriculture for the province of Quebec, Mr. Godbout, promised the farmers a rural credit system, but he took no steps whatever towards this end, and to-day he is trying to persuade the Quebec farmers that this question of rural credit is purely a matter for the federal government, a Tory administration.
Well, gentlemen, we never ceased to ask for this rural credit system when you were in power. What did you do? You claim it is a matter for the federal authorities! Have the courage and the will-power to assume responsibility for the evil deeds of the Quebec administration.


Joseph Arthur Barrette: Very
true. They cannot get out of it.


Joseph-Fernand Fafard: We are in the hole.


Joseph Arthur Barrette: Understanding is necessary.


Joseph Léonard Duguay: The farmers of Quebec must face another problem. It is all very fine to spend money for land settlement and for unemployment relief, but we must not lose sight of the fact that most of our Quebec municipalities are heavily in debt. To-day our farmers cannot meet their taxes. If we give too much encouragement to colonization schemes these people will necessarily allow their land to 'be sold by the sheriff and will take up holdings in the newly opened districts; then those who remain in the municipalities will have to shoulder all the debts. A great many of our farmers are obliged to pay from $150 to $250 in taxes every year. I believe governments should think seriously, and by governments I mean the federal government and the provincial governments,- of finding some means of lightening the burden of our Quebec municipalities and our taxpaying farmers.
I am doing my best to show,-I know I have not succeeded in convincing our hon. friends opposite,-that . . .


Mr. MERCIER (St. Henri) (Translation):: You have nothing to blame yourself for.


Joseph Léonard Duguay: Such is the situation in my county to-day from an agricultural standpoint.
An Imperial conference is to be held during the coming summer and, in the interests of Lake St. John county, I would ask the representatives of the Canadian government at this conference to take up the question of paper. If I remember aright, I read somewhere that England imports yearly $63,000,000 worth of paper, of which only $13,000,000 dollars' worth comes from Canada. If, at this conference our government succeeded in obtaining favoured treatment for our paper exports to England, the people of Lake St. John county and the industrial population of Quebec province whose livelihood depends on these paper-mills, would owe an eternal debt of gratitude to the right hon. Prime Minister of Canada.
May I be allowed, Mr. Speaker, to reply to certain statements made by our hon. friends opposite during the famous debate on the proposal to extend the Unemployment Relief Act? A number of these gentlemen sought to prove that the Conservative party is very wealthy-


Joseph-Alexandre Mercier: You are richer than we are.


Joseph Léonard Duguay: My riding is one of those that have suffered at the hands of the Liberal administration in Quebec; you

The Budget-Mr. MacLean
have there an excellent illustration of a policy that tends to enrich those who are already wealthy.
But I wished to discuss another subject. Several hon. opponents tried to make people believe that we, on this side of the house, were nothing but a flock of sheep.


Vincent Dupuis: Too much
honour.


Joseph-Alexandre Mercier: Your government protects wool.


Joseph Léonard Duguay: I cannot
speak for my colleagues, but in my own name, I wish to reply to this assertion. I was elected in the constituency of Lake St. John as a Conservative-


Joseph-Fernand Fafard: You won't be elected again.


Joseph Léonard Duguay: -and professing, as does my leader, the right hon. Prime Minister, Conservative ideas. I believe it my duty, in the interests of the country, in the interests of my constituents, to support the policies of his government.


Joseph Arthur Barrette: Hear,
hear.


Joseph Léonard Duguay: Mr. Speaker, the Liberals forget that in 1921, in 1925 and in 1926, they got elected in Quebec as Liberals, under the dictates of the hon. member for Quebec East (Mr. Lapointe) and that they bid down before what we call to-day the radical group, so as to remain in power. They should have been strangled then: the province of Quebec would be better off to-day. I ask you, Mr. Speaker, between the kind of sheep who lie down before a third party and those who-
An hon. MEMBER (Translation):	Sheep
seldom lie down in the fields.


Joseph Léonard Duguay: -and those who remain faithful to their policy, which would you choose? For my part I say that if there are two kinds of sheep, if there be sheep of two colours, I prefer my colour to theirs.


Mr. A. E. MacLEAN (Prince):: I am really sorry that I could not follow our Frenchspeaking compatriots in their beautiful flow of language and the flights of oratory to which they have treated this house to-night, and I regret it particularly in the case of the Postmaster General (Mr. Sauve).
But I can understand the Postmaster General when I get a notice that some of the postmasters in my district have been dismissed. In . a return tabled the other day I

noticed that somewhere around 590 postmasters have been dismissed under the administration of my hon. friend as Postmaster General.
I regret that I cannot compliment my good friend the Minister of Finance (Mr. Rhodes) as I should like to have done, coming as he does from the maritime provinces. I think I can compliment him so far as the actual presentation of his budget was concerned, but not upon its subject matter. Possibly that is not altogether his fault; I know he would like to have presented a better budget to the house, a budget along the lines of those presented by that great statesman from Nova Scotia who occupied for so long the distinguished office now held by my hon. friend-the late Right Hon. Mr. Fielding- or a budget along the lines of the Robb and Dunning budgets, which stood for surpluses, freer trade, expanding markets and reductions in taxation. It seems to fall to the lot of our hon. friends opposite whenever they come into power so to manage or mismanage the affairs of the country that they are able to produce only budgets that show deficits instead of surpluses, increased interest charges and increased public debt-budgets which hold out no hope for the Canadian people, and especially the people of the maritime provinces.
If hon. members will look at the public accounts they will find on page 51 thereof a list of surpluses, seven in number, which were the result of the late Liberal administration. The hon. member for St. Ann (Mr. Sullivan) said in this house that he would proceed by way of comparison, and I trust that for a few moments to-night I may proceed in the same manner. Two years after taking office the late government were able to change the deficits of the former Conservative administration into surpluses, and for seven years they were able to show reductions of the public debt and large balances on the right side of the ledger.
A survey of the history of federal administration from 1867 down to the present time will not disclose a record anywhere approaching that of the late administration. No other government since confederation has been able to show seven consecutive surpluses and reductions of debt. Then our friends come into power, and in the short space of two years what do we find? We find they have changed the whole situation, and that in the last two years they have rolled up vast deficits. The surpluses under Liberal administration were not produced by cutting ten per cent from the wages of government employees, by cur-

The Budget-Mr. MacLean
tailment of public services, restriction of trade or increase in tariff. They were produced by directly opposite policies-trade expansion, freer trade, reduction in taxation and tariffs. Because of those policies I think Canada will be able to look back for a great many years upon that period of Liberal administration as a second golden era brought to this dominion through Liberal rule. It is a record of which all Liberals may be truly proud and which our friends opposite would like to duplicate, although during the time they were in opposition they sought to condemn the Liberal party and the policies which produced the results I have mentioned. It was a welcome relief to the people of Canada when in 1924 the Liberal party changed this long list of deficits into one of magnificent surpluses, and continued to show those surpluses during the whole time they held office.
We find that hon. members opposite have added very substantially to the interest charges of the dominion. The public accounts show that last year hon. members opposite, after being in power only a little more than a year, showed a deficit of about $84,000,000. This year we regret to say that they have rolled up another tremendous deficit, an addition to the public debt, of something like $119,500,000. That is not the whole story, because there has been an increase of $13,000,000 in the interest charge, which is shown on page 6 of the estimates for this year, the whole constituting a burden which our people will have to carry for a great many years to come.
When hon. members opposite were sitting on this side of the house they were very free in their advice to the government of the day, and were always advocating some way of taking care of the public debt. Our good friend the present Minister of Justice (Mr. Guthrie) would wax eloquent on the building up of a reserve fund or sinking fund or some provision for paying off our public debt. I now ask my hon. friends this question: Where is that policy they so strongly advocated when they were on this side of the house? We hear nothing about the reduction of the public debt; on the other hand we find tremendous additions made to it, and interest charges mounting each year. The two deficits 1 have mentioned total $203,000,000. As the hon. member for Shelburne-Yarmouth (Mr. Ralston) showed, the total addition to the public debt amounts to about $307,000,000.


Mr. SPENCE:: Are there any other additions the hon. member would like to take in?


Alfred Edgar MacLean: ' If the hon. member for Parkdale will have patience I may show him
that there are others. Certainly if he waits until another budget is brought down he will see a further substantial deficit.
If the present government had increased the public debt and had shown deficits without increased taxation, there might have been some excuse for them. But we find that deficits have increased, in spite of heavier taxation all along the line. If those deficits had been made without additional taxation, we would not think so much of them. Last year when the Prime Minister (Mr. Bennett), who was then acting as Minister of Finance, brought down his budget, his estimate of new taxation was $78,000,000. In the budget brought down this session we find an estimate of $55,000,000 for additional taxes. The figures show that in two years this government have imposed in additional taxation the sum of $133,000,000, and at a time when this country should be receiving relief from taxation.
If the Conservatives had carried out a few of the promises they made during the election campaign the deficit would be much greater than it is. What would have been the situation in Canada to-day if they had gone on with only one promise, that concerning the old age pensions, in connection with which an expenditure of $25,000,000 was involved? Had that promise been implemented, undoubtedly the deficit would have been greatly increased. As you know, Mr. Speaker, this policy of old age pensions has not been brought into effect in Quebec or in the three maritime .provinces, and the government in supplementing the old age pensions is only paying some 75 per cent to the provinces that have adopted the legislation.
Hon. gentlemen opposite when they were in opposition promised that they would start a stream of money flowing over this country. I remember the Conservative campaign literature published in my own county at that time contained this promise among others. What do we find to-day? Instead of this flow of money into the pockets of the producers and consumers of this country, we find the flow of money is out of the pockets of the people into the coffers of the government in the way of tariff and taxation-* $133,000,000 of added taxation in two years. Now, if increasing the tariff and taxation burdens of the people would balance the budget, this government should have succeeded, as they have followed that course. An advertisement in the Citizen runs: The more you tell the quicker you sell. But our friends opposite might adopt this slogan: The further they go the more they owe. I be-
The Budget-Mr. MacLean

lieve the time will soon come when the people will demand that the government go to the country and let the electorate decide whether they are satisfied with their record.
As I have already said, reducing the salaries of those who have been serving the country well has been resorted to by the government to help out the present financial stringency. This was not included in the many promises which our hon. friends opposite made before they came into power. Nearly everything else they promised but this reduction of salaries, and it has come as a great surprise to the public service. I believe the tariff changes are largely responsible for the difficulties we are in to-day. This government have a policy diametrically opposed to ours, and they are pursuing that policy with a vengeance. The present Prime Minister, speaking in the house in 1927 said:
Furthermore, and it is on this point that there is an essential difference between us, my hon. friends opposite are more concerned with foreign trade; we are more concerned about domestic trade. They are concerned about developing channels of trade that take our ships, they say, to the seven seas; we are concerned with bringing people to Canada and giving them work to do in the development of our country and at a proper living standard of wages.
This proves conclusively that the policy of the Conservative party is directly opposed to the policy of the Liberal party. As I said before, the policy of the Liberal party is directed to extending our export trade, and it was wonderful how it did expand during the Liberal regime. But immediately our friends got into office they saw fit to increase the tariff, with the result that we have lost our best customers and to-day we find ourselves with a surplus of products which we are unable to market. This home market that they were going to build up overnight, about which our good friend the Prime Minister waxed so eloquent in 1927, has not developed as he and his party expected. When he was addressing the house in 1927 I remember asking him what he expected to do with our surplus products while he was building up this home market. His answer was, "We will sell them." But it has been simply impossible to sell our surplus products, and the home market has not developed. Later on the right hon. gentleman stated it was not a matter of a year, but perhaps of generations before that home market could be developed. As I said at that time so I say now, what is to become of our surplus products while that home market is being built up? The Conservative party were going to give everyone who wished to work a chance to work, they were going to give the

Canadian workingmen a full dinner pail and a good many other things when they came into office. Well, our hon. friends have had that opportunity, they have been in power for two years, but up to the present we do not see any improvement from the putting into effect of their policy. Evidently the high tariff policy which they believed would build up industry and improve the economic situation has not worked out as expected. Let me take the automobile industry as an illustration. In 1929 our exports of automobiles and parts were valued at over $47,000,000; in the eleven months of the last fiscal year those exports are down to $4,000,000-a decrease of nearly $43,000,000 in the short period of two years. It is almost unbelievable, but this is what the record shows. No doubt the same condition obtains in a good many other industries.
As I have said before, this budget holds out no hope for the farmer, nor for the manufacturer, nor for the consumer. It is just another wet blanket thrown over agriculture and industry. I can see nothing in it for the benefit of the maritimes. Let me contrast this policy of restricting trade with the policy of trade expansion so well expressed by our former Minister of Finance, the Hon. Charles A. Dunning, on May 1, 1930, when he said:
Canada will not engage in a tariff war with any country. The world shows at the present time too many examples of disaster following such a course. As a great exporting nation our course must be the contrary one of facilitating trade with those who facilitate trade with us. Those who raise prohibitive barriers against our products entering their markets must expect that we will extend favour to our own good customers rather than to them. I speak in no spirit of retaliation. I would much rather extend lower tariff favours to those who extend them to us than to impose prohibitive tariffs in return for like treatment.
Lower tariffs to those who buy most freely from us makes for trade extension and wider markets for our products, while prohibitory duties to meet prohibitory duties generally applied constantly tend to restrict our export markets.
Nothing can be more to the point than that wise declaration of tariff policy, and events since that time have proved that the Hon. Mr. Dunning was correct. Our friends opposite have said on different occasions that there would be no retaliation. I can point out time and again where news items have appeared in the press showing that retaliation has been practised by a great many countries against Canada. Senator Robinson, speaking in the United States Senate, said:
We started this high tariff by putting on embargo rates. The othei; countries followed, and it makes no difference in the final result whether they were moved by a desire for

The Budget-Mr. MacLean
revenge and reprisal or by the non-vindictive purposes to favour their own industry. Tariff barriers such as those now standing are comparable to a blockade of commerce.
He went on to say:
To say that the United States could close home markets to foreign traffic and live by herself was silly and untrue.
If that statement is true concerning the United States, which is a much more self-contained country than Canada, it is true in a greater degree regarding this dominion. We find that Germany has imposed special duties against goods from Canada and Poland. The newspaper item states:
In the case of Canada, the special customs tariff would be postponable for a period of six months in the event that the Canadian government negotiated for a commercial treaty with Germany.
The Irish Free State has given notice of a tariff to affect all foreign imports that can be made at home; another country that has put up tariff barriers against Canada is Italy, and we find our trade has fallen off. Our hon. friends opposite cannot blame depreciated currency for the falling off in trade, because if ever theTe was a time in the history of the dominion when the United States could have bought from Canada, it was during the last two years. With their inflated currency they were able to buy here and the premium on exchange would almost wipe out the tariff between the two countries so far as they were concerned. Notwithstanding the fact that they had this favourable rate of exchange, our trade with them and the rest of the world has fallen off to a marked degree. Our exports to all countries, United States included, declined from $1,120,000,000 in 1930 to $605,000,000 in 1931, or a decrease of over $515,000,000 in two years. I ask the question here and now: Who is to blame for this state of affairs? Our hon. friends opposite cannot have things both ways. The Minister of Trade and Commerce (Mr. Stevens), speaking in the house the other evening, said that he and his government took credit for shutting out imports. He said that they had been able to balance the trade of Canada and that we now had a favourable balance of trade, that position being achieved, as he claimed, by shutting out imports. If this government are going to take the credit for shutting out imports, they must also take the blame and the condemnation of the Canadian people for destroying our export market, because it will be found that our exports have declined in practically the same proportion as our imports. Will the minister explain what has happened to our exports that they have declined almost equally with our
imports? As regards our trade with the United States, our imports have declined 52 per cent, while our exports have declined 35 per cent, so that the decline is about the same in each case.
One thing that has tended to discourage trade both from and to Canada, but especially in respect of goods coming in, has been the application of the dumping duty. This duty, which is really an increase in the tariff, has been applied by the present government in a very decided way. We can cite instance after instance where this dumping duty has been applied by the government and where, owing to the rulings which have been put into effect by the Minister of National Revenue (Mr. Ryckman), it has been almost impossible for importers and merchants to carry on trade. Our hon. friends opposite surely must realize that we cannot have trade all one way, and that if we are going to sell abroad, we must also buy. As I have stated, the tendency to shut out imports has been one of the greatest factors in destroying our export markets and placing our farmers and other producers in the position in which they find themselves to-day. It was Nicholas Murray Butler who said:
The last place to look for security is in annaments and the last way to seek prosperity is through isolation.
The Conservative party seem to believe in the isolation of trade, of shutting out imports, of living to ourselves, but I think they are finding that such a policy not only is destroying the revenue of the country, but has brought about stagnation in trade and the unemployment situation as we have it to-day.
These hon. gentlemen, not satisfied with the tremendous increase which they have made in the tariff in the past two years, have made this year another very substantial increase by raising the excise tax to 3 per cent. This cannot by any stretch of the imagination be termed an excise tax; it is purely and simply an increase in the tariff, because it applies to everything that comes into the country. Back in 1924 the average tariff was around 15 per cent; at the present time it is
22.1	per cent, the highest of any country in the world with the exception of the United States and Spain. We were led to believe that many articles would be exempt from the tariff which our hon. friends opposite imposed in the short session of 1930, but owing to the imposition of the dumping duty and the excise tax, very few articles now remain on the free list. If we take bills that some people have handed to us, we find that in many cases this

The Budget-Mr. MacLean
dumping duty works a very severe hardship. I should like to give just one illustration, that of a 'bill that was handed to me by a newspaper. It says:
The finished bill was made up like this:
Six articles at $5 each	 $30 00
Exchange 15 per cent	 4 50

Forty per cent ad valorem duty..	13 80
Additional duty, 35 cents per lb.. 2 28

Four per cent sales tax	 2 04
One per cent excise tax	 0 51
Total	 $53 13
We could quote a great many other items which have been handed in to us, where merchants find it almost impossible to carry on under present conditions. The Montreal Star, writing about the present budget, said:
Taxation of any kind retards recovery. The tax collector is the best friend that depression has. When a community is in the condition ours is in to-day, any impost which blocks business or chills initiative slows down the wheels of production and marketing, and tends to postpone the return of those happy days when things were at least "normal." It does not matter so very much, except to the individual, where the blow falls. In every case, it stuns public confidence, saps energy and reduces enterprise.
In conclusion, it is pointed out that the real sinners in raising taxation are the people who apply political pressure to the ministers to compel the expenditure of public funds.
Every man or interest that goes to Ottawa demanding a new expenditure is the poorest sort of patriot to-day unless his expenditure is absolutely imperative in the public interest.
The government, it is pointed out, have made economies, but have not made enough.
In passing the estimates, not a dollar should be voted -which cannot prove its right to exist.
Now this sales tax which is proposed is going to affect very severely some of the industries right in the county which I have the honour to represent. Take the silver fox industry. This sales tax, which will apply on biscuits, will hit that industry very hard, because a large proportion of the food used comes under the category of biscuits and cereals of different kinds on which the sales tax has been increased. If you add on every hundred $6 of an increase in price, it simply means that business cannot carry it; and on the other hand it will almost ruin the manufacturers of these biscuits who are carrying on at the present time under hardships and who also are performing a splendid service to the fox industry in the manufacture of this food product. The same complaint comes in regarding the duty and the sales tax being applied to ice cream. They say it is impos-

sible to increase the standard price of ice cream, because that has been regulated so long at a certain price that an additional price cannot be charged, and therefore it will reflect back on the producer of dairy products. So that it hits the farmer in that way. Containers for dairy products of all kinds are also included in this six per cent sales tax.
If hon. gentlemen apposite had told the people of this country that they intended to carry on in this way and put these policies into effect, I do not think they would have been placed in power. If they had told us that the first year they had the reins of government they would increase the debt of this country by $84,000,000, do you think the people would have given them the reins of power? I do not think so. If they had told the people that this year they would have $119,000,000 of a deficit, I do not think they would have been put in charge. Would any business concern think of carrying on under such conditions? No, sir. I submit that the first thing a business concern would do would be to call in the manager and simply tell him: "You have put my business behind in two years to this extent. I have undertaken to engage you for four years, but I find that it is far better for me to call you in, pay you your four years' salary and save my business rather than continue you in charge for four years, because by that time I shall have no business to save." This is the situation that we are in to-day, and where our friends will land us by the time their four years are up is more than we can tell.
But the worst feature of this budget is that it interferes with and annoys all business. This three cent stamp on cheques is only a small thing, but still it is very annoying and hinders business, and the six cents on every hundred dollar cheque is a tremendous tax on business. As I said, moreover, there is this six per cent sales tax and three per cent excise tax in addition to the regular tariff and the dumping duty imposed in a great many cases on top of that. Is it any wonder that business to-day is languishing and that our farmers and fishermen cannot carry on?
Our friends down in the far corner of the house have introduced a subamendment. That subamendment wipes out the amendment which has been moved by our good friend from Shelfourne-Yarmouth (Mr. Ralston): If our friends had offered a subamendmenl amending our amendment there might have been some chance of our supporting it. But when they introduce an amendment which simply wipes out the amendment moved by this side, it is impossible for them to expect

Questions
us to support it. They go on to say that they are going to restrict national production. I am not altogether clear as to what their proposal is. Do they propose to restrict the output of farm products? Do they propose to restrict the production of other commodities? Just what their resolution means along that line is something in regard to which I must say I am not altogether clear. Then, regarding the financial system, they say they are going to nationalize it. That may mean doing away with our present banking system and establishing something else in the way of control of our monetary system. These are very far-reaching reforms which would need to be given a good deal of study before they could be considered by this house and given to the public as legislation. Hon. gentlemen claim that money at the present time does not begin to compare with what it was worth when the debts were created. I do not suppose it is any fault of the present banking system if debts were created when wheat was $3 a bushel or when potatoes were selling at $2 and $3 a bushel, whereas now these commodities are worth so very little. That is a condition that has been brought about, I claim, more by the trade policies of this government than, possibly, by the monetary system; and to enter upon reforms such as our friends have advanced is, in my opinion, going a long way. However, there may be a good deal of merit in the subamendment, and, as I said, if it had been moved as an amendment to the amendment and not for the purpose of wiping out the amendment, we might have been able to support it. But under present conditions I am afraid that we cannot give it our support.
Another thing: I am surprised that our hon. friends, who are very strong on low tariffs and who back in 1921, I remember, were almost for free trade, have apparently to-day turned their backs on that policy, and now the very thing that we propose in our amendment they refuse to accept. They say, "No; we will wipe that out altogether; we will not support it." I do not know whether they have changed their ideas in that regard and now favour a higher tariff. I do not know just what their position is.


Pierre Édouard Blondin: The hon. member's time is up.
On motion of Mr. Duranleau the debate was adjourned.
On motion of Mr. Rhodes, the house adjourned at 10.45 p.m.
Wednesday, April 20, 1932