Mr. JEAN FRANCOIS POULIOT (Temis-couata):: Mr. Speaker, may I draw the
attention of this house to what I conceive to
be a breach of its privileges and refer for a moment to an article which appeared on Wednesday last, April 6, in LTllustration, a Conservative, French Montreal daily.
In order to be fair to the minister concerned, I notified him by letter on Thursday, April 7, that unless a satisfactory retraction was published on Saturday last I would bring it up on the following Monday-yesterday- as a matter of privilege. As my letter is still unanswered, as no retraction appeared on Saturday, yesterday, nor to-day, and as that paper is mailed to my colleagues, Englishspeaking as well as French-speaking, I will read a translation in order that my correction may be understood by all. The first four paragraphs are a preamble to the lies which abound in the latter; therefore I should deal with it not only paragraph after paragraph, but line after line, and almost word after word. This is what was printed after I had said "all was over":
Mr. Pouliot and Slander
Shall we believe that Pouliot, the Liberal member for Temiscouata, has at last realized that be often goes too far in his daily outbursts in the bouse.
During the sitting of yesterday, when Mr. Gordon, Minister of Labour, was submitting his estimates, Mr. Pouliot attacked him in the most injurious way.
Mr. Pouliot accused the minister of lack of tact, oi being an ignoramus, of not answering intelligently to question, etc.
But as soon as Mr. Pouliot resumed his seat he realized that he had gone too far and that he had behaved rudely.
Shortly afterwards he invited the Hon. Mr. Gordon to his office, asked for the stenographic copy of Hansard and made all corrections demanded by the minister.
The facte are as follows: The minister was gracious enough to come to my office without receiving any invitation from me. He did not demand any correction whatsoever; he simply requested me to strike two lines off Hansard, and I did not hesitate to comply with his request. What I said was not ruled out of order, but having agreed to strike it off I will not repeat it. The article continues:
Mr. Pouliot went afterwards to the press gallery beseeching the correspondents of the papers to soften his utterances in order that they should be decent, at least in the press.
I have been to the press gallery, true; but I have not besought any one to soften my utterances; I thought it fair to notify the members of the press gallery that I had agreed with the minister's request to strike those two lines off Hansard. That was the only thing I told them about it. The article concludes:
One cannot crawl more cowardly after having played the braggart.
Bankruptcy Act

It is to be hoped that in the future Mr. Pouliot will not be obliged to apologize so pitifully when he speaks in the House of Commons.
I did not crawl because I never put myself in a position, to crawl, and I did not apologize because I had no reason to apologize.
This is the second time that the same individual has published a slanderous libel against me; the first one was a circular sent six years ago to the Tory organization in my county. As it was not distributed, I did not pay any attention to it. This time I have settled the matter with him by telling him personally what I think of him. Should he offend a third time, I would not say that there would be murder because that would not be parliamentary, but there will surely be a K.O. that will be O.K. In accordance with Roosevelt's advice, we shall go to it with a soft voice and a big stick.



BANKRUPTCY ACT AMENDMENT


[Stage Direction]
Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, the special committee appointed to consider Bill No. 41, to amend the Bankruptcy Act, have the honour to present the following as their first report:
Your committee recommend that they be given leave to print from day to day as required the minutes of proceedings and evidence taken, and a'lso such papers and documents as may be directed by the committee to be printed for the use of the committee and members of the house; and that standing order 64 be suspended in relation thereto.
Your committee also recommend that they be given leave to sit while the house is in session.
Mr. HACKETT moved that the report be concurred in.
Motion agreed to.

Mr. SPEAKER:: I have the honour to inform the house that I have received the resignation of Hon. George B. Jones, member for the electoral district of Royal.
This is accompanied by the following letter:
Ottawa, April 12, 1932.
Dear Sir:
I am the principal partner in the firm of Jones Brothers, carrying on a general store business at Apohaqui, New Brunswick. The store is not operated by me personally.
For some time past, the Indian medical director has been in the habit of giving to needy Indians residing near Apohaqui orders for merchandise which have been filled by the firm of Jones Brothers.
Yesterday afternoon, I learned, for the first time, that in the House of Commons Act there
l Mr. Pouliot.]
is a provision against goods, wares, and merchandise being sold to any department of the public service by an unincorporated firm of which a member of parliament is the proprietor, in whole or part, and that if goods are sold by such a firm, the interested member of parliament thereby vacates his seat.
I therefore find myself in a position where I have vacated my seat in parliament. I enclose herewith my resignation as member of the House of Commons of Canada for the electoral district of Royal in the province of New Brunswick.
I need hardly say how deeply I regret that my lack of knowledge of the provisions of the law relating to the House of Commons has placed me in the unfortunate position where I am compelled to resign my seat in parliament.
I have the honour to be, sir,
Your obedient servant,
George B. Jones.
His Honour.
The Hon. George Black, K.C., M.P.,
Speaker,
House of Commons,
Ottawa.



UNEMPLOYMENT AND FARM RELIEF

Hon. W. A. GORDON (Minister of Labour) :: Mr. Speaker, I desire to lay upon the table of the house orders in council passed pursuant to the Unemployment and Farm Relief Continuance Act, numbers 789, 793, 794, 795, 796, 810, 811 and 812, all relating to the payments of money under the statute.



RAILWAY ACT AMENDMENT

[Stage Direction]
Mr. THOMAS REID (New Westminster) moved for leave to introduce Bill No. 44, to amend the Railway Act.
Mr. GUTHRIE:: Explain.


Mr. REID:: Mr. Speaker, the first two
clauses of the proposed bill deal with the scope or functions of the Board of Railway Commissioners and are recommendations made in the report of the royal commission on maritime claims, commonly called the Duncan report of 1926.
In numerous appeals which have been made to the Board of Railway Commissioners for a reduction of freight rates, they have been met by argument on behalf of the railway companies, that due to physical and other conditions it was very necessary for the railway companies to have tariffs or rates greater in some sections than in other sections. The Board of Railway Commissioners have, I believe, made it clear that there is no authority in the act to allow them to render decisions on broader lines such as to develop business. Section 320 of the Railway Act provides:
In deciding whether a lower toll, or difference in treatment, does or does not amount to an undue preference or an unjust discrim-

Railway Act Amendment
ination, the board may consider whether such lower toll, or difference in treatment, is necessary for the purpose of securing, in the interests of the public, the traffic in respect of which it is made, and whether such object cannot be attained without unduly reducing the higher tolls.
I have suggested the following amendment to section 320, subsection 1:
In deciding whether a lower toll, or difference in treatment, does or does not amount to an undue preference or an unjust discrimination, the board may consider whether such lower toll, or difference in treatment, is necessary for the purpose of securing in the national interest, both producing and consuming, the traffic in respect of which it is made, and whether such object can be obtained without unduly reducing the higher tolls.
You will note, Mr. Speaker, that the change suggested is the deletion of the words " in the interest of the public " and the substitution of the words " national interest, both producing and consuming." My argument can be better summed up by reading from the report of the Duncan commission, at page 24:
In addition, the cases which the maritime provinces have already submitted to the railway commission also raise the question of handicaps arising from the geographical position of their natural products, and their distance generally from central markets. If we were satisfied that under their present power the railway-commission could adequately deal, on appeal, with the broader aspect of the maritime eases before them, we would make no further comment. Previous judgments of the railway board, however, lead us to fear that they will not feel competent to deal with such broad considerations as are still involved in these maritime claims.
Then the report cites three cases, of which the first is the application of the district board of trade of Coalhurst. In their judgment in that case the board said:
The board under the Railway Act has no profit and loss responsibility, and its intervention in the matter of rates must, as has been indicated, be concerned with matters falling within the categories of reasonableness and unjust discrimination, and not with a policy of the development of industries through rate adjustments.
The second case referred to is that of the Imperial Rice Milling Company vs. the Canadian Pacific Railway Company, in which the board say:
The board has no power to regulate tolls, for the purpose of equalizing cost of production, or geographical, or climatic, or economic conditions.
The third case is that of the British Columbia News Company vs. Express Traffic Association, in which the board say:
It is not the board's function, as delegated by parliament, to make rates to develop business, but to deal with the reasonableness of
rates, either on complaint or of its own motion. ... As it has not been established that the rates as charged are unreasonable the board is not justified in ordering the installation of the experimental rates asked for.
The Duncan report proceeds:
The conclusion to be drawn from these extracts seems to us to be that the railway commission does not feel itself empowered to pass under its review, when appeals are made to it, the same wide range of business considerations which railway companies themselves can take into account in forming a judgment as to the extent to which they should develop trade and business.
I will pass over some of the comments I had intended to make, in order to condense my argument. The Duncan report further states:
At present the work of the railway commission is circumscribed within the two considerations, viz:-
(a)	Reasonable compensation to the carrying company, and
(b)	No unfair preference or unjust discrimination as between traders.
Section 320 of the Railway Act seems to give the wider powers that we have in mind to the railway commission, so far as the question of undue preference or unjust discrimination may be involved.


Pierre Édouard Blondin: Surely it is not necessary for the hon. member to read that whole report in explaining his bill. Usually these explanations are very brief.


Thomas Reid: I feel it is necessary to give this finding of the Duncan commission in support of the proposals I have included in the bill.


Pierre Édouard Blondin: I would ask the hon. member to shorten his remarks as much as possible. I did not understand that the introduction of the bill was a controversial matter.


Thomas Reid: My argument will not take very long, Mr. Speaker. I quote again from the Duncan report:
... we feel that, if the intention was to have larger national interests in mind, the section should be made clearer, and instead of the words "in the interests of the public" (which might be interpreted as in the interests of the "consuming" public) the words should clearly state that it is national interests (both "producing" and "consuming") that are in mind. If this was not the original intention of the section, we suggest it is the intention which should now be imported into it. We feel further that a similar extension of authority should be imparted to the railway board in regard to the question of reasonable compensation. It would then be competent for the railway board to make a survey of just the very character that the president of the Canadian National Railways testified as being part of his function (as the business head of a railway); and if from public policy they felt that an experimental rate should be conceded,

Railway Act Amendment
they should be free to constitute the rate% even although it might not, at the time, or of itself, give reasonable compensation to the railway company.
That has to do with the first and second changes proposed in the bill. The third and last change proposed is in regard to the rates on grain and flour moving west. It will be remembered, Mr. Speaker, that in 1925 a bill was introduced to amend the Railway Act of 1919, and that bill included -amendments touching the Crowsnest pass agreement. It is hardly necessary for me to recite the history of that agreement, which has often and ably been presented in this house by many hon. members. From what I can gather, however, the reason given in 1925 for introducing further legislation in connection with the Crowsnest pass agreement was that a supreme court decision had been rendered confirming the stand, taken by the Canadian Pacific Railway, that when the agreement was first entered into in 1897 the territory covered included only those points that were in existence at the time the agreement was made. This judgment brought about a somewhat chaotic state of affairs as far as freight rates were concerned, because of the fact that adjacent towns were obliged to pay the higher regular rates.


Some hon. MEMBERS:: Carried.


Thomas Reid: I think it is necessary to give this explanation, Mr. Speaker, so that the house may have a clear conception of the purposes of the bill. At that time it was argued that three courses were open to the government in regard to the Crowsnest agreement. It could have been left as it was, in accordance with the judgment of the supreme court; it could have been entirely done away with, or the third course, that followed by the government, could have been and was adopted. It is not necessary, Mr. Speaker, to suggest what might have been done; the fact remains that the Crowsnest pass agreement was altered and changed. By that change the prairie provinces gained something-though they lost something as well-in having the Crowsnest pass rates on grain and flour fixed to all points east, while it was also contended that the railways gained something by the removal of the Crowsnest rates on certain commodities.


Pierre Édouard Blondin: Cannot the hon. member
continue his remarks on the second reading of the bill? These motions are not usually debated at such length.


Thomas Reid: Some hon. member asked for an explanation of the bill. The change sug-

gested is to give the same rates by law to British Columbia as those given to the east.
Motion agreed to and bill read the first time.



PROCEDURE IN NOTIFICATION OF VACANCY IN REPRESENTATION

[Stage Direction]
On the orders of the day:
Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Mr. Speaker, yesterday in discussing the vacancy which exists in the representation of the constituency of Maisonneuve a question was raised as to the proper procedure in the matter of notifying the Speaker of any such vacancy. The Prime Minister took the view that it was an obligation on the party to which the member had belonged to notify the Speaker that a vacancy existed. I stated that I did not hold that view at all, that I thought it was the duty of the government to see that vacancies were filled and to see that the Speaker was notified accordingly. The Prime Minister then said:
... I challenge the right hon. gentleman to name any case in which notice has not been given by the opposition with respect to vacancies existing in constituencies formerly represented by members of their party. That always has been done; it has become a sort of custom.
I replied, speaking at the time without reference to the Journals of the House:
In answer to that challenge I may say that I remember many occasions during the time I was Prime Minister, having vacancies in constituencies brought to our attention, and where we took action as a government without waiting for the opposition to give the notification.
I have since looked up the Journals of the House and by a hasty glance I have come across the following, which are among the number of cases where the Liberal government of the day notified His Honour the Speaker with regard to vacancies which had arisen in constituencies which were represented in this house by Conservative members. From the Votes and Proceedings of January 31, 1923, it will be found that the notification with respect to the death of the Hon. John A. Stewart, a member of the Conservative party for the -constituency of Lanark, wTas made to His Honour the Speaker by the Hon. George P. Graham and the Hon. D. D. McKenzie, both members of the Liberal administration of the day. In the Votes and Proceedings of February 5, 1925, it will be observed that the notification of the vacancy occasioned by the death of Mr. John A. MacKelvie, Conservative member for the constituency of

Home oj Commons-Procedure
Yale, was made to His Honour the Speaker by the Hon. Ernest Lapointe and the Hon. James Murdock, both members of the Liberal administration of the day. In the Votes and Proceedings of January 26, 1928, it will be seen that the notification of the vacancy occasioned by the death of the Hon. James K. Flemming, Conservative member for the constituency of Victoria-Carleton, was made to His Honour the Speaker by the Hon. P. J. Veniot and the Hon. Fernand Rinfret, both members of the Liberal government of the day. In the Votes and Proceedings of June 5, 1929, it will be seen that the notification of the vacancy created by the death of Dr. R. F. Preston, Conservative member for the constituency of Lanark, was made to His Honour the Speaker by the Hon. J. C. Elliott and the Hon. V/. D. Euler, both members of the Liberal administration of the day; and in the Votes and Proceedings of the same day there is record of the vacancy occasioned by the death of the Hon. Dr. J. W. Edwards, Conservative member for the constituency of Frontenac-Addington, and the record shows that His Honour the Speaker was notified of the vacancy by the Hon. J. C. Elliott and the Hon. W. D. Euler, both members of the Liberal administration of the day.
A little earlier, in the course of his remarks, the Prime Minister said that in the case of Athabaska the notice required by law had been given by two members of parliament. Undoubtedly, my right hon. friend was aware of who the members of parliament were who had given notice in regard to the constituency of Athabaska.
I have in my hand the Votes and Proceedings of Thursday, February 4, 1932, and I find the following communication there recorded:
Electoral District of Athabaska
Dominion of Canada 7
To wit	J House of Commons.
To the Hon. the Speaker of the House of Commons:
We, the undersigned, hereby give notice that a vacancy hath occurred in the representation in the House of Commons, for the electoral district of Athabaska, , in the province of Alberta, consequent upon the death of the sitting member therefor, John Francis Buckley, Esquire.
Given under our hands and seals, at the city of Ottawa, this 21st day of January, 1932.
George H. Perley (L.S.),
Member for the electoral district of Argenteuil.
R. WTeir (L.S.),
Member for the electoral district df Melfort.
Both hon. gentlemen who signed that notification are members of the Conservative administration of which the Prime Minister
is head. I find, also, looking over the records, that not only was notification sent to His Honour the Speaker by members of the administration with regard to that particular vacancy, but that notification of all vacancies which have occurred since the present government has taken office, with the exception of the one mentioned the other day, in the constituency of Maisonneuve, has been made by members of the administration of my right hon. friend. In the electoral district of Three Rivers-St. Maurice, where a Liberal member had formerly occupied the seat, notification with respect to the vacancy appears in the Votes and Proceedings of March 12, 1931, and is as follows:
Electoral District of Three Rivers-St. Maurice Dominion of Canada 7
To wit	J House of Commons.
To the Hon. the Speaker of the House of Commons:
We, the undersigned, hereby give notice that a vacancy hath occurred in the representation in the House of Commons, for the electoral district of Three Rivers-St. Maurice, in the province of Quebec, by reason of the death of Arthur Bettez, the sitting member therefor.
Given under our hands and seals, at the city of Ottawa, this 10th day of March, 1931.
Arthur Sauve (L.S.),
Member for the electoral district of Laval-Two Mountains.
Maurice Dupre (L.S.), Member for the electoral district of Quebec West.
Again, both hon. gentlemen who signed this notification are members of the administration of which the Prime Minister is head. Also, with respect to Hamilton East, notification was made by the Hon. Hugh Guthrie and the Hon. R. J. Manion, both members of the administration.
I think, Mr. Speaker, I should again direct your attention and the attention of the house to the statement which the Prime Minister made in refutation of what I said at the time. The statement was to the effect that in all cases vacancies existing in constituencies formerly represented by members of the Liberal party had been made by members of this party. He added:
That always has been done; it has become a sort of custom.
As a matter of fact, it has never been done as a custom. The Prime Minister, in making that statement, was misleading the house, and I say that he was misleading the house deliberately.


Mr. MANION:: Order.


Some hon. MEMBERS:: Order.


Hugh Guthrie: I rise to a point of order, Mr. Speaker.
House of Commons-Procedure


An hon. MEMBER:: Is that so?


Hugh Guthrie: The concluding sentence uttered by my right hon. friend was distinctly against the rules and order of this house-flagrantly so. I ask that it be withdrawn.


Mr. BENNETT:: He has got away with it so long he thinks he can continue.


Pierre Édouard Blondin: The right hon. leader of the opposition (Mr. Mackenzie King) will agree that he should not accuse the Prime Minister or any other hon. member of deliberately deceiving the house.


William Lyon Mackenzie King: I am using language with respect to the Prime Minister which he repeatedly uses with respect to members on this side.


Some hon. MEMBERS:: Withdraw.


William Lyon Mackenzie King: If the Prime Minister did not know he ought to have known, and there is every reason to believe that he did know, because he referred to Athabaska in citing his instances.


Some hon. MEMBERS:: Withdraw.


William Lyon Mackenzie King: I say that the statement made by the Prime Minister was not a correct statement; it was not an accurate statement. He ought to have known it was not an accurate statement, and he should not have made the assertion he did unless he was prepared to prove the statement he made.


Some hon. MEMBERS:: Withdraw.


Pierre Édouard Blondin: All that the right hon. the leader of the opposition has now said is parliamentary. I object, however, to his saying that the Prime Minister or any other member has deliberately deceived the house. The right hon. gentleman knows as well as any other hon. member does that that is not parliamentary, and I must ask him to withdraw it.


William Lyon Mackenzie King: When ' the
Prime Minister uses the expression-


Some hon. MEMBERS:: Order.


Some hon. MEMBERS:: Withdraw.


Mr. LAPOINTE:: Let him speak.


Pierre Édouard Blondin: Even though the Prime Minister may on any occasion have used such language, it would be none the less unparliamentary, although I cannot recall his having done so. At any rate, that would not establish a precedent.
[Mr. Guthrie.!


William Lyon Mackenzie King: When the Prime Minister uses the words, "That always has been done; it has become a sort of custom", he is speaking deliberately, and I say that in making the statement he did make, he was making a statement which is to be regarded as a deliberate statement. I say that the Prime Minister must have known or ought to have known that it was not correct at the time.


Pierre Édouard Blondin: The question is not
whether or not it was a deliberate statement: that is perfectly parliamentary. Either the Prime Minister or any other hon. member may be mistaken in making a deliberate statement. But to say that the right hon. gentleman makes a statement deliberately to deceive the house is unparliamentary, and again I ask the right hon. the leader of the opposition to withdraw that accusation.


Some hon. MEMBERS:: Withdraw.


William Lyon Mackenzie King: Well, it was
a deliberate statement calculated to mislead the house.


Some hon. MEMBERS:: Withdraw.


William Lyon Mackenzie King: If you prefer me to say that it was a deliberate statement, well and good.


Some hon. MEMBERS:: Withdraw the statement.


Pierre Édouard Blondin: I wish the right hon. gentleman would not quibble. He must either withdraw or refuse to withdraw the language he has'used. He is too good a parliamentarian not to know that the statement he has made is not parliamentary. The statement was that there was a deliberate intention to deceive the house. It is unparliamentary in character and in the interests of parliamentary procedure and good order in the house I ask that it be withdrawn.


William Lyon Mackenzie King: I did not use the statement " to deceive the house," I said, " to mislead the house." However, if Your Honour rules that any particular words have been unparliamentary, so far as those words are concerned I am quite prepared to bow to your ruling. That is all I have to say.



STAMP COMMISSION

[Stage Direction]
On the orders of the day:
Mr. A. L. BEAUBIEN (Provencher):: Mr. Speaker, may I refer to a question answered yesterday by the Prime Minister (Mr. Bennett) with regard to the Stamp Commission. His answer reads:

The Budget-Mr. Motherwell
In answer to the second question, no sum was paid for fees to any of the commissioners, but for expenses Sir Josiah Stamp received $2,120.57: Chief Justice Brown, $1,198.16; Mr. W. S. Evans, $1,101.73. Sir _ Josiah Stamp declined to accept any fee for his services, and, as has been intimated, a piece of plate was presented to him. Chief Justice Brown expects to be paid some small honorarium for his services, an appropriation for which will be included in the supplementary estimates, no amount having been determined.
I should like to inquire of the Prime Minister if Mr. W. S. Evans, one of the commissioners, is to receive any fees for his services, and I should like to know also when we may expect to know the amount which Mr. Sweatman is to receive for his services in connection with the commission.


Richard Bedford Bennett: So far as I know, no fees are payable
to Mr. Evans. I fancy the account of Mr. Sweatman will be paid at a not distant date but I am not now in position to say exactly when.


Arthur-Lucien Beaubien: This is the first instance I have known of a lawyer delaying to render his bill.



THE PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Mr. A. M. CARMICHAEL (Kindersley):: Mr. Speaker, I have an inquiry to make of the Postmaster General (Mr. Sauve), but as he is not in his place, possibly the Prime Minister (Mr. Bennett) can give me the information I desire. If not, my question can stand as a notice to be answered to-morrow. I have received a letter from the postmaster at Plato, which is in my constituency. This man is paid on a commission basis and because of abnormal conditions the revenue of his post office has decreased over 16 per cent while his own revenue has decreased over 12 per cent. He understands that he will be subject to the ten per cent reduction in addition to the decrease in revenue. My question is:	Are
postmasters paid on a commission basis to be subject to the ten per cent reduction as provided in Bill 19 and, if so, will special consideration be given to those who have already received a drastic cut in their revenues?


Hon. E. N. RHODES (Minister of Finance):: Unfortunately, I did not hear the first portion of the hon. member's question but I will look it up in Hansard and give him an answer to-morrow.
BEAUHARNOIS POWER PROJECT On the orders of the day:


Hon. CHARLES STEWART (West Edmonton):: Mr. Speaker, may I inquire of the Prime Minister (Mr. Bennett) when he will be prepared to make a statement on Beauhamois?


Richard Bedford Bennett: Just as soon as I am possessed of sufficient information to enable me to do so.
I have not the required information and there have been delays in obtaining it over which I have no control.


Mr. BOURASSA:: Is there anything left?


Richard Bedford Bennett: I suppose the valley of
humiliation is still left.


Charles A. Stewart: We would
be content with a partial statement.


Richard Bedford Bennett: That is just what I do
not want to make.


Charles A. Stewart: I do not
understand my right hon. friend's position; of course, he can refuse to make a statement, but this is of great importance to some hon. members. I should like to have an answer to the question I asked three weeks ago as to what amount had been guaranteed for advances to the Beauharnois company.



THE BUDGET


[Stage Direction]
The house resumed from Monday, April 11, 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 way and means, and the proposed amendment thereto of Mr. Ralston.
Hon. W. R. MOTHERWELL (Melville):: Mr. Speaker, my first word also will be one of congratulation to the Minister of Finance (Mr. Rhodes) on the very excellent and handsome manner in which he delivered his first budget to this house. Of course, this is said without prejudice to anything further I may say in connection with the substance matter thereof. I think it is all right also to extend congratulations to my colleague, the hon. member for Shelburne-Yarmouth (Mr. Ralston) for I am sure that all hon. members in this house believe he delivered a very excellent and even brilliant speech. I think he made it very difficult for the hon. gentleman who followed him to do full justice to the share
The Budget-Mr. Motherwell

he took in the debate. The other two hon. gentlemen who spoke were too remote from where I sit to be heard distinctly, but from what I did hear, they were both quite all right from their respective viewpoints.
Before I go on with my own little story regarding the budget, I should like to refer to two or three outstanding points raised by the hon. Minister of Trade and Commerce (Mr. . Stevens). He has fallen into the error into which so many others have fallen of assuming that at one time the policy of the Liberal party had been in favour of free trade.


Some hon. MEMBERS:: Oh, oh.


William Richard Motherwell: 
Mr. PORTEOUS:: What did he say about trade balances?
The Budget-Mr. Motherwell


William Richard Motherwell: I think I heard a remark somewhere. Do I spy a stranger in the gallery?


Victor Clarence Porteous: What is that swat?


William Richard Motherwell: That is like some sepulchral sound one would hear at a funeral. Last Wednesday there certainly was a funeral-like story, but it is over now. I desire to draw the attention of the house, if I may, to some of the remarks made in the speech from the throne. Because of the hopes that were held out in that speech, I think we should have expected to receive a brighter and better budget. Let me read a few extracts from the speech from the throne:
This period of trial has shown the Canadian situation to he fundamentally sound.
If it is, what are we worrying about?
Canada still maintains its high place in world commerce.
I am just afraid that statement is not quite correct. My colleague, the hon. member for Shelburne-Yarmouth, told us that the foreign trade of Canada had been cut nearly in two during the last two or three years, reduced from 12,000,000,000 to nearly $1,000,000,000. Yet this is put into the mouth of His Excellency, notwithstanding that horrible decline. It is easy to satisfy hon. gentlemen who can congratulate themselves on having one-half of the world trade that they used to have.
As regards this last quotation, I know what we would have called it when we used to go to school, but I cannot say it in this house.
The provisions made at the last session of parliament for unemployment and farm relief are proving effective.
The effective nature of it is that the situation is getting worse; it is effective in that respect; it is becoming progressively worse.
I notice members on the other side are disappearing gradually. That last quotation is a real corker. If these statements were all warranted, surely we would have had a different kind of budget; that is the reason why I am drawing attention to them. This is another paragraph in the speech from the throne:
You are successfully meeting difficult domestic problems.
I think the rank and file of Canadians are, but I do not think the government is. Conditions are gradually improving.
I think that is the climax.
I come now to the budget. I shall say this much for it: it is much less objectionable and offensive in some respects than the last one, and more so in others. It will be remembered


William Lyon Mackenzie King: And that is in addition to the tariff.


William Richard Motherwell: Yes/ The tariff
was not imposed gradually at all, but with
ghastly suddenness. .At the special session the British people were given not simply a swat in one eye but all over the face by this government jacking up the tariff sky high on many British commodities, followed by a further raise in 1931, and now they are following last year's imposition of a one per cent import tax by an increase this year of two hundred per cent, and applying that tax to all commodities no matter where they come from. How can the government defend such a horrible piece of hypocrisy, preaching intraempire trade and practising exclusion? Really I have no language with which to describe it adequately. I shall have to get a new vocabulary, Mr. Speaker, to express what I think of it. When the government were in the midst of doing these things here is what the Minister of Trade and Commerce said at the special session of 1930. The government put up such a magnificent bluff on that occasion that we all thought that they were going to do something, that they were not going to make blooming asses of themselves. Here is what the Minister of Trade and Commerce said:
But we are going there-
That was to the Imperial conference.
-also in a spirit of good will.
If I gave my colleague to my right a cuff on the ear, Mr. Speaker, would he call that good will?


Ernest Lapointe: No.


William Richard Motherwell: Certainly not. But that is what the government call good will. The minister went on to say:
We are going there prepared to open negotiations with our sister dominions and the mother country for the most friendly cooperation in order to bring about an increase of trade between them and us.
Going to increase good will by putting up a trade barrier and treating our kinsmen in that unfriendly manner! Why, it seems to me that in their heroic endeavour to balance the budget they have succeeded only in unbalancing themselves, because nobody outside of a mental hospital would conduct himself as these hon. gentlemen on the treasury benches are doing with regard to this question.
Having raised the tariff in September, 1930, they gaily took the boat for the old country. Inside eight days after they got there the right hon. Prime Minister made a speech, not to the conference but to the whole world, in which he stated in effect the British government's propositions were not worth a hoot. Then he spent the rest of the time chasing the Right Hon. J. H. Thomas trying to round him
The Budget-Mr. Motherwell

up because he called Canada's proposals "humbug." Well, that may not have been diplomatic language, but it was true.
Now I come again to this three per cent import tax business. If there ever was an opportunity, as was so rightly said by the hon. member for Shelburne-Yarmouth yesterday, this government had that opportunity last Wednesday to redeem themselves by making a reciprocal preference offer to the mother country prior to sitting around the conference table at Ottawa in July next. Then it did not matter what might happen, the conference could not be a failure, with the wheat quota on the British side plus the ten per cent preference in the Chamberlain tariff. However small the offer it would have been a big thing for hon. gentlemen opposite to make, because as yet they have not made any budget preference offer to Great Britain. But the government missed that opportunity. It can be recovered yet by their backing up once more. We have had a lot of newspaper criticism regarding the little preparation that is being made for the coming conference. These hon. gentlemen opposite are preparing wittingly or otherwise, to make the Ottawa conference another failure. There is lots of preparation in this budget of the wrong kind. At one time we thought, Mr. Speaker, they were playing the wise part of putting these duties up to dicker them off when they came to close quarters. Well, you cannot fool the Right Hon. Philip Snowden in that fashion, you cannot fool the people in the old country who have been making diplomatic exchanges with foreign countries and the overseas dominions since way back; they know that part of the bargaining game and discount it accordingly. Are the government going to try to dicker this three per cent off in exchange for something? What is that old saying about setting a net in the sight of the bird? Well, that is what the government are doing, setting a net in the sight of' the bird, and thinking they are going to fool the "bird" by taking off this increase when they sit around the conference table. That may not be their purpose, but if it is not, what is their purpose at this particular time in placing further restrictions on inter-empire trade? I cannot denounce that too strongly. Is not that the offspring and spawn of Toryism intensified? Isn't it just what you would expect from a small-bore Tory government preparing to enter a great inter-empire conference-something that the whole world is watching? But what is the use of pursuing the subject further?

We are told, Mr. Speaker, that you cannot see spiritual things with the natural eye. It is just as true that you cannot see Liberal things with the Tory eye. That is what makes the big difference between the two parties, and yet superficial people will discuss these things and say, " Well, there is not much difference between the two old parties." But every day since this government has come into power the gulf has been getting wider and wider, until the two parties to-day are poles asunder. You cannot mix one with the other, neither can one understand the other. I suppose as I am talking now my hon. friends opposite are wondering if I am not a proper subject for a madhouse.


Some hon. MEMBERS:: Hear, hear.


William Richard Motherwell: Didn't I touch a
responsive chord? That is exactly what I am thinking of

their policies, and sometimes themselves. Therefore there is no use trying to reconcile the two viewpoints. They have their views and they are entitled to them; we have our views and we are entitled to them. The electors will decide between us in due course.


An hon. MEMBER:: They did decide last time.


William Richard Motherwell: Well, I do not
know that they will decide just quite the same next time, but we shall see.
The budget itself is therefore more odious than the budget of last year in the above respect. So much for the ways and means of getting revenue. The objective of the government is to balance the budget. They do it in two ways, by imposing new taxes and by reducing expenditures. How are they going about their policy of reducing expenditures? I see my good friend the Minister of Agriculture (Mr. Weir) in his seat. I am not going to blame him a bit more than the rest of the government in what I am about to refer to. Agriculture is staggering as it has never staggered since Confederation; it is down at the heels and out at the elbows as it never was in my lifetime, and yet in the face of that, the government comes down with estimates reduced by three and a quarter million dollars with respect to agriculture. Is that the way to hold up the chief industry of Canada, an industry that occupies nearly half the people and feeds them all? Is that the way to treat it? This is the avenue by which we are to come back to normal conditions of development. How are our industries to progress when agriculture is on its beam ends,

The Budget-Mr. Motherwell
also mining, lumbering, paper and pulp, and fishing? These are the primary industries of the country, and the major one of them they have swatted to the tune of three and a quarter million dollars, in the face of the government election promise, oft repeated. " We will put the power of the dominion exchequer and of the government behind the cause of agriculture." The right hon. Prime Minister said that in Woodstock, New Brunswick, he said it all over the land, and yet when it comes to a showdown he cuts the agriculture estimates right to the bone, so much so that many of the services to agriculture will have to be dispensed with or else paid for by the farming population. I do not know where they will get the money for the purpose. Down in the maritimes they depend very much upon inspection of their certified potatoes to hold the market in the United States, but that service is threatened to be cut off, or else charged for. Potatoes to-day are worth about twenty cents a bushel or less and the government are asking the potato growers of the maritimes to bear that load. I know the Minister of Agriculture was not a party to that, I feel sure he must have protested against it. Perhaps he might have gone further with his protest, but he is a new member and a new minister, and my sympathy goes out to him. But I wonder if he could not stir things up a bit before the supplementary estimates come down. Could he not also do something for our winter fairs? I know he is a genuine live stock lover himself. The government of which the Hon. Martin Burrell was Minister of Agriculture, and all the governments that have followed between that day and this have been anxious about promoting the prosperity of our live' stock industry as the chief cornerstone of agriculture. Why take away their grants at this time and leave them not only with loss of money but loss of morale, because of lack of sympathy on the part of those to whom they have the right to look for encouragement? That is the story of how they are trying to "save" money; what they cannot get from agriculture they are skinning off the poor civil servants, to the tune of 87,000,000 or $8,000,000. If all these prognostications contained in the speech from the throne had come true the government would not have had to resort to these questionable methods of getting revenue in order to balance their budget, which is not balanced and would not stay balanced if it were, so long as these hon. gentlemen remain in power and keep on destroying revenue by prohibitive or high tariffs.
Then I come to another matter. Hon. gentlemen opposite say we are making no constructive suggestions. Is there nothing constructive in the suggestion that the Minister of Agriculture (Mr. Weir) try to remove himself and the government from the charge of being more unfriendly to agriculture through that one act-reduction of the agriculture estimates-than was the case with any previous administration within my memory? This has been done at a time when agriculture is least able to stand it. It is like kicking a man in the ribs when he is down; in fact it is like kicking a man all over, in the ribs and everywhere else. I hope the Minister of Agriculture will respond to this appeal; he must realize the situation himself. If there is anything I can do I will be glad to help him, although I do not see how I can render much assistance except by giving hail Columbia to his leader and colleagues, which I aim trying to do now.
I do not think the previous government could have made the progress it did make in agriculture if we had .not had a sympathetic Liberal prime minister. I do know who is responsible for the building in which the Department of Agriculture is now housed; I do know who is responsible for that fact that for the first time since confederation the department is under its own roof, and that is the leader of the Liberal party. The present Prime Minister is the gentleman who is guilty of slashing the grants and estimates for agriculture,. I can just imagine him dismissing his cabinet some night, telling them to go to their offices and come back the next day with their estimates reduced by so many millions of dollars. It would not matter where the reductions were made; it would not matter who was hurt, whether it was a primary industry, whether it was the militia, the flying corps or anything else. That is the way they apparently made up their estimates over there, from all the evidence we can gather. We have no spy in the cabinet to tell us these things; we never hear a peep outside from hon. gentlemen opposite, but those who have been in cabinets before can read the evidence in the estimates and between the lines.
So much for that; I do not hear hon. gentlemen opposite jeering very much now. Now let me for a moment refer to the Hudson Bay railway, which was nearly ruined once by the Tories, who located the terminal at Nelson. I say that advisedly, that the mongrel Union government, which was in power part of the time, and the Tories almost ruined that road at that time. The Liberal government is responsible for moving the terminal to

The Budget-Mr. Motherwell

Churchill. The road can be ruined again, and it is no wonder hon. members from the west who are anxious about this road have some misgivings as to how friendly this government is to that undertaking. Of course it is finished; it was completed to salt water before the government changed, but the Tories got all the hurrahs when the first loads of wheat were sent out last year. But the insurance is so high as compared with the St. Lawrence rate that I do not see how we are going to develop trade via the Hudson Bay route unless these and other rates are lowered to those of competing points. It takes a long time and a great deal of effort to switch trade from an established route to a new one. Hon. members will recall that when the Vancouver route was opened, via the Panama canal, it took many years to develop it, and that port is open all year. It will take more effort and a longer time to develop a route which is open only four or five months during the year, so the insurance rates and other rates must be reasonable in the early stages at all events or the development will be disappointingly slow.. Just think; we have a new (port on the plains of the west to which we have been looking forward for fifty years. It was started by the Liberals and finished by the Liberals, but then hon. gentlemen opposite came along and by means of high tariffs and everything else put all the obstructions imaginable in the way of trade over that route.


The ACTING SPEAKER (Mr. MacDonald, Cape Breton):: The hon. member has spoken forty minutes.


Mr. W. E. ROWE (Dufferin-Simcoe):: Mr. Speaker, after observation of the first budget presented to this [parliament by the Minister of Finance (Mr. Rhodes) I am in hearty agreement with the hon. member for Shelburne-Yarmouth (Mr. Ralston), chief critic of the Liberal party in this house, at least in one respect: I think it is a clear-cut and concise business program. The splendid style in which it was presented to parliament is further evidence of those excellent parliamentary qualities for which the hon. minister has been distinguished in his native province as well as in other parliaments.
I do not propose to follow very closely the somewhat rambling remarks of my hon. friend from Melville (Mr. Motherwell). I have the highest personal regard for the hon. member, and during his years in this house we have listened to him on different occasions with great interest. It is somewhat remarkable, however, that his speeches are becoming more conspicuous for the entertainment they provide than for the logic they contain.
fMr. Motherwell.]
In this country to-day we have very great difficulties confronting the present administration; the great economic crisis that has prevailed throughout the world has brought about unprecedented problems within Canada which have made the task of government more difficult than it has been at any time since confederation. It is not my purpose to contrast at any length the policies of the present administration, faced with these difficulties, with the lack of policy shown by the former administration under much more favourable circumstances. However, I venture to state that during those days that have been properly referred to as an era of prosperity, Providence smiled on Canada and with bountiful harvests and favourable world conditions the producers of this dominion secured rich returns. But I think it must be admitted that this temporary prosperity was something over which the previous government had no control and for which they should claim very little credit.
One recalls that immediately after the last election it was found necessary to call a special, emergency session of parliament to provide $20,000,000 for the relief of unemployment, which was supplemented by a similar amount provided by the municipalities and provinces. Something over $7,000,000 a week was spent in order to care for the thousands who were unemployed at that time.
We have heard a great deal with reference to low commodity prices, Mr. Speaker, and it is rather interesting to note that agricultural commodity prices have dropped by over fifty per cent. However, it is equally significant to observe that these commodity prices dropped almost forty per cent, between December, .1929, and the beginning of 1931, during the greater part of which period the party sitting to your left had charge of the government of this country. Therefore I douibt if hon. gentlemen opposite can find much glory or comfort in these difficulties though which we are passing, when we remember that they failed even to recogniz', the problem before going to the country, and failed to offer any reasonable solution for the unemployment problem or for the prevention of the unfavourable trade balance then in sight.
Many problems are confronting the government of the day, Mr. Speaker, but I believe they have been adequately met. Our financial obligations have been met one hundred per cent, and through the enthusiastic cooperation of the people of Canada and the skilful management of the former Minister of Finance, the present Prime Minister, our financial integrity has been maintained in spite of the trying

The Budget-Mr. Rowe
conditions which have existed during the last couple of years. There are many other problems facing this government at the present time. There is, for example, the problem of transportation, which has been well described as the second national debt of Canada, and there is the problem of balancing revenues and expenditures. The problem of balancing our trade has been met in a way that promises a substantial tirade balance in our favour in 1932. Transportation is one of the major problems before the government at the present time, as every citizen must admit; and encouragement has been given the management by the present government with a view to curtailing apparent extravagance in the conduct of the road. As a result of the encouragement which has been given to industrial activities in Canada by the "Canada first" policy of the government, we find that 142 new industries have been established in the dominion, and when normal times return -and I believe they will return sooner in Canada than in any other country-a good deal of assistance will be afforded our unemployed.
I know there are thousands to-day in this dominion who are praying for a return of the prosperity they enjoyed in stock market days, that era of plenty; but there are many more who are becoming more and more fearful for their very existence. We are no doubt passing through a serious economic crisis. There are those to your left, Mr. Speaker, who charge this government, and particularly the Prime Minister, with having made promises. Well, we know that the leader of the opposition has broken promises in the past, but there is one leader whose promises no one has doubted in these times of trouble. We have from him the assurance that he that tilleth the land shall have plenty of bread, and the unemployed in this dominion must in future establish their homes and seek employment on the land rather than in highly industrialized factories. In this regard I would refer you to the development that has taken place in this country during the last ten years, in which time the hon. member for Melville, was what one might call the manager of our great enterprise in Canada, namely, agriculture. Agriculture, as he has said, employs directly and finds homes for approximately forty-six per cent of the people of Canada. It has been well said that possibly two-thirds of the rest of the population depend indirectly upon agriculture and its allied industries, or at any rate are indirectly affected thereby. The general progress of the dominion depends upon the success of agriculture. If that is true,
then one is reasonable in assuming that upon the soundness of Canadian agriculture depends the future prosperity of this country. It has often been said that agriculture in Canada is the producer of one great commodity; but may I point out that after all agriculture embraces a multitude of important industries in this country. Some of these branches of our agricultural enterprise are capable of much greater expansion than others. Some are capable of vast expansion by means of improved machinery, while others can expand only by the employment of man power.
Before the war, in 1913, Canada produced five per cent of the world's wheat, and at that time she had ten per cent of the exportable surplus of the world. Since that time she has increased her production by 122 per cent, the major portion of that increase having taken place between 1920 and 1930. To-day she produces over ten per cent of the world's output and supplies over thirty-five per cent of the exportable surplus of the world-that is, exclusive of Russia. The Argentine, the United States and Australia, have had, of course, similar increases ranging anywhere from twenty-five to seventy per cent. Taking these facts into account, we find that the world's production in that ten-year period has increased by approximately twenty-five per cent, or 700,000,000 bushels in one year. It is not surprising, therefore, to find in 1930 double the world's exportable surplus on hand, or double the world's normal carry-over.
One would hesitate to hazard the opinion that this is an over-expansion, in view of the very nature of the product itself, because so much depends upon the weather conditions in the countries that grow wheat extensively. I do sav, however, that it makes uncertain the marketing of wheat independently of world depression, in view of the increased acreage, which has been about 30.000,000 acres since 1920. The consumption increase has been much less, and therefore only a failure of. crop in certain parts of the world ensures the safe marketing of wheat in the future. But I repeat that one would hesitate to say that we have had over-expansion. If we had an increased yield per acre of two bushels, next year there would be 600,000,000 bushels of extra surplus, or 100,000,000 bushels more than we have ever produced, and that fact must be taken into consideration.
Great encouragement has been given the production of wheat in this country. Special freight rates, for instance, with both railways, approximate $20,000,000 or $25,000,000 of advantage to grain growers in certain years. Then there are terminal facilities, seed grain

The Budget-Mr. Rowe
and so forth, all of which has considerably benefited the trade of Canada. I believe that in peak years it has approximated almost half a billion dollars, .representing new wealth in this dominion.
We have had, to some extent, an unbalanced development throughout this dominion. I am not attributing this all to the government that is no longer in power, for world conditions and the prices of wheat have in no small way effected that change. We find, again, that it is possible to produce more wheat in Canada with less labour than it has been at any other time in our history. It has been estimated, according to figures at Washington, that in the United States 20,000,050 acres of land have been released for the production of wheat as a result of the change from horse to mechanical power. The ground formerly used for the production of fodder, hay and oats, to feed the horses that were used for power purposes, is to-day, owing to the substitution of mechanical power for horse power, released for the production of wheat, and as I say, this represents 20,000,000 acres. On a smaller scale, the same change has been evident in Australia and in the Argentine. It has been estimated that the full time employment of one man can take care of from 1,000 bo 1,500 acres of wheat ground in Australia or the United States. I presume the same could be done in certain sections of western Canada if modern machinery were available. It is therefore reasonable to assume that 100,000 men could produce the total output of Canada's wheat at the present time.
I mention this to show what has taken place. Even in eastern Canada we have felt the trend of things in the west, for peak labour in western wheat production is no longer required. Not a single train left eastern Canada in 1929 for the wheat fields of the west, and I doubt whether one has left between that year and the present time. The combine and the tractor have played their part in this change. The rapid advance that mechanical science has made has also affected industrial as well as agricultural activity. So that it is not fair to compare the numbers employed to-day in any line of production with those employed five years ago. It is not uncommon to-day for a manufacturer to tell you that he can produce more at the present time with fifty men that he would have thought possible five years ago with one hundred. Machinery obviously has played its part in industry generally in Canada as elsewhere. But there is one field in which machinery cannot interfere with the labour man, one place where it

cannot rob him of his labour. I refer to mixed farming. Consider the districts that have been growing wheat for a number of years, having had to combat the stubborn sow thistle, tumbleweed, mustard, and so on, and you will realize that the rotation of crops is absolutely necessary. Every agriculturist in Canada realizes now that rotation of crops is becoming an increasing necessity. I know there are certain sections in this country which will be retained for many years to come for wheat production, but I know also that there are other sections where farmers are endeavouring to grow wheat which would be better adapted to mixed farming. I doubt if there is a farmer in this house who will deny that statement. Rotation of crops means that barley and other coarse grains which can be sown later in the spring allow for a longer cultivation of the ground in spring. Some fibre is given back to the soil by this method and I venture to say that if this step was taken we would have a larger live stock production and much of this grain would be consumed. I believe it is possible to consume in Canada over thirty or forty per cent of the present exportable grains such as barley and the lower grades of wheat. That is the surest and safest market, at least for the low grade wheat and the coarse grains which we are now finding difficult to dispose of in the markets of the world.
Wheat has not always been our main export. Even back in 1920 Canada exported $133,000,000 worth of live stock and dairy products, which was $16,000,000 more than the value of the wheat exported last year. I direct the attention of the house to the fact that despite these hard times the dairy industry produced last year $35,000,000 more than the value of the total wheat produced. I need only contrast these two phases of agriculture in order to impress upon the house the importance of the live stock industry, as was mentioned by the hon. member for Melville.
However, it is a rather peculiar coincidence that during the regime of his friends, from 1920 to 1930, we saw a lopsided development in agriculture. In 1920 we were in the export market and we sold to the United Kingdom 26 per cent of her requirements of bacon, while Denmark supplied less than 12 per cent. In 1930, ten years later, Canada sold 1| per cent of the requirements of the United Kingdom, while Denmark supplied 60 per cent. Sixty years ago Canada sold to the British market almost three times the amount of bacon she has been selling in recent years. This market should have been properly nursed and encouraged and at least maintained to a degree.

The Budget-Mr. Rowe
I appreciate the world conditions which have contributed to the change as well as the neglect of the former government. In 1910 we found that the production of thirty years previous had been increased by two or three times, and by 1920 this production had been increased again by five times. However, in 1930, instead of exporting to the United Kingdom twice as much as did Denmark, we exported less than 9,000,000 pounds while Denmark exported 600,000,000 pounds. It must be quite evident that a lopsided development has been carried on in this country, and I suggest that this market should have been retained for Canadian products.
Perhaps the house will pardon me for going into details but I think what I have to say is of national importance at this time. The live stock industry should be developed in order to solve to some degree our unemployment problem. This market in Great Britain which was properly our market, should have been retained. I have discussed this matter with leading manufacturers and pork packers, and I doubt if there is a farmer or packer in this house who will deny what I have to say. My information is that the processing of one hundred hogs into bacon will give employment to two men. It would require 2,560,000 hogs to supply the bacon for one half the sales in the United Kingdom which we have lost to Denmark, and this processing would give employment to 50,000 men.
The dairy industry is another factor to be considered in (this matter. I am not going to say that we should properly develop the export butter market; I know that has been said by hon. members opposite. I know that farmers of this house agree that the development of cheese would relieve the butter market in Canada and would automatically be of interest to the dairy industry. In 1904 we sold the United Kingdom 234,000,000 pounds of cheese, while last year we sold only approximately 85,000,000 pounds. In 1903 our sales of butter amounted to 34,000,000 pounds, and this market was maintained until 1925. I shall not go into the reasons why this market was not maintained and why we were finally forced to import over 50,000,000 pounds; we all know this story quite well and those who sit to your left, Mr. Speaker, must be tired of it. Had we retained our market overseas for the dairy products of this country, 400,000 more cows would be required in production to-day. As one who has sometimes milked a cow, I say -I leave it to the dairymen in this house to decide whether or not my statement is reasonable-that the feeding, stabling, housing and milking of eight cows and all that is
involved in the production of butter, cream and cheese so produced, would give employment to one man. The 400,000 additional dairy cows needed would give employment to 50,000 of those who are now waiting for government assistance.
If we had an assured market for the products of mixed farming, more people would be employed than the total number required to produce our wheat crop. I am in full accord with everything that has been done for the production of wheat-every year, one-third of the land cultivated on my own farm has been in fall wheat-but we need a more diversified production in agriculture. This method of agriculture offers an elementary existence to the people who are now hungry. It is the only industry which offers any apparent expansion; it is the only place to which a man can take his family and be sure that he will obtain a living. He can kill a pig or a chicken and will be able to obtain a living, at least until the sheriff drives him off his land.
I know it has been said that once we enter the export market, prices will be reduced and hardship caused to those on the farm. I admit that since we went on the export market with certain lines of our products prices have dipped enormously, there is no doubt about that. It has been stated in this house that the only way to solve unemployment is to have fewer people, the only way to increase prices, is to produce less. Canada has a staggering debt and a tremendous transportation problem, and these matters will always remain difficult of solution if those theories are carried into effect. My own personal opinion is that some assistance should be given to mixed farming. If such a plan were evolved it would encourage this type of agriculture. Take the production of bacon, for instance. Our exports last year amounted to 11,000,000 pounds; if this amount was increased even to 30.000,000 pounds, it would cost the treasury of this dominion only $600,000 to establish an export bonus of 2 cents per pound. If our exports of live beef were bonused by two cents a pound, allowing an increase of 25 per cent, it would cost $700,000. An amount of $1,000,000 spent on cheese would allow for a similar increase on that and an expenditure of $60,000 would allow for a bonus of three cents a dozen on eggs. This would mean you could establish a bonus system which would encourage the sale of our exportable surpluses at satisfactory prices, automatically stimulate the market at home and return to the mixed farmers throughout the dominion approximately $30,000,000 by the increase in prices of farm products. I believe it should
The Budget-Mr. Rowe


Hon. P. J. VENIOT (Gloucester):: Mr. Speaker, I listened with rapt attention to the speech which has just been delivered by the hon. member for Dufferin-Simcoe (Mr. Rowe). I was especially interested in his remarks touching the price of farm products, and in his admission that we were bound on an exportable basis to have low prices for farm products, especially for butter. I was just wondering whether this was the same gentleman who visited the province of Quebec last summer and some parts of the maritime provinces two years ago, encouraging our farmers to pass resolutions condemning the Liberal government for the very low prices prevailing at that time for farm products, and laying stress especially upon the price of butter, which was then selling at 35 cents a pound and is now selling somewhere around 18 and 20 cents a pound. I wonder if the hon. gentleman who has just resumed his seat would dare go into the eastern townships of the province of Quebec to-day with the story he is telling now. I wonder if he would go down to Prince Edward Island, which he visited, and to Nova Scotia, and induce the farmers to listen to
The Budget-Mr. Veniot

his plea. I wonder if he would say to them now: In order to get a reasonable price for your butter I appeal to the government in power to-day to bonus you. My hon. friend is in favour of the bonus system to-day. Why? Because the system adopted by the party which he supports has not brought about results that he anticipated. Consistency is a jewel; there is no question about that, but I fail to see many jewels on the other side of the house. They certainly do not shine if there are any.


An hon. MEMBER:: I see an emerald.


Peter John Veniot: My hon. friend is thinking of the emerald isle.


Mr. MERCIER (St. Henri):: He means a dandelion.


Peter John Veniot: I wish to refer in passing to the speech delivered last night in this house by an hon. gentleman who dealt with the industrial situation in this dominion. He set forth the argument that because of an increase in industrial establishments in Canada under this government, unemployment had to some extent decreased. But the hon. gentleman forgot to tell the house how many factories and industries in this country have closed their doors since the present government came into power. He said that he made a tour of investigation to satisfy himself by so and so and so and so. I wonder if he toured the maritime provinces and went into the city of St. John, where in the last ten months some three industries have closed, throwing out of employment over twelve hundred men. If my hon. friend had wanted to be honest in his argument he would have also shown us the other side of the medal. He would have shown how many industries have dwindled and disappeared since this government came into power, as well as how many have been reported as being established in the dominion.
Before I undertake, Mr. Speaker, to give my reasons for opposing the method adopted by the present government to balance their budget, I wish to pay my compliments to the Minister of Trade and Commerce (Mr. Stevens). Last evening he made a speech in this house, and it was one of the most laboured attempts to defend the government to which I have ever listened, or which it has ever fallen to his lot to deliver. We all appreciate the ability of the Minister of Trade and Commerce, and when I saw that he had been chosen to reply to the financial critic of the opposition I certainly expected something sound. I expected that he would be able to shoot holes through the argument of the

opposition critic, but he failed, and failed utterly to do so. What did we find him doing? We found him rather attempting to attack and also wishing to have sympathy from this side of the house. His first utterance was this:	"We are here to face
courageously the economic problems which confront the country, and so far the government had received very little assistance in the form of constructive suggestions from the opposition." Let me ask the hon. gentleman, Mr. Speaker, what use would it be for the opposition to offer constructive suggestions to our friends opposite? What have they done to prevent us from doing that which they blame us now for not doing? They have taken out of the hands of parliament the , very powers under which we could sit here and offer and discuss constructive suggestions. They have taken the power, which we on this side of the house have strongly opposed, to legislate, not as in the past, aboveboard and before parliament, but in the secrecy of council, and there to adopt and put into force policies without reference to this parliament. We on this side of the house at the present time cannot find entry to the executive council; therefore we cannot offer any constructive suggestions in that way. But notwithstanding -that, let me attempt to prove that the Minister of Trade and Commerce did not confine himself to the facts when he stated that the opposition offered no constructive suggestions. What is the record? Let us go back to the record of the Liberal party since we have been sitting to your left, Mr. Speaker. At the special session of September, 1930, the opposition strongly advised the government that the sky-high tariffs they were proposing to introduce would not remedy unemployment. We pointed that out to them in the strongest parliamentary language. To-day I will not say it is a matter of satisfaction to us to know that we were right; no, because it should not be a matter of satisfaction to think the government have acted in such a way as to render the situation worse to-day than it was when they took office. But, sir, we can point to our friends opposite and say: On a certain date we suggested to you that the methods you were proposing to this house to meet the unemployment situation would not operate successfully. Our honoured leader suggested that a non-partisan commission ibe appointed with power to administer whatever relief the government was prepared to give to the unemployed, either in cooperation with the provincial government and the municipalities or alone. The government did not accept our view. But what do we

The Budget-Mr. Veniot
find to-day? We find those very gentlemen to whom we again appealed in the session of 1931 to adopt a different and a better means to meet the situation, and to whom we gave the benefit of our views on that occasion, are themselves so convinced that their methods were too expensive and did not bring about the results that were anticipated that to-day they have called a conference of the provinces-the very advice which was given to them by our honoured leader in 1931, and which they then flouted on the floor o.f this house. We find they are in conference now with the provincial premiers, and if we are to believe the reports in the press we must come to the conclusion that our hon. friends opposite are about to abandon their unemployment policy of the past and are groping in the dark for a new policy. And yet the Minister of Trade and Commerce says that we have offered no constructive suggestions. If time permitted I could give several other constructive suggestions offered by the opposition to our friends opposite, but not listened to and certainly not adopted by them.
In reading the speech of the Minister of Trade and Commerce I have discovered what I consider to be a gem, if I may use that term. I am going to quote it. Referring to the hon. member for Shellburne-Yar,mouth (Mr. Ralston), he said:
His was a subtle, bitter, and I might say petty criticism of the government's position and difficulties. Not one syllable to indicate the difficulties which we are facing, and not one word on the causes of our troubles.
Those words fell from the lips of the hon. Minister of Trade and Commerce last night. Knowing him as I do, having listened to him for six years in this house delivering speeches in criticism of the Liberal government, I was somewhat surprised that he should complain of any bitterness in the criticism of others, because no public man in Canada ever used such a bitter tongue as the hon. minister used When, seated to your left, sir, he rose to criticize the Liberal policies of that day. But now that he is receiving in return an application of the very medicine that he applied to the Liberal government, we find him cringing under the lash. I thought the hon. gentleman was more of a sportsman, I thought that he who has been held up as bold and courageous in defence of the government could take a little criticism without pleading that the opposition was not treating him and his party right. Thin-skinned indeed must be the hon. minister when he cannot listen to criticism which compared with his in the past is but eulogy. And yet the hon. gentleman has the effrontery to tell us that our criticism
is bitter! I find that the hon. gentleman also gave a definition of a pessimist. I am not going to quote it, but if that is a true definition of a pessimist, then, Mr. Speaker, we are in the presence of a wonderful artist who can paint his own portrait without having to use a mirror.
Now I come to the budget. My experience in the administration of public affairs has convinced me that, if at all possible, every government should balance its budget. It is necessary to do so to maintain the credit of our country both at home and abroad, but when we have to use the means adopted by the government to balance its budget, the imposition of very onerous taxation, taxation that weighs especially upon the shoulders of the masses, when in order to balance the budget we have to introduce taxation that will take away the purchasing power of our population, then I think it would be better for this country if there had been no balancing of the budget. Because the moment you burden the people with too heavy taxation, the moment you place them in the position where their purchasing power is gradually but surely disappearing, that moment you retard the development of the internal industries of the country.
In that respect let me ask this question: How does excessive taxation affect us at home? I cannot better express my conviction on this point than by giving the following quotation:
Where trade is hampered or restricted by excessive taxation it follows that the measure of profit which may accrue to those engaged in it is correspondingly less, and that the cost of living to the individual becomes correspondingly more.
I agree with every word of that quotation, while I do not always agree with its author. The words I have just quoted were uttered by the present Prime Minister in 1927, and if that statement was true then certainly it is even truer now, but the Minister of Finance, in delivering the budget address, condemned the very policy laid down by his present leader just a few years ago. The right hon. gentleman went further in that speech; he added that increased purchasing power means increased trade, and surely if that is so the reverse is so also, and diminished purchasing power must mean a diminution in the trade of the country.
Starting with that principle, Mr. Speaker, I am surprised that the Minister of Finance could not find some way to balance his budget without imposing these heavy taxes. I am not the only one who differs with the minister; there are those in his own party who
The Budget-Mr. Veniot

The other day I heard Sir Josiah Stamp speak at the luncheon given by the Prime Minister. After hearing his magnificent speech, I was proud indeed that I had been invited. In dealing with discouragement and encouragement, Sir Josiah told of a visit which he had paid to the United States and said that the one thing he noticed was that public men seemed to be losing faith in their institutions. Had Sir Josiah Stamp been able to listen to the Minister of Finance deliver his budget address, I feel sure he would have applied those same words when speaking of the Canadian government. When we criticize we are told by hon. friends opposite that we are preaching blue ruin and pessimism, but if ever there was evidence of blue ruin and pessimistic feelings, it is to be found in the present budget and in the methods adopted by the Minister of Finance to try to balance the finances of this country.
I have given the reasons why I believe the budget could have been fully or at least nearly balanced without the imposition of this heavy taxation. In view of the figures given, have I not the right to ask: Where is that increased home market promised by the Prime Minister and which was to stimulate to such a great degree the internal business of Canada? Where are the new foreign markets into which he was going to blast a way for Canadian products of all kinds, and which together with the increased home market was to put an end to unemployment? Where is that great market for our agricultural products, to create which he was going to make the increased tariff fight for the farmer? The Prime Minister's increased tariff has failed to fight for the farmer and now the government comes along with increased internal taxation, perhaps in the hope that it will do some fighting for the farmer. I am afraid the only result of the fight will be to put the farmer out of business and keep him out of business just as long as this government is in power.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Mr. ROBERT GARDINER (Acadia):: Mr. Speaker, before I begin to discuss some of the proposals upon which I desire to say a few words to-night, permit me to take this opportunity to congratulate the Minister of Finance (Mr. Rhodes) upon his splendid presentation of the subject matter which he laid before the house last week. Realizing that he has been occupying his present position for

only a short time, and taking into consideration also the immensity of the task under present conditions, I think it is quite proper at this stage to congratulate him upon his excellent presentation. It does not follow, however, that I agree with everything in the budget proposals, but I shall come to that later. The subject matter really before the house is the amendment moved by the hon. member for Shelburne-Yarmouth (Mr. Ralston), with which I propose to deal later in my address, because it appears to me that a statement from this corner of the house should be made concerning it.
The subject matter of the budget is, as was stated by the Minister of Finance, discussed under five headings. As a matter of convenience not only to me but to the house generally. I shall cite them:
1.	A brief reference to events which have so profoundlly disturbed international finance and the consequent reactions on our own situation.
2.	The financial operations and accounts of the dominion for the fiscal year ended March 31, and in this regard it will be understood that the figures are not final but represent the closest estimates that can be made.
3.	Canada's trade and commerce.
4.	The estimated revenue and expenditure for the fiscal year 1932-33.
5.	Ways and means for securing the revenues required to meet the estimated expenditures.
Subdivisions 2, 3 and 4 do not require much consideration from me to-night. Number 5 is very important, because it provides for ways and means by which the revenues are to be raised, particularly as it takes into account the deficit during the last fiscal year. But I should like for a few moments to discuss subdivision number 1, which deals with the breakdown of international finance and the consequent result upon conditions as we have them in Canada.
There is no doubt that international finance plays such an important part in the welfare of nations that we cannot avoid taking it into consideration. It would appear, however, that at present no country is taking any measurable steps to control international finance in order that we may eventually emerge from the conditions from which we are now suffering. Unfortunately for the Minister of Finance, in dealing with that particular phase of our economic problems, he did not even intimate to the house or to the country that the government was looking into this matter very seriously to see if it be possible for the government or parliament to take action having for its purpose the clearing up of the international exchange situation so that- trade between different countries may flow more freely than it is now doing. If the govern-

The Budget-Mr. Gardiner
ment is not paying heed to this important question, it is evading a serious duty, one which the government of every civilized country should undertake if we are to try to prop up the present economic system which is on the verge of total collapse. As I stated before, the government has given no intimation whether it is considering this matter, let alone whether it proposes to take action for the purpose of dealing with it. If the government is not doing this, it is evading a very important duty and responsibility.
Without doubt we are to-day in the midst of such a depression as we have never before experienced. It has been prolonged, to such an extent, indeed, that many people now feel there is no hope of recovery. I am, however, optimistic about the situation-not so optimistic that we shall be able to prop up this system so that it will function more efficiently than it is doing at present, but as regards the welfare of the masses of the people I can see a decidedly optimistic outlook when one considers the possibilities within our grasp. On many occasions we have discussed both in and out of the house our valuable heritage in natural resources, a matter which, so far as Canada is concerned, is one for congratulation. Very few countries on the face of the glolbe .have to-day such a wonderful and varied heritage in natural resources as we have in Canada. It is true we lack some that we need, but on the whole we have a tremendous number which can be used to provide all our staple necessaries of life. That being so, the people of Canada are in a very happy position if only we have the intelligence to make proper use of those natural resources. Furthermore, we have in this country, in proportion to population, an industrial plant second to none in the world. It is true in other countries there may be industrial plants that are larger, but for the immediate needs of the Canadian people we have more than sufficient of plant and equipment to utilize our natural resources so that every man, woman and child in Canada may be made .comfortable by being provided with all necessary food, clothing and shelter. Given these two important factors, why is it that to-day hundreds of thousands of our people are on the verge of starvation? Why is it that we have to provide sustenance through governmental and charitable agencies in order to keep people from starving? It would appear from these facts that our system has failed adequately to provide the people with what they require, and that we must give some consideration to that problem if we are to avoid disaster. Before I have finished I hope to be able to place some proposals before the house which may be of value in this direction.
Another matter that is of grave importance is the debt situation. We probably hear more discussion to-day about external debts than internal debts, but in my judgment our internal debts are just as important as are our externa! debts, and unfortunately these internal debts are growing and no doubt will continue to grow just so long as we work, at least in part, under the present economic system. The interest upon the national debt, for instance, which was created because of the war, has amounted in the period between the close of the war and the present time to practically the total principal of the original debt, and we have not reduced that debt by one iota. There is a problem that should engage the attention not only of members of this house but of the people of Canada, and more particularly that class of people who are interested in social matters, in order that we may devise ways and means not only to pay the interest charges on this debt but to reduce the debt from year to year so that it will eventually be wiped out. When it is remembered that a sum of money invested at five per cent and the interest reinvested every six months will double itself in fourteen years, it will readily be agreed that the statement I made a few moments ago with regard to our national debt is approximately correct. I may be a little out, but not very much; that is to say, we have already paid in interest charges on the war debt a sum almost sufficient to pay off the war debt itself provided we had not had those interest charges to pay. It would therefore appear to me that there are many fundamental defects in our economic system.
I was glad indeed to listen to the address which my good friend the Minister of Trade and Commerce (Mr. Stevens) made to the house last night. May I congratulate him on the manner in which he discussed some of the questions he brought up, and more particularly that of price levels and that of interest rates? If I may be permitted I should like to quote just one sentence from his speech of last night and then to make some comments upon it. At page 1910 of Hansard of yesterday the hon. Minister of Trade and Commerce said, speaking of interest charges:
No agriculturist, no industrialist and no merchant can afford to pay ten per cent interest for the money he uses in his business; it simply cannot he done; normal business will not permit of that rate of interest.
You will notice that the Minister of Trade and Commerce stated that ten per cent was too high a rate of interest for agriculturists and business men to pay. That is quite true, but I wondered, when 1 heard the Minister of Trade and Commerce make that state-
The Budget-Mr. Gardiner

ment, why he placed at ten per cent the rate which it was too high for agriculturists and business men to pay. Why did he not, for instance, say five per cent?-because under our present financial system, in my judgment it is almost as hard-I will go further and say it is just as impossible-for any agriculturist or business man to pay five per cent for money as it is to pay ten per cent and hope to keep away from the creation of debt. That we probably can never do. I appreciate the fact that the Minister of Trade and Commerce has given this matter consideration, and I think it would be in the interests of Canada as a whole if both members of the house and the people outside gave this question more study than we have been giving it in the past. My judgment is that any interest rate which is higher than the actual cost of the service can never be paid in full. It creates a debt which can never be paid under our present financial and economic system. If we were to take the time to analyze the situation I believe we would find that that statement is absolutely correct. Under our present financial system when our institutions lend money, particularly our banks and especially those banking institutions which are responsible in the first instance, for permitting money to go into circulation, if they charge a rate of interest that is above the cost of the service, I submit that we are creating a debt which can never be paid off; in order to meet those obligations in the past we have simply had to borrow more money to pay the interest which could not otherwise be met. Such is the nature of our present financial system. In the cost of the service in so far as our present banking system is concerned I include office costs, salaries, rentals, taxes, and even dividends to shareholders. I submit that when the interest rate to be charged to the customers of our banking institutions goes above that cost, we create a debt which can never be repaid under our present financial system. That is the main reason why our debts are growing and will continue to grow and accumulate just as long as we retain the particular financial system that we have at the present time.
Hon. members may ask, what are you going to do about it? My judgment is that there is only one remedy for that condition, and when we do remedy it we shall begin to make an inroad into some of the other conditions which arise out of it but do not seem to be closely connected with it. The only system I can see that would be effective would be the nationalization of credit and currency to be used in the interests of the Canadian people, with the Canadian people having the

use of that credit and currency on a basis of cost-because it would make no difference, even if we did nationalize the credit and currency of this country and made it a government monopoly, if the interest rate was higher than the cost of the service. We would then be in exactly the same position as we are in now, with the exception that the government would be making a profit and the people would become indebted to the government instead of the banking institutions So that even under a policy of nationalization of the currency and credit of this country we ought still to stick to the proposal that currency and credit must come into circulation at all times on a cost basis.
Last night my hon. friend the Minister of Trade and Commerce gave us some very illuminating examples with regard to price levels. He was quite right in stating that the currency and credit system of this country was at fault in so far as our present price levels are concerned. But what can we expect otherwise under our present financial system? The people who run our banking and financial institutions to-day are not considering first of all the welfare of the Canadian people; they are considering the profit which they can make out of their business. And we cannot blame them. Therefore, if my good friend the Minister of Trade and Com- ' merce has any idea at all of being able to control price levels by virtue of the volume of currency and credit in circulation in relation to the volume of goods and services in circulation, then I am afraid he will be very much disappointed at the outcome of such a policy unless nationalization of our banking and financial system takes place before that idea is tried out. Why should the people of this country be called upon to pay interest charges above the cost of the service for the very necessary medium of exchange that is required to distribute goods and services? One would naturally think that with the tremendous productive system we have at the present time, and the tremendous demand for the goods of this productive system, one of the things essential both to producer and to consumer is a medium of currency which will flow equitably and ensure that these goods are properly distributed. And when we put our finger on the profit which those make who are engaged in permitting money and credit to come into circulation, we put our finger on what is the most important problem of all.
I hope my good friend the Minister of Trade and Commerce will follow up his studies still further, and that next session he will have seen the light just the same as we in this corner of the house believe we see it, and

The Budget-Mr. Gardiner
that we shall have his assistance in advocating and demanding the nationalization of our banking and currency system.
Other things besides the control of currency through nationalization are essential to make effective our present productive system. A year ago my good friend and colleague from Wetaskiwin (Mr. Irvine) placed before this house a plea for national planning. I submit that one of the most important things after nationalization of the currency of the country is national planning-planning with the idea in our minds of providing the Canadian people with all the necessary food, clothing and shelter which they require from the natural resources of the country by our present machinery of production. Some system then, of national planning is essential, and the sooner we start on the job the better in my judgment, because if we do not do so, and if this depression continues, there is no telling where humanity will land by reason of our inability to plan nationally to take care of the interests of our people. Therefore I suggest again that it would be well for the government to take into consideration very seriously the creation of an economic research council such as was advocated by my hon. friend from Red Deer (Mr. Speak-man) in the resolution which he placed before the house this session, and which was halfheartedly accepted by the Minister of Trade and Commerce on behalf of the government. Such a research council to-day is absolutely essential, a council composed of the best brains of the different elements of this country, men who will set themselves to the task of planning nationally, not in the interests of a few people, but in the interests of the whole Canadian nation in order that eventually we may get away from conditions such as we have at the present time.
I might take a few minutes, Mr. Chairman, to call the attention of hon. members to what might might be termed the development of the capitalistic system. Unfortunately many people in this and other countries think that the capitalistic system has been in existence for many centuries. As a matter of fact it is the shortest lived of any system we have ever had on the face of this globe as far as any records show. It may be said that the capitalistic system had its birth in the discovery of steam and its application to driving the machinery of production. With that discovery the present capitalistic system became possible. Let me say before I proceed further, in case hon. members may misconstrue my meaning, that in my judgment the present capitalistic system under which we are working has done more for the human race than all
other former systems combined of which we have any record. The capitalistic system is certainly very efficient so far as production is concerned, but when we come to distribution it falls down, and falls down very badly.
Tracing briefly the history of the development of the capitalistic system, we find that with the application of steam to driving the machinery of production the inventive genius of the human race reached out to produce better and better machinery, so that this machinery to-day is capable of producing more and more than was possible with the machinery of former days, and with less labour. And how well has the human race achieved its objective! To-day we have a machinery of production so productive in comparison to the labour power required that its possibilities almost overwhelm the understanding of the average person. Undoubtedly so far as our present system is concerned there is no question about production. But I want for a minute or two to deal with one phase of the system which in my judgment the Minister of Finance should have given some consideration when he was proposing to this house the ways and means by which the necessary revenues of the public service might be provided. If you study very carefully the development of our present system you will find that in order to provide for the machinery of production the people have to take a certain portion of their consumable goods and turn them into permanent plant and equipment. In the past this has been done by what we call savings. Savings may be composed of profits or of actual savings from salaries or wages, as the case may be. These savings, however, represent purchasing power which the owners do not require to provide them with the necessaries of life. Therefore they have looked around and no doubt found that they could invest their savings to provide new plant and equipment which would be more productive than the plant and equipment used heretofore. That is the method by which we acquire the plant and equipment that we have in this and other countries the world over.
That being so, sir, let us look at the world situation as far as plant and equipment are concerned. Great Britain was the first country to develop the machinery of production to any extent, and very soon those who were making that machinery found they could not sell it all in Great Britain, so they sent it to other countries and exchanged it for whatever those countries could produce, or for money as the case might be. Eventually other countries became industrialized, so that to-day every country in the world, with the exception of three, is highly industrialized.
The Budget-Mr. Gardiner

That is a condition which this country never had to face before. So we have a new problem facing us. Within the borders of each country, with the exception of three, there is enough plant and equipment to provide for the needs of the people living in that country. What then are we to do with the surpluses produced in this and other countries, when other countries are capable of producing everything they require? It is true that in Canada we do not produce rubber or cotton, but we produce more than enough wheat and other commodities which can be exchanged for those goods. Even allowing for the exchange of these surpluses we still have the situation of the world having become industrialized, a condition with which the human race has never had to cope. This is brought to our attention more forcibly than ever because of the depression.
What is the situation in this country? We have noticed recently, that many loans have been floated by the Dominion government, by the provinces and by different municipalities. It is true that they have paid enormous rates of interest on those loans but, sir, if you look up the bank returns you will find that to-day there is more money on deposit in our Canadian banks than ever before in the history of this country. Why is that? It is because the people who in the past made profits or who saved from their salaries or wages cannot under present conditions find profitable investments for those savings. Generally speaking, there are only two sources of investment, either bonds of governments and municipalities, or new plant and equipment in order to produce more goods. Since we have more than ample plant and equipment in this country to-day, and since that condition obtains also in almost every other country, we are faced with the problem of what we are to do with these savings of the people.
It must be remembered also, Mr. Speaker, that these savings represent purchasing power to supply which there are goods already in existence, but just as long as those savings remain in the banks those goods cannot move. Therefore our industrial plants and equipment are slowed down, creating more and more unemployment and making a condition with which we are finding it increasingly difficult to deal. I submit that the Minister of Finance might have taxed those savings into circulation. If he could have devised some method of doing that, probably the depression from which we are now suffering would begin to lift a little, but just as long as those savings remain in our banking institutions,

and as long as they are not used for the purpose of providing new plant and equipment in the development of what we might term our capitalist system, I venture to predict that there will be no improvement in the depression now existing. It cannot be done. I have stated on more than one occasion, although not in this house, that if I were Minister of Finance just for long enough to bring in the budget I would take the attitude that under present conditions we are justified in taxing those enormous savings into circulation. I would even go so far as to say that in these days of depression we would permit the people with large incomes to enjoy an income of say $20,000 or $25,000 a year, but that we would take 99 per cent of all above that for the use of the state in order to improve conditions in this country. By virtue of such action the government would put those savings into circulation, through public works and services which are needed in every corner of this country, if it could not be done in any other way. I submit that the Minister of Finance missed a golden opportunity to do a real service for Canada, but I appreciate the fact that, having occupied his present position for only a short time, probably this was a little further than he dared go.
My time is nearly up, Mr. Speaker, and we still have to deal with the matter really before the house, that is, the amendment moved by the hon. member for Shelburne-Yarmouth. I have read and studied this amendment with a great deal of care, and there is at least one paragraph I can support, but the other portions of the amendment I consider very much exaggerated. Consider the last paragraph, for instance:
That a reversal of the present fiscal policy in relation to customs tariffs and an immediate resumption of parliamentary direction and control with respect thereto are essential to a revival of trade, and improvement in business, and to the ultimate return of prosperity in Canada.
I assume the hon. member, speaking for the party he represents, suggests in that paragraph that we should go back to the fiscal policy in effect at the time of the last general election. May I direct attention to the fact that this depression started before the previous government went out of office, so the policies which they advocate in this paragraph appear to me very weak so far as their ability to meet the present depression is concerned. If these policies, in which no doubt they firmly believe, are as effective as they are claimed to be, why were they not effective in 1930? At tfiat time they were not able to stop this

The Budget-Mr. Sullivan
depression, and we do know that even before July 28, 1930, the day of the election, we had a tremendous unemployment problem facing us. I do not know whether or not I am to understand from this amendment that this is the only policy suggested by the Liberal party to meet the present condition of depression; if it is, then I say it is totally inadequate to meet the situation. So, while as I stated before there are one or two statements contained in the amendment with which I quite agree, I think the policies suggested by my hon, friends are totally inadequate.
Representing an agricultural constituency, Mr. Speaker, let me say that I will always support lower duties on goods coming into this country. The primary producers cannot benefit from tariffs; that has been clearly demonstrated in the last two years, and we have only to consider some agricultural commodities to realize the truth of that statement. Furthermore we must always remember that the primary producers are the ones who create the new wealth which Canada enjoys each year. Under those circumstances, therefore, I will always vote for a lower tariff in order to reduce the production costs of the primary producers of this country. To that extent I will go, and I shall always be in that position of being able to support such a policy. But after all is said and done, I maintain that even that is not sufficient to overcome the depression which we are passing through at the present time. Something more drastic, something more fundamental is required than is contained in the amendment moved on behalf of the Liberal party in this house. Being unable, then, to accept the amendment, I am going to move a subamendment. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Woods-worth) :
That all the words after the word "that" in the said proposed amendment be deleted, and the following substituted therefor:
Whereas, in Canada there exists an ample supply of natural resources to provide for all primary needs, and
Whereas, we have developed an efficient industrial machine capable of producing more than sufficient of the requirements of our people, and
Whereas, notwithstanding this our external and internal debts are increasing enormously- large numbers of our citizens are in dire need and exist through governmental and charitable relief, and a large proportion are faced with declining purchasing power involving a lowered standard of living, and
Whereas, in our opinion these conditions are attributable to fundamental defects in the present economic system, and
Whereas, it is therefore necessary that parliament, the agency with the widest legislative 41761-123
powers, should take the initiative in the task of reconstructing national production and consumption with a view to the widest possible use of commodities on a basis of human needs, and
Whereas, the control of finance is a basic element in such reconstruction, affecting as it does industrial plant establishment and development, the distribution of goods and the price level of goods and services.
Therefore be it resolved, that in the opinion of this house, as a first step towards general economic reconstruction, our financial system should be nationalized, and provision be made to issue immediately sufficient money to bring the value of the dollar as speedily as possible to that point at which the major portion of our debts were incurred during the war; stabilize the dollar at this point internally and thereafter manage credit and currency issue to secure and maintain a stable price level within Canada.


Mr. J. A. SULLIVAN (St. Ann):: This is my first address in this house-


Some hon. MEMBERS:: Hear, hear.


John Alexander Sullivan: -and I am certainly
very much impressed by the applause I am getting from the other side.


Paul Mercier: Your policy
is wrong but you are a good fellow.


John Alexander Sullivan: After listening to masters of rhetoric and dialectic I was reluctant to address the House of Commons, but this wonderful reception is certainly heartening. It brings to my mind a comment I read a few days ago by a French author upon another house of representatives of the people. Describing the play of passions and prejudices there, he ends by saying: "Car ohaque jour on se plonge dans un bain de haine"-"For each day they plunge into a pool of hatred." No doubt the author has drawn upon his imagination and perhaps upon his resentment for these words; but one thing is sure, and that is that the description certainly does not apply to the House of Commons of Canada. We may sometimes have had displays of passion, but on the whole we work together in perfect understanding and harmony for the happiness and prosperity of our fellow citizens.
May I be allowed to say a few words about the division which has honoured me with its vote? St. Ann is the oldest division on the island of Montreal. On its shores three centuries ago Chomedy Maisonneuve founded Ville Marie, and his monument, erected in the very centre of the division, speaks of his heroic deeds. St. Ann is the headquarters of finance, of railways and shipping in Canada, and we also boast three most important newspapers, the Montreal Star, La Presse and Le Canada. But we boast more particularly of the mutual understanding which exists between the different races that compose the
REVISED E/.1II0X
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division and which are an example to the rest of Canada of what we must do to make of this dominion a great nation.
We are now discussing the budget. The other day we heard the Minister of Finance (Mr. Rhodes) in this great pronouncement which the nation has accepted, and on Monday we had the pleasure of listening to another very distinguished member from the maritime provinces, my hon. friend from Shelburne-Yarmouth (Mr. Ralston). I have always had a great deal of admiration and esteem for the hon. gentleman, especially since he has chosen to have his office in St. Ann division. He proceeded to criticize the budget, and he did so by comparisons all along the line. He spoke of the conversion loan, credit for which the Minister of Finance had given the Prime Minister. The hon, member for Shelburne-Yarmouth would not give him any consideration. He said that the people of Canada made this conversion loan possible, that in fact 50,000 people in this country subscribed amounts of less than $1,000. Sir, this is the greatest compliment that could come from the people to the Prime Minister of Canada, because in subscribing as they did they expressed their loyalty to their country and their faith in the Prime Minister.
The hon. member was scandalized because we had voted $20,000,000 at the last session and because we were responsible for the spending of $140,000,000 to relieve the unemployed. During the last election, I said, as many others did, that we had spent hundreds of millions to save our allies. We said we were ready to spend millions to save our own kin, our own Canadians; that is what we did and that is what we are ready to continue doing.
In order to understand the feelings of the people it is necessary to have their opinions. I have before me clippings from different newspapers in Canada, and I find that La Presse, which cannot be considered to be a Conservative paper,-says of the budget "le budget est bien accueilli." La Patrie says that this is the best budget given to Canada in many years. Sir Charles Gordon, president of the Bank of Montreal, has stated that the government has taken the best step possible under the present circumstances. Mr. John T. Foster, president of the Montreal Trades and Labour Council, says that this is a commendable attempt to balance the budget and is pleased to note the new surtax on incomes. The Conservative party, which has always been accused of being a friend of the big interests and corporations, is commended by the president of the Trades and Labour Council. Mr. Beaudry Leman, president of the Banque

Canadienne Nationale, a very distinguished gentleman who is perhaps not a Conservative, says that this is a courageous budget. Mr. John Irwin, president of the McColl-Frontenac Company, says that it is a good budget and should serve its purpose.
I have stated before that my constituency is the headquarters of navigation in Canada. The Gibb report has been tabled by the Minister of Marine (Mr. Duranleau), and I presume this important document will be discussed at a later date. It is very important that the questions affecting the St. Lawrence river should be studied. In 1825, after the completion of the Lachine canal which completed the waterway 'between Montreal and the great lakes, the government in deciding to make a deep water seaport of Montreal arranged to dredge a channel in the St. Lawrence river 14 feet in depth by 150 feet in width from Montreal to the sea. In 1850 the citizens of Montreal took it upon themselves to make this channel more suitable to the shipping needs. The government refused to guarantee the principal or interest on the bonds and the commissioners had to borrow money from the public in order to provide the proper facilities for shipping. It was only in 1889, after many protests had been made, that the government decided to take the matter in hand and work was proceeded with until 1910. In that year the government decided to dredge the channel to a depth of 35 feet and increase the width to 400 feet and although the work has been proceeded with up to the present day, it is not as yet completed. The sum of $34,000,000 has been spent on this work, which includes $13,000,000 for equipment, and over $200,000,000 has been spent by the government on the different canals between the great lakes.
There is no question as to the advantage of having large vessels coming to Montreal. This city is the greatest transfer point between the central states, where there are fifty millions of population, and European countries. But Montreal has lost this trade and something should be done. I appeal to the Minister of Marine to complete the channel between Montreal and Quebec, because every improvement made for the benefit of the port of Montreal is an advantage not only to the city of Montreal but to the whole of Canada. Because of the non-completion of this channel the rates of insurance on vessels coming to Montreal are more than double those charged on vessels going to New York. Based on the number of boats and the tonnage handled, this additional insurance amounted last year to more than $3,000,000. This is a tremendous

The Budget-Mr. Sullivan
discrimination against the harbour of Montreal and prevents many boats from using the St. Lawrence river route.
The speaker who preceded me stated that the economic system of Canada must be wrong, but what about that of other countries? It has been stated repeatedly in this house that unemployment this last year was worse than it was two years ago. Unemployment may be bad in Canada, but there is no gainsaying the fact that the present government has done everything possible to relieve this condition. The hon. member for Shelburne-Yarmouth has proceeded by comparison. May I be allowed to proceed by the same method? What is the difference, as regards unemployment, between Canada and other countries in the last two years? I have under my hand some figures which came from the organ of the American Federation of Labour in the United States, and the figures for 1930 and 1931 are, in round numbers, as follows:
Country	Year	Number of unemployedGermany	. . 1930	4,300,0001931	5,600,000Australia	.. 1930	104,0001931	118,000Denmark	.. 1930	74,0001931	91,000Great Britain.. ..	.. 1930	1,853,0001931	2,262,000The mother country, where they have the dole, where they had a Labour government for so many years, and where they passed all possible labour legislation which may be invoked and which our good friends in the far corner opposite are	trying to	put on the
statute books of this country, had 1,853,000 unemployed in 1930, and just one year after, in spite of all this legislation, in spite of the socialist government in power at that time, the number of unemployed had increased to
2,262,000.
Number of
Country	Year	unemployedUnited States	
1930	5,000,0001931	8,000,000A number almost equal to the population of Canada. Unemployment is a universal condition; it exists not only in Canada but in every other country in the world, and so long as we are willing to devote our best attention and energies	to	the solution of this
problem, no one can say we are not working in the best interests of Canada and of our unemployed.
In the course of the last election we were asked:	Whom are you going to send to the
imperial conference? The people of Canada gave us their confidence and we sent the 41761-1231
present Prime Minister (Mr. Bennett). During the election campaign he had toured the country, saying "Canada first," not in the narrow sense that Canada would not trade with any other nation, but broadly. He went to the imperial conference and there, in the face of all England, he repeated those same courageous words " Canada first." Was he wrong when he was giving interpretation not only to his own sentiments and those of Canada, but to those of Australia, New Zealand, the Irish Free State and every other member of the British commonwealth of nations? Is it possible that only the opposition and Mr. Thomas were right, and that all the others were wrong? The Prime Minister said "Canada first." Mr. Thomas said "humbug." The Prime Minister returned to Canada and the leader of the opposition (Mr. Mackenzie King) said "humbug." Every member of the loyal opposition said "humbug." What has been the result? Was this a political slogan? No, it was an economic rallying cry. If it had been a political slogan, the people of England, who are essentially politicians, would not have accepted it; it would have fallen of itself. The result was that within one year there was a change of government in England. The further result is that the imperial conference will sit in Ottawa in the month of July and that this city will be the capital of the world for one month. The Prime Minister has been compared with many men. The dictator of Italy has been compared with him, and this was a great honour to Mussolini.
I do not wish to speak about the imperial conference, as it is a thing of the future, but I have great hopes of it. One sure thing is that the Prime Minister has been doing well for this country. I am sure the judgment of impartial history will be that the Prime Minister of Canada has deserved well of his country and of the British Empire and that he was one of the great men of the world.


Mr. J. L. BROWN (Lisgar):: Mr. Speaker, in the course of this debate hon. gentlemen have said many things to which one would naturally wish to reply, but it would be impossible for everyone to deal fully with the matters upon which he might desire to make comment. I am sure it will be generally conceded that the Minister of Finance (Mr. Rhodes), in his presentation to the house some days ago of the economic condition of the country, discharged his duty in a highly creditable manner. It could not have been an altogether pleasant task to present to the house and to the people the condition in which Canada finds herself at the moment,
The Budget-Mr. Brown

nor do I imagine that the minister took any keen delight in announcing the new measures of taxation which he deemed necessary. However we may differ as regards the policies that have been pursued by the government, although we hold that the difficulties in which they are involved are largely of their own making, still we would be less than human if we did not manifest some sympathy for those who are now floundering in a morass. We can therefore very well afford, without relieving the government of any of its responsibilities, to congratulate the Minister of Finance upon the manner-and I say only the manner-in which he discharged the very onerous duty that his position imposed upon him.
The discussion of the general financial condition of the country has already been dealt with from this side of the house by one more capable than I, and let me extend to the hon. member for Shelburne-Yarmouth (Mr. Ralston) my hearty congratulations for the manner in which he performed the duty that was laid upon him by his party. The special resolutions of the budget I -think we can perhaps best deal with when the Speaker has left the chair and the house finds itself in committee of the whole. So far as the budget speech itself is concerned I shall content myself with referring to a few salient features which I think call for some comment, and perhaps it will be indicated in the course of my remarks that I heartily approve of the amendment which has been moved by the hon. member for Shelburne-Yarmouth. Before dealing with that phase of the subject I -wish to -take a few moments to discuss a matter which was referred to yesterday by the hon. Minister of Trade and Commerce (Mr. Stevens).
The hon. Minister of Trade and Commerce undertook at one point to give us a lecture in the kindergarten of economics. He showed that the revenue of the country, collected as it is under our system by a series of indirect taxes, must necessarily reflect the condition of trade in the country. If he had left it at that he would have been wise, but after emphasizing that very elementary fact he went on and intimated that the mentbers on this side of the house had frequently asserted that the true test of the burden laid upon the country was not the rate of taxation but the actual amount that was raised. He had listened to many speeches in the house, he said, in which that position was asserted.
Here are his own words:
Mr. Stevens: If it were possible to do so briefly, and if I felt warranted in doing so, I might remind my hon. friends of how frequently

in the past they measured the burden of taxation upon the people of Canada by the amount of revenue raised through taxation.
Mr. Browm: Oh, no.
Mr. Stevens: Oh, yes. When it suits their argument hon. gentlemen opposite frequently state that the rate of taxation is measured by the revenue produced or collected from the people. In my long experience in this house I recall having heard that argument frequently.
Mr. Brown: That came from hon. gentlemen opposite.
With the Minister of Trade and Commerce I can say that in my long experience in this house I recall having heard that argument frequently, but invariably it was from those who now sit on the government side of the house and never from those on this side. Having made that statement, the obligation rests upon me to prove that -what I say is true. I go to the Hansard of 1927, where at page 396 of Hansard I read these words of the present Prime Minister (Mr. Bennett), who was then simply the member for West Calgary:
But that is not all. Let us take the figures and consider them in the light of the statements made by the minister himself. In 1925-26 the Department of Finance shows that there was taken in customs duties as taxes from the people of this country the sum of $127,355,000 in round figures; this year the amount	is	$141,500,000-an increase of
$14,144,000, or $1.50 for every man, woman and child in this country, which represents, Mr. Speaker, an average of $7.50 for every Canadian family. That is the reduction in taxation enunciated by the hon. Minister of Finance!
But that is not all. With respect to excise duties as distinguished from excise taxes, we find that for the year ended March 31 last there was taken from the Canadian people for these duties $42,923,549.03, and this year there has been taken from them $47,500,000-an increase of $4,576,450.97, equivalent to practically 48 cents a head for every man, woman and child in Canada.
, It was in vain the Finance minister of that day pointed to the large revenue which was flowing into the coffers of the dominion. The revenues were buoyant, he said, because trade was flourishing. In that same budget debate I felt it incumbent upon me to correct that fallacy of the hon. member for West Calgary. I said:
I have been amazed at some of the fallacies

I am not so easily amazed as I was then:

to which utterance has been given during the debate by some hon. members opposite, from the first hon. member who spoke, the hon. member for West Calgary (Mr. Bennett) almost down to the last. It was urged upon us that taxation had not been reduced, and elaborate figures were produced to show that such was the case.
I need not read all that I said on that occasion. I simply pointed out the very

The Budget-Mr. Brown
obvious truth which the Minister of Trade and Commerce himself pointed out yesterday.
The Minister of Justice (Mr. Guthrie) is the one who generally suffers from these references to the Hansard of old days. In his criticism of the budget of 1929 he said this:
Now this is where the precise language in his budget speech fitted in so well. How careful he was when speaking on taxation to use these words:
' The rate of taxation has been reduced."
Well, even that statement was not true before Friday last, but who cares about the rate of taxation? The rate does not count. The only thing that counts in this world in regard to taxes is the burden of taxation.
Then he went on to quote Mr. Gladstone- not very pertinently I think, because Mr. Gladstone was speaking of an entirely different set of circumstances, and I think the hon. Minister of Justice misquoted from Mr. Gladstone.
May I also quote from my speech of last session when I said:
Something else upon which I would congratulate the Minister of Finance is that he has evidently come to a recognition of the fact that the volume of revenue does not necessarily depend upon the rate of taxation, or at least that the rate of taxation is not the only factor in determining the volume of revenue.
Further on I said:
As I have said, .the Minister of Finance has evidently learned, speaking generally, that all he is able to do is to fix the rates of taxation, tor the volume of taxation will be determined by the amount of business that is done when those different rates are in effect.
I trust now that we have heard the last of these very foolish arguments that we listened to in the last parliament, and I hope that when we have a government in power again with the revenues of the country buoyant, brought about by expanding trade, we shall not hear those foolish arguments from hon. gentlemen opposite.
In reference to the reduction in customs duties, the Finance minister in his budget speech the other day said that the customs duties had been reduced in the last fiscal year to $102,891,000, or about $29,000,000 less than in 1931, and $84,000,000 less than in the peak year of the last five years, in 1928-29. He said this was due in part to the encouragement given to the production of goods in Canada. I do not know whether the Minister of Finance holds the extreme views, I might almost say the fanatical views, of the Prime Minister in regard to protection. On two occasions I have asked the Prime Minister how certain changes he proposed to make in the tariff were going to affect revenue. His answer was something like this-quoting
Henry George as authority: When it was a matter of protecting Canadian industries the question of revenue was not to be considered. I should like to ask the Minister of Finance whether in view of the reduction in customs receipts, brought about, as he himself has admitted, by the policy of protection, that is the policy of encouraging the production of goods in Canada, he is still prepared to ignore the question of revenue when he proposes increases in the tariffs. That he is not disposed to ignore the question is abundantly clear from the fact that he has added two per cent to import duties. Now, do not let us be confused as to what that tax really means. We call it an excise tax, but it is just as truly a custom tariff tax as the other twenty or thirty per cent. I should like him to explain how he expects to get more revenue from the two per cent additional tax when the hitherto existing tariff taxes have already resulted in a reduction of revenue. That is his own statement. It may be urged that that tax is not high enough to exclude goods that are now coming in under the free list. That may be true. Rut if it is true, as is the implication of his remarks, that goods are not coming into Canada because the tariff barriers have been raised against them, is it not just as likely that other goods will be added to that class which is now being excluded? So that as to there being any increase in revenue from this new tax that is being imposed, it is a question whether the Minister of Finance will get more than an even break. He may possibly get some increase on those goods that have been coming in on the free list or the one per cent duty of last year, but it is also possible that further goods will be excluded, and to that extent our revenue will be reduced. Certainly that will be the case if he allows his colleague the Minister of National Revenue (Mr. Ryckman) to sit up night and day devising means whereby he can stop goods from entering Canada. I may remark that on a former occasion I mentioned the dilatory tactics of the government when it was a case of allowing some hay into southern Manitoba that the farmers there needed to feed their starving cattle; there was a delay of six months before any action was taken; but when it is a case of increasing the tariff to protect an industry that is manufacturing some trifling article, the government can take action overnight.
The Minister of Finance derives great satisfaction from the fact of a so-called balance of trade. That has been well dealt with by the hon. member for Shelburne-Yarmouth, but I

The Budget-Mr. Brovm
might repeat a few of the figures. It is said that the balance is now in our favour to the extent of $25,000,000, as opposed to a former unfavourable balance of $70,000,000. I suppose there is no more contentious subject than the true significance of the difference between imports and exports, the excess of one over the other. I do not think the Minister of Trade and Commerce did any credit to himself when he criticized the method by which the hon. member for Shelburne-Yar-mouth emphasized the point. He ridiculed it by saying: "You should not say, ' Black is not white,' but you should say, ' White is not black,' " or something of that kind. But the hon. member for Shelbume-Yarmouth was trying to call attention to the fact that this so-called balance of trade was brought about not by increasing exports, but by decreasing imports. Of course, I know from the standpoint of the Minister of Trade and Commerce that that is good policy, because in one of his famous advertisements that he sent out to the papers he wanted to exclude $800,000,000 worth of imports of goods that he said could be manufactured in Canada. However, we cannot agree with that point of view. Certainly it may be doubted whether we have any reason to congratulate ourselves regarding this so-called favourable balance of trade when it is brought about by decreasing our total foreign trade by almost one third. These are the figures given by the Minister of Finance himself: For the eleven months ending February 28, 1931, $1,591,939,000; as against $1,067,602,000 for the same period ending February 29, 1932, or a total loss in our foreign trade during that period of $524,-
337,000.
The Minister of Finance stated there would be no major tariff changes pending the meeting of the imperial conference. I cannot say that we were surprised by the statement, for the farmers of the country have learned that so far as reducing the burden laid upon them by the tariff that this government has imposed is concerned, they have nothing to hope for. We have to content ourselves with the announcement that the last straw which was to break the camel's back, that is the imposition of a higher tariff on repairs for agricultural implements, has been deferred for another year. Let me say to those who represent farming constituencies in the west that they had better get busy during the next year and make representations to the Minister of Finance so that the application of that higher tariff will be postponed indefinitely. I suppose, however, it is a small measure of relief for which we must be

thankful, but the Minister of Finance must not expect us to tumble over ourselves in our enthusiasm for his budget.
Last year the then Minister of Finance (Mr. Bennett) when introducing his budget announced a five cent bonus on wheat. He said it was a compensating adjustment. He would not admit the tariff was a burden, but the Minister of Agriculture (Mr. Weir) has admitted it for him, for in his speech in the early part of this session he said something to this effect; that he had scanned the Whole field for possible means of relief for the farmeT from the burdens of the tariff, and this was the one that appealed to him. I wonder how the Minister of Agriculture feels now when that small measure of relief is absolutely withdrawn. Does he and do other members from the west representing farming communities feel satisfied with the tariff policy of the present government? I know they do not.
A few weeks ago Ithe hon. member for Marquette (Mr. Mullins) .placed on the .records ol the house a well-reasoned and weULprapared statement of the investment of a farmer on a three hundred and twenty acre farm, including the equipment necessary to work it. I commend that Statement to all members of the house. In the list he had one item of $2,500 for farm implements-a modest item for there is no notice taken there of threshing machines or of tractors. But yet the hon. member in the session of 1930, and again in (the session of 1931, by his vote endorsed the government that -had raised the tariff on farm implements from rates ranging from six to fifteen per cent up to a flat level of twenty-five per cent. Now it is twenty-eight per cent, for I insist again, Mr. Speaker, that that three per cent on all imports must be considered as an additional tariff tax. The biggest internal problem before us to-day is the rehabilitation of the farmer. One of the most prominent farm leaders a few days ago made a statement something like this. He said his father had pioneered on a bush farm in Ontario; he himself had operated ithe farm for a number of years after that, and now his son was on it, and he stated that the young man is having a harder time to make things go to-day than was -the case with either his father or his grandfather.
The question confronting us is this:	Are
our farmers to be men living on and farming their own land, finding satisfaction in the work of the farm and yet capable of taking an interest in national and international affairs, of enjoying good literature and everything that ministers to the moral, the intellectual and the spiritual life of man, or are

The Budget-Mr. Brown
our farmers to sink to the status of peasants, operating rented farms, caring for nothing except the wresting of a bare living from the soil, becoming simply hewers of wood and drawers of water, men with weak heads and strong backs? It seems to me those are the alternatives presented to our farmers to-day, and I am afraid that present conditions will produce a tendency that is all in the latter direction. We hear a great deal said about having turned the corner. There can be no turning of the corner until the farmer gets a crop he can sell at a price that will leave him some measure of profit, and what is true of wheat, our main product in the west, is true of all agricultural products to-day. Every article produced on the farm is being produced at a loss, and there can be no turning of the corner until this is all changed.
Indeed, Mr. Speaker, it may be just at this point that the farmer is faced with his greatest danger. To-day there are many men still on farms simply because the mortgage companies or other creditors do not think it in their interest to put them off. There is no sale for land and it has no productive value. The danger is that with the first sign of returning prosperity the creditors will swoop down upon the farmer and strip him naked. The accumulated obligations of the last three years have become enormous. Even before that time the farmers incurred liabilities which, had prices prevailing at that time remained in effect, they might reasonably have expected to meet at maturity. The result of the drop in prices, as has been stated time and again in this house, has been simply to increase the burdens of the farmers threefold.
So to-day we have our western legislatures discussing the question of debt adjustment. I suppose under our constitution that is a Question for the provincial legislatures rather than 'or this government, but that does not mean there is nothing this government can do. This government can do much to lift the burdens that have been placed upon the farmer, and everything possible should be done to make sure that his cost of production is reduced. I am not unmindful of the fact that Canada is one of the nations of the world, that to-day as never before the world has to be considered as a whole, and that if one nation suffers all nations suffer. It would have been well if hon. gentlemen opposite, during the election campaign of 1930, had kept in mind that fact which they now like to emphasize, instead of going through the country proclaiming that they of themselves were going to take steps which would bring prosperity to Canada. That is the obligation which rests upon this
government and this parliament, to see that every possible step is taken to bring about the rehabilitation of the farmer.
I feel that I cannot close without commenting on the reference by the Minister of Finance to the coming imperial conference. His words will toe found at page 1768 of Hansard:
While the world is close knit to-day in matters of trade and finance as never before in its history-and we cannot expect normal or prosperous conditions apart from the general world trend-nevertheless some one nation, or group of nations, must assume the leadership and point the way. To that end an opportunity unique in history is afforded to the British nations, whose representatives will assemble in Ottawa at the Imperial economic conference in July next.
If the delegates who assemble here meet in an atmosphere charged lvith determination to approach their deliberations from the viewpoint of mutual advantage, there will result measures which will give a marked stimulus to Empire trade.
Those are splendid sentiments, but my fear is that if hon. members opposite adhere to the policies they have followed hitherto those sentiments will evaporate into thin air. I said that I was in perfect accord with what the Minister of Finance said, 'but perhaps that is hardly correct. He referred to the opportunity as being unique. If by "unique" he meant that there never had been a similar opportunity, I disagree. A similar opportunity was afforded the Prime Minister and the government at the last imperial conference in 1930, but the result was absolute failure simply because of the truculant attitude of the right hon. gentleman. By the application of his blasting policy he led one of England's -ministers to describe his propositions as humbug, and humbug they were. It is a tribute to the forbearance and the courtesy of the English people that someone did not say it sooner. That is a thought^provoking statement of the Minister of Finance:
. . . nevertheless some one nation, or group of nations, must assume the leadership and point the way.
Some trivial -circumstance has often changed the whole current of human history; it has been frequently given to nations to exercise an influence upon ithe -affairs of mankind far out of proportion to the extent of their territory or the size of their population. Such was the case with Israel of old; such was the case with Greece. From the little island of Iona off the coast of Scotland, in the early centuries of the Christian era, radiated an influence that left its mark upon Great Britain and Ireland, and which still extends to the remotest comers of the earth. Canada has a
The Budget-Mr. Brown

vast stretch of territory. It is true that our population is comparatively small, but we would gladly believe that to-day we are exercising an influence upon the affairs of the world that is not measured by the number of our people. We could wish for no higher honour than that our country should give a lead to the British Empire and, through the British Empire, to the world in all those policies which make for peace, such as disarmament; the breaking down, so far as may be possible, of race and national prejudices; the removal of trade restrictions, the cessation of that insane policy that seeks higher and higher tariffs. Can anyone say that this was the course we pursued at the last imperial conference? Positively no, but the reverse. What was done there was not calculated to make for peace and harmony but for strife and discord.
An attempt has been made to cast ridicule upon the present leader of the opposition when as Prime Minister he expressed concern as to who should represent us at the imperial conference. The result of that conference showed that that concern was well founded. It is still a matter of concern to us, not as to who shall represent us, for we know that, but as to what policy shall be presented at that conference. Is the same course to be followed or is a different attitude to be taken? There is reason to hope, from the statements made by the Minister of Trade and Commerce, that to some extent at least the government have seen the error of their ways. Let us hope that when the conference meets it will be in a spirit of good will.
The hon. member for Shelfoume-Yarmouth quoted the closing words of the budget speech of the Hon. Mr. Dunning. I quoted those words on every platform during the last Dominion election. They seemed to me to express, . as well as language could express, the attitude which Canada ought to assume at the conference, and I believe that hon. members opposite upon whom the responsibility is cast should study these words and grasp the principles that were emphasized; and when they go to meet our fellow citizens from all parts of the empire I hope that they will go in a spirit of tolerance and good will, so that the result of this conference will bring good not only to Canada and to the British Empire but to the peoples of the world.
Then let us pray that come it may,
(As come it will for a' that.)
That Man to Man. the world o'er, Shall brothers be for a' that.
[Mr. Brown.l


Mr. B. M. STITT (Nelson) :: May I begin by congratulating the Minister of Finance on . the lucid manner in which he presented his budget to the house, faced with conditions such as have never existed in Canada before. May I also congratulate those hon. members who have preceded me upon the masterful manner in which they have advanced their arguments. I hope the hon. member for Lisgar (Mr. Brown), who preceded me, will pardon me if I do not appear to follow him.
I have come to the conclusion that the members of this house and indeed the people of Canada as a whole are tired of rehashed speeches, and I will attempt to develop my own material along far different lines, dealing particularly with my own constituency, and with matters which, while of importance to that constituency, are at the same time of great importance to the whole of the dominion and particularly of western Canada.
It is apparent, from the criticism that has been so far levelled at the Minister of Finance (Mr. Rhodes) and at his budget, that budgets can be criticized for what they omit as well as for what they contain. I have no objection to hon. members criticizing; we expect that it is their prerogative. But I will say this, let them criticize this government and the budget as they will, but one fact stands out, that the balancing of our trade and the bringing of the imperial conference to Canada this year are two of the outstanding achievements of the last quarter of a century. It is obvious, from the arguments to which we have listened, that in the minds of the masses there are two schools of thought. One is that the government in power should embark upon a broad program of public works, pledging the credit of the country to get the money and putting the unemployed to work. Those who take this view believe that such action rvould reflect prosperity in all departments of endeavour. There is the other school of thought-those who feel that the government should retrench as far as possible, pare its estimates, and sit out the depression. One seems to have about as many supporters as the other, judging by the arguments we hear from one end of the country to the other.
I was rather disappointed to hear the hon. member for Shelburne-Yarmouth (Mr. Ralston) criticize the government for relief expenditures and for the loan of moneys to the western provinces. I am sure that all hon. members, in this house, and especially the members from the west, realize the seriousness of the situation out there, the plight which these people find themselves in in these distressed areas. I am also quite sure that, when

The Budget-Mr. Stitt (Nelson)
requested by the Minister of Labour last fall to make suggestions as to the public works that might be carried on in their constituencies which would furnish employment to those who needed it, there were very few lion, members who did not present a program of public works, including the hon. member for Shel-burne-Yarmouth. If all of these projects had been carried out, as suggested by various members, I am informed that it would have taken something like a billion dollars to pay the bill. The government, of course, could not find that much money, and therefore had to go along and try to satisfy everyone as far as it was humanly possible to do so, to the extent of the money they had. I think that in that respect they have done very well indeed. As a matter of fact, if we believe some of the reports that have come in, this feeling is generally shared. The premier of Quebec, a man from whom we can accept criticism, said that he was well satisfied with the treatment his province had received and with the manner in which the relief situation had been handled by this government. That, I think, was one of the greatest compliments paid to the right hon. the Prime Minister in the conduct of this work. Retrenchment is the duty of the day and the hour; no one will deny that. It is a beautiful word. But governments must lead as well as save; they must march as well as fortify; and at the same time they must of necessity originate plans for the future while correcting errors of the past. Now, the question might reasonably be asked: What plans can we originate at the moment? First, to my mind, we must devise ways and means of stabilizing our basic industries. Agriculture, which leads the procession, must be placed on a paying basis. I do not think anyone can argue against that statement. To bring this about we must concern ourselves with finding broader and more profitable markets for the produce of our farms. At the same time we must concern ourselves with lower transportation costs to be brought about by the development of new and existing routes and outlets. In this connection I might refer to the Hudson Bay railway, which means a great deal to the farmers of western Canada, and to the Peace River outlet, which is badly needed and which would open up and develop a great empire. The mining industry, especially in connection with base metals, must be put upon its feet, as it has been hit just as hard as agriculture. Millions of dollars have been invested in Canada in this industry, upon which not one cent is being received in return. Some attention must be paid to the lumbering industry,
with which is linked up the pulp and paper industries. All these industries are having a hard time and, as I said before, we must concern ourselves with finding more and profitable markets for their products. If we can solve the problems confronting these three major industries, the rest will follow; the railways will come into their own by virtue of an increased volume of business and the unemployed will be automatically absorbed.
The coming imperial conference may easily bring about the necessary changes. Let us hope that all the delegates to this conference will gather together realizing deep down in their hearts that the destiny of a great empire is in their hands. We are proud to be a part of that great empire and I am convinced that if all those taking part in the conference are prepared to give and take, which after all is of the essence of our federation, much good will come from their deliberations. It may be well for our delegates to realize that it may be necessary, in order to bring order out of chaos, to sacrifice, in part at least, some of our industries. They should enter the conference with that spirit. We all hope that these steps may not be necessary, but we cannot expect to get everything and give nothing in return. May I express the hope that the Most High in His infinite wisdom will so guide the deliberations of the conference that our dream of a united economic empire may be fully realized. Then and only then will sunshine come into the hearts of our people and confidence be restored in this great country.
I was pleased to hear the Minister of Finance intimate that some further provision would be made for the completion of the Hudson Bay railway. I do not need to elaborate on this project, as it has been before this house for many years; both governments have been committed to it and both governments have subscribed to it. While I am dealing with this matter I desire to take exception to the statement made this afternoon by the hon. member for Melville (Mr. Motherwell) when he said that the Liberal government had done practically all the work done on this road. As one who has lived in this north country for something like seventeen or eighteen years, as one who has seen the project develop from almost the time the first sod was turned by the Hon. George P. Graham, I desire to say that in 1911, when the Conservative government came into power, a contract was given to J. D. McArthur for the grading of this road. That winter the piers were put in for the bridge at the Pas and the following summer about 14 or 15 miles of grading was completed. From that time until 1918 or 1919 the Con-

The Budget-Mr. Stitt (Nelson)
servative government 'completed 356 miles of the road, as far as the Limestone river, including the necessary bridges. From that time, until the Liberal government came into power, the grading was completed into Port Nelson and finally the Hon. Mr. Dunning with great vision and courage changed the terminal from Port Nelson to Churchill. I am fair enough to give Mr. Dunning credit for taking that action; I think his move in that direction deserves the commendation of every hon. member and in fact of every man, woman and child in western Canada. The Liberal government completed the road up to mile 511 and started the harbour work. That government did a good deal of the underwater work at the docks, it let the contract for the elevator, did considerable back-filling in the yards and' had made a good start towards the completion of the road when the government again changed. The present government completed the elevator, finished the yards and the docks and last fall was able to ship out two cargoes of grain. I should like to correct that statement made by the hon. member for Melville by saying that this road has been built by both governments on a fifty-fifty basis.
I had not intended to refer at this time to the Hudson Bay railway, but in view of certain articles which have appeared in the eastern press attacking this project I feel it my duty to take a few minutes of the time of the house in making a reply. I refer particularly to an editorial which appeared in the Ottawa Journal of February 15, 1932, under the heading "Speaking of Economy". It reads:
Six million dollars voted last year. Six million good dollars thrown after 46 million bad dollars. Some of our portentous politicians who are talking about economy would be a little more impressive if they hadn't talked just as elocpiently for this Hudson Bay railway.
And again:
And to what end? Well, last fall Mr. Manion, Minister of Railways, informed western farmers that if they wished to have their grain shipped to the Churchill elevator they would be given free storage, and not a bushel was shipped. Not a pound. And this was the great grain route that was to put western Canada on the map.
The Minister of Railways did make such a proposition, but it was made ito Ithe grain men, the elevator men and the pool men, not to the farmers of western Canada. It would not have been possible for any farmer to make his individual shipment to that elevator because the facilities were not there to handle such shipments.
An article appeared in the Financial Post of February 13, under the heading "Hudson Bay Line Takes Interest Toll." After going

into the financial aspects of this road, the question is asked: When is this road going to pay interest on this money invested? The same question could be asked in connection with the St. Lawrence waterway, the Montreal harbour, the Quebec harbour, the maritimes harbours, the Welland canal, upon which hundreds of millions have been spent, and the Canadian National Railways. It is rather unfair for such a paper as the Financial Post to pick out the Hudson Bay railway and to ask when it is going to pay interest, when in fact the road is not fully completed and in operation. I do think articles such as that will do very much to solidify Canada. This is another article appearing in the Winnipeg Free Press of October 6, quoting a Quebec paper, L'Evenement:
To inaugurate a port at Churchill, the Canadian government has spent practically $150,000,000.
I do not need to take the time to read the rest of this article, but I should like to say that L'Evenement has multiplied by three the sum of money expended on this project, and it might at least be fair when using figures and discussing the project. I have under my hand another article, which is rather a rich one, in respect to the two grain boats that made the voyage in there last year:
Tyne vessel's pioneer voyage. First cargo to an ice-bound port. Saving of 6,000 miles.
Another gross exaggeration.
Another romantic page in the history of Tyne commerce will be written a fortnight hence, *when a Newcastle steamer will drop anchor in the harbour of Port Churchill, the new port on the shores of Hudson bay, and embark the first cargo of grain sent overland across the Rockies from Vancouver.
Rather hard on Vancouver.
She is the Farnworth, owned by the Dalgleish Steam Shipping Company, of Newcastle. To the Farnworth will go the honour of loping 6,000 sea miles off the present-day route, and changing the whole trend of grain transhipment. Almost a month will be saved.
A strange and hazardous voyage lies ahead of the thirty-five Shields men who form the crew of the Farnworth.
Port Churchill is one of the loneliest outposts of civilization. There is no welcoming town, not even a village. Just a trapper or two, a few Eskimos, and eternal snow. For ten months out of twelve the approach to this little port is ice-bound.
The Farnworth will berth alongside a warehouse in which is stored ithe grain brought from the rail-head.
As soon as loading is completed she will steam back to England. The barren nature of this little town is illustrated by the fact that provisions and bunkers for the return journey are being taken on board while the vessel is lying at Harton Staiths, South Shields.

The Budget-Mr. Stitt (Nelson)
The nearest shops or cinema to Port Churchill are hundreds of miles away, and there is not a coaling station within a thousand miles.
Captain W. Mouat, of South Shields, is in command of the Farnworth.
The vessel is going in ballast to Port Churchill, and will bring back 7,000 tons of grain to the United Kingdom.
An immense field of stationary ice imprisons Port Churchill all the year round, with the exception of September and October. This autumn the Canadian government, in conjunction with the railway company, are trying the experiment of loading grain from Vancouver at Pont Churchill, as an alternative to the sea route by way of the Panama canal.
I might tell hon. members that this is not from a Montreal paper, although the captain of that boat informed me he had heard around Montreal very much worse tales about Churchill than this paper reveals. This is from the Evening World of South Shields, Newcastle-on-Tyne, England, of August 26, 1931. These are some of the weird statements that are being made about this port that means so much to western Canada. In the west we had hoped we had heard the last of these venomous attacks on the part of the press which have no doubt been inspired by the same sources that have sought to destroy the project from its inception. I was of opinion that the demonstration of last September would be sufficient when the Farnworth and the Warkworth, two ordinary tramp steamers, not built with steel protected bows, as it was said they would have to be constructed in order to enter the strait or bay, made the trip from Churchill and Liverpool and Antwerp in fourteen days. In order that the value of this feat may be appreciated, I shall add four days for railroad transportation from Saskatoon or Regina; and thus it is evident that wheat or other products of the soil, or live stock, can be landed in British or other European ports within twenty days of the loading of cars at points in the Canadian west, and with only one handling. The better to illustrate the value of this feat, I might refer to two cars shipped from, say Saskatoon, one by the Churchill route and the other by the St. Lawrence route. The cars for the northern route can be unloaded into a ship at Churchill, which is at tidewater, as soon as and perhaps sooner than the contents of the second car can foe unloaded into a ship at Fort William or Port Arthur. The two shipments thus start at Churchill and Fort William or Port Arthur at the same time. Which one reaches the European market first? The answer was always evident to those whose eyes were not blinded by prejudice, but it comes now in a form that cannot be challenged, because a boat can make an}' port in the British Isles
as quickly from Churchill as from Montreal, and there are no marine handicaps; the route is safer and speedier than the St. Lawrence. It is true there are at present some artificial handicaps by way of arbitrary marine insurance rates imposed for the protection of vested interests threatened by the newer and cheaper route. If the underwriters have their way, they are going to plug this northern route effectively. While a hundred years ago all Canadian ports on the Atlantic suffered because of similar discrimination against them in favour of United States ports, it would appear now, judging from the extremely high rates set on shipments out of Churchill, that the same unenlightened policy is being applied in greater degree to this new port. The new route is now ready and equipped to do a magnificent service for Canada, and we must see that it is not hampered by restrictions imposed by interests outside of Canada which are not only indifferent but quite possibly hostile to its future development.
First, the underwriters set rates so high as to prohibit ships from sailing into Churchill and then they blandly say: Once the safety of the route is proven we shall consider an adjustment. I do not wish to take up the time of the house, or for the next hour I could quote statements from sea captains and men who have sailed the seven seas, who know something about this route and whose statements cannot be challenged regarding its safety and usefulness. I might, however, in passing, refer briefly to a statement made by the captain of the Farnworth, the first boat to reach London dock from Churchill with the first cargo of wheat out of that new harbour. This is from the Manitoba Press Press of October 6 of last year:
Captain Mouat had an air of quiet satisfaction about him when he was encountered on the bridge of the steamer Farnworth to-day. The Farnworth arrived in London docks Sunday at the conclusion of a history-making voyage of 16 days from Churchill, Canada's newest seaport on the shore of Hudson bay, bringing a cargo of 277,000 bushels of grain over the new Hudson Bay northern route, which cuts one thousand miles off .the journey from the prairies to Britain.
In the captain's view it was a most matter of fact achievement to navigate from Churchill through the Hudson straits. The spare-looking skipper could find few remarks to make about the voyage simply because it had been like so many others he had made.
Ice Proves No Difficulty
"Ob, there was no ice at all to bother anyone," he said.
"Was there any fog?"
"Well, we will call it a haze, but it was nothing to worry over," the captain replied. "In fact, I was surprised to find how easy

The Budget-Mr. Stitt (Nelson)
things were. Everything possible had been done for us in advance, and the wireless gave us wonderful assistance. Without it we might have encountered some difficulties."
"Churchill is already well fitted with what ships like this need," Captain Mouat said. "The berthing is capital there already, and I see no reason whatever why this port should not be an excellent business proposition. Of course, this will be my only trip on this route in the present season."
Further, the Minister of Marine (Mr. Duranleau) sent into Churchill this year the Canadian government steamship Acadia which cleared Churchill outbound on October 2, remaining in Hudson strait until October 22 when further work was abandoned on account of a shortage of coal. I talked to the captain of this ship who told me that had he had a supply of coal he could have remained in the strait well into December.	Here is the
testimony of another captain who is very well known, Captain W. J. Balcom, commander of the Canadian government icebreaker N. B. McLean. I quote from a Canadian Press despatch of October 31, 1931:
Shipping of grain and other cargoes through Hudson straits from Canada's new northern harbour, Fort Churchill, to European ports, is very feasible, according to Captain W. J. Balcom, commander of the Canadian government icebreaker, N. B. McLean, which returned to Quebec yesterday after spending three and a half months patrolling Hudson straits.
Captain Balcom said to-day that the two grain boats, the Farnworth with 7,410 tons of wheat and the Warkworth with 7.127 tons were both escorted through the strait from Cape Chidley to Coates Island at the eastern extremity of the straits on their trip to the old country. No trouble was experienced, and the owners of the two vessels had already signified their willingness to carry further cargoes from Churchill.
I have possibly fifty such opinions as that, Mr. Speaker, from such noted men as Captain Bernier and others who have sailed those northern waters, testfying that we have at least an average of eighteen weeks open navigation, which surely can be increased by modern ships with modem equipment, and our modern inventions such as direction-finding stations, and so forth. For two hundred and fifty years the Hudson's Bay Company carried their cargoes to and from Europe in and out of this bay, and for one hundred and fifty out of that two hundred and fifty years they used wooden sailing ships. It does not seem unreasonable, therefore, to suppose that modern ships, with modern equipment and modem ideas, should meet with a very much greater degree of success, provided of course that in the initial stages of development of this route every precaution is taken for the protection of the vessels using it-and I am happy to say that all precautions have been 
taken. Direction-finding stations have been located at four points in the straits which are in touch with the vessels using the straits at all times. When I say "the straits" I do not want hon. members to think of a narrow stretch of water running between high rocks, or anything of that kind, because the Hudson straits are 450 miles long, 65 miles wide at the narrowest point, with 500 fathoms of water and no obstructions from the time you pass out of the gap at the harbour, a quarter of a mile from the dock, until you arrive in the straits, which is a voyage of 450 miles. There is not a shoal of any kind in all that stretch. To all intents and purposes you are out on the ocean.
It may be said, and it is being said, that the Canadian government having provided the necessary facilities, it is now up to the shippers, the importers and the exporters, to make use of those facilities. But, Mr. Speaker, I hold that the government has a further duty. Canada has a large sum of money invested in this project. The present government has given its approval of the scheme. Advantages will certainly accrue to the farmers of the west from the development of this route. Because of those two circumstances alone the government owes it to the people of Canada in general and to the west in particular to take the initiative and lend every possible encouragement to the routing of traffic through this new port. Some may say that it is unfair for the government to attempt to divert traffic from the existing routes on the Atlantic and Pacific to the Hudson Bay route. But I say that it would be just as unfair to neglect it in its infancy. To do nothing to direct traffic into the channel which will be the most economical would be most unfair to those sections of Canada which it will immediately benefit; and after all, anything that will help the west will help the whole of Canada. I think all hon. gentlemen will agree that it is no time to talk of sectionalism in this country.
There is another important matter which I should like to mention, important judging from the number of resolutions that are being passed by boards of trade in the west in connection with the rates that apply to the Hudson Bay railway. The boards of trade in western Canada are desirous that the government publish at 'the earliest possible moment a tariff of rates applicable on the Hudson Bay railway. Shippers are ready to use this new route but find themselves unable to quote prices due to the fact that the tariff of rates is not published. It is true that the provisions of the Crowsnest pass rate structure apply to

The Budget-Mr. McMillan (Huron)
Churchill, but only in part. For some reason or other when the Crowsnest rate structure was applied to the Hudson Bay railway it was made applicable only to wheat. To such grains as barley, flax, oats, rye and so forth, as well as flour, it does not apply, although the Crowsnest pass rates apply to all these grains when they are billed to the head of the lakes. The people in western Canada who are supporting this route feel that this is rank discrimination and that it should be removed at the earliest possible moment.
Another matter that is giving them concern is the fact that the Crowsnest pass rates as applied to the Hudson Bay railway extend only as far south in Saskatchewan as Regina or Moose Jaw, or the main line of the Canadian Pacific railway. Now if this new route is going to serve the purpose for which it was intended, these rates should apply to all parts of Saskatchewan and Manitoba as well as to certain points in Alberta which hope to use it. This is particularly important because our neighbours to the South in the states of Dakota, Montana and Minnesota, expect to make use of this new grain route, but if they are to be penalized by having to pay the regular prairie schedule rates up as far as the main line of the Canadian Pacific railway- and the same applies to Manitoba south and east of Dauphin-I fear it will militate very strongly against the success of the route. I would ask the Minister of Railways to do his utmost to bring these adjustments about, because the people of the west feel very strongly about them, and there can be no question that it is discrimination of the rankest kind.
Before closing may I pay a tribute to the Minister of Railways and Canals (Mr. Manion) and his staff for the able and efficient manner in which this work has been brought to a successful conclusion. I have watched this work very closely from its inception, and I feel quite safe in saying that this is one of the public works projects in Canada for which the people of Canada got value for every dollar expended. I pay that compliment to both governments because, as I said, both have contributed towards its construction about on a fifty-fifty basis.


Mr. THOMAS McMILLAN (South Huron):: Mr. Speaker, my first words must be words of congratulation to the hon. Minister of Finance (Mr. Rhodes) for the manner in which he delivered his budget. It, of course, was true to form. I was also pleased indeed to notice the most effective criticism which it received at the hands of my good friend the hon. member for Shelburne-Yarmouth (Mr. Ralston). I have long since realized, Mr. Speaker, that honesty or purpose and sincerity of heart are among the greatest virtues of man. But, sir, as one who has largely expended the energies of life in and for the uplift of Canadian agriculture, I must confess that the prospects of farming to-day are less attractive than at any previous period of my life. Therefore I cannot allow this budget to pass without voicing my protest regarding the action of the government with respect to agricultural matters.
Experience has taught me that in order to accomplish anything in debate we must have some common standing ground, some platform, as it were, upon which the contestants at the outset can agree. That requirement the Prime Minister (Mr. Bennett) and I most surely have. During his campaign in Calgary he said:
Agriculture is the basic industry of Canada.
At Ormstown, Quebec, he said:
Agriculture stands first in Canadian activities.
Meaning thereby that it should have first consideration at the hands of any Canadian government. At Woodstock, New Brunswick, he said:
It shall be my great responsibility, if elected on the 28th of July, 1930, to see that the collective weight and power of the whole Dominion of Canada is placed behind agriculture. I would be lacking in the qualifications entitling me to head a Canadian government if I failed to do so.
Surely those expressions were such as to convince every farmer that the first consideration of this government would be the welfare of Canadian agriculture. Nevertheless from the moment of his election he and his government have subordinated the requirements of agriculture and of the general consumers of this country to those of his "special-interest" friends. Therefore my text to-night and wherever I go will be. contained in these words: If there be an inevitable conflict between agriculture and any other interest, that other interest must yield." In view of the commanding importance of a healthy and vigorous rural life, the welfare of Canadian agriculture must be preserved and stabilized if the national integrity is to be upheld.
Economically this country is in the most critical condition of its history; its situation is so critical that there is no time for anyone to talk cheap politics. Politics in the true sense of the term means the science of government, the government and regulation of a nation in order to ensure the liberty, security, and progress of its people. Canadian
3	COMMONS
The Budget-Mr. McMillan (Huron)
agriculture is to-day in the very trough ^ of depression, in the midst of a world depression which is driving many people to a state of panic. But we must not forget that this condition is temporary, that agriculture will again become prosperous. Agriculture in Canada must become prosperous, but only if given its commercial freedom and if justly dealt with by and under governmental authority. It is acknowledged by all that agriculture is the basic industry of Canada, that the constant condition of agriculture is the real barometer of the trade of the country, and that without a dominant agriculture the whole national economic fabric will fall to pieces. Never has that fact been illustrated more clearly than to-day. For the past eighteen months business conditions in this country have been largely paralyzed. That state of affairs has been greatly intensified through the customs and tariff enactments of this government, preceding and following in the wake of the last Imperial conference. With trade falling off, revenues declining, transportation seriously restricted, national debt piling up, expenditures growing, immigration reduced to a minimum, and unemployment so rife that in the midst of bulging warehouses and overflowing elevators we see the lurid picture of thousands of destitute citizens living in semistarvation and away over 530,000 idle working people.
There is a condition upon which no one wishes to dwell. Why is this so? Because the farmer is unable to sell the produce of his labour for the bare cost of production; as a consequence his purchasing power is largely destroyed; and so the whole national economic fabric is threatened. In the midst of such a condition last fall was it not a striking coincidence that the price of wheat should begin to rise, and almost at once, as if by magic, a buoyant, optimistic feeling took possession of the people? Does that experience not prove the force of my words, that the constant condition of agriculture is the real barometer of trade? Why, it represents the backbone of our whole national economic structure. And does not that fact prove the words of my text: If there be inevitable conflict between agriculture and any other interest, that other interest should yield? Agriculture must be preserved and stabilized if national integrity is to be upheld.
Wherein lies the remedy? Give to agriculture the wider and better markets which it demands and which it must have, and at the same time enable the farmers to obtain their requirements at prices somewhat on a parity with the prices which they must accept for

their farm products. That is the crux of the whole situation. Give the farmers their requirements at prices equivalent to those which they must accept for their produce, and the way is largely open for a solution of the problem. But what does this government do? It tries to put this whole dominion into an hermetically sealed condition so far as trade is concerned, and so well has it succeeded that in the short space of eighteen months it has practically destroyed almost one half of our entire foreign trade. But not content with that condition this government, through the medium of the Finance minister in this budget, comes along again and places a further burden on agriculture in the shape of a two hundred per cent increase in the special excise tax upon all imports.
No nation can live unto itself. This world has become a family of interdependent nations which must work hand in hand and become mutually helpful. To accomplish this, if we could only cancel the war debts between the nations, stop the building of armaments, pull down these most obstructive tariff walls and allow the family of nations economic liberty, the problem would largely be solved. The way things are going at the present time, sir, it seems to me it might be a good plan to lock up some of the ministerial heads of this government in order to ensure the free flow of trade in its natural lines. Surely we have already had ample proof of the effect of the policies of this government on agriculture. To my mind the great reason why a policy such as I have suggested cannot be followed is that those who are in control in some of the leading nations of the world are afraid that by doing so they may lose that control when they next appeal to their electorates.
If further proof is needed of the way things are going in the economic life of the world to-day it is only necessary to consult the last report of the Basle committee, which called for adjustment of all reparations and other war debts to the troubled state of world finances, and warned the governments of the world that this must be done immediately if fresh disaster were to be averted. This report, adopted unanimously by the eleven financial experts and economists who composed the committee, was set out in full detail after the most exhaustive inquiry into the economic condition of Germany, and the report stated that action was urgently needed in a much wider field than Germany alone. When the Hoover moratorium ends in July, under the Young plan, Germany will be required to pay some $450,000,000 annually in gold to the

The Budget-Mr. McMillan (Huron)
allied countries, with the exception of the United States. Of this amount about $165,000,000 is unconditional, earmarked for the repair of war damage in France and Belgium, and according to the Young plan that payment cannot be postponed. All the financial and economic experts who have been studying this question have agreed unanimously that Germany is absolutely unable to pay the balance of $285,000,000 to the other countries. It so happens that European governments owe the United States about $250,000,000 annually, or only some $35,000,000 less than Germany's entire annual obligation.
The Basle committee, while unable to consider the matter of unconditional reparation annuities, stated in their report that they would not feel they had fully performed their task if they did not bring to the attention of the governments of the world the extreme gravity of the present situation, which undoubtedly has exceeded the relatively short depression envisaged in the Young plan, to meet which the safeguarding measures contained therein were designed. Speaking at Manchester on December 9 last Sir George Paish, eminent economist, who is in complete accord with the report of that committee, stated, "If my information is correct, and I think it is, nothing can prevent a complete world economic breakdown. Reparations should be cut off entirely or reduced to such a low figure that they would become negligible. Inter-allied debts should be written off entirely. World tariffs must come down." He said the most serious consequences were likely to result if the new British high tariff system were put into operation; he said it would cause world bankruptcy, and described it as the greatest folly that could be conceived. Commenting on this statement, according to the press the Prime Minister of Canada was so unimpressed that he merely said, "Mother Shipton predicted that the world would come to an end one hundred years ago." Mark you, this is the man who is empowered to speak for the Canadian people. I quote the following press report, dated St. John, New Brunswick, December 13, 1931:
The prediction of Sir George Paish, British economist, regarding an early breakdown of the world s economic structure, has not impressed Right Hon. R. B. Bennett, Prime Minister of Canada, who was here fifteen minutes last night en route to Ottawa on his return from England.
No; he said, "Mother Shipton predicted that the world would come to an end one hundred years ago." I ask the Prime Minister if this press report is a fair summary of his opinion of the gravity of the present world economic condition, and I hope before this
debate ends he will give this house a satisfactory reply.
No man was ever in a better position to make a name for himself and to place Canada on the highest pinnacle among the British commonwealth of nations, but let us pause for a moment to inquire what this government have done to solve these pressing problems with which we are faced, or I might put it the other way and ask what this government have done to place Canada in the desperate economic condition in which we find ourselves to-day, particularly with regard to agriculture. Twelve months ago I said this was practically a one man government, with a following so weak and submissive that you would almost think they were hibernating. After twelve months have passed who can say that this is other than a one man government?
I have outlined the course which I believe should be followed. Everyone realizes that agriculture is the backbone of our whole economic structure, and everyone realizes also that Canadian farmers must have access to wider and better markets, but it is a thoroughly sound economic maxim that if we are going to sell our goods to other countries we must buy goods from those countries in return. But what did the Prime Minister do? He increased the tariff at the special session and last session for the one purpose, so he said, of remedying an unfavourable trade balance. I do not believe that, and I propose to show by the words of the Prime Minister himself that I am right in my contention. If the Prime Minister will look at the Monetary Times of January 8 last he will find that in 1930 Canada borrowed from the United States some $393,632,000 whereas in the following year we borrowed only $155,920,000. That fact alone would decrease the imports from that country, and that result would have followed if the Prime Minister himself had gone into hibernation and remained there during the whole time. While the borrowings of Canada from the United States had decreased in that one year by $237,000,000, in the same year the imports from that country, as you would naturally expect, had declined by $259,000,000.
I have said that I propose to show from his own lips that he did not increase the tariff for the purpose of remedying an adverse trade balance. His very first expression on the floor of this house as Prime Minister of Canada was that so far as (possible the requirements of ten million Canadian people must be produced at home, thereby showing at once that he did not wish to encourage the importation of any goods that could possibly
1968	COMMONS
The Budget-Mr. McMillan (Huron)
be produced in this country, thus drying up the springs of trade and further paralyzing Canadian agricultural life. His very first expression, as I say, was this, as I have pointed out. Secondly, his next act, in amplification of that policy, was to jack up the Canadian tariff against the importation of British goods almost to the prohibitive point, practically wiping out the British preference before ever he went to the imperial conference, thus ejecting British goods at the toe of the boot from Canadian markets which they had enjoyed for a lifetime. Thirdly, his act was to pass some of the most diabolical customs legislation ever forced through the parliament of any country, legislation which has driven the people of Canada, to a status away back behind the days of Magna Charta, the day of the signing of the great charter of English liberty for the preservation of those liberties of the British people, which charter, amongst other things, stipulated that no taxes must be levied within the realm without the approval of parliament, and that foreign merchants should be allowed safe conduct to enter England and leave it, to buy and sell, without the obstruction of an evil toll.
Why were these safeguards to English liberty insisted upon in those early days? Simply to prevent exploitation of the people. But now we have a government who have passed this legislation, taking the right of taxation directly out of the hands of parliament, a right which had rested with the representatives of the people, under the terms of the British constitution, ever since the days of King John, and putting that power into the hands of one man, the Minister of National Revenue, to fix for duty purposes, whatever valuation he wished upon the importation of goods into Canada, regardless of what the cost price of such goods might be. If that is not an exhibition of high protection gone crazy and autocracy gone to seed, made legal in the face of the solemn protests of the Liberal party in this house, and under the threat of the Prime Minister that until it was passed he would refuse to leave Ottawa for the imperial conference, I do not know what you would call it. It has destroyed the stability of trade to such a degree that every prospective trader is afraid to launch out and do business, for he will never know the valuation upon which he will be required to pay duty. If anyone is engaged in the business of buying and importing goods, would common sense not tell him that the valuation on which he ought to pay duty would be the reasonable cost price of those goods? That is the valuation upon which any sensible indi-

vidual would expect to pay duty. But now we have a government who have passed a law nullifying that sensible view and putting it in the power and at the whim of one man to fix whatever valuation he pleases without any regard whatever to the cost price of goods, and whenever he likes to take such action.
But of course this is in line with the whole fiscal policy of this government. The government do not wish to allow the importation into this country of any goods of a kind that is or can be produced in Canada, no matter how exorbitant a price the consumer may have to pay.
iSome hon. MEMBERS:	Carried.


Thomas McMillan: I know you
would like me to stop but I am not through yet. Surprise has been expressed that there are no tariff changes in the budget. Why, Mr. Speaker,- we do not need any; the Minister of National Revenue is making such changes regularly. Read Hansard of the special session of 1930, and you will see from the whole discussion that the Minister of National Revenue can make the entire tariff ten times higher than it now is if he so chooses, without ever consulting parliament at all. And through the medium of orders in council he is continually doing it. But of course, as I say, this is in line with the whole fiscal policy of this government.
This principle of one-way trade is no good. It is a policy of blind nationalism which should be stamped out. The endeavour to put Canada into a hermetically sealed compartment, so far as trade is concerned, is absurd and is becoming intolerable to the great masses of the people. Therefore I charge the Prime Minister, according to his own yard measure, with being entirely lacking in the qualifications that should entitle him to head the Canadian government in the measures so necessary for the salvation of Canadian agriculture. The longer he proceeds the worse the mess becomes. And further, Mr. Speaker, no one who will not observe the full meaning of these words: "If there be economic conflict between agriculture and any other interest, that other interest must yield," should be allowed to continue at the helm of Canadian public affairs.
Agriculture must be preserved and stabilized if national integrity is to be maintained. If the Prime Minister were only true to himself, he would see that such a policy was observed. Everyone knows that, as I have said, agriculture is the foundation and the backbone of our whole national economic structure. The condition of agriculture to-day is becoming too serious to be longer neglected.

The Budget-Mr. McMillan (Huron)


Some hon. MEMBERS:: Carried.


Thomas McMillan: Hon. members need not think that they can annoy me.
I see a lot of hon. members opposite who represent agricultural constituencies. Their actions show how much they care for agriculture, and that is why agriculture has received so little consideration and so little real sympathy on the floor of this house. If the government of Canada would only solve the problems of Canadian agriculture and put the farmers on a sound and healthy basis economically, the other economic problems would largely solve themselves. What surpasses my comprehension, something I cannot understand, is that type of mind, that peculiar mentality which enables its possessor boldly to announce that he will place the collective weight and power of his government behind agriculture, and in the same breath have the temerity to enact legislation which has the effect of so severely paralyzing Canadian agricultural life as to drive from it the last vestige of outstanding natural ability. It is worse than a crime upon the body politic, and tragic in the consequences which it will involve. We may well recall those memorable words of Goldsmith:
III fares that land to hastening ills a prey, Where wealth accumulates, and men decay: Princes and lords may flourish or may fade; A breath can make them, as a breath has made;
But a bold peasantry, her country's pride, When once destroyed, can never be supplied.
It is the same type of mind which will enact legislation which will place the great body of the people under the iron heel of special privilege and then declare that there shall be no exploitation of the consumer. This government realizes that by its enactments it has placed the people at the mercy of the specially favoured interests; if this were not the case, nothing would be said about the exploitation of the people. Before the government talks about preventing exploitation under such circumstances, it should be able to assure us that it is possessed of that superhuman power which will enable it to reconstitute human nature. Unless the government can do this, such talk is the sheerest balderdash. It reminds me of the expression, "They might tell the truth to the people, before asserting that they can appreciate nothing in argument but fallacies and nothing in language but balderdash."
All these things which have proved to be to the detriment of Canadian agriculture were enacted before the Prime Minister and his colleagues went to the imperial conference. They have continued ever since with increas-41761-124
ing force and to-day we are reaping the bitter effects of such disastrous legislation. Go into the towns, the villages and the cities, consult the bankers, businessmen or tradespeople, what do they say? Their constant prayer is: Lord, give us a policy which will help the farmer in his extremity and he will help us all. This government could begin at once one of the greatest developments in history right on the farms and in the farm houses of Canada, but it still persists in its immeasurable folly. The farmers of this country are just as anxious to have the comforts and conveniences of city life as are the townspeople, and there is no class of people in this country who, if they had the wherewithal, would spend more freely. If my hon. friends across the way would only drop party politics, I am convinced that they would support me in this matter.


An hon. MEMBER:: Where has the hon.
member been all his life?


Thomas McMillan: He has always been trying to do his part.
This government went to the imperial conference with the idea of blasting its way into the markets of the world. What has it accomplished? In a single twelvemonth its blasting folly has destroyed more than one-third of the entire foreign trade of Canada. How did it accomplish that result? .It was accomplished by increasing the tariff and by peremptorily demanding that the British government impose a tax on foreign foodstuffs, thus identifying in the minds of millions of Britishers the once-honoured and respected name of Canada with the odious and much-feared policy of taxing the food of the British people. The Prime Minister then became wildly uproarious and left Great Britain with the veiled threat of economic separation simply because a British minister mildly designated his whole proceeding as "humbug." What has Professor Stephen Leacock to say on this point? He says that Right Hon. J. H. Thomas used the right word when he called Mr. Bennett's proposal "humbug." He continues:
The Canadian tariff prefers British manufactured goods to American, but shuts them both out so far as they interfere with our own manufacturing system. A nation that blocks out everything with a tariff and produces vast quantities of goods which it cannot consume is working its own ruin.
I do not need to emphasize the fact that the whole proceedings at that conference were a dead failure as far as the welfare of Canada was concerned, and this is known to every real student of public affairs. Has that fact had any effect whatever in dissuading the

1970	COMMONS
The Budget-Mr. McMillan (Huron)
Prime Minister from following the course which he has apparently mapped out, a course so ruinous to the interests of Canadian agriculture? None whatever, and that is the reason why I am impelled to say that according to his own yard measure he is entirely lacking in the qualifications which entitle him to lead a Canadian government in providing the measures so necessary for the salvation of Canadian agriculture.
I do not need to rehearse the proceedings of the last session of parliament. From beginning to end it was one continuous course of action-


Mr. GOTT:: If the hon. member persists
in reading his speech, I shall have to direct the attention of the Speaker to his conduct.


Thomas McMillan: -as far as fiscal legislation was concerned, against the true interests of agriculture and the general consumer, and showed unmistakably that there had been no recanting whatever of his opinions previously expressed and acted upon.
On motion of Mr. Edwards (Waterloo) the debate was adjourned.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, April 13, 1932