[Stage Direction]
The house resumed from Friday, March 11, consideration of the motion of Mr. Johnston (Lake Centre) for concurrence in the second report of the special committee appointed to investigate farm implement prices, presented to the house on the 8th of April, 1937.
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Mr. GEORGES BOUCHARD (Kamou-raska):: Mr. Speaker, as vice-chairman of the committee on farm implement prices I have much pleasure in seconding the motion for concurrence in the report of our committee which was presented on April 8, 1937, as moved by the hon. member for Lake Centre (Mr. Johnston). As everyone knows, the inquiry was first conducted by the standing committee on agriculture and colonization, according to the order which reads as follows:
March 2, 1936: Ordered, that an immediate inquiry be made by the standing committee on agriculture and colonization into the causes underlying the high price of farm implements, with particular reference to the advance in prices for the year 1936.
After twenty-five sessions of this standing committee it was felt that a more compact group of members should proceed with the work, and the following recommendation was made to this house:
Your committee recommend:
1.	That the inquiry be continued at the next session of parliament by a special committee of the house.
2.	That such special committee be appointed as early as possible after the commencement of the next session of parliament.
3.	That during the coming recess of parliament the government take into consideration the necessity of continuing such investigation as may be deemed advisable for such continued inquiry.
4.	That the records, exhibits and evidence filed with or taken by your committee be placed in the custody of the Minister of Agriculture, and that such records, exhibits and evidence be made available to such special committee upon its appointment.
Acting upon the recommendations in our report, instead of entrusting the continuation of this work to a standing committee composed of sixty members, the government moved on February 1, 1937, the following resolution:
That a select special committee of the house be appointed to continue and complete an inquiry begun by the standing committee on agriculture and colonization, pursuant to a resolution of the house on March 2, 1936, into the causes under-lying the high prices of farm implements, with particular reference to the advance in prices in the year 1936.
I want to thank the government for this decision, and I wish to offer my most hearty felicitations to the Acting Deputy Speaker, who presided over this special committee, first, because he was the first one to bring the question at issue to the attention of the house, and, second, for the able and courteous manner in which he presided over the deliberations of the committee. It was no uncommon achievement for a chairman to have merited an expression of satisfaction from, an hon. member with a parliamentary experience as long as that of the hon. member for Kootenay

East (Mr. Stevens), and one whose competence in part had been gained in presiding over the price spreads committee. That hon. member said, as reported at page 1207 of the report of the farm implements committee:
There has been harmony here, and your presiding has been excellent; there is nothing to complain about at all, and I am not complaining.
I believe it will be agreed by all hon. members who served on the committee that we sat in an atmosphere of peace and yet of activity. The very competent officers-the clerks, accountants and solicitors-contributed to making our sittings most enlightening. We have no complaints with regard to the witnesses. They were fair-minded, and I do not believe they used words to conceal their thoughts. This was a fact-finding committee which made a report on proceedings extending over 1,300 pages, a report which should be of value to the general public, to the expert, to the student, to the economist, to ail who can take advantage of it. I admit I do not know many men who could grasp the significance of the report, but I must point out that the investigation should make for a closer approach to harmony among different social activities.
When one first hears about manufacturing costs and retail prices he is inclined to think that the manufacturers are robbing him. But, as one who often injured his little finger with a sickle, I suggest we owe a debt to the manufacturers for the modern implements which help the farmer of to-day. I am not fossilized to the extent that I am unwilling to admit the great help to the farmer brought about by improved machinery. But on the other hand the agricultural implement companies should not forget that in a certain way they live in partnership with the farmers, and that they should trade on a basis of mutual advantage. Although some may say it is a truism or a platitude, I believe one of the first recommendations of the committee, that the prosperity of the farm implement industry is directly dependent on the prosperity of agriculture, is a basic principle.
The third recommendation reads in this way:
That, as a result, the price level of farm implements during the next few years is of the greatest importance to agriculture.
Without any desire to antagonize the agricultural implement companies, beyond the limits of the evidence adduced or the limits imposed by the fair-mindedness of any public man, I believe I should make the following observation. Throughout the years of the depression between 1930 and 1935, agriculture in Canada suffered perhaps more than it did in any other country. Importing countries

Farm Implements Committee Report
had raised tariffs against our products. They adopted quotas, and restricted supplies. While experiencing severe competiton in foreign markets, the Canadian farmer had to purchase his production and consumption goods from industries which were afforded the greatest protection in Canada's history. Not only had he to face tariffs, but he had to face a monetary policy which forced the prices of his products to disastrously low levels. When recovery from the depression commenced, industrial organizations, in order to rehabilitate their own position first, began to exploit primary producers.
During the course of the inquiry it was generally agreed that the problem of the farm implement industry did not lie so much in low prices as in the inability to secure a normal volume of output and sales. Since the volume of sales has improved, the machinery companies are in a much better position than they were four or five years ago. At the beginning of the depression the tariff on farm implements was increased to twenty-five per cent. The argument has been advanced that in spite of the increase in tariff, the companies did not increase their prices. It should be pointed out that the years following 1930 were characterized by a general decline in prices so that in fact the prices were relatively raised. With the drop in duty from twenty-five per cent to twelve and a half per cent, under the Canada-United States trade agreement* effective on January 1, 1936, the implement companies still have plenty of opportunities to raise prices to the Canadian farmer without inviting increased importations.
It should be pointed out that while the tariff on implements was reduced to 7i per cent in May, 1936, the present excise tax of three per cent on imported goods makes the rate 10-72 per cent. It will be argued that the farm implement industry in Canada is a large employer of labour and that by giving more protection to this industry it will be enabled to employ more Canadian labour. In this regard it is interesting to look at the average number of men employed by the industry during the past years. The following figures are taken from a table to be found at page 87 of the evidence:
1926
1929
1931
1933
12,838
10,091
11,011
11,408
7,405
4,471
2,758
3,039
3,706
During the five years 1925 to 1929, the average number of employees in the farm
implement industry ranged from 7,559 to 11,408, or an average for the five years of 10,187. After the increase in the tariff in 1930, the average number employed in the period 1930 to 1934 ranged from 7.405 to a low of 2,758. The average number of men employed in 1932 was only 24 per cent of the average number employed in 1929. There are not many industries with such a record of unemployment, especially an industry with a tariff protection of 25 per cent plus a three per cent excise tax. For the period 1930 to 1934 the average number of men employed in the implement industry in Canada was 4,276. These figures show that tariff protection does not stabilize the economic life of the country. Employment and agricultural production did not decline as did the farm implement industry. Agriculture is the greatest stabilizing influence a country could have, and Canada is sacrificing her agriculture on the altar of industrial development. I invite the house to consider recommendation 17, which reads:
That reduction in the tariff should and does, in the long run, tend to lower the price level to the farmer, depending on the extent of free price competition in the industry.
Coupled with that is recommendation 16, which reads:
That it is the opinion of the committee that the cost of cream separators to the consumers should he reduced and with that end in view recommends that this item be placed on the free list.
I urge upon the government the necessity of placing cream separators on the free list, as they were before 1930. A cream separator is an essential piece of machinery on most farms. It is not like a binder that may be used only for two or three days in a year and sometimes not at all; this piece of machinery is used twice a day every day during the year.
I direct attention also to recommendation 18, which reads:
That in the farm implement industry there is competition in the matter of sales but little effective competition in the matter of prices.
The problem of combination and monopoly is a very complicated one. Though there is no evidence to that effect, the lack of competition in prices should make the government cautious in its supervision. I am confident the implement companies will favour recommendation 24, which reads:
That the companies should encourage the further standardization of replacement parts in the same implements manufactured by different companies and in addition standardization of the implements themselves.
The following recommendation, number 27, will give comfort to the farmer, more particularly to those whose credit has not been impaired by bad times. It reads:

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That the cost of credit to the farmer purchasing farm implements on time is excessive and the companies should take immediate steps to reduce these credit charges.
The further standardization of parts should make easier and less costly the sale of replacement parts. This is referred to in recommendation 28, reading as follows:
That the profits to the farm implement companies on the sale of replacement parts is excessive and the price of these to the consumer should be materially reduced.
I am glad to see a notice of motion in the name of the hon. member for Weyburn (Mr. Douglas) on the order paper. This will give an opportunity to hon. members to discuss this matter. It reads in part:
That this house recommend to the government that they encourage farmers to organize in provincial units for the cooperative distribution and servicing of farm implements.
I invite the attention of the house to recommendation 32, which reads:
That after due consideration of all the essential factors, the committee is of the opinion that any suggestion of a further increase is not justified at the present time.
Let me refer for a moment to the improvement in the financial situation of the companies in the years 1933, 1936 and 1937. I read in the Montreal Gazette, for instance, of February 8, 1938, under the heading Jump in Earnings of Massey-Harris, the following:
Operating income $3,044,267, against $1,523,344 in preceding year.
Working capital up-Net profit of $1,043,728, first since 1929, compares with $58,414 loss a year ago.
Then in the Financial Post of February 26 I read:
Shareholders of Massey-Harris Company were told at the annual meeting on February 22 that the company was successful in increasing its turnover in every country in which it operated last year.
The manager, Mr. Duncan, in concluding his remarks said:
Under the circumstances, however, the future is somewhat beclouded, but we do believe that in view of the very marked improvement in the economic position of the farmer in the majority of the agricultural countries of the world, and the undoubted progress which your company is making, that subject always to the hazards of crop and weather conditions upon which this business is ever dependent, we are justified in looking forward to 1938 with confidence.
The profits of the Cockshutt Plow Company also showed a wide gain last year.
In conclusion, Mr. Speaker, I desire to say, with my colleague from Lake Centre, that the rehabilitation of the agriculturists of this country is a pressing national problem, and I believe the government should explore all the

avenues leading to more and more successful agriculture.
(Translation) Mr. Speaker, in conclusion, may I be allowed to express the hope that the farmers of my province, who met the depression with such undaunted courage, may still rely that the government, which never failed them yet, will obtain for them a decrease in the cost of their implements.
Mr. E E. PERLEY (Qu'Appelle):	Mr. Speaker, as stated by the hon. member for Kamouraska (Mr. Bouchard), who has just taken his seat, and who was vice-chairman of the committee that inquired into this matter, the inquiry was first suggested by the hon. member for Lake Centre (Mr. Johnston) on March 2, 1936, who moved that an inquiry be made to ascertain the causes of the increased prices of agricultural implements in January of that year. The question was referred to the agriculture committee under the chairmanship then of the hon. member for Macdonald (Mr. Weir). Counsel and auditors were provided, the committee held many meetings and heard many witnesses, in particular the heads of the different companies manufacturing farm implements.
I should like here to pay my respects not only to the members of the committee, who I think made an honest effort to get at all the facts with respect to that increase in price, but also to the witnesses, and the heads of the implement companies for the way in which they tried to assist the committee by giving us every possible detail with respect to every branch of the industry.
When the house was ready to prorogue that year it was felt by the members of the committee that we could not present a satisfactory report within the time available, and it was therefore recommended that the evidence be tabled and that a special committee be set up at the following session to continue the inquiry. A committee wras duly set up and continued the inquiry under the chairmanship of the hon. member for Lake Centre, our Acting Deputy Speaker. Last year the committee decided to proceed along somewhat different lines. The auditors were given authority to go into the head offices of the different implement companies and audit their books, and finally a report was presented to the committee by the auditor and reviewed with him by the committee. Different witnesses were called and questioned on the auditor's report, and we certainly secured further details with respect to the manufacture of implements and many other branches of the trade; but I think we could almost as well have made as satisfactory a report at the end of the committee's work in 1936 as last year

Farm Implements Committee Report
or in the report we are considering to-day. As a member of the committee I endeavoured to give the subject the closest possible attention and to hear as much of the evidence as possible, and I drew this conclusion, that the prices of implements in Canada at that time, and to-day, were more or less controlled by the International Harvester Company of America.
The report quotes a mass of figures, draws certain conclusions and makes certain recommendations, to which the hon. member for Iiamouraska has referred more particularly than I propose to do to-day.
The hon. member for Lake Centre, in moving adoption of the committees' report, enlarged on the conclusions and recommendations of the committee; and he drew certain conclusions himself, which appear in Hansard of March 11 last, at page 1243. I must say that the procedure was a little out of the ordinary. The chairman generally moves the adoption of the report and makes certain references to the recommendations, but it is not often that he goes as far afield as the hon. member for Lake Centre did in moving adoption of the committee's report. But the hon. member for Lake Centre did draw certain conclusions of his own, and then made this statement, "These conclusions are made by me.' I agree with all the conclusions he draws. I think they were admirable in themselves and almost as good a set of recommendations as the committee would have made if they had condensed their report and conclusions into such a brief space as the hon. member took. I am not quarrelling with him very much in that respect. I only want to point out that he went far afield in dealing with the report in that way, and I trust that other members will not be criticized if we also transgress and go a little far afield.
The hon. member quoted certain figures which were not altogether relevant with respect to agricultural production and other matters. I certainly do not agree that increases during 1936 and 1937 in the prices of implements in Canada can be charged to a high tariff; for these increases took place, as the hon. member for Kamouraska has just stated, after very substantial reductions in the tariff rates. The first reduction was fifty per cent.
The hon. member for Lake Centre referred to the resolution introduced in 1911 by the Hon. Arthur Meighen. May I remind the house that the tariff which was introduced and passed by the house in 1919 was the lowest with respect to farm implements that we have had under any government in this country. I refer to a certain number of imiple-
51952-85J
ments, and particularly to tractors and parts thereof; as we know, they were put on the free list. What happened? Following that enactment, and as a result of that tariff change, some twenty concerns that were manufacturing tractors or parts thereof in Canada went out of business, and there was then a steady increase in prices up to 1929 or 1930. I could quote the prices which prevailed during that period, but the facts can be found in the report by anybody who will take the trouble to review it.
It will be clearly seen that from 1919 to 1930 the increase in price was very considerable. In 1930 a change of government occurred, and the prime minister saw fit to introduce measures which provided for some increase of the tariff on agricultural implements. In doing so, an agreement was made with the manufacturers that they would not increase prices. We know what happened during the ensuing period; we have the figures here to show that there was some reduction in price. Taking for example the year 1935, it will be seen that a very considerable reduction in price of certain agricultural implements took place. The report indicates these price decreases, from. 1930 to 1935. In 1936 the tariff was lowered, and again the implement companies began to increase prices. No conclusive evidence was given to the committee on which it could base the conclusion that this state of affairs was related in any way to the tariff.
Reference is made in the report to the high cost of distribution. I think that is one of the principal findings of the committee. In recommendation 33 it is stated:
That the committee is of the opinion that the cost of distribution of farm implements is unnecessarily high and constitutes an important factor in the prices to the consumers.
I believe we all agree with that, and certainly the industry itself is of the same opinion. But certain things must be taken into consideration in connection with distribution. The western business of necessity is a credit business. The farmers out there have been in desperate circumstances during the past few years, and it will be necessary for many years to come for the implement business in that country to be conducted on a credit or a time basis. Also, when we consider the evidence produced before the committee to show the percentage of business done in Canada by wholly Canadian manufacturers as compared with the amount of business done by United States manufacturers, it will be seen that Canadian manufacturers are under a very serious handicap.
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I believe the figures indicated that the Canadian manufacturer has about thirty-two or thirty-three per cent of the Canadian business, and that United States manufacturers and importers have the balance of sixty-odd per cent. Hon. members will appreciate what the heads of the Canadian factories made very apparent to the committee, that if a condition could be brought about whereby they would have sixty per cent or more of the Canadian business, the cost of distribution would be considerably less, owing to the larger percentage of business; if that should happen we should have, I believe, a reduction in price from that cause alone.
United States manufacturers control a very considerable amount of business in western Canada. I believe it was stated by the head of the International Harvester Company that its business in Alberta amounted to four per cent of the total business done by them on the American continent. It must be recognized that under a system of free entry that company could set a price in Alberta which might involve them in considerable loss as regards that particular part of their business, but when considered in relation to the total business done by them on this continent it would not amount to hardly anything, although it would put the Canadian manufacturer in a very disadvantageous position.
The question of freight rates was brought into the debate by the hon. member for Lake Centre. I wholly agree with what he said on this subject. We have come to the time when we should consider a reduction in freight rates, and not merely on agricultural implements. The subject might well be further considered. All of us must agree that freight rates have had nothing to do with the trend of prices of implements, either up or down, because the rate has been steady since 1897. When the hon. member for Lake Centre suggested that we should revert to the rate which was in force prior to the establishment of the Crowsnest rates, that is, prior to 1897, I found myself in entire agreement with him.
The hon. member made some suggestions of his own with respect to the prices of farm products: here again I certainly agree with him. There is no one in this chamber more anxious than I am to do something for the agriculturist, to assist the farmer in every practicable way, to make it possible for him to pay for the implements which he will have to buy in the next few years. I have suggested on various occasions in this house a reduction of freight rates. I succeeded in one year, I believe in 1934, in obtaining from the then minister of railways a statement as a result

of which an order was issued to the board of railway commissioners asking them to consider a reduction in the differential as between the domestic and the export rate. I also had much to do with the bonus of five cents per bushel which was given to the farmers of western Canada, under which there was paid out about fourteen million dollars. And I had considerable to do with the framing and the passing of the Canadian Wheat Board Act, a piece of legislation which, if it had been given a chance to operate, would have meant much to the farmers by way of getting them an increased price for their wheat.
The time has come when this government should act upon some of the reports that have been handed down in the last two years, particularly this one. Why all this meaningless talk about tariffs, which we have listened to during that time? I well remember, and no doubt it is within the memory of many members of this house-possibly the Liberal party is running true to form-that in the legislature of Saskatchewan a resolution was passed annually for free furniture and implements of production. The Minister of Finance (Mr. Dunning), when he was premier of the province supported these annual resolutions to have furniture and implements of production put on the free list. But we have never had any action in this regard, notwithstanding that both he and the present Minister of Agriculture (Mr. Gardiner) supported such resolutions in the legislature. They have satin this government in the last two years and have done nothing, although we have heard a lot of talk from back benchers. I wonder if the back benchers are going to continue this session talking along that line. H they do, I trust they will force the government to take some action. We ought to know something definite now, and the only way we can find out is for the government to make a move in one direction or the other.


Mr. MACDONALD (Brantford City):: May I suggest to the hon. member that a reduction from 25 per cent to 7J per cent represents some action.


Mr. PERLEY:: That is true, and if the government go any further they will find out that lowering the tariff does not help us to get any reduction in the prices of implements.


William Ross Macdonald: Why do you want action then?


George Halsey Perley: We want the government to do something concrete, but instead we have nothing but talk from western members supporting them. Let these hon. gentlemen go

Farm Implements Committee Report
back to the west and say to their constituents, "This is what the government has done"-let them do this or stop talking.
And what about the wheat board? The hon. member for Lake Centre mentioned it in his speech when moving concurrence in the report. A resolution was passed in the legislature of Manitoba a few days ago recommending that the government take steps to bring the wheat board act of 1935 into operation, to bring coarse grains under the act, and to issue participation certificates. In this connection an amendment was moved to amend another amendment that had been put forward. It read:
That the said amendment be amended by adding at the end thereof the following words:
And that this house regrets the practice of nullifying a federal statute by the passing of a federal order in council, thereby preventing the actual delivery of grain to the grain board except at low market prices.
That motion passed the Manitoba legislature with only one dissenting voice. I believe it was the member for South Winnipeg that voted against it, but the premier and the members of the government and the opposition as well all voted for it. Will hon. members from Manitoba and Saskatchewan who support the government in this house press such a resolution on this government with a view to having something done in that respect.
After dealing with the cost of distribution, which was the main recommendation, the report in its thirty-fourth recommendation proposes:
That the companies themselves should make every effort to reduce these costs, or the farmers should be encouraged to organize for cooperative distribution and servicing of farm implements.
As regards the first part of the recommendation, surely it is unnecessary to state that the companies themselves look upon the cost of distribution as one of their major problems. If, therefore, there is any way of solving that difficulty, we can rest assured that the companies will endeavour to find it.
The thirty-four recommendations of the report give the government a good deal of latitude in preparing legislation and I trust that the cost of this investigation will not have been wasted and that some action will be taken to assist the farmer. There may be some difficulties to overcome, but the government is given a good deal of latitude in this report. In conclusion, may I commend the work of the committee. I believe that every member of the committee made an honest attempt to deal with the problems referred to the committee, and I wish to congratulate both the chairman of the present committee
and the chairman of the one that preceded it upon the manner in which they conducted the investigation. Further, I believe it is only fair to say that the heads of the Canadian manufacturing industry in Canada and those who came from the south endeavoured to cooperate with the committee. They tried to give the committee all the details that were available, and I do not think that any of them made any effort to withhold anything. They are to be congratulated, and I trust that something concrete will result from the labours of this investigating body.


Mr. JOSEPH NEEDHAM (The Batt.le-fords) :: 
Mr. SPENCE:: What would you substitute in its place?


Joseph Needham: Let the farmer go to the merchant and buy a machine when he wants one, just the same as he would buy a pair of shoes or suit of clothes. There should not be this great expense in the distribution of farm machinery. With a strong financial position and efficient management it should not be necessary to increase the price. These advantages should be passed on to the customer. It would appear that the shareholder is the first consideration rather than the customer. The executives cannot be blamed for this, because they must show profits or lose their positions. That is the case in many walks of life to-day. We find the same thing in the chain and departmental stores and in other lines of industry: the management is left to executives who must produce results. I submit that these companies should mark time until the farmer is in a position to take advantage of cash sales. The prices should be kept as low as possible.
What can the government do with this report? The committee has completed its work and has made certain recommendations, but what can the government do? The government cannot force the implement manufacturers to sell at a certain price. The report shows the position of the manufacturers, and we all know the condition of the farmers. However, there is one thing that can be done; farm implements could be put on the free list. The manufacturer could be told, "You have had your innings ever since you started to manufacture implements; it is now the farmer's turn to see whether he can gain anything along this particular line." If that is

not sufficient, I would suggest the recommendation made by the hon. member for Melville (Mr. Motherwell), that there be some compensation as well.
I ask the government to try this for a period of years to see whether it will not help to rehabilitate the farmer. The agriculturist is the mainstay of the country. No country can be prosperous when its agriculture is not prosperous. I ask you to say with President Roosevelt: We will try anything once; if it works we will work it some more, if it does not work, we will try something else. I suggest that for a while we try free trade in farm implements.


William Ross Macdonald: Mr. Speaker, in every industry there
are three interests: the capitalist, the worker, and the consumer. I do not put them in that order for any special reason; I might just as well have said, the worker, the consumer and the capitalist; or the consumer, the worker and the capitalist. Under our system of government they are all necessary and no country can exist without the three. Every hon. member who has spoken so far seems to think there is only one class in Canada, namely, the farmer. I pay my respects to the farmer; I know he is very necessary indeed, but we must remember that at least half of the population of this country lives in our cities. The farmer is necessary, the capitalist is necessary, and the worker is necessary. There must be cooperation; the three must work together for the good of all. If this investigation does no more than bring these three together, then I feel that the effort we have put into it and the long hours we have spent in the inquiry shall not have been entirely in vain.
I desire to pay my respects to the chairman of the committee for his fairness, for the kindly manner in which he received ail those who came before him, and for the way in which he allowed questions to be asked. However, at times it appeared to me that the manufacturers and workers were on trial. At times the committee took on the form of an inquisition rather than an investigation, as though they had done something wrong and we were out to condemn them. That was not so all the time, but I do feel it was so part of the time. In fact I believe the farm implement industry has been discriminated against. If you look back you will see that in parliament after parliament it has been investigated, or there has been some change in the tariff affecting the industry. One government comes in and the tariff on farm implements is changed; another comes in and the tariff is changed again, and it is

Farm Implements Committee Report
probably changed two or three times in the life of each parliament. We had a price spreads investigation, when the farm implement industry was subjected to very critical examination. Then we had the agriculture committee of this house investigating it, and last year a special committee was appointed to investigate it again. Here we are in the third session of the eighteenth parliament, and we are still discussing the farm implement industry.
I say, Mr. Speaker, that the farm implement industry has been and is a great asset to this country. There are some people, as the president of one of these companies has said, who look upon manufacturers as public enemies, and the agricultural implement manufacturers as public enemy No. 1. Surely they are not an enemy of this country. Surely they have contributed something to its greatness. They have given the farmers the best in agricultural implements. They have employed their capital to go into research, to develop the very finest of implements, in order that our farmers may produce the greatest possible amount from their land with the least amount of labour. They have given employment to thousands of Canadians, who have a right to live on a fair scale, on a high scale the same as the farmer and the capitalist. I would like hon. members of this house to come to my city of Brantford. There you will find working men, the finest class of men in this country. I will take you down street after street and show you their homes, neat and tidy, with industrious housewives, children growing	up-happy
homes. Surely, Mr. Speaker, nothing should be done to lower the standard of living of the thousands and thousands of these working men and their families.


Mr. QUELCH:: Is the hon. member suggesting that farmers have a high standard of living at the present time?


William Ross Macdonald: I am hoping that the standard of living of these working men will not only be maintained but raised, and I have the additional hope that the standard of living of the farmers will also be raised. The hon. member apparently has missed my point. In speaking to-day I hold no brief for the capitalist, the farmer, or the worker. I feel that we must endeavour to benefit all, and I trust that no one will interpret my remarks to the contrary.
It has been mentioned in this house that profits have been made by this industry. But since when, Mr. Speaker, did it become a crime for industry to make profits? If we take the figures year after year we shall
probably find that the profits were not as high as some might imagine, but when someone states that a certain industry has made profits some hon. members of this house immediately assume that industry is committing a misdemeanour. Surely my hon. friends cannot object to reasonable profits, fair wages to the worker and fair prices to the consumer.
It has been said that one implement company in Canada last year made a million dollars, but an analysis of the business of that company will show that three-quarters of that amount, namely, S750,000, was made from implements sold outside Canada, and only 8250,000 from implements sold within Canada.
It has also been stated that during the earlier years of the agricultural implement industry, from 1891, we will say, to 1911, great profits were made by this industry. I agree that great profits were made at that time not only by the agricultural implement industry but by practically every industry in this dominion, and I would also remind hon. members that great profits were made by the farmers in those years. The farmers were prosperous from 1901 to 1911; everyone was prosperous in those years, and surely we cannot complain of that. But our investigation was into the current prices and current profits of the implement companies. I have taken the trouble to go back over a period of twenty years from 1935, and I have averaged the profits or losses, as the case may be, of the implement manufacturing companies, and have then gathered them together, and I find that for the twenty years prior to 1935 the Canadian companies did not make money but lost -37 per cent. During the fifteen years immediately prior to 1935 they lost 3-89 per cent. During the ten years immediately prior to 1935 the Canadian companies lost 5-59 per cent, and during the six years prior to 1935 they lost 12-26 per cent.


Joseph Needham: Are these figures taken from the report?


William Ross Macdonald: They are taken from the report. In some years the companies made money, in some years they lost money, just as in farming operations the farmer makes money one year and loses money another. But taking an average of the implement companies during the last ten years, while in certain years they made money and in certain years lost money, on the average they lost 12-26 per cent in the last ten years.


Mr. JOHNSTON (Lake Centre):: Is the hon. member grouping all the implement companies together in that statement?
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William Ross Macdonald: It is the Canadian companies.


John Frederick Johnston: All doing business in Canada?
Mr. MACDONALD (Brantford City) t No, just the strictly Canadian manufacturing companies.


Mr. DUPUIS:: Where are those figures taken from?


William Ross Macdonald: They will be found in the financial reports submitted to the committee by the implement companies, and if hon. members will take the trouble to look into those reports they will find that my statement is correct.


Mr. DOUGLAS (Weybum):: Has the hon. member the figures for individual companies as well as the average of all taken together?


William Ross Macdonald: No, but that could be easily ascertained, and if the hon. member cannot obtain it himself I shall be glad to obtain it for him.


Mr. EDWARDS:: The figures are all in the price spreads report.


William Ross Macdonald: 
Mr. BLACKMORE:: Are those the rates on commodities coming into Canada from the United States?


William Ross Macdonald: I am talking about farm products coming into Canada from the United States.


John Horne Blackmore: Has the hon. member the figures from New Zealand?


William Ross Macdonald: From New Zealand there is a substantial duty on butter.


Mr. BENNETT:: Five cents.


Mr. EULER:: Plus exchange, which amounts to between three and four cents.


William Ross Macdonald: In conclusion I would point out that the forcing of Canadian manufacturers out of business would with the resulting unemployment involve a tremendous loss to Canadian economy and leave the farmer dependent entirely upon foreign sources of supply. It has been a matter of consistent observation that any country which is entirely dependent on foreign sources of supply invariably pays more for its products. I would refer my hon. friends to a statement I read showing that farm implements cost more in other countries than in Canada. The Canadian farmer would be the loser if farm implements ceased to be manufactured here or were produced on a very much smaller scale than at present. The best interests of the Canadian farmer, of the working man and of this industry itself would be served by the maintenance of a reasonable tariff, especially if it were established on a basis of permanency. A reasonable tariff, I suggest, would be one which would be

low enough to assure a reasonable price to the consumer and high enough to ensure steady employment to the working man.


Mr. J. T. THORSON (Selkirk):: I wish I could be as eloquent on behalf of the dairy farmers of Canada as the hon. member who has just taken his seat (Mr. Macdonald, Brantford City) has been on behalf of Canadian manufacturers. I intend to confine my remarks to the subject of cream separators.
The statement was made in this house some days ago by the hon. member for Greenwood (Mr. Massey) that no evidence had been taken from the Canadian manufacturers of cream separators. A similar statement was made a day or two ago by the leader of the opposition (Mr. Bennett).


Richard Bedford Bennett: I did not say "not any," but " not any adequate evidence." I think you will find there was some evidence.


Joseph Thorarinn Thorson: I accept that. To-day the hon. member for Brantford City stated that very little evidence had been taken on the subject. It might be desirable, therefore, that hon. members should note the evidence that was given before the special committee on farm implements with respect to cream separators.
There are four principal companies in Canada that manufacture or assemble cream separators-the International Harvester Company of Canada, Limited; the Massey-Harris Company, Limited; the De Laval Company, Limited, and the Renfrew Machinery Company, Limited. Questionnaires were sent out to the two larger companies, the International Harvester Company and the Massey-Harris Company, and full replies were given by them. One of the questionnaires asked the companies to supply full information with regard to a number of typical farm implements, including cream separators. Cream separators, therefore, received exactly the same amount of attention as any one of the other typical farm implements in respect of which information was requested and given.
The officers of these two large companies appeared before the special committee and gave evidence freely, frankly and in great detail. They were examined by counsel to the committee, Mr. R. T. Graham, K.C., and cross-examined by members of the committee; they had the fullest possible opportunity of placing their case before the committee. Detailed evidence was given as to costs of cream separators, manufacturing costs, distribution costs, selling costs and sales realizations. These details were given with regard to all the typical farm implements in respect of which

Farm Implements Committee Report
information had been requested. In the case of the International Harvester Company there were nine typical farm implements in respect of which information was requested and given. Their No. 2 cream separator was in this list. If anyone is interested in the information that was given to the committee he will find it all in the tables that appear on pages 138 to 146 of the evidence. Comparable information was given in respect of the Massey-Harris Company, in so far as it is possible to compare it with the information given by the International Harvester Company. It is not possible to give absolutely comparable information because of the differences in the systems of accounting of the two companies. In the case of the Massey-Harris Company there were seven typical farm implements listed, and included in this list was their 500-pound cream separator. The tables for the Massey-Harris Company will be found at pages 1092 to 1100 of the evidence. These tables were compiled as the result of facts and figures given by the companies themselves. The companies cooperated fully with the committee and its auditor, Mr. Walter J. Macdonald, in giving the basic information that was desired, and there were no complaints made at any time by the officers of the two companies to which I have referred.
With regard to the two other companies, the De Laval Company and the Renfrew Machinery Company, special questionnaires relating to cream separators were sent to each of these companies. The De Laval Company made a full reply to the questionnaire sent to it, and one whole session of the committee was devoted to the evidence given by the officers of that company. Their general manager, Mr. Breyfogle and their auditor, Mr. Cutmor, appeared before the committee and gave full and detailed information that was very useful to the committee. The Renfrew Machinery Company made no reply to the questionnaire that was sent to it. I understand that the auditor of that company was in consultation with the auditor of our special committee, and that he promised that the information requested in the questionnaire would be given, but no information was ever furnished at any time by the Renfrew Machinery Company. They were given every opportunity to do so, and now they have no cause for complaint. In addition, evidence relating to cream separators was given by correspondence from MacLeod's Limited, and there was also evidence given with regard to the effect of tariffs, customs rulings and freight
rates upon the prices of cream separators. Therefore, Mr. Speaker, the special committee had a great deal of evidence before it; it gave very careful study to the question of cream separators 'before arriving at the following recommendation:
(16) That it is the opinion of the committee that the cost of cream separators to the consumers should be reduced and with that end in view recommends that this item be placed on the free list.
This recommendation was made unanimously; I submit that it was justified by the evidence that was before the committee and that it is justified by the needs of the dairy farmers in every part of Canada. There is an unanswerable case for the recommendation thus unanimously made by the special committee on farm implements.
What is the history of the tariff on cream separators? For over thirty years before 1932 cream separators came into Canada free. This is as it should be; for there is no farm implement so important to the needy mixed farmer, the needy dairy farmer, as the cream separator. It has often been described as "the handmaiden of thrift." It is the cream separator that provides the poor farmer with his cream cheque, which is practically the only cash that he gets, and it is of more importance to the dairy farmer in hard times than it is in good times that his implements of production should be provided at the lowest possible cost. A change was made in the tariff in 1932, when the Ottawa agreement was entered into. The tariff was then increased to 25 per cent under both the intermediate and general schedules. It remained on the free list as far as importations from the United Kingdom were concerned, but note this. Not a single cream separator had come into Canada from the United Kingdom for three years before the Ottawa agreement was concluded. They had come mainly from the United States, Sweden or Belgium. The average importations of cream separators into Canada during the years 1930, 1931 and 1932 amounted to $833,000 per year. None came from the United Kingdom during these three years. Seventy-five per cent of the importations came from the United States, thirteen per cent from Sweden, six per cent from Belgium and the balance from Finland and other countries. So in 1932 the tariff was jumped up from the free list to 25 per cent on importations of cream separators from all countries except the United Kingdom, which for three years had not exported a single cream separator to Canada, and which was itself a large importer of cream separators.
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But this was not all, for article IX of the Ottawa agreement guaranteed this 25 per cent margin of preference to the United Kingdom in respect of cream separators for the whole lifetime of the agreement. Therefore during the five years that the agreement was in force it was impossible to make any reduction whatever in the tariff on cream separators, and for five years this high protection was clamped on against the dairy farmers of Canada. In the first speech I made in this house during the session of 1936 it was my privilege to describe this clause of the Ottawa agreement that guaranteed this margin of preference as a vicious clause, and I urged its deletion from the agreement when it was to be reconsidered in 1937. In that year we made some progress. The Ottawa agreement was revised. There was no reduction in the tariff on cream separators but they were no longer tied to the margin of preference to which I have referred. Cream separators are not mentioned in schedule 5 to the Ottawa agreement of 1937, and therefore they are not tied to this guaranteed margin of preference of 25 per cent. In the session of 1937, further progress was made through the recommendation made unanimously by the special committee on farm implements, of which I was a member, that cream separators should be put upon the free list. This present session therefore. Mr. Speaker, is the first since 1932 that the government has been free to act in the matter of tariffs on cream separators, and I sincerely urge upon the government that it should carry into effect at this session the unanimous recommendation of the special committee on farm implements, that cream separators should be put on the free list. This recommendation should have the active support of every hon. member who represents a rural constituency in which there is mixed farming, and in which there are dairy farmers. There are in Canada 2,600 butter factories or creameries, of which 1,200 are in the province of Quebec. There are thousands of farmers in this country who depend upon cream separators for the only cash they receive. There is no implement more important to these small farmers than the cream separator.
What has happened since 1932? The evidence given before the committee shows some startling facts. In the first place it shows clearly and conclusively that while prices of cream separators were not increased after the tariff was put on, the prices were artificially held up. May I refer hon. members to the comparative statement of prices that appears on page 131 of the evidence.
fMr. Thorson.]
The International Harvester Company, giving evidence with regard to some typical farm implements, gave a statement of comparative prices. The information with regard to their No. 2 cream separator shows the cash price at Regina, Saskatchewan, and also the cash price at Billings, Montana. Prior to 1932 there was comparatively no difference between the price on the United States side of the line and the price on the Canadian side. In 1932 the price of the No. 2 cream separator at Regina was $103.50; at Billings it was $102.30. But let us now see what happened after the tariff was put on. In 1933 and in 1934 the price of the cream separator at Billings, Montana, dropped to $90.90, a drop of $12.40. What happened on the Canadian side of the line? The drop was merely one from $103.50 to $102.50. That is fair evidence, Mr. Speaker, that the price of the cream separator on the Canadian side of the line was artificially held up by the imposition of the tariff of 1932.
There is also clear evidence given by Mr. Morrison of the International Harvester Company, when he said that his company could supply the agricultural implement requirements of the farmers of western Canada from its plant at Chicago, pay the duty and let the farmers of western Canada have these implements at less cost than they could be supplied at from its factory at Hamilton. Then, in reply to the Minister of Agriculture (Mr. Gardiner) Mr. Morrison stated that the amount of duty was decidedly a factor in the cost. I would prefer to have the statement of Mr. Morrison to the statement recently made by a member of this house. Undoubtedly the rate of duty is a decided factor in cost.
Furthermore, the evidence of all three companies shows that the cream separator has been loaded with heavier selling costs for commissions than any other typical farm implement. For example, in the case of the International Harvester Company the percentage for selling costs for commissions in the matter of cream separators is 28-17 per cent, whereas the average for all typical farm implements is only 15-89 per cent. In the case of the Massey-Harris Company there is a similar state of affairs; the commission percentage in the case of cream separators is 21-26 per cent, whereas the average for all typical farm implements is only 12-53 per cent.
Then, the evidence shows one other striking fact. Two of the companies are related to United States companies. The De Laval Company is affiliated with the De Laval Separator Company of New York, through shareholder control. The International

Farm Implements Committee Report
Harvester Company of Canada is a subsidiary of the International Harvester Company of the United States. These Canadian companies imported parts and materials for use in their factories in Canada. These parts and materials came in free of duty, and yet in each case the United States company billed its Canadian subsidiary or associate with the cost of production, plus 25 per cent. It has been stated that they followed this practice because of rulings made by Canadian customs officers. W hether the rulings are correct or incorrect, the result has been that the United States companies in each case have retained in their pockets this 25 per cent profit arising from Canadian business. This additional profit ought to have been used by Canadian companies for the purpose of reducing the price of cream separators and other farm implements made in Canada. In any event, this practice has produced profits for United States companies in the United States, at the expense of Canadians.
Furthermore the purpose of the tariff increase of 1932 has completely failed. I do not think I would be accused of unfairness if I were to
say that the fundamental purpose of the Ottawa agreement of 1932 was to divert from foreign countries to the United Kingdom importations into Canada, so that our trade with the United Kingdom might be enlarged. But the imposition of the tariff has not helped the United Kingdom to any extent, and it has not served the purpose-


Richard Bedford Bennett: That is not what they say.


Joseph Thorarinn Thorson: -of keeping out foreign farm implements. With the leave of the house, if I may have it, I should like to put on Hansard a table showing the importations of cream separators into Canada, since 1929.


Richard Bedford Bennett: Giving the countries from which imported?


Joseph Thorarinn Thorson: Giving the countries from which importations came.


Richard Bedford Bennett: And the number of each?


Joseph Thorarinn Thorson: Yes, the number of cream separators and also their dollar value. The table is as follows:
Dominion Bureau of Statistics-External Trade Branch
Canada's Imports of Cream Separators (Fiscal years ended March 31, 1929-1937)
Cream separators and complete parts, n.o.p.-
Countries
From United Kingdom	No.

British South	Africa.. ..No.
*
Australia	No.

New Zealand	No.

Austria.. ..	 No.

Belgium	No.

Czechoslovakia	No.

Denmark	No.

Finland	No.

France	No.

Germany	No.

Sweden	No.

Switzerland	No.

United States	No.

Total imports	No.
*
1929	1930	1931	1932
521			
11,862			
2,494	1,844	2.653	96,446	63,502	85,953	506	23,300	7	13	8	12,372	5,253	2,473	801,172	1,076	916	10537,545	32,189	28,140	2,207165	3,375	618	643	279	56718,254	16,107	6,960	11,4484,527	6.525	5,218	3,937100,532	129,926	106,701 1 366	103,66310,112	11,238	14,763	5,920586,484	681,530	859,311	338,32319,451	22,010	23,838	10,530853,495	955,182	1,089,904	455,7211933	1934	1935	1936	193732	794	1,069	1,340	2,7731,374	34,702	41,451	60,970	96,54436	71	1	135	15	250	32	2582,402	12,187	1,365	10,9693	2	20	77	61,032	1,496	4,574	1,747	3,299179	37	109	824,294	1,177	1,409	809171	443	330	208	450	7098,449	8,759	7,609	13,715	20,5632,359	4,984	8,529	9,520	15,50341,891	78,574	149,641	178,036	288,8433,177	4,848	1,963	653	1,063205,508	330,210	145,710	50,502	58,6646,193	10,995	12,148	12,073	20,394262,548	457,335	362,788	306,541	479,6911352	COMMONS
Farm Implements Committee Report
I should also like to put on record a brief statement showing the production of cream separators in Canada from 1920 to 1936, giving the number made and their selling value at the works. The table is as follows:
Production of Cream Separators in Canada, 1920-1936
Selling value
Tears	Number at works
1920	
31,001	$1,683,6341921	
13,596	934,9231922	
15,895	727,6551923	
14,279	854,0671924	
11,155	724,9091925	
11,897	816,4681926	
17,649	1,096,2151927	
16,643	1,061,2131928	
14,921	995,2371929	
13,431	830,2271930	
8,616	568,6951931	
7,218	508,3351932	
3,324	203,2011933	
6,652	413,5301934	
9,963	675,1651935	
12,107	791,3461936	
10,902	710,003
These tables show that in 1936 approximately 12,000 cream separators were imported into Canada, approximately 11,000 were produced in Canada and only approximately 1,000 came in from the United Kingdom. It follows that in 1936 the United Kingdom supplied less than five per cent of the requirements of the Canadian dairy farmers for cream separators. Therefore, it follows that the Canadian dairy farmer has been penalized by this protection and duty to the extent of ninety-five per cent of his requirements. In 1937 importations of cream separators increased from 12,000 to 20,000 with an increase in value from 8306,000 to $479,000.
The United Kingdom has not been greatly assisted by the imposition of this tariff. I understand that there are only two concerns in the United Kingdom that are engaged in the manufacture of cream separators. There is the Lister Company of Dursley which formerly handled a Belgian make of cream separator and which only recently has commenced to make cream separators itself. Then there is the Wolseley Sheep Shearing Company of Birmingham which engages in the manufacture of cream separators only as a side line.
Let us look at this table of imports of cream separators and consider the importations from Sweden and the manner in which they have increased notwithstanding the heavy duty of twenty-five per cent. In 1932 a total of 3.937 cream separators came in from Sweden. In 1933 the number dropped to 2.359. From then on the story is one of ever increasing importations. In 1934 the number of cream separators imported from

Sweden had risen to 4.984; in 1935, the number was 8,529; in 1936 it was 9,520, and in 1937 it had increased to a total of 15,503. The tariff has not served to keep out Swedish cream separators. Why? The Canadian farmer needs a small separator. This small separator fills a need which cannot be filled by the United Kingdom and which has not been filled by Canadian manufacturers or operators of assembly plants. The De Laval Company admitted that they could not compete with the Swedish separators for a number of reasons.


Mr. McCANN:: On what grounds?


Joseph Thorarinn Thorson: For a number of reasons. They have themselves imported Swedish cream separators to be sold as their junior model. The dairy farmer has to pay 25 per cent duty on every cream separator brought into this country. It is the small dairy farmer who is particularly affected and he is the one who can least afford to pay this heavy duty. The large dairy producer usually has a fluid milk contract upon which he can rely, but the small dairy farmer has nothing but his cream separator that produces his cream for which he receives his cream cheques.
I submit that there is no need for the retention of this duty. Whom does this duty help? It does not help labour to any extent. So far as cream separators are concerned, the De Laval Company is not a manufacturing plant; it is simply an assembly plant. The cream separator end of the business is a very small proportion of its total business. Mr. Breyfogle stated at page 1191 of the evidence that the cream separator end of the business was a comparatively small portion of its manufacturing. The amount paid for Canadian labour is only a small fraction of the cost of the cream separators assembled at the De Laval plant. For example, out of a total factory cost of $59.65 per separator, only $1.69 is paid to direct Canadian labour. What is the evidence with regard to the Massey-Harris Company? This company builds a 500-pound cream separator, which is their main separator.


William Ross Macdonald: They build a small one now.


Joseph Thorarinn Thorson: I said it was their main one. This 500-pound cream separator represents only 2-2 per cent of their total volume of Canadian made implements. In the case of the International Harvester Company the percentage is even less.
Whom does the tariff then help? It helps only these four companies. It has helped the United States parent of the International Harvester Company and the United States associate of the De Laval Company to retain

Farm Implements Committee Report
in the United States profits from Canadian business which should be used to reduce Canadian prices. I have also heard that Canadian companies compete at Chicago, for example, with foreign cream separators. I have heard that they are able to make quotations in Chicago and have captured business from foreign exporters of cream separators. If they can do that, why do they require any such tariff protection as they now receive?


Richard Bedford Bennett: Was there any evidence of that?


Joseph Thorarinn Thorson: I was careful to say that I had heard that that was so. If that is so, then they require no protection from this parliament.
Whom does this tariff hurt? It hurts every dairy farmer in Canada. The Canadian tariff on cream separators is the highest of any country in the world. New Zealand is one of our chief competitors in the production of butter, and yet the New Zealand farmer gets his cream separator in free. We export cream separators to New Zealand, but the Canadian farmer who has to compete with the New Zealand farmer must pay 25 per cent duty on every cream separator imported into this country.
I wonder if hon. members realize the importance of cream: separators to the dairy farmers of Canada? It is a matter of prime importance to them that they should be able to get the maximum butter fat content out of their milk. They are entitled to the benefits of all improvements that are made in cream separators anywhere in the world. It is essential also that they should get their cream separators as cheaply as possible. Dairy farming is the hardest of all farming occupations. It goes on every day in the year. The dairy farmer uses his cream separator twice every day and every day in the year. He is entitled to get as large a return as possible from his hard labour, and he is entitled to have his implements of production supplied to him at as low a cost as possible. The removal of this duty, Mr. Speaker, would lessen the costs of production of the dairy farmer. The removal of this duty would also do another thing: it would enable the independent dealers to handle cream separators, and they could do so at less spread for distribution, at less cost, than the large companies with their wasteful systems of distribution. There is no implement so necessary to the dairy farmer of Canada as the cream separator. We in western Canada are trying to build up mixed farming. We should have assistance in doing this. In 51952-86
eastern Canada mixed farming and dairy farming are their most important industries. Therefore every member of this house has a direct interest in this recommendation. He can help his dairy farmers by supporting the unanimous recommendation made by the special committee that cream separators be placed on the free list.
For the reasons I have stated, Mr. Speaker, I urge upon the government that it should carry into effect this unanimous recommendation of of the special committee on farm implements. The tariff of 25 per cent on cream separators has failed in its purpose. It has not served to help the United Kingdom to any great extent; it has not helped labour. The table that I placed on record shows that more cream separators were made in Canada before this tariff was imposed than are made in Canada now. The present tariff serves only as a bonus to a few companies, whose cream separator business is merely a small percentage of their total volume of business, and it penalizes a large and important class of primary producers.
The Liberal party is pledged to tariff reduction. On this item we expect the government to carry out its pledge. We have heard of compensating adjustments. At a later date in this session I hope that I may have an opportunity of saying something on the subject of compensating adjustments, but in respect of this item we want no compensating adjustments. We want this tariff removed altogether in accordance with the unanimous recommendation of the special committee, and we want it removed this session; for this is the first session in which the government has -been free to act in the matter. The farmers of Canada generally will expect this recommendation to be carried out. I urge this, Mr. Speaker, in the interests of agriculture, and when I urge it in the interests of agriculture I urge it in the interests of the whole of Canada; for upon the welfare of the primary producer, whether he be farmer, fisherman, miner or lumberman, the welfare of the whole of Canada depends.


Mr. ROBERT FAIR (Battle River):: Mr. Speaker, in Canada to-day as in all other countries of the world we have two types of farmers. One is the type that farms the land; the other is the type that farms the farmer. Whether it is my good or my bad luck, I belong to the type that farms the land, and I must say that for a number of years I have not been satisfied with my lot in that respect.
Under ordinary business conditions the farmer should first of all see to it that he

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gets a decent living for himself before providing a decent living and luxuries for the farmer who farms the farmer.
Speaking a few moments ago, the hon. member for Brantford City (Mr. Macdonald) suggested that the farmers were enjoying pretty well the same standard of living as the manufacturers, although I do not think he really meant that. But if he wanted us to take it as truth we must dispute his statement flatly. Living in Alberta as I have for the past twenty-four years and farming all that time, I strongly disagree with that statement of the hon. member. Time after time in this house statistics have been given, showing the kind of home the western farmers live in, and giving the percentage of farm homes that have radios installed, that have running water, electric light, bathtubs, the number of farmers driving automobiles, and so forth. I do not think it is necessary to make any exception of the east or central provinces, because only two years ago we were told in this house by a practical farmer representing an Ontario constituency that when he wanted to take a bath he had to take it in a wash-basin, which goes to prove that conditions in Ontario among the farmers are not very much better, so far as domestic facilities are concerned, than they are in the west.
During the last war, when farmers were in a position to make a little money, with wheat prices going up, the government then in power undertook to keep the price of wheat down by bringing a wheat board into operation. But immediately the war was over and it was to be expected that prices might drop-and here the board could have been of considerable assistance to the farmer -the government saw to it that in a very short time the board was removed. For the other class of farmers we find that something to help them put their prices up and keep them up was not removed, but has been maintained ever since.
During the 1936 and 1937 sessions we had investigations into prices of farm machinery. I would not for a moment agree with all the estimates and figures which have been given to the committees that inquired into that matter. For a number of years we have been told that figures lie and liars figure, and from some figures which came out during that investigation I am inclined to believe that that statement is true.
Referring to the question of cream separators, which the hon. member for Selkirk (Mr. Thorson) dealt with just before I rose to speak, I should like to show the house this small part of a cream separator which

I have on my desk. It is just a little piece, one of a number of pieces that go to make up a cream separator. No later than last month a farmer in Saskatchewan had to pay SI.65 for this little piece of machinery. In case some of the armchair farmers have not looked at it, I again hold it up for them to see, and if they want to examine it more closely it will be here on my desk. Back in 1932 it would take eight and a half bushels of No. 1 northern wheat to purchase this little piece of cream separator. According to dominion government figures, in 1932 it cost the farmer S8.07 to produce enough wheat to buy this little piece of separator. Yet we are told that the farmers are in a pretty good position and are not being soaked by the farmer who farms the farmer.
Going back a number of years to about the time I came to this country, we find that prices of farm implements were not anywhere near what they are to-day. I will instance just two necessary implements used not only in the west but in all parts of the dominion: The seed drill, with which you put in seed; and the eight foot binder, which you must use to take your grain off, provided you happen to have any. In 1915 the seed drill cost $147 and the eight foot binder, $165. For purposes of comparison I will use five year periods. In 1920 the drill cost $243 and the binder, $288; in 1925 the respective figures were $253 and $288. In 1930, when that burden of man-made depression struck the farmers and the workers generally with such violence, the drill still cost $252 and the binder, $283. We come to 1935, when we were paying a tariff on a 25 per cent basis; the drill then cost $237 and the binder, $262. These prices are all f.o.b. Regina. At the 1936 session a reduction of 174 per cent was made in the tariff on farm implements, bringing the rate down to 7J per cent. But see what happened. In the case of the drill we find the price had increased to $248, while the binder cost jumped to $280.
Some people say that the Conservatives are and have been the high tariff party; but in view of the figures which I have given, what difference does it make which party is in office? We have a cut in the tariff of 174 per cent, and yet a net increase in the prices of these implements.
I join with other hon. members in asking the government at this time to abolish entirely the tariff on farm implements, and not on implements alone. I suggest that the government investigate the figures constituting the balance sheets of these companies, and where those figures lie, have them corrected; not only that, but the government should make

__________Farm Implements Committee Report
the companies sell at fair prices. Overhead and items of that order are padded, if I may-use that term, and we find also that in industry there is such a thing as secret reserves.
As regards my own home town, I can quote from memory the prices of eight foot binders in 1935 and 1936. In the former year the price was $272.52 cash. After the 17i per cent reduction which I mentioned a' few minutes ago, the price had jumped to $290 cash. This refers to the product of the International Harvester Company. The profits of that company for 1935 amounted to $19,618,000, and for 1936, to $29,760,000. That corporation, like all the others, has been doing pretty well. During the investigation it was also found that a little secret reserve of $40,000,000 existed in the accounts of the International Harvester Company. I have nothing whatever against that company; but I am bound to say that there is every evidence of a combine among these machine companies, and I believe that if the government would investigate the financing of these companies, the secret manipulations of their assets, and so forth, they would be justified in making very substantial reductions in the prices of farm machinery. I am not pleading that this should be done because I am a farmer; for if the other fellow can get along, I am Scotch enough to get along too. But I believe everybody realizes that until the farmers of Canada are in a prosperous condition, the economic position of the rest of the country cannot be sound. At this time, I believe, the government has all the necessary information, and if it also possesses the pluck of which it talked so much prior to the election of 1935, it should not be necessary for us to ^ finish this session without some drastic action having been taken to put the implement manufacturers in their proper place and to utilize them for their proper use.


James Joseph McCann: At the outset I wish to congratulate the chairman of the committee who made this report on- the thoroughness of it and on the manner in which the question was reviewed from every aspect. Perhaps, however, in making some of the representations, particularly when he included his own personal observations and recommendations with reference to what might be done, and did so at a time after the committee had risen, he may have misled members of this house and the Canadian people -into believing that those expressions of his were the conclusions of the committee.
I do not entirely agree with him in some of his conclusions, more especially with reference to the requirements of western farmers in the line of general agricultural machinery. 51952-861
In his observations he says in part, as reported in Hansard of this year at page 1237:
The annual requirements of farm implements m this country amounted to $51,700,000, and that during the period 1926-35, on account of the depression and farmers not being able to purchase their annual requirements, there had grown up in this country a backlog of requirements amounting to some $200,000,000.
Then he goes on:
If this estimate is anything like correct and I think well within the mark, and if this backlog is to be taken up in the next few years, it will be understood that farm implement manufacturers have in prospect a period ot large sales, probably equal to tile days when western Canada was being settled. When we consider the financial statements of the implement companies during that period -we find that they experienced very prosperous times. VVith that annual requirement of $51,700 000 plus the backlog of $200,000,000, lion, members will understand how vital this matter of price is to the farmers of this country.
I cannot agree with the logic of the statement that the backlog of $200,000,000 is likely to be taken up. The time is gone when those sales could be made, and to accuse the farm implement companies of being in a position or of attempting to take advantage of that is, to me, entirely illogical.
_ With the report, generally speaking, I am in accord. It has several recommendations which, if put into effect, surely should bring about those conditions with reference to farming to which the industry is entitled. However, I propose to speak principally with reference to recommendation No. 16, which has to do with the proposal to remove entirely the tariff on cream separators.
The hon. member for Selkirk (Mr. Thorson), referring to the Renfrew Machinery Company' manufacturers of the Renfrew separator, said that a questionnaire was submitted to them and that they paid no attention to it. I submit that the Renfrew Machinery Company had not sufficient time in which to compile the data necessary to answer that questionnaire. It is true they were invited to answer a questionnaire sent out by the auditor of the special committee on farm implements requesting information as soon as possible. The officials of the company proceeded to secure the necessary information and to compile it in the form required for submission to the committee, but before all the data could be gathered the sittings of the committee ended and parliament prorogued. The evidence and information which the Renfrew Machinery Company could have supplied were not given to the committee, and it is the suggestion of the company that certain facts should be brought forward-facts which might have altered the committee's findings.
1356	COMMONS
Farm Implements Committee Report
Some hon. gentlemen in discussing this motion speak entirely from the standpoint of the farmers. I can quite understand their position because they represent entirely rural constituencies. But when one comes from a constituency that is part rural and part urban, one must take into consideration the needs of all the people in the constituency and not those of one set of individuals. I happen to represent a constituency that is partly rural and partly urban. The Renfrew Machinery Company in the manufacture of cream separators employ 225 people, most of them heads of families. Altogether there depend upon the company for support from 800 to 1,000 people in the town and from 1,000 to 1,200 people throughout the country. All these people depend upon that one particular industry for support.
Let me call attention to the policy of the Liberal party with reference to industry, the policy as enunciated by the Prime Minister (Mr. Mackenzie King) in the federal campaign of 1935. I myself heard him say-and he said it from one end of the country to the other-that it was not the intention of the Liberal party to destroy any legitimate industry. I submit that if the tariff is entirely removed from cream separators, that promise which was given to the people of Canada will not be implemented, because the Renfrew Machinery Company differ from other implement manufacturing concerns in that they are specialists in the manufacture of cream separators. They have manufactured over 50.000 of these machines, which are in use from one end of Canada to the other.
The committee in its recommendations contends that the farmers have a right to expect the price level of farm implements to be based upon the most economical and efficient manufacturing and distribution costs. It is apparent that such results will not be secured, so far as cream separators are concerned, by the implementing of recommendation No. 16. Such legislation would tend to destroy entirely the competitive factor in cream separator sales and prices, thus increasing the cost of the machine to the Canadian farmer and allowing exporters, particularly in Sweden, to secure still wider margins of excess profit at the expense of the Canadian consumer, the Canadian suppliers of this product, and their dependents.
The hon. member for Selkirk took pains to remind the house that the Swedish manufacturers could undersell the Canadians, but he did not say why. The hon. member for Brantford City answered that in his remarks. The reason is that in Sweden the labourers, artisans and mechanics work on an average

for 191 cents per hour os compared with 55 cents per hour and up, in Canada. If the hon. member for Selkirk wishes to reduce Canadian artisans and machinists to the level of those in Sweden, then he is alone in that particular wish. It is quite true that their machines can be brought into Canada at a lower price than that at which Canadian machines can be manufactured; nevertheless we have a duty to perform to our Canadian manufacturers, and particularly to those whom they employ, and we are not doing our duty if we allow our manufacturers to be undersold by Swedish manufacturers.
After all, this government has done a good deal for the farmers. Are we not treating the dairy farmers fairly when we attempt to get them a decent market for their products? The price of butter will prove to anyone that the dairy farmers are enjoying at the present time the best price that they have had for a number of years. Those who work for the Renfrew Machinery Company-and the same is true of other manufacturing concerns-are customers of the farmers, and they too are entitled to a fair wage with which to buy the products of the farm.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.



POST OFFICE ACT AMENDMENT


[Stage Direction]
Mr. T. L. CHURCH (Broadview) moved the second reading of Bill No. 20, to amend the Post Office Act.
He said: Mr. Speaker, this is commonly known as the newspaper bill. This legislation was introduced into the house in 1909 by one of the most prominent members of the Liberal party, a great, patriotic citizen, the late Hon. Mr. Lemieux, who so ably presided over this house for many years. It is the law in England, the United States and Australia.
This bill has been before the house since 1925. It came up in that year and in 1926; in 1927 it passed the House of Commons unanimously. It was brought up in 1928, 1929, 1930 and 1935, and now it is being brought forward once more in 1938. That makes eight times it has been introduced in this house. In the other place this bill has been rejected, but no grounds have been given for that rejection. This bill is valid, as was decided by the Supreme Court of Canada the other day in connection with the Alberta legislation.

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Mr. Justice Cannon on behalf of the court delivered a strong judgment, in which he said that the Alberta press bill was an invasion of the field of criminal law and a retrograde step to an early day when any criticism of the government was a crime. Mr. Justice Cannon said:
The federal parliament is the sole authority to curtail, if deemed expedient and in the public interest, the freedom of the press and the equal rights in that respect of all citizens throughout the dominion.
These subjects were matters of criminal law before confederation, have been recognized by parliament as criminal matters and have been expressly dealt with by the criminal code.
No province has the right to reduce in that province the political rights of its citizens as compared with those enjoyed by the citizens of other provinces of Canada.
The subject matter of this bill has been before the house for many years. As is well known, the object of the bill is to identify the ownership of the newspapers. For many years past the newspapers have been coming to parliament and securing privileges. Prior to 1882 newspapers were carried free by the Post Office Department. This bill requires what is the law in England, the United States and Australia, namely, a sworn statement of the names of the owners, editors, publishers and stockholders of every newspaper, magazine, periodical or other publication, which shall be filed with the Postmaster General semiannually. It is not proposed that the Postmaster General shall say what shall appear in the newspapers. That is for the editors or the directors to say; but the Postmaster General is in charge of the administration of the postal laws of this country, and he possesses the same privileges, rights and functions as are possessed by the Postmaster General of England. He may deny the use of the mails to anyone he wishes, without giving any reasons at all. There is in my bill an exception covering religious, fraternal, temperance, scientific and other similar publications, and it is not necessary to file the names of the small stockholders, those owning less than one per cent of the total amount of the stocks, bonds, mortgages or other securities. Any publication which fails to comply with these provisions is to be denied the privileges of the mails. Paid advertising shall be plainly marked, and statements required under the act shall be made in duplicate and delivered to the Postmaster General, who shall make regulations for carrying out the provisions of the act.
I introduce this bill solely in the public interest and in the interests of the press of a liberty-loving country. The bill speaks' for itself. It passed the House of Commons
unanimously on a previous occasion, but was turned down in another place. There are some thirty-six newspapers in Canada which are in favour of the bill; I need not cite them. This legislation is also supported by the assistant postmaster general of the United States, whose letter will be found in Hansard for 1935. He states:
The purpose and intent of the law is to discover the real owners of publications entered as second-class matter and to let the public know who controls the editorial policies of the publication. It has been helpful in many instances where it was necessary to ascertain the actual ownership of publications and has also been beneficial in the case of daily publications which are required to show the average daily paid circulation in correcting the practices of some publishers in representing to advertisers a greater circulation for their publication than actually obtained. The law on the whole has been beneficial in its effect.
The law embodied in paragraph 2 of the above mentioned section, requiring editorial or other reading matter for the publication of which money or other valuable consideration is paid, accepted, or promised to be marked with the word "advertisement," enables readers to determine what is advertising and what is reading matter, and since the advertising portion of publications entered as second-class matter, with certain exceptions, is subject to postage at graduated zone rates, according to distance, the rates ranging from one and one-half cents a pound for the first and second zones to seven cents a pound for the eighth zone, while the reading portion is subject to postage at the flat rate of one and one-half cents a pound, regardless of zone, it also facilitates the collection of the proper postage.
So ithere is a bonus, a subvention, a subsidy given the press through the Post Office Department.
Now, Mr. Speaker, I wish to say a few words on the principle of the bill, because that is all I can deal with on second reading. I cannot go over the various clauses until the bill reaches committee, but I would submit that it is undoubtedly within the jurisdiction of this parliament. I would go further and say that chain newspapers in this country are sounding the death-knell of democracy and of the party system in Canada. If this goes on until 1940 those newspapers will bring about the end of the party system of government. It is not in the interests of the people that we should have these chain newspapers sending out chain letters from Ottawa, one to a Liberal newspaper and another, containing the same subject matter, to a Conservative newspaper, so that the people do no*t know who is behind it. A few years ago the Canadian Press-I think it is still in existence though I do not know where it is this year- was given a subsidy of $50,000 a year. That was questioned in the house in 1919, when
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[Stage Direction]
Sir Thomas White defended the vote. I believe the two major parties, as well as the other parties to my left, are entitled to have their views presented fairly in the newspapers of Canada. In Ontario the two great parties had that right from the time of confederation, but recently it was taken away. In some newspapers only one side is presented. In my opinion the Canadian Press is just a "me, too" organization. It supports the government of the day, whatever the government of the day happens to ibe.
Public opinion is not going to be always silenced in the province of Ontario by chain newspapers and so on; the political parties are entitled to place their views and policies before the people. That is wthat newspapers are for. A newspaper is, or should be, more than a mere business, though of course there is the business side to it and the most important of all to them. I sympathize with the newspapers in the increased cost of production, and I pay tribute to what the newspapers have done during war times and other periods of unrest. As reported at page 2473 of Hansard of 1935, I paid a great tribute to the press of this country. I said:
The contribution which Canadian newspapers made to the community, the country, education, social benefit, the satisfactory outcome of the war and during the depression; what it did to promote the cause of the poor and needy and of charity and philanthropy and to further every worthy movement on behalf of the soldiers and of the nation at large was invaluable and finds its place on the proudest pages of Canada's history. It was the press that helped very largely to restore Canada to her normal position. Nor can one say too much for the honour and integrity of the press of Canada. The tendency of our Canadian newspapers is decidedly forward, and not backward, and notwithstanding the high cost of material and labour and the depression and the social situation their prospects are bright. I have no doubt that the genius of our newspapers will help to make this country great industrially and socially and in every way, so that Canada will march triumphantly on from strength to strength.
Since that time the position has been to some extent modified. The newspaper is the only medium through which public opinion in the country may be expressed. In that connection possibly I should except the radio. If the free press goes, so go liberty and freedom. Freedom of the press is a social and economic necessity, and was never more necessary than it is to-day. It is essential in connection with popular education.
All the gold in the world will not buy public opinion in Canada. I am sorry that the old Toronto Globe, the organ of George Brown, has since been sold, and has been swallowed

up in a merger with the Mail and Empire, a rather independent paper. We all know about the late Harry Anderson, the Jaffray family and others who stood for high principles. We might not have agreed with them, but I oan tell the house that I introduced the bill because of remarks made to me by the late John R. Robertson, the great battling editor of the Telegram, a patriot and a man who stood for freedom and liberty of the press, and who worked all his life so unselfishly for the common worker, the forgotten man in Canada.
Second, there was H. W. Anderson, the late brilliant editor of the Globe, a Liberal, a man respected in this country. Then, third, and not least, the late Speaker of the house, the Hon. Mr. Lemieux, who deserved credit in connection with this newspaper bill. These three gentlemen persuaded me to take up this work, and I have worked on it for eight years.
In that time there have been newspaper mergers, newspaper chains, and as a result some of the press has been silenced. We have what I would call newspaper cannibalism in Canada. They have been gobbling and swallowing up papers all over Canada. In connection with this newspaper cannibalism may I refer to what the late Speaker of the house, the Hon. Rodolphe Lemieux, said in 1919, as reported at page 1563 of Hansard of April 16 of that year.
Let me give a 'case in point. The Montreal Herald, for over a century, was an old and faithful adherent of the Liberal party. It was the old, recognized organ of the Liberal party amongst the English-speaking minority of my province. It had a large clientele. Suddenly, after the election of 1911, Mr. Brierly who had become the proprietor of that paper, mysteriously sold it first to Mr. MeGibbon, then to Sir Hugh Graham, who afterwards became Lord Atliolstan, both being Tories. But Mr. Brierly was the mask; he was still generally supposed to be the owner. One day Mr. Brierly disappeared. As I said, he first sold the paper to Mr. MeGibbon and Mr. MeGibbon finally sold it to Lord Atholstan, and during all that time the paper retained the appearance of being a Liberal paper, whilst it was kept in existence by Lord Atholstan, only to prevent a rival from coming into the field against the Montreal Star. This was disclosed in a celebrated case in Montreal, and the respectable English-speaking Liberal people of Montreal were shocked to find that such a game had been played at their expense.
In connection with that particular newspaper may I say it was admitted by a gentleman in another section of this building that for many years he was president of that paper, but did not know who owned it. That was admitted right in this building in another place when a similar bill was under discussion.

Post Office Act-Newspapers
Newspaper cannibalism has descended on the county of York and the province of Ontario. The old independent newspapers, the old, country weeklies, have been put out of business by trusts and combines and through restraint of trade. They have driven the independent press, and the views expressed by that press, to the wall. That is the condition so great has been the pressure.
In the city of Toronto we used to have six newspapers. First of all the old Toronto World was driven to the wall. Recent events in Canada call public attention to the question of newspaper ownership and identity. The need for the present measure was never more felt than it is to-day. Where a newspaper owner's treasure is, there will his heart be also. He cannot serve God and mammon. He cannot serve two masters, as the Montreal Herald tried to do. The tied newspaper is a menace to democracy. As I say, if it gives only one side it will destroy the party system by 1940. A newspaper should have no tied financial interests to serve. Some trade journals and fashionable social weeklies may render service to the banks, and so on. But a tied newspaper has neither eyes to see nor ears to hear when it has the financial people behind it. It cannot speak out on an issue of the day. It cannot be loyal to the public, to its readers and at the same time to its financial, invisible backers. I believe it was Macaulay who said that John Wesley had said, in the early days of the new church, "You do not make rich men necessary to you." Those are words of wisdom in connection with a newspaper. A tied newspaper has to look to the invisible man behind the scenes for a statement of policy. The newspapers which are respected are those in the hands of old respected families, the sole concern of which is the operation of newspapers. The chains are the property of those whose outside interests are more important. They are just the loud speakers for the interests they represent.
I am not complaining about the three Toronto newspapers. We know who own them; their identity is well known. I am dealing with the press of Canada as a whole. At page 454 of Hansard for 1928, hon. members will find my observations on the second reading of a bill I introduced at that time in connection with newspaper ownership, and the arguments I adduced in favour of the bill.
The Hamilton Herald has disappeared. The London Advertiser, both morning and evening editions, and the Mail and Empire have all disappeared in a short time. The Herald was founded in 1889, and the Advertiser in 1863. The Mail, which ceased to exist on
November 2, 1936, was founded in 1872, and absorbed by the Empire in 1883.
There has been a disappearance of newspapers in the larger cities of Ontario, Toronto, Hamilton and London, and the discontinuance of those newspapers has thrown many able newspaper men and fine citizens out of work. The name " Mail and Empire " was a name applied to a merger. The Mail was founded in 1872, as a spokesman for Sir John A. Macdonald and a supporter of the national policy. Then it continued operations until it was absorbed in 1937.
As I have said, since confederation the two old political parties had through the press a way of placing their opinions before the people of the provinces. They have had that means since confederation, but now it has been abolished. Money-bags may buy a newspaper; they may bring about mergers and chains; but they should not be allowed to buy public opinion in this country.
We must look at the way in which the liberty of the press has been interfered with in other countries. In the last few days news respecting Germany has been in the forefront. We know that Germany has had propaganda in British newspapers for twenty years. The Morning Post, one of the old patriotic newspapers, has gone. When it ceased publication, the last of the patriotic journals in England vanished. It has been taken over by another paper, the Telegraph. It is interesting to recall some of the speeches delivered at Nuremberg. ' It seems strange to hear these speeches boasting of what Germany had done delivered at a time when the Prime Minister (Mr. Mackenzie King) was visiting that country. This is what Doctor Dietrich said:
Liberation of the press from the freedom of the press is one of the greatest historic feats which nazism and fascism have ever accomplished. We have wiped out this freedom of the press-and it is a most glorious achievement.
Is it not a topsy-turvy world when the great rulers boast of having enforced slavery upon their people? If the British Empire is dissolved, the whole world will be in darkness and our lives and liberty will be no more. The decay and decline of the freedom of the press are taking place the world over. There is, in my opinion, no longer any freedom of the press, nor is there any freedom of the pulpit, the legislatures or the universities We can say nothing right here in this house about foreign affairs; no newspaper will mention foreign afairs; but on Sunday I heard over the radio representatives of United States papers relate what this parliament was going to do in regard to foreign affairs. That is what happens when we are afraid to open our mouths in this house in connection with our foreign policy.
Post Office Act-Newspapers
[Stage Direction]
The press of this country are largely to blame for the present state of foreign affairs. With five or six exceptions they failed in their duty. They have all been ready to give lip service to the League of Nations which is now bankrupt, and they have been giving this service for seventeen years. They allowed the finest army and air force and fleet in the world to be scrapped for the benefit of Germany. They encouraged and allowed the armies of France and England to be decreased while Germany was rearming. In my opinion the press, with five or six exceptions, are not doing their duty.
It is interesting to note that the same element is to be found in Great Britain. They are trying to foist a political Anglo-American treaty on the people of that country. This United States agreement will destroy the dominion and the British Empire, and great harm will be done to that Anglo-Saxon federation known as the British Empire. I believe this parliament should do something about the railway situation. I am not going to allow the Canadian National Railways to be thrown to the wolves of private ownership on the urging of newspapers. I believe this parliament should meet this problem as they have done in England and solve it as they did there without anyone losing his job and thus put an end to the $40,000,000 annual deficits.
I do not wish to take up too much time, but I should like, in conclusion, to refer to one or two matters. The Supreme Court of Canada, in upholding the liberty of the press, has rendered a good service to the country. Its decision was that the Alberta press legislation was ultra vires of that legislature. I should like to refer briefly to a report of a special committee of the United States senate which investigated lobbying activities at Washington. Before I quote from this report let me say that a similar condition existed in this country in connection with the evidence given before the mass buying committee. One newspaper was told that if they did not stop referring editorially to the proceedings before that committee certain advertising would be taken out of the paper by big interests. According to the evidence given before this committee of the senate, a similar state of affairs existed in Washington. This investigation was carried on in connection with the president's bill practically to dissolve all holding companies. It was revealed that the duPonts, the Morgans and the Youngs had $12,000,000,000 invested in holding companies. The public utilities power ring attempted to intimidate the New York Times, which was told to stop its criticism of the public utilities or certain advertising would be taken

from the paper. I quote from page 987 of the evidence before the United States senate committee as follows:
The Chairman:: Well, I might refresh your recollection. Do you remember a telegram that appeared-do you remember an editorial that appeared there that you thought did not show the right spirit on the part of the New York Times, which brought about a desire to consider cancelling advertising with the New York Times?
Mr. Hopson:	Yes; I remember that I told
our people over the telephone that I thought that the New York Times with their editorial policy on public utilities did more harm than all the advertising we could do, did good, and I saw no advantage in putting any advertising in a paper which accepted the money of business corporations who were trying to protect the property of their investors, and then had editorial writers who had so little knowledge of the business and the problems which we were up against that they destroyed all of the advantage of it by half-baked editorials.


Frederick George Sanderson: The long and short of it is that you told them to go and see about stopping those editorials or cancelling the advertising?
Which they did. Canada has been the happy hunting ground of these United States corporations. They have seized the public domain of this country and have control of the resources of our mines, the sea, the soil and the forests. They are able to intimidate our newspapers and they even came up here and intimidated the members of the mass buying committee. They went to one newspaper in this dominion and told them that they must stop writing editorials with reference to the mass buying committee or advertising would be taken away from them. That is the same state of affairs which this committee in Washington investigated.
I have no desire to be unfair to the newspapers. Probably my remarks would not apply to 95 per cent of the newspapers in this country. I have paid them a tribute before. The natural resources of this country are controlled by United States companies, and many of our industries have been underwritten in New York. The duPonts were referred to in the investigation at Washigton. They came across into Canada, and their influence was so great that the head of one of their companies was put in charge of the employment commission. Canadian Industries Limited has underwritten a number of companies in Canada engaged in production and distribution and agriculture. The head is one of the duPont industry in Canada.
I have about forty different Canadian editorials here which I could read in support of my bill, but I shall not do so to-night. Another investigation was held in Washington in connection with the newsprint paper industry.

Criminal Code-Sweepstakes
That was in response to senate resolution No. 337. I do not say that conditions are altogether parallel here in Canada, but I know that in England the German ambassador, Joachim von Ribbentrop told Lord Halifax, the British Foreign Secretary, that he wanted these attacks in the British press on Germany to stop, and stop now, and then he flew back to Berlin. But he was told right in the House of Commons that Great Britain was a free country. He also protested to the United States last fall against attacks in the New York press, and they told him the same thing, that the United States was a free country; and that the government could not control the press.
This bill, Mr. Speaker, has 'been before the house eight times. I can show that the bill is intra vires. I can cite the opinion of the Minister of Justice in 1935, the Hon. Hugh Guthrie, who, when he was asked by the hon. member for Comox-AIberni (Mr. Neill) whether subsection 2 was intra vires, replied:
I have no objection to expressing my own personal opinion, but I believe it is the rule that it is not proper to ask for legal opinions from the Minister of Justice in regard to these matters. However, I think that the section referred to is within the competence of this parliament if it sees fit to enact it.
When the bill is in committee I shall be glad to answer any questions in regard to the clauses of the bill.


William Daum Euler: Mr. Speaker, as the house in the session-
Mr'. CHURCH: Would the minister defer answering for four or five minutes so that others may speak?


William Daum Euler: I have no objection to any other hon. member following me, but perhaps my hon. friend will be satisfied with what I have to say. I was going to say that as the house in the session of 1935 accepted unanimously a measure proposed by the hon. member for Broadview (Mr. Church) in terms practically identical with this one, the government has no objection to the bill now under discussion.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee, reported, read the third time and passed.


[Stage Direction]
Mr. ERNEST BERTRAND (Laurier) moved the second reading of Bill No. 28, to amend the criminal code.
He said: Mr. Speaker, this bill is to amend section 236 of the criminal code, by repealing paragraph (e) of subsection 6, which is an exception to the holding of lotteries in Canada, and replacing it with the following:
(e) sweepstakes organized by the government of a province of Canada by or under a law of the legislature of such province: Provided there shall not be held more than one sweepstake in any province in each calendar year, and provided also the net proceeds of the sweepstake shall be applied exclusively to or divided amongst recognized and legally constituted universities and/or hospitals of the province as may be determined by the said province.
For the purposes of this paragraph "sweepstake" means a gaming transaction on horse races in the United Kingdom or in Canada and authorized by the legislature of the province of Canada in which the sweepstake is organized.
This question has been debated before in this house. In 1934 the subject was debated when a bill that had passed the senate came before the house. My idea is that the senate is about the same as it was in 1934. Any changes that have taken place in it might or might not be for the better, according to whether we sit here or in another section of this chamber. But the house itself has changed a great deal, and, I would say, for the better.
This is not a political bill. It is a bill on which I understand we can speak our minds, whether we sit on this side of the house or the other.
In the province of Quebec a law was passed in 1934 permitting the operation of lotteries. It is still on the statutes but can not come into operation without an amendment to the criminal code permitting each province to pass a similar law. In the city of Vancouver a plebiscite was held on this question in 1934, with the result that those in favour of lotteries numbered 25,735, as those against, 9,777. I know that in the province of Quebec nobody protested against the law passed during the regime of the late provincial government, and if a plebiscite were held there I am quite sure the result would be almost unanimously in favour of the statute.
The Trades and Labour Congress, on February 14, 1934, also passed a resolution favouring lotteries controlled by government, and that organization represents about 200,000 working men in Canada.
It is a coincidence, Mr Speaker, that the province of Quebec, which has already passed a law for the operation of sweepstakes, and that Vancouver, the metropolis of British Columbia, by plebiscite, should both favour sweepstakes by a large majority, for only a few years ago Quebec and British Columbia
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[Stage Direction]
were the first two provinces that dared pass a law for government control of the liquor business. How viciously were they attacked all over Canada for that, and not only in Canada but in the United States! Yet to-day, after a lapse of only a few years, all the other provinces of this dominion have followed the example of Quebec and British Columbia, and the federal government of the United States has also followed suit.
The first reason why I am presenting this bill is to put an end to illegality. Lotteries are being held in Canada whether we like it or not. In Montreal, which is no better and no worse than any other city, we can buy lottery and sweepstakes tickets in every club. They are sold in every club in the city. All the brokers are selling them. Janitors of big buildings have them for sale; not only that, but in many buildings they go from one tenant to another asking him to buy tickets. The elevator boys in downtown buildings have them for sale. If we wanted to stop the sale of these tickets our combined mounted, provincial and municipal police would not be numerous enough; we would have to enlarge the gaols of Quebec to lodge there all those who have been selling and purchasing tickets. Tobacco stores at the corners of the large streets have them for sale, and I know a lot of people who are buying them.
William Daum Euler: Members of parliament?


Mr. BERTRAND (Laurier):: Even members of parliament. If lottery tickets can be sold in this open fashion in the metropolis of Canada, and if such large amounts of money are going out of the country every year, why not divert the business and get the money for charitable institutions in Canada? It seems to me that this paragraph which I ask should be replaced, in section 236, has the effect of enabling a levy to be made on Canadians in favour of Great Britain and Ireland. Our prohibitory law does not prohibit this business; as it stands, it is a farcical law. Let me explain what I mean. Section 3 reads as follows:
Every sale, loan, gift, barter or exchange of any property, by any lottery, ticket, card or other mode of chance, depending upon or to be determined by chance or lot, is void, and all property so sold, lent, given, bartered or exchanged, is liable to be forfeited to any person who sues for the same by action or information in any court of competent jurisdiction.
Quite often I have seen reports in the Montreal newspapers that the morning after the drawings of the Irish sweepstakes, relatives of persons who had won tickets ran to court to lay an information against their relatives in order to protect them from action by strangers to have the money confiscated.


Richard Bedford Bennett: It now goes to the crown.


Ernest Bertrand: 
Mr. WOODS WORTH:: The Liberals might make that a new plank in their platform.


Vincent Dupuis: It would be very helpful
to the Cooperative Commonwealth Federation.


Ernest Bertrand: The hon.
gentleman is suggesting something that we on this side of the house do not need. We simply refer to the last general election. We are satisfied with the progress that we have made.

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Richard Bedford Bennett: Forty-six per cent of the
voters.


Ernest Bertrand: A large number of tickets have been seized during recent years in the principal cities of Canada; but as the law is applied, the police seized the lottery tickets after some of them had been sold for some time, with the result that the lotteries did not take place and the promoters retained the money for the tickets which they had sold. Action of this kind does not repress crime; it is rather an encouragement of it. I sometimes ask myself whether or not the good-for-nothings who are profiting by this system are going to fight the bill affecting this matter, and I am more convinced that, if these good-for-nothings oppose it, the bill is good legislation. Those who would be most opposed to it are those who have been illegally holding lotteries and sweepstakes all over Canada. Some of them are operating in the north country, in the bush, around Lac Tremblant, north of Montreal; they are selling their tickets not only in Canada but all over the United States.
If this law were passed, it would provide large sums to all the provinces for universities and hospitals. I know that every one in this house thinks this bill is intended perhaps to help the university of Montreal. I readily admit that fact, and I ask hon. members who are fortunate enough to come from provinces in which there are universities with rich foundations, universities that do not need to appeal to the poorer sections of the community for assistance, to give favourable consideration to the university of Montreal when they are called upon to cast their votes. After all, universities like Oxford, Harvard, the university of Paris, were all started on lotteries; yet to-day these institutions are not looked down upon because they were born in sin, so to speak, if we do think, as some of our fellow-countrymen do that lotteries are sinful. In the Reader's Digest there appeared, some time ago, an article in which the calculation was made that the sum of three billion dollars was taken out of the United States in three years by foreign lotteries. This does not include the bootleg lotteries operated in the United States. In one instance $17,000,000 worth of tickets were seized, and according to certain figures quoted before an inquiry held in New York I understand that $8,500,000 worth of lottery tickets are sold in New York and New England a month.
We hear a good deal about the moral aspect of lotteries. Well, I respect all opinion so long as it is sincerely expressed; I even respect the opinions of those who are not of
my race or religion. I do not believe, however, anyone can argue that sweepstakes held for the benefit of hospitals or universities are immoral in themselves. After all, if the lotteries are immoral-and I do not admit that they are-they have been permitted for a considerable time in our criminal code, where the object to be won represents less than fifty dollars; and through this section I am seeking to have replaced I do not think that matters will be made any worse.
I have here a book by H. M. Muller on Lotteries. May I read a short passage from it. It is very well written, though I do not think I would go quite as far as this writer does. He says:
A parliament which declines, on grounds of public morality, to countenance national lotteries, while drawing revenue from the drink traffic, and taking toll from public gambling on horses-
He adds dogs, but in Canada we have no dog races.
-is guilty of muddled thinking, or hypocrisy, or both.	*
These are very strong words, and while I would not be prepared to go quite as far as this author does, I quote this passage because I think it is well for every hon. member as well as the public outside to know exactly what other people think about the subject.
I have received a large number of letters, newspaper clippings and resolutions passed by labour unions and municipal councils all in favour of the bill. I have also a statement on gambling and lotteries which has been sent to all the members by the Social Service Council of Canada. As I said a few minutes ago, I respect all opinion, but I find one reason given in this statement which I think should be aired. Let me read it:
Churches, not supported by the state, had to develop a sense of financial responsibility in their membership and created sacrificial giving. To-day, the demands made by the government in various forms of taxation and the multitudinous appeals for secular charities tend to reduce that kind of giving which is created in a sense of religious obligation to meet the needs of our fellow men. It is increasingly difficult for the churches to appeal to the sense of stewai'dship, and if, to all the other difficulties, that created by the establishment of national or provincial lotteries is added-
This is what I wish to emphasize particularly-
[DOT]-the springs of genuine philanthropy will be dried up, and with it the sense of personal responsibility for the well-being of our fellow-citizens.
I do not think the argument is sound that we should not have national lotteries or lotteries held under the authority of the prov-
Criminal Code-Sweepstakes

inces, lotteries for charitable purposes, because the churches are afraid that they will not receive as large sums from their adherents. I do not think the reason is a good one, either from the point of view of the churches themselves or from the point of view of the hospitals and universities. After all, if everyone has a chance to buy a ticket, knowing quite well that his chances are very small indeed, in fact that he has practically no chance of winning, and chooses for the mere pleasure to take that chance, believing that at the same time, even if he loses, he is helping some hospital or university, how will that prevent millionaires from making donations to hospitals and having their own names commemorated in connection with a pavilion or something of that sort? I trust that some better reason can be advanced.



FARM IMPLEMENTS COMMITTEE


[Stage Direction]
The house resumed consideration of the motion of Mr. Johnston (Lake Centre) for concurrence in the second report of the special committee appointed to investigate farm implement prices, presented to the house on the 8th of April, 1937.
James Joseph McCann: 
Richard Bedford Bennett: They do not make them.


James Joseph McCann: 
Mr. GOLDING:: Did that happen before 1932?


James Joseph McCann: In New Zealand?


William Henry Golding: No, here in Canada.


James Joseph McCann: Did what happen? I do not understand the hon. gentleman's question.


William Henry Golding: What you describe as going to happen; did that happen before the tariff was imposed at all?


James Joseph McCann: They were not in business to the same extent in Sweden at that time. As I pointed out when I was speaking on this same subject, is it fair to the Canadian workmen to be placed in the same position as Swedish workmen? The average wage paid in Sweden is 19-5 cents an hour, while the average wage received by mechanics in this line of business in Canada is 55 cents an hour.
I want my position with respect to tariffs definitely understood. I ' am not a high protectionist, neither am I a free trader. I should like to take a medium course, not because that is the line of least resistance but because under our present economic system we must raise money by taxation to keep the affairs of the country going. With the customs tariff and the excise tax bringing in a revenue of approximately $100,000,000, no political party in this country will dare to come out and say that they are in favour of the removal of all tariffs. Such a policy would not be economically sound and it cannot be done.
Our artisans and mechanics and manufacturers are entitled to protection just as are
our farmers. Our farmers are being dealt with fairly. I have found no particular criticism of this item from the farmers of Ontario. It appears strange to me that most of the criticism should come from the farmers of the west. What have the farmers of Manitoba, Alberta and Saskatchewan been doing these last three years? They came down here in 1936 and 1937 with empty carpetbags and took them back in the spring filled to the brim. They have come back again this year to do the same thing.


Mr. McLEAN (Melfort):: Many of them live off the cream can.


James Joseph McCann: Yet they want to remove the only measure of protection there is for these manufacturers. I see that my time is nearly up, but I should like to make a suggestion in this regard. I suggest that the question of the duty on cream separators be referred to the tariff board to be inquired into in detail. I for one will be ready to abide by any decision they may make. If this particular recommendation is acted on and the duty is removed from cream separators, it will mean the closing up of the Renfrew Machinery Company. That will mean that 225 mechanics will be thrown out of employment and they and their dependents, totalling 700 or 800 people, will be forced on relief. It will mean that the 1,000 to 1,200 men who are out in the field selling these machines will have to look for other jobs. I think these are matters that the government might well take into consideration. I should like to remind the Liberal government, and the Prime Minister (Mr. Mackenzie King) in particular, of the assertion made prior to tjie election of 1935, that it was not the policy of the Liberal party to put any legitimate business out of commission.


Mr. M. J. COLD WELL (Rosatown-Biggar):: Mr. Speaker, first of all I should like to join with other hon. members who have expressed their appreciation of the efficient and fair manner in which the chairman and officers of this committee conducted their inquiries. Having said that, I should like to discuss this matter from the standpoint of what I believe to be the declared policy of the present government. I realize that I am addressing myself to a Liberal government having the largest majority which any government has enjoyed at any time in the history of Canada.


Some hon. MEMBERS:: Hear, hear.


Leslie Gordon Bell: Some of my Liberal friends say, "hear, hear;" but lest we forget, I am going to quote from the tariff plank of the last national convention of the Liberal party.


Mr. FINN:: That is our chart.
1368	COMMONS
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Leslie Gordon Bell: Let us see how far you have kept to that charter.


Robert Emmett Finn: Chart.


Leslie Gordon Bell: I beg your pardon; I should have said "chart." I quote as follows:
That the best interests of Canada demand that substantial reductions of the burdens of customs taxation be made with a view to the accomplishing of two purposes of the highest importance: First, diminishing the very high cost of living which presses so severely on the masses of the people; second, reducing the cost of the instruments of production in the industries based on the natural resources of the dominion; the vigorous development of which is essential to the progress of our country.
That to these ends, wheat, wheat flour, and all products of wheat, the principal articles of food, farm implements and machinery and repair parts thereof; rough and dressed lumber, gasoline, illuminating, lubricating and fuel oils, etc., nets, net twines, and fishermen's equipments; cement and fertilizers, should be free from customs duties, as well as the raw material entering into the same.
Skipping a paragraph which is not material, I read this:
-and the Liberal party hereby pledges itself to implement by legislation the provision of this revision when returned to power.
That platform was adopted by the Liberal party in 1919, and since 1919 that party has been in power eleven years. I think it is noteworthy that the opposition we have heard in this debate to the lowering of the tariff or the elimination entirely of the customs duty on certain farm implements should come from hon. gentlemen who were elected to this house as Liberals. We are told from time to time that the fundamental difference between the Liberal and Conservative parties is that the Liberal party is low tariff while the Conservative party is high tariff. To-day we have witnessed the spectacle of Liberal members rising in their places and urging the retention of present tariff or tariffs.
The report now before the house cost the country a great deal of money. As a member of that committee and as one who is interested in the recommendations contained in this report, I should like to ask the house and the government what we are going to do now that we have the report and its recommendations. To-day various speakers have discussed features of the inquiry brought out during the evidence submitted last summer, and I do not propose to rehash what has been already said to-day. The hon. member for The Battlefords (Mr. Needham), the hon. member for Qu'Appelle (Mr. Perley) and others touched upon certain features which I had very much in mind myself.
But what stands out in the report, and in the discussion which led up to that report,

was to me the tremendously great spread between the costs of manufacturing farm machinery and the price the farmer had to pay for it when he bought it. We asked the president of the International Harvester Company what he thought about the costs of distribution, and he admitted that they were too high. We asked him what he proposed to do about the matter, and he said they had been endeavouring to discover more efficient, ways of distributing farm implements. I asked him, if the western farmers established cooperative societies for the distribution of farm implements, would his company, the largest in North America, supply the cooperative societies with implements for distribution? He evaded that question. But a little later in the inquiry the hon. member for Kootenay East (Mr. Stevens), at page 492 of the evidence, asked very definitely if the company would supply cooperative societies with agricultural implements, and the answer was a very emphatic no. Consequently I am particularly interested in the recommendation which deals with that very point. We recommend in paragraph 33:
That the committee is of the opinion that the cost of distribution of farm implements is unnecessarily high and constitutes an important factor in the prices to the consumers.
And in paragraph 34:
That the companies themselves should make every effort to reduce these costs or farmers should be encouraged to organize for the cooperative distribution and servicing of farm implements.
To me that is more than a pious hope, and in view of the fact that the farm implement companies have not yet attempted to reduce the admittedly high costs, but on the contrary have in some respects even raised them, I hope that the government in considering the report will make some recommendation to the house for the establishment of cooperative selling agencies at least for the distribution of farm implements in order that they may be distributed at prices more nearly in line with what they ought to be.
The hon. member for Brantford City (Mr. Macdonald) this afternoon defended the companies very ably, I think, but I found myself in disagreement with him except when he deplored the frequent investigations of this industry and the few results that bad accrued to the people of Canada. But after this latest and very thorough inquiry I think the government should act upon such recommendations of the committee as are found to be sound. I believe that the recommendations arrived at, after very careful investigation and very careful consideration of all the evi-

Farm Implements Committee Report
deace, are sound; but so far, as I said before, the companies have done nothing about the matter themselves.
Again I would ask the government and the majority supporting it what they propose to do about this matter. I have not forgotten that some of us two years ago agreed with those who raised this question in the house, with the hon. member for Lake Centre (Mr. Johnston), for example, when he complained of the price of implements; and as will be remembered, when the Canada-United States trade agreement was before the house I moved that farm implements be placed on the free list, as a gesture against what was then being done. But that motion was not pressed because of the inquiry which was then being undertaken. I am hoping now, two years having elapsed, and having had a sufficient opportunity to look into this matter, that the government will take effective steps to see that the farmers not only of the west but of the east are given their agricultural implements at a reasonable price; and not only their implements at a reasonable price, but that the cost of repairs and servicing be looked after for them also, because when we inquired into the cost of repairs we found they were entirely out of line with the cost of new machines.
We are sometimes told that one of the factors accounting for the increased prices is an increase in labour costs; but may I point out that in the last few years the improvements in machinery, reducing the number of men employed and increasing the total output per man in the factory, has in effect not added to the actual cost of labour, and in that respect I find myself not altogether in agreement with one of the conclusions of this report. One difficulty, of course, which we have to face in Canada is that there is a tremendous capital investment in these companies. Like many of our other Canadian industries they have been established and have grown up with the idea that there was more or less an unlimited market, and their capitilization in the aggregate is out of line with the actual requirements of the country in which we live.
Then of course we found, too, that the price of agricultural implements tended to be set by any company which had a virtual monopoly of certain lines of machinery. We found in our investigation that one company, the International Harvester Company, controlled some sixty per cent of the agricultural implement business in Canada; and although that company denied-and I believed the president when he made that denial-that there was any
5X952-87
collusion between the several companies with regard to price fixing, nevertheless I think that practically all the members of the committee were of the opinion that the smaller companies set their prices after they had seen the prices set by the larger implement company. Therefore, in effect, the International Harvester Company did set prices in most lines of machinery for the entire industry.
To those who defend the tariff I would say again that on the prairies, where most of this very high priced machinery has to be used-not is used, but has to be used- the farmer sells his product on the unprotected markets of the world. Consequently, if we are going to give industries and organizations from which he has to buy, protection in this market, obviously we shall have to consider those proposals that have been called in this house "compensating adjustments" of various kinds. If we are going to guarantee to the industrialists a price for their products, then we shall also have to guarantee to the producer minimum prices for the products which he produces.
I confess that in this house there seems not very much likelihood of substantial tariff reductions, because after a period, extending into years, during which the Liberal party have had every opportunity to make those reductions to which they are pledged, and listening to the debates in the house, watching the budgets that have come down, noticing-as I said yesterday-actual increase in the tariff on one necessity of life, furniture, and high duties on other necessities of life, I do not see very much hope from this government in the direction of really lower tariffs.
The hon. member for Renfrew South (Mr. McCann) spoke of the competition given C_ local manufacturers from cream separators imported from Sweden. He attributed Swedish ability to export and lay down cream separators in Canada at a much lower price than that at which they could have been manufactured here to the fact that Sweden has a lower standard of living than we have. I do not know where he got the information regarding the average wage of the Swedish worker which he placed at 19J cents an hour, but I do say this, that the International Labour Office at Geneva and observers generally throughout Europe make the statement that the Swedish worker today is the best housed, the best clothed, the best looked after, and in many respects the best-off worker in any European country. Consequently, how can it be said that it is the low standard of life in Sweden which accounts for lower costs of production there

1370	COMMONS
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is more than I can understand. Long hours are not in effect there either; the workers are well organized, and the government of Sweden has the most advanced social legislation of any of the European countries.
The hon. member for Renfrew South also said that the reason for the increase in the price of separators laid down in New Zealand in recent years over preceding years was the fact that the Swedish manufacturers had eliminated competition there. I do not know to what extent that is true; but I would draw this to his attention, that in the past few years one factor at least which must have operated was that the New Zealand pound has been greatly depreciated, which means that it would buy less in the markets of the world. Consequently the tendency would be to increase the price as stated in New Zealand pounds; for if four New Zealand pounds of seven or eight years ago have the purchasing power of only five pounds at the present time, it is obvious that a foreign nation axporting to New Zealand will have to increase the price to at least that extent. I would draw that to the attention of the house when we hear of the increased price of cream separators in New Zealand.
As I said before, previous speakers have covered the ground which I intended to cover, and therefore I do not propose to repeat what they have said, because that is wearisome to the house and to anyone discussing the matter. I would simply say again to the government: There is the report on the table; there are the recommendations; the government has an overwhelming majority, a majority which enables it to fulfil every pledge that it has ever made, and one of the definite pledges which the government made through the party which elected it and which formulated the Liberal platform upon which it appealed to the country, was that farm implements would be admitted into this country free of all customs duties. And I say to the government, What are you going to do about this?


Mr. T. A. THOMPSON (Lanark):: I should like to make a few observations upon the matter under discussion. I was not a member of that committee and was not conversant with their findings, and I have not had time to study their report, but I have listened attentively to the addresses which have been delivered to-day, and I was amused to hear this afternoon the hon. member for Brantford City (Mr. Macdonald) and the hon. member for Renfrew South (Mr. McCann) making speeches in this house that might well have been made from the Conservative benches.
Mr. MACDONALD 'Brantford City): Never.
(Mr. Coldwell.]


Thomas Alfred Thompson: It might not be a bad idea to invite them to come across here; we have a few empty seats, and I can assure them that they would be welcome. But it may be better to leave them where they are. A little leaven leavens the whole lump, and no doubt they would be able to do better work where they are than they would do over here.


An hon. MEMBER:: Don't rub it in.


Thomas Alfred Thompson: The hon. member for Kamouraska (Mr. Bouchard), speaking this afternoon, made the statement that between 1925 and 1929, when the Liberal government was in power and there were low tariffs, more people were employed in agricultural implement factories than from 1929 to 1932, at a time when the tariff had been increased by the late government. Everyone knows that comparison is most unfair. From 1924 to 1929 were four of the most prosperous years that Canada has ever known. The country had abundant crops; farmers had the purchasing power and were able to buy machinery, and that is why the people were kept at work. In the years between 1929 and 1932 Canada, in common with other countries, was going through one of the worst depressions the world has ever known. There were no crops; farmers had no purchasing power, and the machine companies could not manufacture the machinery because they could not sell it. The tariff played no part in those conditions.
We have been told in the course of this debate that 32 per cent of the agricultural implements sold in Canada are manufactured here, and that 68 per cent of them have been imported into this country. That means that we are sending 68 per cent of our money into a foreign country to pay foreign labourers and to build up foreign institutions instead of having these machines manufactured at home.
There seems to be a common impression among hon. members opposite that high tariffs mean high prices to the consumer. The very opposite is the fact; high tariffs have always meant cheaper goods to the consumer. Take, for instance, farm implements. The former government had a tariff of 25 per cent and along with that an agreement with the companies that if they raised the price to the farmer, that tariff would be reduced. This government came in and cut that tariff down to 7^ per cent, which nullified the agreement made by the former government, and up went the price of farm machinery. Nothing else could be expected, for this reason, that if United States manufacturers are allowed to come in and take 68 per cent of the business of Canada, with the small turnover that our own manufacturers have, the



IS, 1938

[Stage Direction]
Farm Implements Committee Report
manufacturers here must necessarily obtain a larger profit or they cannot live. Therefore the lowering of the tariff has cost and will cost our farmers some millions of dollars. History is only repeating itself. We all remember, at any rate I can remember when binder twine, barbed wire and coal oil were put on the free list. What happened? They just doubled in price, and putting these things on the free list has cost the farmers of Canada millions of dollars in the extra money that they have been obliged to pay for barbed wire, coal oil and binder twine.
I have often wondered why our western representatives come into this house and talk the way they do. I have been here for a number of years and I find that year after year they rise in their places and denounce the tariff. They cry for free trade. They would kill the industries of eastern Canada, the industries of Ontario and Quebec; they would put them out of business, and by so doing they would be putting their own customers out of business.
Robert Emmett Finn: What about the maritimes?


Thomas Alfred Thompson: The maritimes are all
right. As I say, these hon. gentlemen would destroy their own customers; and yet some of them will rise in their places here and ask for a few million dollars to buy seed wheat, knowing perfectly well that these very industries in Ontario and Quebec will be called upon to meet the cost, because these two provinces pay between 75 and 80 per cent of the taxes of the entire dominion. Yes; they would bite the hand that feeds them. That is exactly what they have been doing for years. I am willing to help the western farmers, and I think we do help and are only too glad to help them when the grasshoppers eat their crops or when the frost blights them or the drought burns them out. Whenever the western farmers suffer these calamities we come to their assistance. But there is a limit to what we can be expected to do when these very men come here and seek to kill the industries of the country upon which our eastern farmers depend; for let me tell the house that it is the men and women engaged in the industrial' life of the country who make the home, market for the farmer.


Joseph Needham: Did the increase in the tariff on furniture result in a decrease in price last spring?


David Spence: We are talking about farm implements.


Thomas Alfred Thompson: The importations of
furniture have increased and the price has
also increased. It is higher to-day than it ever was. Let me point out what has happened in connection with farm implements. In 1934 there was 82,850,000 worth of farm implements imported into Canada and in 1936 with the duty lowered the amount was $8,811,000.


William Ross Macdonald: Were they not practically all tractors?


Thomas Alfred Thompson: No, they were not. In 1937 Canadian farmers sent $16,275,000 for farm implements to fill the pay envelopes of a foreign country and to build up foreign institutions. Then we send men to Washington to get down on their knees and beg these people to allow us to send over some food to them. Our own people should have been manufacturing these implements in Canada and then they would have used our own farm products without hindrance. If we were manufacturing not only farm implements but textiles, also sufficient to supply our own people, there would not be an idle man or woman in the country to-day.


Mr. TUCKER:: Why were there idle men in 1931?


David Spence: The Liberal government was too long in power.


Thomas Alfred Thompson: The policies which my hon. friend enunciates in this house would beggar the country if they were ever put into operation; they would simply ruin us and make us a nation of beggars. In the Globe and Mail to-day I was struck with something I saw on the front page. The premier of Ontario is reported to have said that in October there were 160,000 people on relief in the province, and that in February, last month, there were 260,000. That will be found on the front page. What is the cause? It is the tariff tinkering of this government, which is putting our people out of work. I know one man who owns several factories. He owned one in a certain town in the Ottawa valley and he decided to tear it down. Why? He said that every time the government changed they were faced with the danger of being put out of business. He said he could employ two hundred people if he could be guaranteed the protection he had between 1930 and 1935, but he would not be tormented by the tinkering with the tariff. He simply decided to tear down his factory, level the ground and turn it into a park.
Our people to-day are being put out of business; people are being forced into the relief lines because our industries are not given the protection they should get. Do you
1372	COMMONS
Farm Implements Committee Report
expect the people of Canada to come down to the standard of living that obtains in these foreign countries from which competition comes? We are proud that Canadian workers can live comfortably and bring up their families and educate them as good Canadians and British subjects, and we do not want to see our standard of living lowered to the level that we see in those countries which are attempting to dump their goods here.


Walter Adam Tucker: What about the United States?


Thomas Alfred Thompson: Who is shouting now? Oh, it is some more of the economists. It appeared to me that the hon. member for Renfrew South placed this matter in a very fair light. He said that if we permitted these companies to go out of business, we would pay a great deal more for our products when they were controlled by a foreign country. As I said a moment ago, we had an example of that in connection with binder twine and barbed wire. What about our binder twine to-day? These United States manufacturers sit down in Chicago and set the price that will be charged in Canada for binder twine. We have allowed our binder twine to get into the hands of a foreign country, and we have been paying through the nose for it. In 1896, when the duty was taken off, we had twenty-five small factories manufacturing binder twine in this country. They were the nucleus of a big business that we might have had, but they were crushed out by the mass production of the United States. Then, when our people were out of business, the United States concerns had us where they wanted us, and to-day they charge what they wish.


Walter Adam Tucker: What about the-


Thomas Alfred Thompson: My hon. friend over here has taken up a great deal of the time of the house, and whenever he makes a speech he asks for a little extra time. I do not take up very much time, and I try to talk reasonably and sensibly when I am addressing the house. I have been obliged to listen to a great deal of bunk, and I have listened without interfering with the hon. member; I have let him go on with it.
Let me say here that we are getting off on the wrong foot in this country when we bring about any differences between capital and labour. They are not enemies; they are partners in the development of this dominion, and you could not place upon the statute books any law that would reflect upon one that would not work back to the other. We must stand or fall together in this country;

we must work together for its development. Industry looks to the farmer for a market, and the farmer produces the food for industry. Each is dependent upon the other, and we must cease flying at each other's throats. I am confident that if we were manufacturing in Canada the goods that we consume in this country, we would give employment to every man and woman here, and to a great many more men and women who would be very pleased to make this the land of their adoption. We have listened long enough to this cry of free trade, and I think brighter days are coming. When two men, elected as Liberals, such as the hon. member for Brantford City and the hon. member for Renfrew South rise in their places and make such speeches as we have heard to-day, the future does not look so dark.


David Spence: Mr. Speaker, at five-thirty this afternoon I was on my feet, and I thought I had a fairly good speech to deliver. Since then, however, I am afraid I have had to scrap most of it, because it has been said by other speakers. Consequently I shall have to satisfy myself by making a few observations. When one follows the hon, member for Lanark (Mr. Thompson) on our side of the house, there is not much left for one to say, because he covers the ground so thoroughly, and I wish to congratulate him upon his splendid address.
I do not agree with the hon. member for Selkirk (Mr. Thorson) when he advocates bringing cream separators into Canada from foreign countries free of duty. He is always good at discussing academic questions, which I do not fully understand; but after all, with all the knowledge he has, he does not seem to appeal to me as a good Canadian, and I do not mind saying so. He is always advocating something that is detrimental to the working people of this country, such as he has suggested to-night.
I wish to congratulate the hon. member for Brantford City (Mr. Macdonald) who made a splendid address, in regard to which his country and his own riding should be tickled to death. It was well delivered, and what he said was absolutely true and to the point. That would have been so regardless of whether it was delivere'd by a Liberal or a Conservative.


Miss MACPHAIL:: It does not matter,' really.


David Spence: The hon. member for Renfrew South (Mr. McCann) did the same thing, and I say he deserves credit for giving us full information as to the difference between wages paid in Scandinavian countries

Farm. Implements Committee Report
and those paid in Canada. I was proud of him to-pight as he stood in his place and delivered an address equal to any I have heard delivered in this house by any Liberal during the seventeen years I have been here. It is not often that the Liberals talk really good common sense, when it comes down to business. They are always opposed to something that will build up the nation. I do not know where they get their ideas.
With my hon. friend the member for Rose-town-Biggar (Mr. Coldwell) I cannot agree at all. He seems to be out of touch with things. Instead of something sane that a government could adopt, which one would expect from the brilliant chap that he is, we had a stupid recommendation to-night. Everybody knows this country cannot live without protection, and those who do not know it might as well get it into their heads. I see that gradually the light is beginning to dawn. It will seep in further and further until after a while you will get to -the point where you will do something for your country. I hope it will not be too long delayed.
I happened to be on the committee that investigated the prices of farm implements in 1936, but fortunately for the committee, or fortunately for myself, or something, they got rid of me in 1937. A smaller special committee was appointed, and I was laid off. I listened to a great deal of evidence given there that I thought was of very little importance. Some of it was ratheT amusing. I think some hon. members on that committee suggested that the prices of farm implements were entirely too high, and that the people in the west were getting so little for their grain that they could not afford to buy implements at all. They even suggested that these farmers should be allowed to pay just what they thought they could pay, and that the balance should be absorbed by the government or by some organization appointed by the government. That was the kind of stuff one heard on that committee; that was one of the arguments advanced there.


An hon. MEMBER:: Who argued that?


David Spence: I do not know. I never keep notes of what hon. members say in the house, so I cannot tell tales. But if you will go back to the records of that committee meeting you will find that two or three hon. members from the west made that suggestion. If there is anything more ridiculous than that, go back to the west and find it. I do not see how you can.
It is unfortunate there is so much time wasted. Hon. members cannot say that I
waste much of the time of the house-perhaps ten minutes a week. Some hon. members start in at three o'clock in the afternoon and do not stop until eleven o'clock at night. Half a dozen of them talk all day, and nobody else gets a word in. Do not forget that. But if I am going to pound a little common sense into some hon. members I must take some time to do it.
We are losing a great deal of time in discussing things of the past. I say we are here to legislate for the future. Let us forget the past. Let us start in to do something for the people here in Canada at the present time. Let us try to get this country back to normal-which we are not doing. We have wasted a lot of time in discussing economic questions and radical resolutions. I think all hon. members and particularly those members to my left, will admit that. A great deal of time has been spent in discussing questions which, in the end, amount to nothing. We have now wasted about two months of the session, and have done nothing. The members of the senate have been going back and forth to their homes. They adjourn for a month; then they come back and adjourn for a week, and still, with the exception of a couple of bills which passed this house, they have had nothing to do. Is that not a waste of time?
Let me tell hon. members that if the people in our ridings could see the way we act in the house, they would ask for a dissolution of the house at once, and advocate the formation of a committee of one hundred, or something of the kind, to run the country. Sometimes I would like to see that myself, because it is a waste of time to have the house sitting with sometimes not more than twenty-five members who are taking any interest in the proceedings. What interest is taken by the members who are supposed to occupy these two lines of benches? You may look anywhere in the house-everywhere. They might as well be home, and not be in Ottawa at all.


An hon. MEMBER:: Why don't they go?


David Spence: They have lots of places
to go.


An hon. MEMBER:: They are working
in their rooms.


David Spence: Are they? They are playing bridge in some comer! Such intolerable ignorance of business affairs is displayed by some hon. members, something which is astonishing to one who from boyhood has been trained in the business world. It is astonishing to listen to people in the house
1374	COMMONS
Farm Implements Committee Report
who have never sold even a box of matches, or never made a trade in their lives, tell us how to run the country. It is amazing! It is useless discussion.
There can be no doubt that prices of commodities rise and fall. I shall cover this point later on when I discuss the investigation into farm implements. I would repeat that supply and demand will always regulate prices, regardless of any attempts made by governments to regulate people's business and to regulate prices. You cannot get away from the old law of supply and demand, so you might as well make up your minds that you will have to get back to normalcy before the country can make headway.
Many members of the house should still be in kindergarten, so far as any knowledge of business is concerned.


Robert Emmett Finn: You should be the teacher.


David Spence: Calamity howling is the principal act in the House of Commons. I came down on the train from Toronto yesterday with a gentleman from Saskatoon, a brilliant chap who said to me that the people in the House of Commons from the western provinces are not representing the viewpoint of people in the west. He said that he disapproves the tactics used by those members who picture the sad scenes of people in distressed circumstances, and all that sort of thing. He said it was not advertising for Canada or for the prairie provinces.


An hon. MEMBER:: But they are true.


David Spence: They are not true at all; he says they are not true. There is in the house no more brilliant man than the man with whom I was duscussing the subject yesterday, and he was a Liberal from Saskatoon. You may pick out who he was. He says that Saskatoon is paying its debts and pulling itself out of the hole. You can hear nothing in the House of Commons but calamity howling, all the time. I think that man was a Liberal, although I did not ask him. It makes no difference to me what a man's politics may be. I like to discuss business, whether a man be a Liberal or a Conservative.


An hon. MEMBER:: He was not brilliant, then.


David Spence: He was brilliant, too. I would admit that certain Liberals are brilliant; there is no doubt about that.
When the investigation began into the price of farm implements, it was shown that between 1930 and 1936 commodity prices had increased. It was to be expected that to some extent farm implement prices should

increase. The old stocks on hand were gone, and new stock had to be bought. Jf there were increased costs we could not expect the manufacturers to sell at a loss. One hon. member has suggested that the government should absorb the difference between what the farmer could pay and what the manufacturer should get. Did you ever hear such talk as that in your life?


Walter Adam Tucker: We have heard it from Conservatives for a long time. Protection means the same thing.


David Spence: 
Mr. L. P. A. ROBICHAUD (Kent, NS.):: 
Mr. STEWART:: Is the hon. gentleman aware that subsequently to that deputation very important changes were made in the budget and concessions granted to these manufacturers ?


Louis-Prudent-Alexandre Robichaud: Concessions were made by reducing the tariff on their raw materials; I have no objection to that. Why were they so successful in the two years following the reduction? It is easy to see why. It was for the simple reason that prices went down and people bought automobiles more freely, and although the manufacturers had to accept a smaller profit on each automobile, their aggregate profits at the end of the year showed a large increase. After all, what is the secret of success in any line of merchandising? Is it to sell one article a day and make fifty cents profit on the sale, or is it to sell ten articles a day and make ten cents profit on each article? The more goods you sell the more profit you make and the more service you can give.
Here may I quote, with approval, the statement made by the hon. member for Huron North (Mr. Deachman): "There has never in Canadian history been a tariff reduction which did not benefit Canadian manufacturers, but they fear it." Ah! Fear! Fear! That is it. Fear, which at one time was no doubt the natural and normal reaction of man in his primitive state and was intended as a necessary shield for his self-preservation, has to-day become a heavy and burdensome armour, impeding him in his upward march towards a higher civilization. That fear which in those days was a physical, bodily fear, and quite normal, has to-day become simply an atavic, mental and moral fear-the curse of humanity, and man's greatest enemy.
If I were-I was going to say if I were king, but I will put it in a more modem way -if I were the dictator of Canada, do you

Farm Implements Committee Report
know what I would do, Mr. Speaker? I would issue a decree to take effect to-morrow morning, establishing absolute free trade in this country.


Some hon. MEMBERS:: Oh.


Louis-Prudent-Alexandre Robichaud: It may surprise some hon. members, since I am not a resident of the west or a farmer, when I proclaim myself a one-hundred per cent unadulterated free trader. But someone will say: "If you do that, you will flood the country with foreign goods." I say then, and in the spirit in which the apostle of the gentiles uttered his famous exclamation "O Felix Culpa," Happy flood, blessed flood! The flood would continue only so long as we were able to pay for the goods, and so long as we were able to pay for them we would be prosperous indeed.
If, however, my decree is going to disrupt confederation, and if we are everlastingly to continue bonusing and subsidizing industry at the expense and to the detriment of the primary producers and of the consumers of Canada generally, then I say, Mr. Speaker, let us have an honest-to-goodness, open and above board system of bonusing. Let us, as I said, abolish tariffs, and then at the end of a year, or semi-annually, let us bonus the legitimate natural industries of the country which prove themselves unable to carry on under a system of free trade. We have been bonusing wheat in the past, and bonusing to some slight extent the fishermen of the maritime provinces; but we know exactly to a cent what these bonuses have cost us, and I am sorry to say that on many occasions we have begrudged granting these bonuses to the poor farmer and the poor fisherman. But we do not know, and we cannot tell, how many millions or hundreds of millions of dollars we have been giving in bonuses to industry in Canada by means of the tariff. I think we should take the means to know, and the only way to know is to bonus them directly. Let us have free trade; let them compete with the goods coming from other nations, and let us bonus those industries that cannot carry on under free trade. But many of them are artificial industries which should never have been established in this country. They are economically unsound, and under free trade they would be given a chance to disappear as, to my mind, they should disappear.
As I have said before in the house-and I am convinced of it-the economic situation of this world will never be righted before we have free trade throughout the world and before the nations of the world make up their minds to manufacture the commodities for which they have the raw materials. Does it
stand to reason that nations should spend millions and billions of dollars in removing natural obstacles from the channels of trade, in building railroads, and digging canals, and then the moment after erect artificial obstacles to trade by way of tariff walls? No, Mr. Speaker, it does not stand to reason. The thing is unnatural, and for that reason it will have to disappear from the face of the earth. And so it is with great pleasure that I support the motion of the hon. member for Lake, Centre.


Mr. HARRY LEADER (Portage la Prairie):: Mr. Speaker, at the outset I should like to refer to some of the remarks made by hon. members who have spoken to-night.
The hon. member for Lanark (Mr. Thompson) claimed that 68 per cent of our machinery was imported, and he deplored that fact. We might deplore anything of that nature under certain conditions; but in a country like Canada we must import if we are going to export, and it stands to reason that if we are importing so many of these implements or any other products and are paying out so many millions of dollars for them, that only enables us to sell millions of dollars worth of our own products abroad. I know the hon. member for Lanark pretty well, and respect him very much. I remember he came into my constituency in 1925 and was instrumental in defeating me at that time. I have no hard feelings against him for that. But I wish the Conservative party would send him out at the next election and let him make a speech like he made to-night.


Thomas Alfred Thompson: I will do it.


Harry Leader: You are invited, and I hope they will do that.


Mr. MacNICOL:: Does the hon. member for Portage la Prairie (Mr. Leader) not want to come back here again?


Harry Leader: I am sorry that the hon. member found it necessary to use the words, "The western people would bite the hand that feeds them." He followed that up, it seemed to me, in an apologetic way by saying that we should cease flying at each other's throats


Thomas Alfred Thompson: Certainly.


Harry Leader: 
Alexander McKay Edwards: How do the sales compare in those years?


Harry Leader: The sales had a great deal to do with their profit, because, as I said at the beginning, we were partners in a great business, and when one partner was a little bit down, not as flush as usual, the other suffered also.


Alexander McKay Edwards: But how were the sales
in those various years? Was production up or down?


Harry Leader: The sales were not so good after 1930. Possibly that was because the tariff had been increased and there may have been other causes; personally I believe the depression had a great deal to do with the matter, because there was not the purchasing power.


Alexander McKay Edwards: A great deal would
depend on the number of units built in the year.


Harry Leader: That is so. It would be interesting to the house to have a comparison of the farmers' position during those years. I have here a table prepared at my request by the bureau of statistics. I have selected eight farm implements which the
ordinary farmer must have if he is to make any pretence of farming, and in the same table I give the prices of steers. The table shows what the farmer had to pay in hundredweight of steers for these various implements. These are the prices of steers at Winnipeg. If I may put the whole statement on Hansard I shall net go into the figures extensively tonight, but shall cite simply one or two. In 1913 we received 6-63 cents per 100 pounds for "good" steers, live weight, at the Winnipeg stock yards. And remember, over fifty per cent of the steers are not graded "good." However, to give the manufacturers the benefit of the doubt I am quoting these figures. In that year, 1913, we could buy a walking plough for 300 pounds of steers. In 1920, although the price of walking ploughs had gone up, we could still buy a walking plough for 300 pounds of steers. In 1926 the price of steers had gone down and we could buy a walking plough for 500 pounds of steers. In 1932, with a still lower price for steers, we had to give 700 pounds in exchange for a walking plough. In 1913 we gave 2,600 pounds of steers for a binder; in 1920, 2,300 pounds; in 1926, 4,800 pounds; in 1932, 6,100 pounds; and in 1936, 6,100 pounds.
The table is as follows:
Dominion Bureau of Statistics-Internal Trade Branch
Annual prices of steers at Winnipeg and the number of hundredweight required in exchange for specified farm implements, 1913, 1920, 1926, 1932, 1936
Steers good
over 1,050 pounds per cwt. at
pounds of steers live weight required in exchange for * Double
ay	Disc Gang
disc
Winnipeg	plow	drill	rake	Binder Mower harrow cwt.	plow	Wagon	Total cwt.1913.. .	. .. 6.63	3	22	5	26	9	7	13	16	1011920.. .	. .. 11.86	3	21	5	23	8	7	14	15	961926.. .	. .. 5.99	5	42	10	48	17	13	26	30	1911932.. .	. .. 4.59	7	54	13	61	21	16	32	39	2431936.. .	. .. 4.66	6	54	13	61	22	16	30	36	238


[Stage Direction]
At eleven o'clock the house adjourned,
without question put, pursuant to standing order.
[Stage Direction]
Questions
Wednesday, March 16, 1938