REPORTS AND PAPERS

[Stage Direction]
Additional correspondence in the Department of Trade and Commerce in respect of ocean rates between Canada and Great Britain; also interim report of Canadian marine insurance rates by the Imperial Shipping committee; also interim report on rates of freight on Canadian flour in the North Atlantic by the Imperial Shipping committee; also statement of Imperial Shipping committee on ocean rates on flour and wheat.-Hon. Mr. Low.
Inquiries for Returns

Hon. JAMES MURDOCK (Minister of Labour):: I beg to lay on the table of the
House, for the information of hon. members, copy of a publication issued by the Department of Labour concerning judicial proceedings respecting constitutional validity of the Industrial Disputes Investigation Act, 1907, and amendments of 1910, 1918 and 1920. This book contains a brief history of the circumstances which resulted in the judicial proceedings, together with the texts of the judgments of the Ontario courts and the Judicial Committee of the Privy Council, the cases for the various parties, the argument before the judicial committee and other co-related data.



INQUIRIES FOR RETURNS


[Stage Direction]
On the Orders of the Day:
Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: Press notices of government announcements have given the House to understand that a treaty has been made with Australia, and also that this treaty has been ratified by the Australian parliament. May I ask if there is any reason why it has not been presented to this House for ratification, and if so what the reason is, and when we may expect it?


Hon. J. A. ROBB (Acting Minister of Finance):: Further negotiations with Australia are in progress.


Arthur Meighen: Do I understand that no treaty has been effected?


James Alexander Robb: After the government of
Australia had passed their legislation they passed an order in council changing the percentage that should apply to goods that would come under their tariff. I think my hon. friend understands that under our tariff, if twenty-five per cent of the goods are manufactured within the British Empire they are admitted. That was changed by Australia to seventy-five per cent. So, we are negotiating with them to have this more clearly defined.


Arthur Meighen: Is there any reason why the Acting Minister of Finance should not lay on the table, and perhaps distribute, the treaty as already accepted? It may be subject to these negotiations, but the treaty has now a definite form. I see no reason why we should not have it.


James Alexander Robb: I am not sure that there
are any good objections. I will let my hon. friend know later. fMr. Mackenzie King.]



REMISSIONS OF TAXATION

[Stage Direction]
On the Orders of the Day:
Sir HENRY DRAYTON:: When may we
hope for the return called for by section 92 of the Audit Act which directs that returns have to be made of all remissions of taxation and the like, within the first fifteen days after the House opens. I have been unable to find any such return.


Hon. A. B. COPP (Secretary of State):: These returns were made a week or two ago.


Henry Lumley Drayton: I made inquiry
some days ago and my instructions are to the contrary. I communicated with one of the departments which had the matter in charge and understood that returns would be made in a few days.


Arthur Bliss Copp: It was brought down a week
or two ago.



ROYAL COMMISSIONS

Hon. R. J. MANION (Fort William and Rainy River):: A return was ordered to be
brought down a week or two ago in regard to the number of royal commissions which have been appointed by the government. I do not know which department it would come under. I have not seen the return yet.


Arthur Bliss Copp: It
was changed to an order for return. Afterwards another question was asked, I understand, by my hon. friend from Winnipeg, and that was changed to an order for return. The whole matter will be brought down shortly.



ORDERS OF SESSION 1924

[Stage Direction]
On the Orders of the Day:
Arthur Meighen: There are not only a
large number of orders passed early this session which have not been brought down, but there is an overhang from last session. The government have not managed yet to comply with these orders. I have a list of at least half a dozen moved by hon. gentlemen on this side of the House, and I doubt not that there were some moved by hon. members in other portions of the House. One would think that a year would be sufficient time to comply with these orders, especially as some of them are very simple.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: The delay in that regard
must have been unintentional. It was an oversight. I will seek to have these returns brought down.

Questions



BANK ACT AMENDMENTS

[Stage Direction]
On the Orders of the Day:
Mr. ROBERT FORKE (Brandon):: I wish to ask the Prime Minister (Mr. Mackenzie King) or the Minister of Justice (Mr. Lapointe), whether the government proposes to introduce legislation embodying the amendments of the act proposed by the standing committee on Banking and Commerce at the close of last session; and if so, when will the bill be brought down?


Hon. ERNEST LAPOINTE (Minister of Justice):: The matter is under consideration, and I think it is the intention of the government to deal with the matter as suggested by the committee.



RURAL CREDITS

[Stage Direction]
On the Orders of the Day:
Mr. H. E. SPENCER (Battle River):: Will the government tell us when it is their intention to bring down legislation with regard to rural credits?


James Alexander Robb: I have already informed the House that Dr. Tory was expected in Ottawa this week.



PRIVATE BILLS


[Stage Direction]
Mr. E. R. E. CHEVRIER (Ottawa) moved the second reading of Bill No. 20, respecting a patent owned by the Concrete Surfacing Machinery Company.
He said: This bill is for the purpose of reviving a patent. I understand that under the provisions of chapter 44, section 4 of the Patent Act of 1921, this patent was valid until the 10th day of January, 1922. I am also given to understand that the owners thereof failed to manufacture in Canada after January, 1922, and that they also failed to pay the second fee. I am further given to understand that under the provisions of the Patent Act as now constituted, application may be made to this parliament for the purpose of reviving this patent, and that application is now made.
Arthur Meighen: The hon. member has given two very valid reasons why the second reading should not pass. I think he should give us some reason why it should.


Mr. CHEVRIER:: As I understand it, in proposing the second reading of a bill this House does not usually go into all the reasons why the bill should be read the second time;
but that on the motion for second reading, the bill is referred to the committee to which that bill should go, there to be threshed out, and the committee decide whether the bill should be reported or not.
Motion agreed to on division and bill read the second time.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Hon. Mr. STEVENS:: 1.	Who prepared plans for No. 2 elevator, Vancouver, and what was the engineer's estimate of cost?
2.	Were tenders called for the erection of said elevator, and if so, in what manner?
3.	How many firms tendered, and what are the names of such firms or individuals?
4.	What was the amount of the lowest tender?
5.	At what figure was the contract awarded, and to whom?
6.	What is the total cost to date, based on engineer's approved certificates?
7.	How much has actually been paid to said contractor?
8.	Has contract been completed? If not, what still remains unfinished?


Hon. Mr. CARDIN:: 1.	(a) John S. Metcalf Co. Ltd.
(b)	Estimate of cost:
Superstructure	$1,336,292	00Substructure	
201,813	00Car unloading plant.. ..	277,616	00

2.	The Northern Construction Co. Ltd. and J. W. Stewart were asked to tender as they were already in possession of the ground on the construction of the Ballantyne pier.
3.	The Northern Construction Co. Ltd. and J. W. Stewart.
4.	Contract for substructure $190,000, for superstructure, contract was cost plus 10 per cent. Awarded to Northern Construction Co. Ltd. and J. W. Stewart.
5.	See answer to No. 4.
6.	$1,652,967.72.
7.	$1,623,561.45.
8.	The contract is completed.
Mr. M. G. WALKER


Mr. ARTHURS:: 1.	Does the name of one, M. G. Walker or Milton G. Walker, of Winnipeg, appear on the records of any department of the government, as having been at any time employed as a full or part time employee?
2.	If so, what were his duties, and what remuneration was paid him?
3.	Is he still in the employ of the government either as a temporary or permanent official?
4.	Tf so, what are his duties and what salary does he receive?
Questions


Hon. Mr. COPP:: 1.	No.
2.	3 and 4 answered by No. 1.


DEPUTY MINISTERS
Mr. DOUCET:: What are the names and salaries of deputy ministers, and of those, who though not deputy ministers, held the same rank on December 31, 1921?


Arthur Bliss Copp: Department of Agriculture: Dr. J. H. Gris-dale, Deputy Minister, $5,500.
Department of Public Archives: Dr. A. G. Doughty, Deputy Minister, $6,000.
Auditor General's Office: Mr. E. D. Sutherland, Auditor General, $6,000.
Civil Service Commission: Hon. W. J. Roche, $7,000; Col. M. G. LaRochelle, $6,000; Mr. Clarence Jameson, $6,000.
Department of Customs and Excise: Mr. R. R. Farrow, Commissioner of Customs, $6,000.
Department of External Affairs: Sir Joseph Pope, Deputy Minister, $6,000.
Department of Finance: Mr. J. C. Saunders. Deputy Minister, $6,000.
Governor General's Secretary: Capt. O. H. C. Balfour, $8,000.
Department of Indian Affairs: Mr. Duncan C. Scott, Deputy Superintendent General, $6,000.
Department of Insurance: Mr. G. D. Finlay-son, Superintendent of Insurance, $6,000.
Department of the Interior: Mr. W. W. Cory,' Deputy Minister, $6,000.
Department of Justice: Mr. E. L. New-combe, C.M.G.,	K.C., Deputy Minister,
$10,000; Mr. E. R. Cameron, K.C., Rank of Deputy Minister, $6,000.
Department of Labour: Mr. F. A. Acland, Deputy Minister, $6,000.
Department of Marine and Fisheries, Mr. A. Johnston, Deputy Minister, $6,000.
Department of National Defence, Naval Service:	C. J. Desbarats, C.M.G., $6,000;
Militia Service: Major General Sir E. Fiset,

Department of Mines:	Dr. Charles Camsell, $6,000.	*
Royal Canadian Mounted Police: Mr. A. A. McLean, K.C., Financial Comptroller, $6,000.
Post Office Department: Mr. R. M. Coulter, Deputy Postmaster General, $6,000.
Privy Council: Mr. Rodolphe Boudreau, Clerk of the Privy Council, $6,000.
Department of Public Works:	Mr. J. B.
Hunter, Deputy Minister, $6,000.
Department of Public Printing and Stationery:	Mr. F. A. Acland, King's Printer and
fMr. Arthurs.]
Controller of Stationery, without remuneration.
Department of Railways and Canals: Major G. A. Bell, Deputy Minister, $6,000.
Department of the Secretary of State: Mr. Thomas Mulvey, Deputy Minister, $6,000.
Department of Trade and Commerce, Mr. F. C. T. O'Hara, Deputy Minister, $6,000; Mr. Geo. F. OTIalloran, Commissioner of Patents, $6,000.
Department of Immigration and Colonization:	Mr. W. J. Black, Deputy Minister,

Soldiers' Civil Re-establishment: Mr. N. F. Parkinson, M.A., Sc., Deputy Minister, $6,000; Department of Health: Dr. J. A. Amyot, Deputy Minister, $6,000.
Parliamentary Librarians:	Hon. Martin
Burrell, $6,000; Mr. J. de L. Tache, $6,000.
Clerk of the Senate: Mr. A. E. Blount, C.M.G., 86,000.
Clerk of the House of Commons: Mr. W.
B.	Northrup, K.C., $6,000.
Chief Electoral Officer: Mr. Oliver M. Biggar, $12,000.
Parliamentary Counsel: Mr. F. H. Gisborne, I.S.O., K.C., $6,000.


PROPOSED VANCOUVER ISOLATION HOSPITAL
Hon. Mr. STEVENS:: 1.	Has the government received from the city council, Vancouver, a request for a grant towards the construction of an isolation hospitail?
2.	Is the government aware of the large sum collected, annually, for sick mariners' dues at the port of Vancouver, resulting in a very substantial surplus each year above the cost of caring for sick mariners?
3.	Is the government aware that a substantial number of infectious cases are due to sea-borne traffic entering the port of Vancouver?
4.	In view of this substantial surplus, is it the intention of the government to accede to the request of the city council for substantial grant to the cost of erection of isolation hospital?


Hon. Mr. BELAND:: 1.	Yes.
2.	There is no substantial difference between the sum collected and the expenditure incurred in connection with the service.
3.	No.
4.	Answered by No. 2.


BOARD OF GRAIN COMMISSIONERS
Hon. Mr. STEVENS:: 1.	How many employees were on the staff of the Board of Grain Commissioners, and located at Vancouver, during each month for the crop year ending August 31, 1924: (a) weighmaster's department; (b) inspection department?
2.	What was the total amount of grain during crop year ending August 31, 1924: (a) inspected inwards at Vancouver; (b) inspected outwards at Vancouver; (c) weighed inwards; (d) weighed outwards?
3.	What is the total revenue derived from:	(a)
weighing department of the Board of Grain Commis-

Questions
eioners at Vancouver for the crop season ending August 31, 1924; (b) inspection department?


Hon. Mr. LOW:: 1.	(a) 1923:	September, 6; October, 7;
November, 9; December, 10.
1924: January, 11; February, 11; March, 11; April, 12; May, 12; June, 12; July, 12; August, 12.
(b) 1923: September, 5; October, 6; November, 6; December, 10.
1924: January, 11; February, 16; March, 17; April, 18; May, 17; June, 17; July, 15; August, 17.
2.	(a) 53,538,521 bushels.
(b)	53,415,036 bushels.
(c)	53,538,521 bushels.
(d)	53,415,036 bushels.
3.	(a) $95,291.
(b) $55,233.


HEALTH APPROPRIATIONS
Mr. CHURCH:: What has been the vote by the parliament of Canada to the provinces for health purposes during the past six years?


Hon. Mr. BELAND:: This question refers
to a vote by the Parliament of Canada to, the provinces for health purposes. A number of votes are passed every year for different associations, which have as their object the furtherance of health conditions in Canada. These are, for instance, the Canadian Association for Prevention of Tuberculosis, Child Welfare Association, Mental Hygiene Council, and some others. I presume, however, the hon. gentleman does not refer to these particular branches. The direct vote by parliament for health purposes during the past six years has been $1,050,000, exclusive of grants to the associations to which I have referred.


OYSTER AREAS
Mr. MacLEAN (Prince):: 1.	Have any negotiations been carried on between Ihe local government of Prmce Edward Island and the Marine and Fisheries Department of the Dominion povernment for the transfer of the oyster areas ot Prince Edward Island back to the control of the Dominion government ?
2.	If so, what is the nature of those negotiations and how far have they proceeded?
3.	Is it the intention of the Dominion government to endeavour to develop and restock these areas if control is given to the Dominion government?
4.	Have Nova Scotia and New Brunswick consented to hand over their areas to the Dominion government and has any provision been made for development in those provinces ?


Hon. Mr. CARDIN:: 1.	Yes.
2.	The Minister of Marine and Fisheries informed the provincial premier by correspondence that if the divided jurisdiction were removed by placing the administrative control in the hands of his department, such measures as were deemed necessary by it for cleaning up public beds and building up an industry in private oyster culture would be taken. The proposal has not yet been accepted by the provincial government.
3.	Answered by No. 2.
4.	The Premiers of Nova Scotia and New Brunswick have indicated their willingness to place the administration of the suitable areas in their respective provinces in the hands of the Department of Marine and' Fisheries provided mutually satisfactory arrangements for the development of the industry are concluded.


ROYAL GRAIN INQUIRY COMMISSION
Hon. Mr. MANION:: 1.	What was the personnel of the Royal Grain Inquiry Commission?
2.	Who were the counsel of the said commission?
3.	What were the fees paid to each of the same?
4.	What was the total cost of the commission?


Hon. Mr. LOW:: 1. Hon. W. F. Turgeon, Chairman; Prof.
W. J. Rutherford, B.S.A.,	Prof. D.	A. Me-
Gibbon, Ph.D., Jas. G. Scott, Robert Deach-		
man, Secretary.		
2 and 3.		
Remuner-	Living	
ation	Allowance	Total$	$	$D'Arcy Scott,	Chief Counsel to Oct. 3rd,	1923 	
6,950 00 S. B. Woods,	1,350	8,300 00Senior Counsel from Oct. 13,	1923	
15,337 50 J. F. Fisher,	2,840	18,177 50Senior Counsel 7,025 00	11,330	18,335 00$29,312 50	15,520	44,832 504. Expended to Feb. 28,	1925.. 167,610 82	Accounts in hand,	pending	supplementary vote.	3,000 00$170,610 82


PULPWOOD EXPORTS
Mr. MAYBEE:: How many cords of pulpwcod have passed through the port of Cobourg, Ontario, during each of the years 1922-23-24-25?


Hon. Mr. BUREAU:: Exports "Pulpwood" through the port of
Cdbourg, Ontario, during the fiscal years
Questions

ended March 1022, 1923 and 1924, and for eleven months ended February 28, 1925.
Fiscal Year	Cords
1922		  49.798
1923		 64,604
1924		 68,674
April 1, 1924 to February 28, 1925, 81,163


CANADIAN NATIONAL RAILWAYS-COAL
Milton Edgar Maybee: How much coal have the National railways purchased from: (a) United States companies; (b) Canadian companies during each of the years 1922-23-24?
Hon. Mr.	GRAHAM:	
1922	1923	1924Net tons	Net tons	Net tons(a)	2,955,464	5,432,170	3,204,728(b)	2,546,735	3,231,897	2,136,311
The quantities of coal shown as having been purchased from United States companies include the following tonnage of coal taken from the Rail and River Coal Company's mines at Belaire, Ohio, which are owned by the Canadian National Railways: 1922, 793,311 tons; 1923, 1,397,991 tons; 1924, 1,266,253 tons. These figures also include approximately one million tons of United States coal purchased yearly from United States companies for use on our United States lines, such as, Grand Trunk Western, Duluth, Winnipeg and Pacific, Portland-Island Pond division, Rouses Point and Fort Covington.


TRANSPORT OF MAIL TO EUROPE
Mr. DENIS (St. Denis):: 1.	What is the total amount now paid by the Canadian government for the transport of mail to Europe?
2.	What are the names of the companies employed for the transport of said mail?


Hon. Mr. MURPHY:: 1 and 2. Fiscal year, 1923-24-
Canadian Pacific Steamships
Ltd	 $181,536 67
Robert Reford Company....	7,160 50
White Star Dominion Line..	34,144 75
Total	$222,841 92


DALHOUSIE POST OFFICE
Mr. JONES:: 1.	What was the nature of the repairs made on the Dalhousie post office. Restigouche county, New Brunswick?
2.	Was a specification submitted to contractors inviting tenders for said work?
3.	Who made the repairs?
4.	What was the cost?
IMr. Bureau.!


Hon. Mr. KING (Kootenay):: 1.	Masonry repairs and waterproofing; painting-exterior and interior-and whitening; repairs to plumbing and roof.
2.	Yes.
3.	Messrs. J. & D. A. Harquail Co. Ltd.
4.	$2,065.


CAMPBELLTON POST OFFICE
Mr. JONES:: 1.	Were tenders invited for repairs and improvements on CampbeMton post office, Restigouche county, New Brunswick?
2.	If so, how many tendered, what are their names and the amount of each tender?
3.	Who made the repairs?
4.	What was the nature of said repairs?
5.	What was the total cost?


Hon. Mr. KING (Kootenay):: 1.	Yes.
2.	One-Messrs. J. & D. A. Harquail Company, Limited, $1,012.50.
3.	Messrs. J. & D. A. Harquail Company, Limited.
4.	General repairs, including roof, plastering, joinery, tiling, plumbing, etc., also exterior and interior painting.
5.	Cost $1,012.50.


DARTMOUTH PIER
Mr. BLACK (Halifax):: 1.	From whom was the site for the Dartmouth, Nova Scotia, pier acquired?
2.	What was the total amount paid and to be paid for the site?
3.	Who is the contractor for the pier, what is the amount of contract, are there any extras on the work, and what is the total cost of the pier exclusive of the site ?
4.	Is the work of making approaches to the pier included in the foregoing? If not, what is the cost of constructing approaches?
5.	Who was the inspector of the work, what are his qualifications for the position, what pay was he allowed, and what is the total payable to him?
6.	Was there more than one inspector? If so, who are they?
7.	If any inspector was dispensed with, which one was discharged and why ?


Hon. Mr. KING (Kootenay):: 1.	Beazley Brothers.
2.	Paid in full, $6,802.
3.	(a) Halifax Dredging Company, Limited, and Standard Construction Company, Limited. (b) Approximately $135,659.64 based on approximate quantities, (c) No. (d) Final estimate, $139,063.06 increase due to increased quantities on unit prices basis.
4.	Yes.
5.	(a) Douglas D. McCulloch, O.A.S. (b) Civil engineer. (*' r>er working day. (d) $762.
6.	Yes, Geo. Young and Geo. Richards employed as assistant inspectors.

Questions
7.	Geo. Young and Geo. Richards were employed from July 2 to July 4 and July 9 to November 8, 1924, respectively, to check deliveries of material.


CANADIAN NATIONAL RAILWAYS-DEBT
Sir HENRY DRAYTON:: 1.	What additions were made to the funded and unfunded debt of the Canadian National Railways and affiliated companies during the calendar year 1924?
2.	What is the total amount required for interest on funded and unfunded debt of the Canadian National Railways and affiliated companies during the said year 1924?


Hon. Mr. GRAHAM:: 1. To the debt to the public.? 90,814,026 70
To the debt to the government (including interest). 28,085,159 35
Total	$118,899,186 05
2. On debt to the public.. . .$ 38,361,704 14 On debt to the government. 31,271,043 00

The interest on unfunded debt, consisting principally of interest on bank overdrafts, overcharge claims and other small interest payments for the year 1924 was $377,115.47.


Sir HENRY DRAYTON:: 1.	What additions were made to the funded and unfunded debt of the Canadian National Railways and affiliated companies, exclusive of the obligations of lines in the United States and of separately operated properties during the calendar year 1924?
2.	What is the total amount required for interest on funded and unfunded debt of the Canadian National Railways and affiliated companies, exclusive of the obligations of lines in the United States and of separately operated properties during the said year?


Hon. Mr. GRAHAM:: 1.
To the debt to the public.. $90,080,526 70 To the debt to the government, (including interest)	28,085,159	35Total	$118,165,686	05
2.
On	debt	to the public.. ..	$37,450,173	25On	debt	to the government	31,271,043	00Total	$68,730,216	25
The interest on unfunded debt, consisting
principally of interest on bank overdrafts, overcharge claims, and other small interest payments for the year 1924 was $347,265.10.


WEMBLEY EXPOSITION
Mr. DOUCET:: 1.	Who were the officers in charge of the Canadian exhibits at the Wembley Exposition in 1924?
2.	How many of these were able to speak the two official languages ?


Hon. Mr. ROBB:: 1.	Mr. A. W. Tolmie and Mr. J. 0. Turcotte.
2.	Both.


GOVERNMENT NEWSPAPER ADVERTISING
Mr. CHAPLIN:: 1.	In what newspapers in Canada has the advertisement "Canada is coming through" appeared?
2.	How much was paid to each newspaper.
3.	What is the amount of unpaid obligations in respect to this advertisement?
4.	Is it the intention to further continue the advertisement, and if so, for how long?


Hon. Mr. LOW:: 1, 2 and 3.
Amount unpaid
Manitoba Free Press	$ 369 60
Gazette Printing Company.. ..	258	72Can. Congress Publishing Company	
100	00Globe Printing Company	
488	00Saturday Night	
412	50MacLeans Magazine	
980	00Financial Post	
285	00
2,893 82
Nothing has been paid on account of this advertisement.
4.	No.


RURAL ROADS
Mr. DESAULNIERS:: 1.	How many rural roads were opened to traffic in 1923 and 1924, respectively?
2.	What was the total cost for the upkeep of said roads, by provinces?


Hon. Mr. GRAHAM:: 1.	The Department of Railways and Canals has no information except as to roads constructed or improved under the Canada Highways Act. In 1923, 2,768 miles of rural road were so constructed or improved, and in 1924, 1,936 miles.
2.	Maintenance is a purely provincial matter as to which the federal department has no record.


GRAND-MERE CUSTOM HOUSE
Mr. DESAULNIERS:: What was the revenue of the custom house, at Grand-Mere, for the years 1921, 1922, 1923 and 1924, respectively?
Questions


Jacques Bureau: Fiscal Year	Amount
1921- 1922	$ 98,498.51
1922-	1923	
99,791.651923-	1924	
144,792.371924-	1925 (eleven months) . 73,034.43


IMPORTS UNDER BRITISH PREFERENCE
Mr. DECHENE:: 1.	What was the total value of merchandise imported into Canada under the British preference regulations during the years 1922, 1923 and 1924, respectively?
2.	What proportion of said merchandise was imported from the British Isles, and what proportion was imported from other parts of the British Empire during each of the above years?
3.	What proportion of said merchandise was imported through Canadian ports during each of the above years?


Hon. Mr. LOW:: 1. and 2. Imports into Canada under the British .preferential tariff during the fiscal
years ended March	31, 1922,	1923 and	1924.
Countries whence			
Imported	1922	1923	1924
United Kingdom .. ..	$69,901,949 $93,534,415, $102,944,42?		
Africa, British-			
East	6,024	4,791	6,783South	15,249	90.916	17,405West-	Gold coast	12,558	188,601	228,734Sierra Leone.. ..	218	942	23Other	4,526	29,671	55.537Bermuda	21,862	54,013	22,672British East Indies-	British India	4.784,531	7.569,999	8,648.246Ceylon	1,931,224	2,601,705	3,055,834Straits Settlements..	220,110	277,607	415,510Other	381British Guiana	6,123.685	5,634,137	6,199,838British Honduras.. ..	7,363	17,771	19,133British West Indies-	Barbados	2.965,555	4,111,014	7,015,411Jamaica	2,065,508	4,184.666	3.258,956Trinidad and Tobago	1,568,403	2.053,661	1,384,101Other	1,113,040	1,864,284	1,944,845Oceania-	Fiji	1,965 843	4S6.784	6,523New Zealand	800,448	702,443	823.987
Total Imports under British Preferential
Tariff	$93,508,096 123,427,420 $136,048,346
3.	The information is not available.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. MAYBEE:: 1.	Has the government established any rural mail routes in the years 1924 or 1925?
2.	Have any tenders been asked for in connection with any proposed routes? If so, in what counties, and, from what post offices?
3.	Is it the policy of the government to establish any new mail routes?


CANADIAN GOVERNMENT MERCHANT MARINE -CATTLE EXPORTS
Mr. BLACK (Halifax):: 1.	Have any Canadian Government Merchant Marine steamers carried cattle from Montreal, or other Canadian ports, to iports in Great Britain or the continent, during the years 1922, 1923 and 1924? If so,
to what ports?
2.	What number of cattle were carried each voyage?
3.	What rate of freight was paid?
4.	What was the net result of this business, voyage by voyage ?
5.	What was the profit or loss, as the case may be?


CANADIAN NATIONAL RAILWAYS-SHIPMENTS
Mr. SENN:: 1.	How many carloads of hay and straw were shipped from the following points in Ontario, on the Canadian National Railways in 1923 and 1924:-Caledonia, Hagersville, Seneca, Middleport, Canfield?
2.	How many carloads of other farm produce were shipped during the same period from these points?
3.	How many carloads of other merchandise were shipped during the same period from these points?



UNOPPOSED MOTIONS FOR PAPERS


Mr. R. B. HANSON (York-Sunbury) moved:: For a return showing by districts or regions the number of employees in each of the following classes and the average annual compensation for each employee cf such class of the Canadian National Railways:-receiving under $1,000 per year; receiving $1,000 per	year	or	over	but	under	$2,000;	receiving	$2,000per	year	or	over	but	under	$3,000;	receiving	$3,000per	year	or	over	but	under	$4,000;	receiving	$4,000per	year	or	over	but	under $5,000; and so on until
all classes are complete.


Arthur Meighen: Carried.
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals): No. My bon. friend and I have had some conversation concerning this. The Canadian National board have objections to giving this information, and my hon. friend, I understand, is going to ask to have this motion transferred to the order "Notices of Motion". He wishes to discuss it.	[DOT]


Richard Burpee Hanson: What the minister has said is quite correct, but the only difficulty about that is, at this stage of the session, if it is transferred to the notices of motion, I am afraid it will never be reached. It will enter the land of limbo, and it wild never come out. If, however, it is not going to be allowed to pass, I do not know if there is anything I can do but ask that it be transferred to notices of motion.


Mr. GRAHAM:: Transferred to notices
of motion.


Arthur Meighen: (Leader of the Opposition): I do not know that this

Unopposed, Motions for Papers
can be transferred by so simple a formula as that. I do not like interfering in view of the arrangement made, and I would be prepared to abide by it, although all of us know that if it is transferred to notices of motion it may never be reached. Provided the minister will see that it will be reached during this session, I do not think anyone on this side will object to its being transferred.


George Perry Graham: We had better let it stand. Like my hon. friend, I do not think one individual has a right to make any pledges to anyone about the transference of an order and Whether it will be reached. Every hon. member who has a motion on the order paper would have a right to say whether his should have the preference over this one. It is not discussable where it is. All I can say is that the Canadian National board has suggested to me that it would be very injurious to the management of the Canadian National Railways if this information were given out, because that would mean that all information could be given that is requested concerning salaries and everything else in regard to the Canadian National Railways.


Arthur Meighen: If the minister will say
that he supports the company in that view, I will not raise any further protest.


George Perry Graham: From my experience, I would support the company in that view, as this is absolutely a matter of operation.


Arthur Meighen: Hon. gentlemen are
coming round to our doctrine.


Ernest Lapointe: Under rule 38 this motion must be , transferred automatically. Let me read the rule:
Notices of motion for the production of papers which the member asking for the same intends to move without discussion, shall be marked by him with an asterisk and shall be placed by the Clerk on the order paper above " Notices of Motions," under the heading " Notices of Motions for the Production of Papers." All such notices when called shall be forthwith disposed of; but if on any such motion a debate be desired, it will be transferred by the Clerk to the order of Notices of Motions.


Mr. DEPUTY SPEAKER:: Transferred to "Notices of Motions".


Arthur Meighen: So far as I am concerned, it may as well be taken as defeated. I have accepted the minister's statement, which I think is absolutely right; and I am pleased to see that the government has become slowly converted to the viewpoint I expressed three years ago.


Mr. WOODSWORTH:: I should like to join with the leader of the opposition (Mr. Meighen) in protest against the minister's stand in this regard.


An hon. MEMBER:: But the leader of the opposition agrees.


James Shaver Woodsworth: I mean, not as a point of order but as to the stand taken as regards such information being in the interests of the public. The other day, in response to a question of my own with regard to the salary paid to an official of the Canadian National Railways, the statement was made that it was not in the interests of the general public to give the information. In this particular case to which I have referred, the official was employed by the Colonization department, and-


George Newcombe Gordon: I must point out to the hon. member that this is not a debatable matter.
Motion transferred to "Notices of Motions".



LEASE OF RESERVE TO V. GRENON

Mr. ROSS (Kingston) (For Mr. Arthurs):: For a copy of all correspondence, documents, and other communications regarding the leasing of certain property in the lower French Indian reserve to one V. Grenon, and also relating to any complaints or requests for cancellation of the said lease.



CANADIAN GOVERNMENT MERCHANT MARINE

Mr. BLACK (Halifax):: For a copy of all correspondence, cables, telegrams, and other negotiations which may have taken place during the years, 1923 and 1924 and 1925, between the Minister of Railways and Canals and/or his department, and/or any other member of the government and any individual, firms or companies wherever situated, relating to the purchase or sale of the Canadian Government Merchant Marine steamers, as a whole, or for any part thereof.



QUEBEC HARBOUR COMMISSIONERS

Hon. Mr. STEVENS:: For a copy of all correspondence passing between Quebec Harbour Commissioners and any minister, or department, or official of any department of the government during the year 1924, in reference to advances by the Dominion government from votes by parliament ; also, a copy of the report of the Board of Audit in regard to the affairs of the Quebec Harbour Commissioners made during the year 1924; also, a copy of a report of any individual member of the Board of Audit made in addition to the report of the Board.



DARTMOUTH PIER, NOVA SCOTIA

William Anderson Black: For a copy of all documents, contracts, estimates, pay sheets, vouchers, correspondence and other papers relating: (a) to the acquisition of a site for the Dartmouth pier, Nova Scotia, constructed since 1921, and (b) to construction of said pier and the approaches thereto.
Watered Stock



TIBURCE MALLET

Alexandre Joseph Doucet: For a copy of all correspondence exchanged between the Department of Marine and Fisheries and others, regarding, services rendered in saving lives, by one Tiburce Mallet, of Ste. Marie, Shipipigan Island, New Brunswick.



WATERED STOCK


Mr. M. N. CAMPBELL (Mackenzie) moved:: Company was only $5,000, but in two seasons Norcross and Wolvin drew about $275,000, which rightfully belonged to the Canada Steamship Lines. This was a convenient way of hiding the merger's dividends. This $275,000 was all taken out of the pockets of the farmers of the northwest. In the same report I find that the Great Lakes Transportation Company claimed their profits for the same year to be only 11 per cent on the appraised value of their holdings, but the investigation of the commission showed these holdings to be tremendously overvalued. Take one instance, the steamship Glenclova, which was valued in the exhibit handed to the commission at $525,000. From the record and the testimony of the appraisers who were employed by the commission it was proved that this vessel was worth only $125,860. If the valuation of the other vessels was inflated to that extent it would mean that the company in that year would make a dividend of about 46 per cent instead of 11 per cent. As a further indication of how misleading their figures were, I will refer to a letter which was issued by the president of the company, Mr. Playfair, on July 5, 1922. This letter was sent out in support of an issue of bonds. In part, it reads as follows:
The net earnings after deducting depreciation for the year ending December 31, 1921, exceeded five times the amount required for interest on this issue.
With regard to that the commission made the following observation:
Five times the amount required for interest on the issue would be $350,000; but in Exhibit 329, which was put in as part of the evidence of the company, it is stated that the net earnings of 1921 were only $133,794. No satisfactory explanation of this astonishing difference is tendered.
Now we will deal with the Mathews Steam" ship Company. This company claimed their profits to be only 10.24 per cent on the appraised value of the vessels. They showed the value of one vessel, the Mathewston, as S900.000; but in a letter which was given to the public in support of an issue of bonds they mentioned that this vessel had been completed during the previous year at a cost of $800,000, so that after the vessel was in use for a full year, when there should be a considerable amount of depreciation, we find it written up to the extent of $100,000. In this letter which the Mathews Steamship Company sent out, dated August 20, 1922, I rind the following:
The average annual net earnings derived from operation, after depreciation and taxes for the five years ending January 31st, 1922, amounted to almost five times the total interest charges on the bonds now outstanding including the present issue. Preliminary figures for the first half of the year 1922, indicate

that the earnings for this year may be considerably in excess of the above proportion.
On this part of the letter the commission make the following observation:
The bond issue was $700,000; the interest on that would be $49,000. Five times that would be $245,000; but in Exhibit 277 the company claims that its operations for the year 1922 up to the first of September resulted in a loss of $29,709.61.
Now, I have dealt briefly with causes; let me refer for a moment to the effects of the concentration of wealth. According to the Canada Year Book for 1922-23, .14 per cent of those who paid income tax had 25.77 per cent of the total income; .42 per cent of the taxpayers,-that is, less than one-half of one per cent-had 37.73 per cent of the income, while 7.7 per cent of the taxpayers had 74.80 per cent of the income. I want to point out that this is only the percentage of the amount of income of those whose incomes were taxable. After all, it is only a small proportion of the population who have incomes that are taxable under the Income Tax Act; so that when we figure it out on the proportion of the income, of the whole population we find that a very much greater percentage of wealth is in the hands of a few than these figures would indicate. In reference to the income tax figures of the United States, I find that in 1918, 14 per cent of the income taxpayers had 40 per cent of the total income. In this connection I would also like to quote a former chancellor of the exchequer of Great Britain, Mr. Snowden, who, speaking in the British House of Commons on March 20, 1923, said:
Eighty-eight per cent of the wealth of this country is owned by two and a half per cent of the population and five out of every six persons who die leave not a penny behind them.
At the risk of being accused of failing to put forward some constructive remedy or suggesting some constructive measures in connection with this matter, I am going to leave it in this way: I have certain concrete ideas in my own mind of how this situation could be dealt with, but I realize that if these do not meet with the approval of the government or pf some hon. gentlemen they will be used as a reason for opposing the spirit of the resolution itself. It is my opinion that when a private member puts certain facts and figures before the House to show the necessity for legislative or administrative action, his responsibility ceases. The responsibility for legislative and administrative action is on the government. The government has the advice of the very best legal counsel, which is something that the ordinary private member cannot secure; it has at its disposal a means cf securing facts and figures which are not.

Watered Stock
available to a private member. Therefore I say that the responsibility for dealing with the matter is entirely with the government. We have undertaken to control in some measure, to exercise supervision over our transportation companies, our banks, our insurance companies, and a great many other corporations, and I see no reason why we should not carry that principle a little further. While I would be the last to suggest that we carry supervision to the point where it will interfere with the efficient management or with the proper carrying on of business, yet I think the public are entitled to know just what dividends certain companies are earning, particularly when some of them secure very special privileges by legislation from the people of this country.


Arthur Bliss Copp: Mr. Speaker, the question that the hon. member for Mackenzie (Mr. Campbell) has brought before the House this afternoon is a technical one, a complicated and an interesting one. He has cited a number of cases where companies have made large earnings because of what he calls the watering of stock, and the paying of dividends on. stock which was of no value. The resolution seems very innocent as it stands on the order paper, but it has one or two features which present difficulties. Before we could accept the resolution that my hon. friend has so ably put forward, we would first have to have some definition of "watered stock". Watered stock may be of different varieties. It might be stock such as my hon. friend has described, for which the holder gives no particular value. Stock may also be described as watered that is issued for the purchase of goodwill, or anything of that kind. A company taking over the assets of another company may pay in stock for such things as that. Such an asset may have no tangible value, but nevertheless it is of some value.
For many years, the several provinces of the Dominion have grappled with this question. I was unable to hear my hon. friend very distinctly, but I think he did refer to the different provinces that had grappled with this question to some extent. Some of the provinces have issued what are called blue sky 'laws to protect the public from the sale of stock by companies, and I think the Supreme Court of Canada has recently brought down a judgment declaring that the legislation passed in the province of Saskatchewan in that respect was ultra vires of the provincial legislature. I might also say to my hon. friend that the officials of the department under whose control and administration the Companies Act comes have given a very
great deal of study to this question for many years, and I have several reports before me in regard to it; I have one very lengthy one before me now. The question my hon. friend has raised is not without its difficulties. A company is organized, and an application is made for its incorporation, either to the provincial legislature or to the Dominion. The company sets forth its object, and obtains its charter. All that is pretty well safeguarded, in -so far as we are able to do so. The issuing of stock is practically a matter of civil contract between the company and the purchaser of the stock. My hon. friend has referred to cases where companies have made large a.nd unreasonable profits because of stock watering, and that as a result of watering their products were sold at a higher price to the public in order that they could pay dividends on the watered stock. Nevertheless, people are not forced to buy these products.


Milton Neil Campbell: Would the minister say that people in Canada are not compelled to buy cement from the Canada Cement Company? They absolutely control the market.


Arthur Bliss Copp: That may be so; I do not
know particularly about the Canada Cement Company, but I say that generally speaking people do not have to buy the products of a firm that is charging a high price in order to enable them to pay dividends on watered stock.
This subject is not a new one; it has been considered every year, and almost every day by those in charge of the incorporation of companies. Under the Dominion charter, as I remember it, we have regulations by which the company that is issuing stock fraudulently or by misrepresentation may be called to account by the department. As regards the issuing of stock in the ordinary way, and charging a higher price for it, I am not in a position to say that some scheme might not be worked out and legislation enacted that would bring about an improvement. I can assure my hon. friend, and I think I can speak not only for the government but for every individual member of parliament, that if anything can be done to better conditions or to pass legislation to bring about an improvement along the line of meeting my hon. friend's complaint, it will be not only a pleasure for me but a duty, and the duty of this parliament, to do it. My hon. friend has brought the matter to the attention of the House and of those particularly interested in this matter, and when they read his remarks in Hansard, they will be able to gather what he has in his mind. The question will then be very thoroughly considered, and I can
Watered Stock

assure my hon. friend that anything that can reasonably be done in the direction of protecting the people of Canada generally in the incorporation of companies, and in the matter of buying the products of these firms that are charging high prices, it will be the duty of this government and of parliament to do.


Mr. GARLAND (Bow River):: Does the
minister approve of the issuing of watered stock? Does he consider it a right thing to do?


Arthur Bliss Copp: It all depends on what the
watered stock is, and on your definition of watered stock.


Edward Joseph Garland: Would the minister mind defining watered stock as he understands it?


Arthur Bliss Copp: I would not attempt to define it at the present moment, but as I ha.ve said, I will be very glad to bring this matter to the attention of the Companies branch and see if they can suggest anything that would be of advantage in the operation of the Companies Act, or in the issuing of charters, to better protect the people as a whole; and if anything can be done in that direction it will be a very great pleasure to me to do it.


Mr. LADNER:: Could the minister not
make greater restrictions in connection with the issuing of prospectuses? The law already provides that the allotment of shares for other than cash consideration shall be stated in the prospectus, but I would judge from the speech of the hon. member for Mackenzie (Mr. Campbell) that it is possible for the applicant, even with that safeguard, to be fooled. Perhaps the minister might find scope for legislation in that direction.


Arthur Bliss Copp: The department is always
checking up and watching anything that comes to its attention through parliament, with a view to bettering the administra-4 p.m. tion of any acts that come under its administration. As my hon. friend says, some regulation might be made in regard to the issuing of prospectuses; but I may say that we cannot always guard against the exploitation of stock. If a man wants to sell stock at a high price, and somebody wants to pay an extravagant price for it, the department cannot prevent that; but I can assure my hon. friend that I will have his remarks brought to the attention of the officials of the department, and if there is anything we can do that will be of advantage we shall be very glad to do it, and also to have my hon. friend come to the department 
and talk the matter over with the officials to see if something might not be worked out.


Mr. BAXTER:: Can the minister state
conveniently at the present time just how that case came before the Supreme court, and what the decision was. I know there was something, but I have not got it accurately in my mind.


Arthur Bliss Copp: The recent decision of the
Supreme Court of Canada was given in the case of Lukey vs the Ruthenian Farmers Elevator Company, Limited, 1924, C.L.R. 56. The Supreme Court of Canada decided that the Sale of Shares Act, Revised Statutes of Saskatchewan 1920, Chapter 199, was ultra vires of the provincial legislature in so far as it purported to apply to the sale of its own shares by a Dominion company. I do not know all the details.


John Babington Macaulay Baxter: The minister has answered me enough. It is apparently a decision that the provincial act was ultra vires, and I know that has been applied; but has there been any decision that the Dominion cannot enact legislation of the character that is asked?
Mr, COPP:	I do not know of any.


Arthur Meighen: The minister says there
are several kinds of watered stock. I only know of one. Would the minister give us two or three examples?


Arthur Bliss Copp: A general definition of watered stock might be stock issued for which no value was given.


Arthur Meighen: Hear, hear.


Arthur Bliss Copp: Another case, to my mind,
would be stock issued for the sale of the goodwill of a business.


Arthur Meighen: If the goodwill was
worth the stock issued at its par value, it would not be watered stock.


Arthur Bliss Copp: It might be a question-


Arthur Meighen: It would be a question
of whether there was watered stock; but the minister said there were several kinds of watered stock.


Arthur Bliss Copp: I would say that the term
"watered stock" might be referred to different kinds of stock.


Arthur Meighen: I suppose there might
be watered stock in different companies; but if there is any kind of watered stock except stock not represented by value, I would like to know what it is.

Watered Stock


Arthur Bliss Copp: I might say in reply to my
hon. friend from Mackenzie, that although the resolution on the order paper may possibly not mean very much, he has brought this matter to the attention of the government and of parliament, and in so far as the Companies branch is concerned, I will see that it is given consideration, and if any remedy can be provided we shall be very glad to do it.


Mr. IRVINE:: The minister has stated
that his department will be very glad to check up on this matter of watered stock; he has also stated that his department does not know what watered stock is. Will he therefore indicate how he is going to be able to check up on it in the coming year?


Mr. MACLEAN (York):: Get a "mouser."


Leon Johnson Ladner: I would like to ask the
minister a question with respect to the registration of agreements. Under the British Columbia laws all shares which are issued1 must be issued for cash. If the consideration is other than cash an agreement embodying such an arrangement must be filed with the registrar of joint stock companies, and that is open for the public to inspect, and the company cannot get behind that; so that any shareholder can get the information as to the stock that is issued, and the expense at which it was issued, and they may look at it before they buy.


John Babington Macaulay Baxter: Do they?


Leon Johnson Ladner: Very often. If they are
sensible people they will do it. Would it not be possible to provide in the Dominion act that, in addition to stating in the prospectus the shares which are allotted for other than cash, there should also be filed-which I understand is not now provided for-the agreement or document under which the shares are issued for a consideration other than cash? Would the minister take a proposal of that kind under consideration? Because in that way the citizens of Canada can investigate what has been done by any Dominion company and can find out whether he is getting watered stock, and bow much he is getting.


Mr. STEWART (Argenteuil):: That would only protect the purchaser of the stock, and I do not think that is what my hon. friend (Mr. Campbell) is after. The point is the protection of the public.


Leon Johnson Ladner: That is one important feature.


Arthur Bliss Copp: I will be very glad to refer
the matter to the officials of the department 75
for consideration. If what the hon. member suggests is considered an improvement it may be accepted.


William Findlay Maclean: Has the minister compared the situation in Canada with the conditions that exist in other countries where this grievance obtains? Perhaps he will find that in some other countries they have dealt with the question and have afforded a protection to the public against what seems to be a bad principle.


Henry Elvins Spencer: I should like to refer to
the statement the minister made a few minutes ago, that his department had been considering this subject of watered stock annually, and he might say, even daily. That being so, have they any policy to suggest lby which they can handle this subject?


Arthur Bliss Copp: The hon. member misunderstood me. I did not intend to convey the impression that we had considered the question of watered stock every day; but the question of the improvement of the Companies Act or any other act has been considered by the officials from time to time. We passed a number of amendments last year, and if it is necessary to pass further amendments, we will be very glad to take suggestions from my hon. friend.


Charles A. Stewart: I think the proper course for the hon. member to pursue is to bring to the attention of the department the amendments he has in mind to propose to the act. I quite agree with the right hon. leader of the opposition (Mr. Meighen) that there is only one kind of stock that can be called watered stock. I do not know how it came to have that name. It is, however, a very difficult proposition.


Robert Forke: Perhaps it is putting water in the wine.


Charles A. Stewart: Yes. If the hon. member who has introduced this resolution has any amendment to propose which would prevent injury being done, I am sure the department will be very glad to give it consideration, and if they are unable to acquiesce in his suggestions, reasons should be given.


Arthur Meighen: If the government feels disposed to prevent the issue of watered stock -and I do not think anybody doubts that it can be done-will the minister say whether the. government, or even himself, feels that it can be accomplished?


Charles A. Stewart: I would be delighted if it could be done, but the right



Watered Stock
hon. member will agree that the definition of watered stock is a very wide one, and care would have to be exercised in order that no injury would be done.


Arthur Meighen: Would the minister commit himself-


Charles A. Stewart: Absolutely.


Arthur Meighen: -to saying there should be no watered stock issued?


Charles A. Stewart: If my hon. friend's definition of watered stock and my definition are the same-and I believe they are, namely stock for which no value is given to the public,-then I will agree with him.


Arthur Meighen: Or inadequate value?


Charles A. Stewart: I would be quite willing to enact such legislation, but I want to qualify my statement-because we have had some experience with this question out west, the blue sky law, for example-and say that it is sometimes difficult to pass legislation of that character without doing injury to legitimate enterprise, and due care must be exercised.


Robert Forke: It- seems a rather strange
situation that the minister admits there is such a thing as watered stock, and then tells a private member: Bring in your amendment and we will see what we can do about it. I do not think that meets the situation in a fair manner.


Arthur Meighen: They could refer it to a committee.


Robert Forke: Something like that. I think it is pretty well known that there is lots of watered stock in companies in Canada to-day. We may have some difficulty in defining what watered stock is, but it has been suggested to me that the minister has been in rather deep water in regard to this question of watered stock. I think the government should take this matter into serious consideration. Something should be done to prevent the floating of companies on watered stock or watering the stock after companies have been formed, and giving the people a wrong idea about capital invested in different corporations and companies. I think the government should do something more than ask a private member to suggest to them what should be done.


Charles A. Stewart: That is
exactly what I said and what I meant. The government is prepared and willing to bring down any amendment that will remedy the difficulty, and will be very glad of suggestions from the hon. member. T think when sug-
gestions are analysed, if I caught his argument aright, he will find very many of the complaints he is making are impossible of being dealt with. But I would not say it is impossible to amend the act; I think it is quite possible.


James Shaver Woodsworth: We have surely a rather anomalous
situation. The members of the government readily admit that we have in Canada such a thing as watered stock, although we may differ a little in our definition of it. They also admit that the watering of stock, that is, the issuance of stock for which no value is given to the public, is an evil, and yet the government, notwithstanding the fact that this matter has been repeatedly brought to their attention, appear to be incapable of devising any means of doing away with this evil. Those of us who are neither legal gentlemen nor financiers sometimes wonder why it is, when it comes to the matter of the great vested interests that the government find themselves in the position of being impotent to take any action which will safeguard the interests of the public. If it is the case of some milkman diluting his milk with water, action can be taken very speedily to stop the practice, without any question as to whether or not the water is pure or impure, alkali water or spring water. We urge that the essence of our representations is that the public is being defrauded. The common people and this government are agreed that the public has been defrauded by the process known as the watering of stock. And yet apparently year after year when the subject has been introduced the matter has been put off, as the government would seek to put it off to-day. Many cases of special privilege come before this House. Whenever we introduce any other than one or two well recognized types, we are said to be dealing with an academic question. I submit that the public is very much concerned about a matter of this kind. I quote here a paragraph which I noticed in a recent editorial of the Quebec Daily Telegraph in which we have noted the close connection between watered stock and the tariff. The editorial reads:
We trust that all those who are crying blue ruin for Canada, on account of tariff reductions or lack of action to raise them, will not fail to let the public know whether or not Canada is going to continue *o protect hundreds of millions of dollars of watered stock which periodically floods a number of our industrial concerns, when their profits become so large that they are afraid of public criticism.
On the other hand, if the Ottawa government is being asked to protect merged industries that contain millions of dollars worth of watered stock for the benefit of a few promoters this information should nJso accompany the blue rum speeches on the tariff question.

Watered Stock
We also think that the federal government shol"J at once institute an investigation into the watered stock capitalization of many merged industries, which are crying for further protection.
I would commend that paragraph to the serious consideration of the Secretary of State (Mr. Copp).
We have before us at the present time the far-reaching results of the failure of the Home Bank. I take it that one of the resons for this failure was that the bank advanced money to concerns which were not sound, which were putting before the country propositions Which involved watered stock. Now the country is being asked to reimburse the Home Bank depositors and yet we are doing nothing to preclude frauds of this kind being perpetuated in the future.
We are to-day facing the very serious consideration of some action in connection with the industrial dispute in the Nova Scotia coal fields. It has been repeatedly called to the attention of this government that the British Empire Steel Corporation has been trying to insist upon dividends oh what we generally know as watered stock. I had an opportunity a year ago of calling the attention of the government to the way in which the capitalization of that corporation had been built upon. I will not repeat here what I said at that time, but it is known that the company, in seeking incorporation, had to admit that it w'ould not require a very great deal to finance the company that it was proposed to create. A little later on, the promoters were able to inflate the capital to a very great extent. I have a memorandum with [DOT] regard to the organization of that company:
The Dominion Iron and Steel Company Limited was incorporated in 1899, H. M. Whitney of Boston being the chief promoter. He had previously organized the Dominion Coal Company. Whitney wrote to Premier Murray asking for concessions in the royalty on coal used in the new steel plant. In that letter he said:
*' The estimate of an iron plant in Cape Breton on a large scale would require the investment of a large sum of money, not less than $3,000,000 to $6,000,000."
This letter is published in the Industrial Advocate of Halifax for April, 1899.
The Engineering and Mining Journal of New York- issue of October 28-records the listing of the Dominion Iron and Steel Company on the Boston stock exchange. The company is stated to have $15,000,003 stock and $8,000,000 in bonds (of which latter $2,000,000 were still in the company's treasury). I
I do not know whether the government can justify anything of that kind. I do not know whether the country is compelled forever to pay dividends on stock of that character, but I know we must face the result of this situation in the low wages and dissatisfaction which prevail at the present time in Nova Scotia.
75i
Let me mention still another instance which recently came before the attention of the public. The L. R. Steel Company were able, through their manipulation, to victimize a large number of poor people throughout this country. This was done very largely through the practice to which reference has already been made, that of maintaining subsidiary holding companies. I think now of families in my constituency who could ill afford any loss of this character, who were approached by plausible agents of the L. R. Steel Company and were told that this was in the nature of a co-operative company. They believed in the principle of co-operation, and they were deceived as to the real standing of the company. An altogether different proposition was put up to them from that which would have been warranted by the facts of the case. We all know the results. I would like to refer to still another organization which has recently been before the public, especially in my city.


Mr. McMURRAY:: At the time that stock to which my hon. friend refers was sold in Manitoba, was there not on the Manitoba statute books legislation whereby a thorough investigation would be made by an official of the government and a writ granted to sell that stock? If that was the case, could my hon. friend imagine anything more strongly designed to protect the public?


James Shaver Woodsworth: My point is that
the public was not protected.


Edward James McMurray: If that will not protect the public, how does my hon. friend suggest that this government protect it in any other way?


James Shaver Woodsworth: I would suggest
that it is rather a. large order for a member of the government to ask that a private member protect the public.


Edward James McMurray: Still, my hon. friend
has had this under his consideration for a long time, and the proposition I put to him is a simple one. Can he not see the difficulties in the way?


Arthur Meighen: Does the minister say
that at the time the L. R. Steel Company was incorporated, there was a Public Utilities commissioner operating under the act?


Edward James McMurray: I think so. I am not
absolutely sure, but I know that official has been appointed and has been carrying on his work there for quite a number of years.


Arthur Meighen: Who was he?
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Edward James McMurray: Mr. P. A. Macdonald.


Arthur Meighen: He was retired long ago.


Edward James McMurray: It was always debated whether he was retired or not, but I think it is one or two years since he retired. If my memory serves me right, he would have been holding office at the time the L. R. Steel Company's stock was sold in Manitoba.


Arthur Bliss Copp: My hon. friend (Mr. Woodsworth) is referring to the British Empire Steel Corporation. That is a provincial incorporation under an act of the province of Nova Scotia, not under a Dominion charter at all.


James Shaver Woodsworth: I am not discussing whether any one organization is under a Dominion charter or not; I am discussing the general principle and saying that the public ought to be protected. If, through any flaw in the legislation of either Manitoba or Nova Scotia, the public has not been protected, that is all the more reason why this House should act in the matter.


Arthur Bliss Copp: Does my hon. friend suggest
that this parliament should pass legislation to interfere with the incorporation of companies in the separate provinces?


James Shaver Woodsworth: I have not made
such a suggestion. I would be glad to make a suggestion later on. The Secretary of State (Mr. Copp) has tried to put off my argument on the ground that the British Empire Steel Corporation comes within provincial jurisdiction.


Arthur Bliss Copp: My hon. friend misunderstands me. I am not trying to put off any argument at all. I am asking only for information. I want to consider it.


James Shaver Woodsworth: I am quite aware
that the British Empire Steel Corporation was refused a charter by this government and subsequently obtained it.


Arthur Meighen: My hon. friend is
mistaken. It was refused by the late government.


James Shaver Woodsworth: I am sure we can
depend on the leader of the opposition (Mr. Meighen) to set us right in regard to matters of that kind. I would refer to another company and ask the Secretary of State to take particular notice of this. It is a company whose conduct has recently been forced upon our attention in the west, the Hearst Music Publishing Company. I am informed that this company had a Manitoba charter but it had been refused a license under the Sales
rMr. Meighen.]
of Shares Act. Then under pressure a license was granted. After a further examination, however, the license was withdrawn. The company then obtained a Dominion charter, thus being able to snap its fingers at the provincial government and at the public generally. Under these circumstances we have a perfect right to come to the Dominion government and ask that the interests of the public be protected.
I should like to read a paragraph or so from a statement which has been furnished me by a friend of mine who has been devoting some little attention to this matter. He suggests:
Watered stock is always a potential charge upon the workers, but where competition really exists its influence or effect upon labour conditions is inconsequential. When, however, a company operates uncitr the direction of a combine-
Such as that referred to a little while ago, the Canada Cement concern.
-or enjoys some special privilege, permitting it to charge unwarranted prices foi its commodities or services, then watered stock may readily become a serious evil. Canada happens to be a country where the financial system lends itself readily to the nationwide control of enterprises, either by means of combines, fixing market spheres or fixing prices. That fact gives to watered stock in Canada an importance which it does not always hold in other countries where the financial systems are less favourable to the establishment of centralized control of whole industries.
The writer then gives one method by which the public has often been victimized.
Another game which has been too often practised may be described. Two or three men owning similar enterprises may be bitten with the passion for easy money. They organize a company to amalgamate their enterprises. The new company makes a loud noise about the economies effected by the consolidation, and reports huge profits. Then the two or three men, having issued to themselves bonds representing something more than the value of the combined enterprises, send out salesmen to dispose of common stock in their company representing something more or less than its bond issue. Usually the stock is sold at par, if the declared profits said to have resulted from the amalgamation are high enough. The stock is bought by small investors who know nothing about the actual workings of the company, and seldom ask for information.
In a year or so the men who formed the company, having utilized the money derived from the sale of common stock in ways which may indirectly benefit them while adding nothing to the resources or capacities of the company, discover that that company is beset with difficulties. The common stock holders are informed that dt can only be saved by additional stock subscriptions, and being frightened usually do not respond. Presently the company declares itself bankrupt, and the original owners who hold the bonds take over the properties and the investors in common stock are left with finely engraved but perfectly valueless certificates. This game in various forms has been played by highly respectable financiers and lawyers, and fairly competent lawyers have been victims of it.

Watered Stock
I want to present to the House a few more paragraphs taken from a memorandum furnished by another friend of mine-a business man. It may seem rather strange that business men sometimes are willing to assist or to speak through Labour members in this House. This I sometimes think may perhaps be attributed to the fact that, as one of the old Socialist leaders once suggested, the workers having nothing to lose but their chains, are able to speak freely in these financial matters. Certainly, they are free to say what I know a great many business men across the country would gladly say. The excerpt to which I refer is as follows:
Perhaps it is not too much to say that the greatest controllable evil in connection with the " high cost of living " is the tendency which Canadian financiers have shown in the last few years, and in increasing numbers, to follow the high finance methods of American promoters. These methods vary so greatly that it is impossible to give more than an outline of them without writing a series of books, but the following are fair examples:-
A family is operating a manufacturing plant in a small town; they give individual attention to the business; they know all their workmen personally and they work in harmony with them, paying fair wages and making moderate but steady profits; the business grows, the line of goods becomes known and the trade mark established. The business begins to outgrow the old methods; new workmen are brought in for special new machines; the owners die; their sons are not content to run the business in the old way. The promoter appears on the scene, he has nothing but a good suit of clothes, a fine line of talk and a knowledge of American promoting methods. The promoter sizes up the business; perhaps the value at a conservative estimate is half a million dollars including buildings, real estate, machinery and stock on hand; but the hard work of the founders, their knowledge of the business, their lack of extra overhead put on iby so-called efficiency experts, and the small salaries that they are content to draw from their own business, and other factors, make the business pay on an average through a period of exception-ally good years, say one hundred thousand dollars a year. Does the promoter buy the business for five hundred thousand dollars (its actual value without the men that built it and the surroundings under which it was built) ? He does not. He searches for and finds a business that will go well in a prospectus with this business. He options this second business which is, 'for some reason we need not specify, not paying, at say one hundred thousand dollars payable partly in cash and partly in the stock of a new company. He options the first business, producing as you remember one hundred thousand dollars a year when trade is good. He gives the owners five hundred thousand dollars of preferred stock and five hundred thousand dollars of common stock; he puts them and himself on the board of directors and arranges salaries for them at least double the rate they have been drawing. He sells bonds to the public for five hundred thousand dollars. He can show earnings which provide three times the interest on the bonds. The second business takes perhaps fifty thousand dollars of the cash, the promotion takes another hundred thousand dollars to swing and the promoter, if he is fairly modest takes only another hundred thousand dollars in cash and five hundred thousand dollars of common stock. Part of his common stock he gives away with the bonds and some of it he gives to the owners of
the small business which has been taken in to show some reason for the water and make believe that it will increase the earning power of the first business or absorb some of its product.
Now let us see where we are. We had one business worth half a million dollars and earning on an average in good years, and when it had the benefit of the founder's experience and his undivided time and attention, one hundred thousand dollars a year. We had another business which was breaking even and which was worth, perhaps, fifty thousand dollars. That is, we had what, stripped of the special circumstances that made them pay, two businesses that were worth $550,000 of anybody's money and that only had to earn $33,000 to give their owners a reasonable return on their investment, or at any rate, would not normally be called on to part with more than $33,000 per annum to satisfy capital. What have we now? Bonds, $500,000; preferred stock, $500,000; common stock, $1,000,000; total $2,000,000. The public is now called upon to pay interest on two million dollars, fourteen hundred and fifty thousand of which is new capital created out of paper and the promoter's ideas. The public is now called upon to pay salaries sufficiently dignified to fit the officers of a two million dollar corporation and at least twice as much as the same individuals drew when the businesses were entirely their own. The public is now called upon to pay for efficiency experts, accountants instead of bookkeepers and all sorts of people who were not needed in the old business, which nine times out of ten, produced as much and as good material as cheaply without their aid.
One of two things happens, either the price of the product is increased and the wages of the lower employees decreased until the interest on the securities is paid, or the concern goes to the wall when the old management is withdrawn and the cost of production increased beyond what the product will bear. If the concern goes to the wall the men in the plant lose their jobs and the small investor who has absorbed the common and preferred stock is wiped out. The bond holders take over the property reorganize the company, rewater the stock and the same thing happens again. If the promoter has had luck the company goes on, pays its dividends and perhaps in time is ripe to be taken into a yet larger promotion and help to put more watered stock on the market. In either case the public is stuck. The promoter is all right; he has his cash and the proceeds of his common stock. The former owner may be all right. He may have sold his stock, and anyway he has the bonds and his property back. But the public is stuck whether the company is a success or a failure.
Every time one of these companies is a success the cost of living is raised to make it a success. Every time one of these companies is a failure the public is stuck. It is always the public who pay.
And this gentleman, who, as I say, is a business man, makes the following suggestion, which I give for what it is worth:
The only thing that can be done is to provide machinery for scrutinizing and licensing new issues of stock and bonds for public sale. The Secretary cf State department are quite competent to deal with this matter if they have the necessary legislation back of them. Governments naturally shirk the responsibility for stock issues but they must assume it or we will go from bad to worse. A few years ago-
And I think this calls attention to a tendency which we cannot disregard.
A few years ago preferred stocks were generally regarded as safe investments but the collapse of the Riordon and other companies has weakened the public
Watered Stock

confidence in preferred stock and the promoter now generally puts the bonds of his company before the public in the first stages of unloading. Bonds were sold during the war in such varied forms that a great many people are now interested in them who never heard of them before 1916 and to the ordinary small investor anything with coupons on it looks aa good as a government bond, consequently the money which once went to mortgages now goes into all sorts of bonds sold by promoters and it is difficult to get the necessary money for building and farm loans. This has forced up rents and increased the cost of living and it is likely that some of these bond issues will fall down and leave the promoter with the need of inventing another form of security to tempt the ever-gullible public. All this cannot be stopped but it can at least be diminished by periodical warnings to the public and by regulation.
Now, the Secretary of State (Mr. Copp) has asked for specific suggestions. I would venture to say that if his own department is not prepared to carry out any such scrutiny as that suggested in this memorandum, probably the purpose in view would be accomplished equally well if the government would introduce an amendment providing that every company with a Dominion charter should come under the Sales of Shares Acts of the various provinces. That may not be going very far, but at least it is something concrete. In a number of our provinces to-day we have agencies, more or less successfully protecting the public with respect to companies that have provincial charters, but it seems that there is no way by which these provincial agencies can do anything to protect the public against a company with a Dominion charter. This suggested measure would require no additional machinery.
Before I take my seat I should like to call the attention of the Secretary of State to what seems to be a very admirable report on blue sky legislation made by Mr. A. H. O'Brien, and issued by order of the Legislative Assembly of Ontario. I note here that:
In 1895, Great Britain appointed a committee of the board of trade to look into the question. That committee made an exhaustive study of the entire problem through a period of years. In 1900 legislation was passed placing moderate restrictions on the issue of fictitious stock. This legislation not accomplishing its purpose, committees of both Houses of Parliament again considered the problem. In 1906 the present legislation was enacted, and it is now incorporated in the Companies Consolidation Act of 1908.
I notice that as far back as 1884 Germany passed laws limiting the sale of fraudulent securities, and France, in 1893, passed similar legislation. I notice also that the Ontario Companies Act is copied largely from the Companies Act of Great Britain, but does not include all of its provisions. Mr. O'Brien states:
When, under the British act, a prospectus is issued it must furnish very full information, not only of I Mr. Woodsworth.]
earnings and assets of all companies formed, but of all promoting, underwriting, selling and managing profits made from corporate promotions, including allotments of stock and ownership of stock. . . The prospectus, when filed, is open to the public, and requires full disclosure of all profits made directly or indirectly from the formation of corporations and officers must reveal fully all money made as a result of their connection with the corporation.
If that is possible in Great Britain, is it not possible in Canada? As to the effect of blue sky legislation in the state of Kansas, the commissioner states that:
The law has kept out of the state an immense amount of worthless securities. It has put some of the persistent violators in jail and has made refugees in other states of others. The law has not eliminated the sale of worthless stock, but has reduced it to a minimum.
The objection that it is dangerous for the state to intervene is, I think, met by the following statement:
Those persons that make such objections fail to realize that the corporation whose securities are being controlled has been created, and the issue of it3 securities authorized and sanctioned, by the state.
In 1921 a special commission appointed by the governor of Massachusetts to investigate the sale of corporate securities reported as follows:
Since the state authorizes the issuance of fictitious or watered stock, it must follow that it is the duty of the state to prevent the sale of such securities until the state itself determines that they are not fraudulent. The state creates the securities, and places them in the hands of the fraudulent promoter, who in turn distributes them to the public. Any additional legislation to check the sale of fraudulent securities is nothing more or less than an effort by the state to limit the use by fraudulent promoters of the false tokens which the state itself creates.
Now, it is not my purpose to read in detail any further extracts from this report, although it contains many passages of very-great importance.


Edward James McMurray: Does the report that the hon. gentleman is reading from deal at all with the issue of watered stock, or merely with its sale after it is issued?


James Shaver Woodsworth: It deals with the sale of watered stock. But I am suggesting that this House might, as a preliminary step, pass legislation by which any company owning a Dominion charter would 'be able to sell its stock only under the laws which prevail in the various provinces. That is my point. Personally I should like to go much further than that, and it seems to me that the government must in the long run go much further. As the House knows, we have the insurance companies brought under cast-iron regulations, and whereas a few years ago there was a good deal of fraud connected with the various

Watered Stock
weaker companies, and especially with their promotion, to-day we have our superintendent of insurance whose duty it is to safeguard the public interest. Last year we made provision for an inspector of banks. The House will remember that two years ago such a measure was voted down on the ground that it was not possible for the state to interfere with the banks; but after the failure of the Home Bank the government came around to the position that it was essential that the public should be protected; and an inspector was appointed. Now, I suggest that, as we have a superintendent of insurance companies and an inspector of banks, it is not any very great innovation to advocate that it is the duty of the state to protect the public generally in this matter of stock manipulation, which, after all, is a much more complicated question than either of the other two to which I have referred.


Edward Joseph Garland: Mr. Speaker, first of all let me extend my deep sympathy to the government. The usual policy of evasion is to be continued on this as on most other matters. When I came down here I was practically given to understand that we should not have come as farmers or as representatives of any other political body than the Liberals, because they were going to give us everything we were advocating. Amongst the things we were advocating was the abolition of watered stock. Another thing was the abolition of protection -1a protective tariff. The government's attitude certainly must make its supporters in -the province of Quebec weep. I am sure they will mourn to-morrow when they read of the attitude of hon. members opposite with respect to the resolution -of the hon. -member for Mackenzie (Mr. -Campbell). I have in my hand an article printed by a paper about which I do not know very much-^proba-bly my hon. friends opposite do

the Quebec Telegraph. Does it represent them or support them at any time? The Quebec Telegraph has this to say:
Liberals are not against a tariff-
I heard the contrary during the elections. -but they are against a tariff which protects overwatered stocks of companies when they stop paying dividends because they have been cleaned out by the insiders. Such protection only benefits a handful of the controlling interests.
I wonder what the Quebec Telegraph will write about it to-morrow? I wonder what the labourers in -the cities of Montreal and in Quebec and Nova Scotia and the west will say? The average annual wage paid in all industries in 1917 was the pitiful sum of $757.
There is no doubt in the world that one of the chief causes for that low wage was the necessity of paying dividends on watered stock. In 1918 the average wage was $866, and in 1919 it was $940, war conditions compelling an increase. We find that of all salaries and wages to employees in all industries in 1919, the average per worker or salaried man was $1,010.


Mr. MARTELL:: Will the hon. member
permit me right there?


Edward Joseph Garland: With pleasure.


Lewis Herbert Martell: Will the hon. member
point to one industry in Nova Scotia that is paying low wages on account of the paying of dividends on watered stock? Will he tell me the companies that he can prove -to have watered stock in that -province?


Edward Joseph Garland: Well, the
hon. Minister of Labour (Mr. Murd-ock) is responsible for the statement that the British Empire Steel Corporation has about $250,000,000 of watered stock.


Lewis Herbert Martell: That may be so, if my
hon. friend will again permit me. But I think that the Minister of Labour at that time was speaking without direct knowledge of -the facts. I am not defending the British Empire Steel Corporation; I am sim-ply saying that when hon. members make assertions of that kind against any company they should be in a position -to prove them.


Edward Joseph Garland: I am delighted that the British Empire Steel Corporation has such a strong supporter in my hon. friend. I suggest-


Lewis Herbert Martell: Do not misunderstand
me; I am not supporting the British Empire Steel Corporation. But I say that assertions are often made against that corporation that are made against other companies, without any knowledge in fact. That corporation may be over-capitalized- or may have watered stock, but the mere assertion of any individual that that is so does not establish the fact.


Edward Joseph Garland: The hon.
member is unduly sensitive. I did not even mention the British Empire Steel Corporation.


Lewis Herbert Martell: The hon. member did
mention it.


Edward Joseph Garland: Not until
after the hon. member had mentioned it himself.
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Lewis Herbert Martell: If my hon. friend will
permit me; I have to take his word, but I asked him to point to an industry in Nova Scotia that had watered stock and he referred to the British Empire Steel Corporation and to the hon. Minister of Labour as his authority. That is the way I understood it.


Edward Joseph Garland: Quite right. I have never made any claims against the British Empire Steel Corporation, but if I am in order, Mr. Speaker, I would ask my hon. friend to tell the House whether or not there is any watered stock in the British Empire Steel Corporation?


Lewis Herbert Martell: I do not know, neither
does my hon. friend know.


Edward Joseph Garland: Will the hon. gentleman go a little further? I have answered his question; now I want to put another to him. Will he say there is no such thing in industry in Canada as watered stock?


Lewis Herbert Martell: I am not speaking on that general subject. But I submit that before a company is said to be paying low wages on account of having watered stock, those who make the assertion should be prepared to prove it by the submission of evidence that would be accepted in a court of law.


Edward Joseph Garland: My hon.
friend will have to take issue with his own colleague and, I presume, political superior, the Minister of Labour. At any rate the fact of the matter is that industry in this country, despite the position taken by the hon. member for Hants (Mr. Martell), is exacting unfair profits as a result of watered stock.
The Secretary of State (Mr. Copp) was very anxious for definitions. I really had not gone to the bother of finding out the actual definition of watered stock; the thing appeared to be perfect^ clear to me. The popular idea of watered stock is that suggested by the right hon. leader of the opposition (Mr. Meighen), and there should be very little trouble about that. But if we turn to another authority we find that Professor Irving Fisher, of Yale University, has discussed watered stock after this manner. In the discussion of certain methods under which the book value of capital, surplus and divided profits may exaggerate the true condition of the company, he goes on to point out another way in which that may be done, namely, through the issue of stock below par, or for services, patents, and so forth, at unduly high prices. He goes on to say:

To illustrate this way oi overvaluing capital, or " stock-watering," suppose a company to be capitalized at $200,000, and that this company issues at the beginning 1,000 certificates of the par value of $100,000, but sells them for only $60 per share actually paid into the treasury. Here is $60,000 paid-in capital, lepresented by $100,000 face value of stock certificates, leaving a margin of $40,000 " water." Suppose, further, that another block of $100,000 of the stock is given to an inventor for his patent, the real value of which is only $10,000. Finally, suppose that bonds are issued to the extent of $300,000, and are floated at par. Then the company has received in actual cash only $360,000. Of this sum only $60,000 has been received from the stockholders. The patent, which has also been contributed m return for $100,000 of stock, and which is worth only one-tenth of that sum, makes	the total	balance due the	stockholders$70,000. But, the company is capitalized at $200,000. Consequently	it will be	necessary for the	bookkeeperto exaggerate	the assets	to the extent of	$130,000. He
may do this as follows:
Assets	Liabilities
Plant (cost	$360,000)..	$400,000 Bonds	 $300,000
Patent (worth $10,000).	100,00 Capital.... 200,000
$500,000	$500,000
Here $90,000 of the exaggeration is put under patent and the remainder in an overvaluation of the plant. Many other methods of stock-watering are possible. A common one is to allow the plant to run down.
That is sometimes called mismanagement.
It is sometimes said that stock-watering is not wrong, as long as all the terms and conditions are known. This is much like saying that lying is not wrong, provided everybody knows that it is lying; lor a false balance sheet is oniy one form of a false statement, and, ordinarily, a false statement is made with the intent to deceive. The object may be, for instance, to mislead intending bondholders by making them believe that there is a larger security for their loans than actually exists. We see here one reason why honest men often undervalue their assets-
And so on. That, Mr. Speaker, is the learned opinion of Professor Irving Fisher in his book The Nature of Capital and Income, given at pages 79 and 80. I would suggest that that is one form of watered stock which has perhaps not come to the attention of the Secretary of State; but the undoubted fact i3 that in Canada, as in other countries, you have the vast body of the public called upon to pay dividends on watered stock for which no value has been given.
If you will turn to the table from which my hon. friend from Mackenzie (Mr. Campbell) has read, I would like now to sum it up. He mentioned several companies including the Amalgamated Asbestos Corporation, Ames-Holden-McGready, Limited, and the Canada Cement Company. I will take the Whole list and summarize it. Ninety-four companies came into various amalgamations, and were thereby reduced to 17 combines or mergers. The 94 companies had a total capitalization prior to amalgamation of $63,788,500. Upon that capital, I presume, they were paying

Watered Stock
dividends to the stockholders; but after amalgamation we find that these 17 corporations have a total capital of $206,650,000. The increase in the capital value of the above companies, authorized under tihe Companies Act is $142,861,500, or 324 per cent, and on that the company now expects to pay dividends. This situation unhappily is not confined to this country. Yet I will say that a certain condition in this country. tends to make the watering of stock a more common practice than in others. This condition is undoubtedly the special privilege of tariff protection which is extended to companies or corporations of the kind cited in these mergers. For example, where a tariff duty is raised so high that it prevents any reasonable competition in the home market, and gives to a corporation in the country complete or almost complete monopoly, and so control of the home market, undoubtedly that company is in a position not only to pay lower wages to the people it employs, but also to exact higher profits from the people who buy its goods. I would, therefore suggest to the minister, who is anxious for suggestions, and in the hope that his officials will do more than his government, that one of the means by which he could get over the British North America Act in regard to the British Empire Steel Corporation-and he was anxious that my hon. friend from Centre Winnipeg (Mr. Woodsworth) would help him out in that regard-is to cut off all bounties on steel until the water is squeezed out of that stock. That would be one method.


William Findlay Maclean: What about
cement?


Edward Joseph Garland: Exactly. I would suggest that with regard to other corporations or combines that have watered stock on which they may be exacting profits from the people, the protective tariff be removed entirely.


Milton Neil Campbell: And cut out the special railway rates that some of these companies enjoy.


Edward Joseph Garland: I have in my hand a further list of suggestions which possibly the Secretary of State has not seen. They were made by Professor Albion Small, a leading American sociologist, and appeared in the January issue of the American Journal of Sociology, published by the University of Chicago Press. Professor Small's views on the problems of profits are practically similar to those expressed by the English economist, Mr. Hobhouse. I will summarize them:
(1)	Stockholders should receive not more than a maximum rate of dividend calculated to be enougn above the average rate of return upon dividends to encourage investment in needed new industries.
(2)	Stockholders should be restrained from evading the prescribed dividend limitation by voting salar.es to themselves for services, mostly imaginary.
1.3) Premiums in the form of pro rata dividends on salaries and wages should be offered as inducements to increased output.
(4)	Net profits in excess of the prescribed dividends and premiums offered on salaries and wages should be divided in some proportion to be determined by experience between employees of all sorts and the state.
(5)	The state's share of the profits should not be available for governmental expenses, but should go to some holding concern, perhaps an adaptation of the Federal Reserve Bank, to be loaned to most desirable industrial enterprises-desirable from the standpoint not of private but of public interest.
I cannot altogether give my assent to all the proposals of this learned gentleman, but I refer them to the minister among others that he is going to take into his consideration.


James Alexander Robb: May I ask my hon. friend if
he does not think that already Canada takes a considerable share of the profits of these companies by way of income and other taxes?


Edward Joseph Garland: I find some difficulty in arriving at a complete answer to that extraordinary question. I do
5 p.m. not think the government is taking anything like the income tax it should, either from individuals of from companies. I am in favour of a much more steeply graduated income tax than we have at the present time, and the elimination of indirect taxation altogether.
In conclusion, let me say that I sincerely trust the hon. member who introduced this resolution will see to it that the House gets an opportunity to vote upon it. I am anxious that that should be done in order that hon. gentlemen opposite will have an opportunity of registering themselves fairly on this question. I dislike very much to have them one session declaiming loudly against the evils of watered stock, and in the next session, anxious to avoid a vote upon it. We have, for example, the eloquent member for L'Islet (Mr. Fafaxd) who in discussing this whole question, at page 1714 of Hansard of last year said:
When the manufacturer bewails the fate of the poorly paid workmen, to justify a request for higher protection, he lacks sincerity; for when certain companies were realizing, during the war, profits of 25, 50 and even 100 per cent, the manufacturers did not idise the salary of the workman; on the contrary they even increased their capital fourfold in " watered stock " so as not to show too large a dividend.
I am quite sure the hon. member for L'Islet will be glad to vote for this resolution. Then we have that very eloquent gentleman the
Watered Stock

hon. member for Charlevoix-Montmorency (Mr. Casgrain). He took almost two whole pages of Hansard last year condemning the practice of amalgamation of companies for the purposes of issuing watered stock, and he quoted at some length-Hansard, page 1886- from the Montreal Financial Times dated April 11, 1924 showing how brazenly these corporations blazen forth their vast profits on the pages of the public journals. Then we have the hon. member for Colchester (Mr. Putnam), who was perhaps one of the most outspoken on this matter. He says:
If dividends are doubled by the application of protection, the owners of the industry will resort to the very common device of watered stock in order to conceal from the consumer the extent to which he is exploited.
I notice my hon. friend from Hants (Mr. Martell) has fled. I wonder is it because he is bored with the subject, or because he finds so many on his side are in favour of the abolition of watered stock? Why, I even find the Minister of Justice (Mr. La.pointe) speaking on the same subject. He does not attack the thing very pointedly, but he talks of watered stock mandarins, whatever a "mandarin" is, something very ferocious, a sort of bogey we are supposed to see in the woods, but which he never sees when he has a chance to invade them.
I therefore sincerely trust that the hon. member for Mackenzie will see to it that the hon. Minister of Justice and all his colleagues get an opportunity of voting on this question.


William Irvine: The hon. member states
that he would like the question put to a vote, in order that the government might place itself on record with regard to the question. Does he not think the easiest way out of the difficulty would be for the government to accept the resolution and put it in the waste-paper basket to-morrow?


Edward Joseph Garland: I have no
doubt if they accept the resolution that danger would still be ahead of it, but I am willing to take the Secretary of State's word that he will accept the resolution and bring down the legislation upon it, and I am willing to wait.
I am always reasonable.


Henry Elvins Spencer: Mr. Speaker, I was indeed interested in the outlining of this subject by the hon. Secretary of State (Mr. Copp). From the fact that his department has given this subject so very much consideration, I feel sure that the government as a whole will support the resolution as it is presented. Possibly when he was 
speaking he was thinking of the clause in the Speech from the Throne which referred to the tremendous high cost of living and the necessity of something being done to lower that cost. In my opinion, possibly no better steps could be taken than some drastic measure with regard to the control of the watering of stock. If this were done it would do more to cut down the high cost of living than many other things we could mention. We have to admit that the matter of centralization of industries is a most natural law in the development of civilization, but there is no reason why we should not regulate these industries, particularly with regard to this matter. There is no doubt, as other hon. gentlemen have said, that the matter of watering of stock brings many evils in its trail, and amongst others is the creating of a higher cost of living, the cutting down of purchasing power. It is one reason for the great labour unrest, and also for the vast unempl 03-men t we have at the present day. As the hon. member for Centre Winnipeg (Mr. Woodsworth) and the hon. member for Bow River (Mr. Garland) state, there is not the slightest doubt that the trouble we are having in Nova Scotia at the present time with the British Empire Steel Corporation is very largely brought about by this evil. The question of watered stock touches every industry, every trade and every life in this country, and it is not surprising therefore, to find the following resolution passed by a convention in Alberta:
Whereas, what is commonly known as watered stock is largely responsible for the high cost of living.
Therefore, be it resolved, that legislation be enacted prohibiting this practice.
This was adopted by the Annual Convention of the United Farmers of Alberta held in Calgary, January 20, 1925. I have before me a very interesting book entitled Wake Up, Canada, written by C. W. Peterson, where he speaks on this subject at page 244, as follows:
It is also well to remember, as has been pointed out previously, that in most cases, the builk of the common stock, in some cases practically all of it, merely re-presents allotments to promoters and bonus allowances to purchasers of the company's preferred stock or bonds. It is therefore in many cases clear loot, upon which the consumer has to provide dividends.
In the chapter headed, "The Looting of Canada," I find a statement showing the earnings available for common stock,-after deducting interest on bonds and dividends on preferred issues-of twenty different in-

Watered Stock
dustrial enterprises in Canada. I will quote
these figures to the House:
Common
Stock
Name of Company	Outstanding
Canada Car and Foundry Company.. ..	$ 4,963,000
Canada Cement Company	 13,500,000
Canadian	Cottons Limited	
2,715,000Canadian	General Electric	
8,000,000Canada Locomotive Company	
2,000,000Dominion	Bridge Company	
6,500,000Dominion	Canners, Limited	
2,794,000Dominion	Steel Company	
37,097,000Dominion	Textile Company	
5,000,000Laurentide Company	
9.600,000Lake of the Woods Milling Company..	..	2,100,000Maple Leaf Milling Company	
2,500,000Nova Scotia Steel and Coal	
15,000.000Ogilvie Flour Mills Company	
2,500,000Penmans Limited	
2,150,000Price Brothers and Company	
5,000,000Riordon Pulp and Paper	
4,500,000Sherwin-Williams Company of Canada..	..	4.000,000Steel Company of Canada	
11,500,000Woods Manufacturing Company	Limited..	1,718,000
I did intend to put a great many more figures on record, but the subject has been so very fully covered by the hon. members who preceded me that I will not take up time in so doing, but I do await with interest a statement of the policy of the government with regard to this subject.
Right Hon. ARTHUR MEIGHEN (Leader
of the Opposition):	Apparently we have had
all the illumination on this subject that we are going to get from the government. The hon. Minister of Agriculture (Mr. Motherwell), when he thinks of how great that illumination has been, smiles in derision.


Mr. MOTHERWELL:: I have not had the advantage of hearing the discussion.


Arthur Meighen: Then it is just as well, as far as any light on the subject from the government side of the House is concerned. I have some opinions on the question. I do not think they are in agreement with any opinions offered so far-at least not in total agreement-but I shall present them to the House, in case they might be considered of some value by someone. The hon. member for Bow River (Mr. Garland) opened with an expression of deep sympathy for the government benches, in that they found themselves perforce silent on a question on which their enthusiasm just a short time ago knew no bounds at all. My sympathy really is with hon. friends to my left, that the hopes with which they looked forward to great drastic reforms on this question of watered stock, as on many others, are dashed to the ground. I of course compliment them on the placidity, the good nature with which they meet the situation. That is, for the most part; some
of them seem to chafe under it, but others are more anxious to see that no Liberal opposes them in the next contest than they are to advance very far in the reforms they so long had at heart.


Robert Forke: What has that to do with
watered stock?


Arthur Meighen: Watered stock had a lot to do with the same question a few years ago, but watered stock sinks into insignificance beside the stock that is not watered, in this House. We all remember not only the speech referred to by the hon. member for Bow River (Mr. Garland) but the speeches of members of the present government themselves-yes, I have a very vivid recollection of the valiant attacks of the present Minister of Justice (Mr. Lapointe). He was a swordsman of wonderful skill, out in search of the big interests and these manipulators of watered stock; he was excelled only by the Prime Minister himself. But the cohorts were numerous, and this chamber used to ring with condemnation of the scandalous stock issues that were going out from the Secretary of State's office, and the whole practice of crushing the masses under this burden of overcapitalization.
The matter is brought up now by an hon. member to my left who has not forgotten his early training and beliefs. The hon. member presents the evils under which the people suffer, and he brings in a most moderate resolution for some sort of relief, doubtless in the hope that it would be accepted by the government. He asks them to do whatever is possible to alleviate the situation. The Secretary of State (Mr. Copp) representing the government replies, and I think I can give a synopsis of his reply. He admits that this is a very important question. He is pleased that it has been brought forward by the hon. gentleman of the Progressive party. He explains that it has caused a great deal of worry to himself and his officials. They have thought over it by day and slept over it by night. There are many phases to the question. Indeed, there are many kinds of watered stock. Some watered stock, he says, is given in payment of good will; other watered stock is given in payment of something else, so that there are different kinds of watered stock to complicate the situation, and thereby add to the difficulties of the administration. He ends, however, with the very momentous pledge, that this resolution moved by the hon. member will be placed by him before the officials of his department. Thus is represented the interest the government now has in the question of watered stock. The only sug-
Watered Stock

gestion the minister made was that he was ready to do this honour to the hon. gentleman's resolution-he was ready to find it a secluded sepulchre.
I said in opening that I am not in full accord with hon. gentlemen to my left on this question. I do not think that all they attribute to watered stock is directly or logically attributable to it. I am against the practice of issuing watered stock and in favour of its curtailment, for the reason that it is, on its face and in essence, a misrepresentation. There is only one kind of watered Stock, as everybody knows. What is meant by watered ' stock is watered stock issued for nothing. That is all. It is not watered stock issued for goodwill, but it is watered stock issued above the value of the goodwill, if for goodwill. In a word, all watered stock is issued for nothing and the public are invited to assume that it is worth its face value.
Before stating further the objections that I have to watered stock, let me refer to one or two allegations made by hon. gentlemen to my left. They seem to assume that watered stock forms the basis of a vested right to tariff protection. I take a position of direct opposition to any such assumption. I do not think watered stock forms any right whatever or constitutes any portion of any right to tariff protection. Nor, for ithat matter, do I think any stock constitutes in itself any portion of a right to tariff protection. Tariff protection does not rest on the need of paying dividends on stock. Tariff protection rests on the need of making a country and on nothing more. When hon. gentlemen lightly use the words that "the public are called upon to pay," I ask:	Who calls upon them to pay?
No government has a right to call upon them to pay and I do not know who there is besides a government. The public are not called upon to pay a nickel upon watered stock, or, for that matter, upon any stock. The public are absolutely free to pay or not to pay as they may see fit. Hon. gentlemen may say:	But a company gets into a position
where it has a monopoly of the field, and an instance is given of the Canada Cement Company. I am not saying that the Canada Cement Company is in that position; but if a company gets into the position of a monopoly, it does not get there because it has issued watered stock. It would be there just the same if it issued stock only to the value of the assets it possessed.


Milton Neil Campbell: The contention that I
made was that the company by amalgamation of competing companies was in a position thereby to raise its prices.
[Mr. Meighen.l


Arthur Meighen: Very good. If such is
the case, that unjust power of the company is due to the amalgamation and not to the fact that upon the amalgamation it issued watered stock. If upon amalgamation the Canada Cement Company had issued stock only to the exact value of even one-half the value of the property that went in, it would be none the less an amalgamation and it would hold just as great an area of Canada as its market.


Milton Neil Campbell: Watered stock is a
result, not a cause of the merger.


Arthur Meighen: Watered stock is only
an incident and has no relation to the power of the company after the amalgamation.


James Shaver Woodsworth: Is it not true that
companies refuse to pay higher wages on the ground that they cannot pay their dividends, those dividends being on watered stock?


Arthur Meighen: As I know companies,
they will not pay any more wages than they can avoid paying whether their stock is watered or not, nor will anybody else. They will pay the wages that they find they have to, first of all in the labour market and second, that will appear fairly satisfactory to the men employed. The question of the water in the company cannot be used logically by any concern. To my mind, no wage earner is so ignorant as to be in the slightest imposed upon by any company which urges the fact that it has to pay a dividend on watered stock, as a reason why it cannot pay wages.


James Shaver Woodsworth: Some boards are
so ignorant that they allow that to weigh with them in granting their awards.


Arthur Meighen: If any board of conciliation is, it ought to surrender its charter. I cannot conceive of any board of conciliation so ignorant as that. In a word, the fact of the water gives a company no right whatever, not even an ostensible, plausible right in respect of wages or tariff or anything else. It is argued as well that the issue of large blocks of watered stock has the effect of deceiving the public. In this, I am in full agreement. It is certainly true that to give a certificate on its face value which it does not possess is very likely to deceive, or contributes at least to deceiving the intending purchaser. Therein I find the main objection to the issue of stock that can be said at all to be watered.
I am aware that especially in this country as a confederation many difficulties present themselves in remedying the situation The

Watered Stock
provinces, as well as the Dominion, have the right to incorporate companies. The Dominion, upon its incorporation, has rights in respect of the control of capitalization of all kinds and the sale of stock representing the capitalization. It has no corresponding rights at all in respect of companies incorporated by a province. This Dominion incorporated most of the companies referred to by bon. members to my left. It incorporated the Canada Cement Company. It incorporated Ames-Holden. I think. It did not incorporate the British Empire Steel Corporation; that privilege was left for the government of Nova Scotia. But most of the companies complained of by hon. gentlemen to my left were incorporated federally, and whatever may be the responsibility for the issue of overcapitalization, it must rest on the government responsible for the issue of the letters of incorporation. But to the best of my recollection, every single one of the companies mentioned by hon. gentlemen to my left was incorporated either under this administration or under the administration which preceded 1911. It is a fact that all these mergers about which we have heard so much, the evils of which were crushing the population, were created one and all just a few years ago under the auspices and the authority of hon. gentlemen opposite or of their predecessors in the government of the Liberal party.


Mr. GOULD:: Will the hon. gentleman
tell the House why the charter of the Besco Company was refused by the federal government?


Arthur Meighen: That could be done better by the hon. member who sits to my left (Sir Henry Drayton). However, I will give a frank answer. The application was made; it was held in the office of the Department of Finance for many weeks; and the charter was withheld on the ground that in the judgment of the department the capitalization issue was too high. It was finally withdrawn by the company itself; and no absolute, written refusal having been given, application was made to the government of Nova Scotia and a charter was issued in pursuance thereof.
I was going to make some reference to the companies mentioned by hon. gentlemen to my left. Let me say again, as I sand before, that the actual incorporation of these companies, irrespective of the capitalization, gave them no right whatever to any tariff protection. In a word, the right to tariff protection does not rest upon the necessities of any concern at all; tariff protection is not in any way whatever an individual right. Tariff
protection is a matter of policy, and the only question before a government or parliament is-is it better for the nation? It is not a question whether protection is needed by any corporation or individual.
Reference has been made repeatedly to the great amount of water injected into the stock issue of the Canada Cement Company. I do not think it can be reasonably disputed that this allegation is correct. Certainly, however, I was in no way, nor was any one of my political friends, responsible for its issue. I think it is a fact that that company to-day controls a very large share of the market of this country; I suppose it has reached perhaps the proportions of as large a controllable market as any single concern in Canada. Hon. gentlemen to my left as well as hon. members opposite used to inveigh against that condition of affairs; and they threatened that as respects the commodity produced by this particular concern there was going to be free entry into this Dominion after they came into power. Now, I may tell hon. gentlemen to my left, confidentially that I do not think that anything I could say would persuade hon. gentlemen opposite to interfere with the tariff on cement. But I do not want anything I Shall say to indicate that it is my view that Canada suffers to-day because of the tariff on cement. I do not think it does. I believe it is a fact that to-day cement sells lower in this country than in the United States or in any of our competing countries. That I believe is true. I know there is a great deal of watered stock, but I do not think that those who suffer are the public of Canada. There doubtless are sufferers, I presume; but they are not, I say, the Canadian public. I have made that statement because I have no wish to appear as the defender of this concern; I do not need to defend it. As I said before, no appeal however fervent, nor any language however eloquent, on my part would have any effect on hon. gentlemen opposite in this respect.
The question comes, then, as to what can be done in this country under the difficulties I have mentioned incident to our federal system. We cannot control the issue of provincial charters. If we placed restrictions on the issue of federal charters which would give less rights to the companies applying federally, then they could apply provincially, the probable result would be that the number of provincial charters would be increased -while the federal charters would diminish. What could be done would be mainly by co-operation with the provinces. And even then care would have to be taken that the restrictions were not such as might give to the incorpor-
Watered Stock

atoTS in other countries, who would operate here under license, any advantage over Canadian concerns. I have always felt, and subject to any further light I can get on the question, I still feel, that there is no reason why stocks should have any par value at all. I do not know why the state should put its imprimatur on any special value attributable to a certificate of stock. Some years ago, I think a couple of years before the late government went out, we introduced and , put through parliament an amendment to the Companies Act to provide for the issue of stock of no par value. Many companies have since been incorporated on that basis; their stock has no par value at all and therefore no one can be deceived. But of course the company still has the right to get stock and fix a par value if it applies. I presume that most of the applicants still ask for the issue of stock of regular par value, and if we ourselves were to proceed to limit the grants of charters to those who issued only stock of no par value, unless the provinces did likewise, it might result in a larger number of provincial issues and a withdrawal to a degree from the federal field. But if the provinces would concur and would adopt the practice of issuing charters only in the case of stock of no par value, it seems to me that a better state of affairs would ensue. No purchaser of the stock could be deceived by anything the government did. He might still be deceived by the seductions of agents; he might still be deceived by misrepresentation on the part of the company. But at least this parliament could be certain that he would not be deceived by a nominal par value across the face of a certificate, placed there on the authority of the government acting by virtue of a statute. This it seems to me would be a real reform. I have never seen advanced any reason that appealed to me at all, why the state should be asked to fix any special par value on a certificate of stock. And this in my judgment applies to preferred stock just as much as to common stock. As respects all that represents the proprietary interest in any concern, why should the state decide what the face value of a certificate is?
There would still remain the problem of controlling the sale of the stock even though it issued without par value. This cannot be done by the federal parliament alone. The federal parliament can control in the first place the sale of stock of companies enjoying federal charters; that is to say, the sale by the company itself. But we could not control the sale by those who purchased from the companies, in whatever form they might purchase.
[Mr. Meighen.j
Similarly, the provinces alone can control the sale in the first place of stock that issues from provincial companies but not the subsequent sale of stock after it has passed from the hands of the company itself. The different provinces have sought to effect such control; the first was Manitoba under the regime of the Roblin government. The blue sky law which that government put through the legislature was in my judgment most efficacious. At the time of the gas and oil boom of about thirteen years ago it saved innocent purchasers in that province hundreds of thousands if not millions of dollars. I do not know whether it is in effect now or not; until the Solicitor General intervened I was under the impression that it had been allowed to die.


Edward James McMurray: The late administration in Manitoba was defeated on a vote to provide for the payment of the Public Utilities Commission, and the present government of the province has set the law aside.


Arthur Meighen: Yes, I did not think it
was in effect at all at the tame of the sale of the L. R. Steel stock.


Robert Forke: Is the Solicitor General correct in saying that that statute has been entirely set aside?


Edward James McMurray: That is my understanding-it has been set aside by the present government.


Arthur Meighen: I do not want my hon.
friends to my left to feel hampered because when in office they do not do what they are very enthusiastic about when in opposition.


Robert Forke: I thought that law was
being administered by the municipal commissioner, Hon. Mr. McLeod. Of course, if the Solicitor General says that my impression is wrong-


Edward James McMurray: The law was left on
abeyance for a year and a half.


Arthur Meighen: For a long time it was
not in effect at all. Now, it may appear from what I have said that the area of usefulness which remains in this respect is not very extensive. I do think that every encouragement should be given-and it is probable that legislative restrictions to that end could be imposed-I do think that every encouragement should be given to the issue of stock of no par value, and that an effort should be made to secure the co-operation of the provinces to adopt a like policy. If all did so, then there could be no misrepresentation under federal or provincial sanction, and

Watered Stock
at the same time there would be no impoverishment of the powers of a company which would handicap it as compared with its competitors in other lands which might operate under license here. Let me say that I think a reform can be effected. I do not oppose the resolution at all. What I rose mostly to do was to declare my conviction that the extent of the reform is not half as great as the mass of people imagine, and the extent of the evil is not at all that portrayed !by many who have spoken in this debate. It seems to me that we have far more watered stock to-day, Mr. Speaker, than we had a few years ago. Watered stock is stock that represents no value. What may be represented by water alone one day, may be represented by value a few years after; what may be represented by value one day may be represented by water a few years after. So water is not injected only on the incorporation; the water is the result of the process of time, of management, and of public policy, and the stock issues of thousands of companies which had par value, and for which full value was given, are to-day represented by nothing: they are water pure and simple and the water itself has evaporated. It is of far more concern to this parliament to see to it that we follow a policy which gives value to the operations of concerns, and thereby gives some value to their stock. It is far more important that we direct our attention to these things than that, we worry over evils which to a large extent are imaginary, and which in any event at the present time are beyond our power to cure except to a small extent.


William Findlay Maclean: Mr. Speaker, I agree altogether with what the right hon. gentleman (Mr. Meighen) has said in regard to this resolution. But I would go a bit further and make a suggestion to the government, especially to the Acting Minister of Finance (Mr Robb), that the way to get at the evil is through the income tax; and the income tax is with us now to Siay for a good many years. If a company is found to be taking unfair advantage of the people, and I do not care how much watered stock is in it, I would subject its assets and its business to strict examination. If it is found to be taking unfair profits by reason of watered stock, let it be punished by increasing the income tax. In other words, have a flexible, adjustable income tax. The Pullman Car Company of Chicago is verv heavily capitalized now. They know they are taking too much out of the public in their sleeper charges, and half of their profits now go back to the railway companies. I take it
that the Canadian National is drawing an immense income from the contract that the old Grand Trunk had with the Pullman Company. Another great company over-capitalized is the Standard Oil Company, and they are making restitution to the public through ihe Rockefeller family, who have made enormous charitable donations for various public purposes. But the greatest over-capitalization in history is in process of formation in the United States, where the consolidation is being formed of all the telegraph companies, the Bell Telephone Company, and the cable and wireless companies, and the flotation will be made almost any day. There should be a way of getting at these companies, and the only way I see is to measure up the service they give against the income they receive from the public, and tax their enormous profits. As the leader of the opposition says, there are lots of companies that are no good now, and there is no reason why the public should continue to be taxed, even if Max Aitken did get a peerage because he floated a great deal of watered stock on the Canadian people. There is the example that is set up for all the boys of Canada to-day: Pe a Max Aitken and then you will become a peer in England.
You cannot punish the men who float these mergers, but you can make them share their over-profits with the public. The Acting Minister of Finance is looking for further income, and perhaps he and the Secretary of State will accept my suggestion. Let them get some " mousers " to find out how these excessive profits can be taxed. I want to toll him what takes place in the province of Ontario. There when estates are valued for probate, and the mouser they have up there in the attorney general thinks the valuations are too low, he checks them up and sees that a fair amount of the estate comes to tlic province by payment of higher duties. The Acting Minister of Finance is very much in need of increased revenue and he should devise such a scheme as this. The responsibility is not on private members to apply a cure, it is on him and on the government, and I hope instead of following the mild suggestion of the Secretary of State-he says to the House, "If you give us some suggestion we will follow it up "-I hope instead of following this course the government will lealize that the duty is on them to frame a policy to protect the investor. The only way I can see of effecting this is to adopt more and more the principle of no par value stock Let every one of these companies be investigated each year so that their assets and their profits may be accurately determined, regard-
Watered Stock

less of the amount of watered stock there may be. They have no right to say that watered stock is entitled to a dividend and that before any tax can be imposed upon it the dividend must be paid. That is not the issue at all. It is the income of the company that ought to be taxed. The only way to get at the difficulty, especially where a company's in-< come is based either upon a monopoly or upon watered stock, is to investigate the company every year; you will put the fear of God into them if they have to make an annual statement. The Minister of Justice (Mr. Lapointe) is going to vote on this; I want to tell him to get a mouser in his department and we will find out about these things. That is the only way to get rid of this grievance-and it is a grievance-with respect to watered stock. There are more victims of watered stock in this country than of anything else. As the right hon. gentleman (Mr. Meighen) says, the provinces and the Dominion must agree on this matter; we must have a united policy. But even that will not work out as effectively as the method I have just suggested. If you find a company making exorbitant profits, then they must know that they are not entitled either to the protection of the tariff or to protection in respect to their watered stock, to the extent that dividends must be paid on that stock before the public are protected.


Mr. JOHN EVANS (Saskatoon):: Mr. Speaker, I did not think there could be any two opinions as to what watered stock is. To me the whole thing has a moral aspect apart from its economic side. There is no doubt that in the years past companies and promoters have capitalized the benefits granted to them by politicians in both the Dominion and the provincial legislatures, such as tariffs, bonuses, bounties, subsidies, tax exemptions, land grants and so on. Watered stock in capitalization is really an American feature, and I think it reached its peak in Canada during the administration of the Laurier government some years ago. To me the whole thing is a fraudulent abstraction of money from the pockets of the people. The representatives of the people, therefore, are entirely responsible for the whole thing. It does really amount in the end to a sale of the rights of the people, to giving the right to certain promoters to take money out of the pockets of the consumers and wage earners of this country. In a speech made in this House on March 22, 1892, Sir Richard Cartwright said:
Thousands of dollars were turned over at Red Parlour conferences to those who devised robbery for the development, of the election fund.
fMr. W. F. Maclean.]
There is not a doubt in my mind that corruption is a part of the National Policy itself; that the National Policy tends to corruption of politicians. Indeed, Sir, the Labour Herald of Glace Bay, Nova Scotia, December 6, 1924, has this to say regarding the British Empire Steel Corporation:
Some time before parliament adjourned Mr. Joe Steel, M.P.P., asked several questions in regard to the purchase of coal by the government for public buildings. Below we give the reply which he received. Study the prices paid to the different companies. Look at Inverness : bankrupt Inverness, gets as low as $4.60 per ton for coal, and the British Empire Steel Corporation for coal not one whit better, and in some respects not so good, receives $11.75. Why the difference of $7.15? There is only one answer: The British Empire Steel Corporation buys up governments, and politicians are for sale. No politician would ever look to bankrupt Inverness to finance his election or other expenses. But Besco can do it, and did it in Newfoundland. And where does Besco get the money to spend on corrupt politicians? Out of the public with the consent of the politicians.
Canada stands well up in the list to-day as an exploiting capitalistic country. From an editorial in the Ottawa Citizen of June 29, 1924, I clipped the following:
The manufacturing of millionaires has been frequently mentioned, and recently there has been publicity added regarding the increase of inflated wealth through various corporation mergers. The formation of this one steel corporation is an excellent example of the prevailing method of "making" money.	_
The authorized statements of the corporation provide the facts. The projected financial statement published over the name of the president discloses the fact than the liability for bonds and debenture stock, representing the intrinsic value of the properties, amounts to $31,102,000, to which must be added deferred payments of $1,484,000. There has been issued in addition to the foregoing $101,750,000, and so far as evidence appears in this regard, this amount appears to be entirely in the nature of a bonus distribution to the bondholders and the parties promoting the merger. The issuing of this large amount of liability of over $100,000,000 is easily balanced by a book entry, as in the case of the British company.
On the asset side of the statement the "land, buildings, plant, machinery, mining properties, and equipment" is written up to $130,000,000 by simply adding to the bonded indebtedness of $31,000,000 the $101,000,000 of common and preferred stock. That this appears to be an exact statement of the facts is confirmed by data taken from Poor and Moody's Manual Consolidated for 1922. The old issues of the merging companies amounted to $63,000,000 common and $19,000,000 preferred. The merger transformed this into $24,000,000 common and $77,000,000 preferred, thus adding to the previous inflated capital the sum of $19,000,000 by way of still further inflation.
So there can. be no doubt that to-day the British Empire Steel Corporation-and I say this in answer to the hon. member for Hants- (Mr. Martel!)-are squeezing their employees to pay a dividend on this watered stock.
Again, perhaps Dominion Canners Limited will furnish a good example of the watered stock method of robbing the consumers of Canada. That is one of the greatest evils

Watered Stock
of the protectionist system of this country. Some 43 companies amalgamated under the name of Dominion Canners Limited. This I take from an issue of the Farmers Sun of November 26, 1921. The actual capitalization of the various companies merged was $115,-
442,000.	They were authorized to issue exactly double the amount of stock, or $230,-
884,000.	Surely the responsibility must rest heavily on those who granted them this privilege.
Watered stock is essentially and particularly a feature of a protected nation. No doubt it is practised in some other countries, but as the Secretary of State said, the stock does have some value there in purchasing goodwill and the like; but here on this continent no value whatsoever seems to be given, and that is how the name of water has come to be used in this connection, because water really represents no value.
I need go no further to show the evils of the system, because my colleagues have already proved the existence of watered stock in the capitalization of many concerns. Some bon. gentlemen in this House are forever crying for more protection; but here is one feature of class privilege that is destroying even the industrial concerns whom it was supposed to benefit. We have built up the industrial concerns of this country on a plan on which it is now really impossible for them to compete. The hon. leader of the opposition declares that 2,000 of these factories have had to close their doors; he says be can vouch for the truth of this. But this is only what may be expected of all that are left before our industries come to run on a rock-bottom basis. It is not possible for an exporting country like Canada, for a country that derives most of its income from the export of agricultural products to ever carry on on this artificial basis. There is really only one industry in Canada that is paying its way to-day, and that is agriculture; and this industry has been bled for the last forty years for the sake of over-capitalized concerns. It is doubtful indeed if under the tariff system and watered stock capitalization we have not paid more in that way than even the total amount that has been paid by these industries in wages during all this time.
At six o'clock the House took recess.
After Recess
The House resumed at eight o'clock.


John Evans: When the House took
recess I had dealt briefly with the
injustice that the infusion of water into the capitalization of certain concerns placed on other industries, agriculture in particular and consumers generally, by reason of the dividends which they claim the right to earn on that which is only nominal capital. There is another charge placed on the real wealth of the producer which constitutes an injustice. By charging an unjust price for any commodity- which must be done if dividends are earned on what is only water or nominal capital,- the company enjoying that privilege is able to pass on more easily than otherwise would be the case the whole of the legitimate taxation which it should pay. This extra burden has mostly been borne as I say by the agriculturist, because he is in a position where he is not able to pass it on as other industries can. Let me give an example from the Farmers' Sun of November 26, 1921, which reads:
For example, the Dominion Textile Company has a capital of $5,000,000 common stock, of which only $500,000 was actually paid in, the balance "bonus" stock. On the actual capitalization it was shown by the Board of Commerce that they made 310 per cent, but on the "book" capital, they only earned 31 per cent.


Mr. WHITE:: What year was that?


John Evans: In 1921.


Mr. ARTHURS:: What was their dividend last year?


John Evans: I do not know.


James Arthurs: Was it anything approximating that amount?


John Evans: I cannot tell. This is a
fact and I am only dealing with facts.


James Arthurs: Is there the same amount of water still in that stock?


John Evans: I cannot tell, I think there is.


Arthur Meighen: Maybe the president lost some when he was over in Europe.


John Evans: That might be, I cannot tell. It must be apparent to hon. gentlemen that if an industry can pay 310 per cent on subscribed capital, a real injustice is caused to other industries in this Dominion.


Arthur Meighen: What does the hon. gentleman mean by subscribed capital? Surely he does not mean that the Dominion Textile had only $500,000 of actual value in its plant?


John Evans: That is what I gathered from the article in the Farmers' Sun.


Richard Smeaton White: I thought the hon. gentleman was dealing with facts.


John Evans: The hon. member can take the floor after I have finished, and show this

Watered Stock

statement not to be a fact, if it is possible. Let us consider this fact: that during the war when there was a prospect of wheat being high in price and the farmer had a chance of meeting the profiteering of the factory owners and distributors, the government arrested the price of wheat. It was stabilized then at about fifty per cent of what it ought to have been, and What the price would likely have been, while the manufacturers of munitions and supplies of war were permitted, by their faithful representatives in this House, to sky-rocket their charges and mulct this Dominion to the extent of the two billions of dollars that represents the public debt. Now the agriculturist and wage earner are supposed to pay this debt, a thing they did not incur, while the manufacturer goes free from paying even a fractional part, because he is still enabled by protection and watered stock to pass on his just debts to the wealth producer. I say, Mr. Speaker, that the debt of this country belongs to the watered stock companies and not to the agriculturist who had the price of his product fixed by law. When deflation started the price of wheat was not kept at the stabilized price set by the government until all the other commodities that entered into the cost of living and production came down to that level, but wheat along with all the other farm products, including live stock, was the first to fall in prices. During all the time since the war'closed the government has stood by and has been content to let all the watered stock bear dividends by further fleecing the agriculturist. Even the Canadian Pacific Railway Company, which has in the past divided melons of sixty and ninety million dollars among shareholders, were allowed to sky-rocket their rates so that ten per cent might be paid on hundreds of millions that they never invested in that concern. I say, Sir, that Canadian industries and public utilities will have to be drained of their water. It is time some idea of justice and equity prevailed in business throughout this Dominion, so that the different classes in the Dominion might have some confidence in each other and that the sectional differences of the country created by favouritism, class privilege and corruption, may be equalized before it is too late. It is useless at this time to talk of unity and optimism while these sores on the body politic exist, while parliament, instead of meeting out even-handed justice, is yet a place where privilege is dispensed.


Milton Neil Campbell: Mr. Speaker, I should like to make a reference or two to the remarks delivered this after-

noon. I was rather surprised to hear the Secretary of State (Mr. Copp) make the statement that people did not have to buy from these corporations. I should like to ask the Secretary of State if he would put that question to the citizens of Ottawa or to the citizens of Winnipeg or to the municipal council of any municipality, if they do not have to buy cement from the Canada Cement Company, or, if they buy from any other company, if they do not have to pay the price fixed by the Canada Cement Company, because that company absolutely controls the market to-day. Let me quote a little instance. On July 8, 1909, the city of Winnipeg purchased 25,000 barrels of cement which they secured at $1.77 per barrel. That was just before the merger took place. Three months later, after the merger was formed, they called for tenders for a smaller quantity. They received only three tenders each of them from an agent of the Canada Cement Company. They received tenders from no other company and the lowest price at which they could secure the cement was $2,24 a barrel. It is useless to ask the citizens of Winnipeg if they cannot buy the cement somewhere else and in that way avoid paying interest or dividends on watered stock.
Ask the people of Canada from the Atlantic to -the Pacific if they can avoid buying their oil, gasoline or fuel oil from the Standard Oil Company, because, after all, every oil company that is doing business in Canada to-day, I care not what be its name, depends entirely upon the Standard Oil Company. There is really no competition in the oil business in Canada at the present time. It is controlled by that one company.
Ask the farmers of the northwest why they use the vessels of the Canada Steamship Company, why the}'- provide business for that company. They have no alternative. The government of this country in putting a prohibitive rate on our railways to the sea prevents us from shipping our wheat to a logical point that would be a competing point for these vessels and forces us to hand it over to them whether we wish it or not. As usual, a great mass of legal difficulties is placed in the way of something being done. I have always found, since I have been in this House, that wherever something requires to be done for the common people, there is no end of legal difficulty in the way, the thing is impossible to overcome. But when one of the corporations needs something, these difficulties all seem to disappear immediately. When it was necessary to start the Canadian Pacific, to give it grants, cash subsidies, 25,-

Watered Stock
000.000 acres of free land, there were no legal difficulties. The provincial governments, where these lands were situated, did not have to be consulted. The whole thing went through without any trouble. It all depends, to use the old and perhaps a little vulgar saying, whose ox is being gored.
The Canadian Northern came to this parliament in financial difficulties in 1917. If the government of that day had not wanted to deal with the matter, they could have placed any number of legal difficulties in the way of providing means for the Canadian Northern to carry on. They got over those difficulties. The difficulties automatically vanished, because this was a huge corporation looking for something. The government of that day started the printing presses running and they printed about $25,000,000 of money which they handed over to that company. I am not particularly criticizing the government of that day. In fact, I think they did right. It was necessary to do something quickly. But when the people of this country want something, when the farmers are in distress, when the working people of Nova Scotia are in trouble, there seems to be none of that statesmanship that was shown on that particular occasion.


Arthur Meighen: The hon. member is
referring only to the present. The late government never declined anything at the request of the people.


Milton Neil Campbell: I am more particularly
interested in the present than in the past, but most of these crimes were committed in the past. We are assured by the Secretary of State that the government is studying the question. How long is the government going to study it before it does anything? In the debate on the amendment to the Companies Act last session, the whole situation was placed before the government. The decision of the Supreme court in the case of the Ruthenian Elevator Company was laid before the government of that time. A year has gone by and the government is still studying the matter. How long does it intend to continue to study before some remedy is provided?
The Minister of the Interior (Mr. Stewart) invites me as mover of this resolution to come forward with an amendment to the act. I think that is a remarkable invitation to come from the government.


Charles A. Stewart: Will the
hon. member please try to stick to what the Minister of the Interior said? He invited the hon. member to come to the department 76J
with suggestions. The government will take the responsibility for the amendments.


Milton Neil Campbell: If I misunderstood the minister, I withdraw the statement, but I understood him to say that the mover should submit an amendment to the act.


Charles A. Stewart: I did not
say that.


Milton Neil Campbell: I think my responsibility ends when I place before the government the necessity for legislative and administrative action. The responsibility for that action is then entirely on the government. The members of the government are more interested in avoiding embarrassment for the administration than in meeting the situation and trying to secure a remedy for it. The hon. gentlemen on the treasury benches must accept that responsibility. They cannot continually invite suggestions from this side of the House. We give them suggestions, but the responsibility is on them to provide legislation. The Solicitor General (Mr. McMur-ray) invited some suggestions from the hon. member for Centre Winnipeg (Mr. Woods-worth), and I could not help thinking that if the hon. member for Centre Winnipeg were in the position of the Solicitor General, he would not be asking anybody on this side of the House for suggestions to deal with the situation, he would deal with it fearlessly, courageously and actually do something. That is what the people of this country want today. They want to see on the government benches men who are attempting something and not simply marking time. The confession of any government of inability to deal with a situation of this kind is simply a confession of inability to carry on the government itself.
We have been discussing for a long time, a contract known as the Petersen agreement, the object of which is supposed to be the control of a combine. The government are making, or at least they think they are making, some attempt to deal with that situation, of which there is no doubt a good deal of political capital will be made in the country. They will appeal for popular support on the ground of what they are trying to do, whether the measure passes the House or not. Well, here is a combine that has existed for generations, and so far nothing effective has been done to control it. Here is an opportunity for the government to show itself to the country a real combine-smashing administration. If they take effective steps to cope with this evil they will have something tangible to show the country.
Watered Stock

The Minister of Agriculture (Mr. Motherwell) a few nights ago declared that we must line up either for or against the combine. That is precisely what I want to see, and an excellent opportunity presents itself right now for hon. gentlemen in all parts of the chamber to line up either for or against a dangerous combine. All sorts of obstacles are placed before us, however; legal impediments are suggested; and the British North America Act is again brought forward. It seems to me that those hon. gentlemen who raise the British North America Act now as a legal difficulty which we cannot get over should have supported the resolution of my hon. friend from South York (Mr. Maclean) a few days ago when he proposed a means of meeting that difficulty. But I am not particularly concerned about that act. When there are on the treasury benches gentlemen who have the will to control watered stock, regardless of the British North America Act, such control will be brought about. It is only two years ago since the same legal difficulties were conjured up when it was proposed to institute a system of inspecting banks. Hon. gentlemen at that time said it could not be done and that statement was echoed all through the House; the whole atmosphere of government was filled with the same thing-it simply cannot be done. But we did it; it is a fact to-day.


James Alexander Robb: Who did it?


Milton Neil Campbell: The government; but the government did it only when forced into action by public opinion. The government simply rode like a chip on the crest of a wave instead of directing the course of that wave. Now, I want to see on the government benches gentlemen who will direct these waves instead of being forced into a certain position by the trend of public opinion. We are controlling the insurance companies, for we have an officer with supervisory powers to keep in touch with them. We are also controlling our railways, and we are overseeing the banks. There is therefore no logical reason why the government should not exercise some control over the issue of watered stock. All that is needed is the will to action on the part of those in power.


[Stage Direction]
Motion agreed to.

Mr. G. G. COOTE (Macleod) moved:: 
Some hon. MEMBERS:: Order. West Toronto.


George Gibson Coote: I stand corrected. I refer
to the hon. member for West Toronto (Mr. Hocken). We have so many members from Toronto that we may be pardoned. Sir, if we sometimes do not designate them rightly. This editorial is headed, "Reduce the duty on motors," and proceeds:
Whatever else may be done with the customs tariff at the next session of parliament, there should be a substantial reduction in the duty on motor cars. It is clear from the prices quoted in the United States and Canada that the Canadian manufacturers are charging " all the traffic will stand." The duty of 35 per cent is more than protection. It is in part a government subsidy to the makers of automobiles. As long as the motor car was purely a luxury that only the rich could enjoy, there was not much reason for complaint. But the motor car has become a necessity in business and professional life, and those who are thus compelled to buy one should not be forced to pay excessive profits to the manufacturers. A certain type of car that sells in the United States at $1,875, costs $3,100 in Canada. That is altogether too wide a sjpread, and is not warranted by any factor in the trade. The American makers have larger production, it is true, but they pay higher wages, and there is no reason why their raw materials are any cheaper. The makers of motor cars in Canada are soaking the public unduly, and it is the duty of the government to lower the tariff, and in that way inject a little competition of American firms that will bring down the prices.
This editorial is from the Orange Sentinel of November 6, 1923. I have one other quotation which I should like to read in this connection. It is from the June number of the Textile Journal, a copy of which I think was sent to all the members of this House. It
contains a plea from a great many manufacturers for more tariff protection, and this is the way that one manufacturer puts the case. He says:
We presume manufacturers in every line-
He is asking for more protection.
-with the possible exception of the automobiles, in which we think there is an exorbitant protection, are suffering along the same lines.
Wherever men are gathered together in this country to discuss matters of current interest the tariff is very likely to be one of the topics engaging their attention, and you will always find many supporters of a protective tariff policy, but when autpmobiles are mentioned almost unanimously it will be agreed that the duty is much too high. I believe that the figures respecting the export of automobiles will prove beyond a shadow of a doubt that our motor manufacturers should now be able to get along with a substantial reduction of the protection they are enjoying.


Richard Smeaton White: What does the hon. gentleman understand by a substantial reduction?


George Gibson Coote: A great many different interpretations will be put on the word "substantial". Of course, if this resolution should be adopted as unanimously as the last one was, I have no doubt the government will interpret it to their own satisfaction. For my part, I would like to see the reduction very substantial. I would suggest about one-half of the present tariff. Of course, a little bit less than that might still be called substantial ; I have before me a copy of the Ford Times, which I think is the official newspaper of the Ford Company of Canada. This issue is dated June 14, 1923, and contains an article headed, "Export trade bid of Canada hits the United States," which says:
During 1922 the Dominion came through to the point of crowding the United States, exporting 37,958 motor vehicles, o*r almost half as many as our competitor across the border.
It gives figures for the different years, but I do not think it is necessary to take the time of the House quoting these. The article proceeds:
For the calendar year 1923 statistics show that there were manufactured in Canada 147,582 motor cars and trucks. Of these 69,920 were exported and 77,662 were consumed in Canada. That is, our exports were 47 per cent of the total output of our Canadian factories.
The value of automobile imports for 1924 was $11,443,158, the value of our automobile exports was $33,828,692, or approximately three times the value of our imports.
I have here, Mr. Speaker, a list taken from a publication by the Trade and Commerce department giving the exportation of motor
Tariff on Automobiles

cars and trucks from Canada. I find that we exported cars and' trucks to ninety-seven countries, dependencies and colonies being included undfer that term. The list includes automob lie exports to the following countries:
The United Kingdom.
East Africa	
South Africa	
British India..- .. ..
Ceylon	
Straits Settlements..
Australia	
New Zealand	
Argentine Republic..
Belgium	
China	
Cuba	
Japan	
Mexico	
Netherlands	
Dutch East Indies..
Spain	
Sweden	
Uruguay	
Venezuela

Total exports of automobiles were $27,246,000. Motor trucks were exported to a total value of $5,496,000. In addition we exported automobile parts valued at $4,162,000. Surely if ability to export is any determining factor, the tariff on automobiles-and trucks-might safely be reduced. I am quite free to admit that Canadian exporters enjoyed an advantage in certain British countries over their American competitors, but that advantage in the United Kingdom, to which we exported very largely, was only a margin of 10 per cent. If our automobile manufacturers can export so many cars to Great Britain in the face of this competition from the United States with only 10 per cent preference, why do they need 35 per cent protection in Canada?
Then there is another phase of the industry which might be considered in determining whether the tariff can safely be reduced. I want to call attention to some figures which were given before the special committee on Agricultural Conditions in this House two years ago. Take the case of the Ford Motor Company of Canada, the report in connection with which will be found on page 981 of the proceedings of that committee. According to the evidence submitted at that time the Ford Company of Canada was formed in 1903 with a nominal capital of $125,000, of which $62,000 was paid up in cash. The balance of the stock was issued, I think, to Mr. Ford and his associates for their patent rights on the Ford car. At page 997 the statement was made by an official of the company that no fresh money was subsequently taken in as capital, that the increased capital all came from earnings. The capital at that time was $7,000,000; cash dividends paid were $10,000,000; surplus and present worth, $12,500,000. That means that

$29,500,000 had grown up from the original investment of $125,000. In a recent issue of the Financial Post of Toronto there is this item regarding the Ford Company of Canada: During the past week Ford of Canada sold at 498 at New York, and there has been a bid of 500 with no stock offering on the Toronto exchange. This is a new high for these shares. Last January and again in March they reached 485, but have been down around 450 since then, the last sale being at 450 on Nov. 6. No reason is advanced for the activity in the shares unless it is expectation in the way of melon splitting. Shareholders have not been overburdened with dividends of late years, the company having paid but 10 per cent in 1924 and a similar amount in 1923. Earnings justified a greater payment. In 1923 they were $5,106,197 and 1924, $3,719,187, while the 10 percent dividend took $700,000 each year. Surplus to-day sfands at $19,609,861. It is interesting to review the dividend position of the shares since the company was organized in 1906 with $125,000 capitalization, reorganized 1911, $1,000,000 capital and again 1916, $10,000,000 capital, $7,000,000 issued.
That was a, pretty nice melon, Mr. Speaker -to raise it from $1,000,000 to $7,000,000 at one issue. Dividend payments have been as follows. I do not think I need read all the list; if there is no objection I would like it placed on Hansard.
The list is as follows:
Dividend Payments
	Per cent	Amount
1905	6	7,4881908	10	12,5001909	25	31,2501910	100	125,0001911	100	125,0001912	500 (stock)	625,0001913	20	150,0001913	33 1-3 (stock)	250,0001914	10	100,0001915	110	1,100,0001916	600 (stock)	6,000,0001917	5	350,0001918	5	350,0001919	35	2,450,0001920	15	1,050,0001921	30	2.100,0001922	30	2,100,0001923	10	700,0001924	10	700,000
The total cash dividends to date have $11,451,000 and the total stock dividends $6,875,000, a total of $18,326,238. I have pointed out that the capital stock is now $7,000,000. At $500 per share-that is whut this article says the price has been on the market-the capital stock would) be worth $35,000,000. On an investment of $125,000 the company has paid in cash dividends $11,451,238 and their capital stock is now worth on the market $35,000,000. In other words, if a man had invested $1,000 in stock of the Ford Company on the formation of the company he would have drawn in cash dividends $90,000; his stock at the present market price

Tariff on Automobiles
would1 be worth $280,000, making a total of $370,000 from an investment of $1,000.


Mr. CALDWELL:: That is in about twenty years?


George Gibson Coote: Yes.


Mr. GOOD:: It is better than farming.


George Gibson Coote: Yes, I think it would make most of our gold mines in Canada look rather poor. Some of the other automobile manufacturing concerns might show a similar statement, but I have not been able to get any information along that line. If the financial condition of this firm is any indication of the condition generally-or even if it is not- there would appear to be good1 reason why the tariff should be reduced.
Another reason why there should be a reduction in the duty is that the prices of automobiles and trucks in Canada to-day are not based on the cost of production. The automobile manufacturers are basing their prices in Canada on the United States price plus the duty of 35 per cent. It should be noted that there is an excise tax of 5 per cent in the United States and when our customs officials collect the duty on imported cars they add the 5 per cent excise tax to the sale price in the United States and use that as the value for duty purposes. This in reality makes the duty approximately 37 per cent of the price in the United States. There is in Canada in addition a sales tax of 5 per cent based on the duty paid value of the car and an excise tax of 5 per cent on the duty paid value up to $1,200 and 10 per cent upon any value in excess of $1,200. Take the case of a car which costs $985 in the United States; when the duty, sales tax and excise taxes which I have described are added, the cost of the car in Canada becomes $1,487.66. That same car is priced at $1,506 in the city of Toronto; the difference, I presume, would be the freight Detroit to Toronto. That, I may say, has reference to a car that is to-day being assembled in Canada. If the individual purchases the car in the United States he has to pay that 5 per cent excise tax before he gets it from the dealer, and a $985 car with that 5 per cent excise tax in the United States added would cost $1,545.27 by the time he landed it in Canada.
To prove that these manufacturers of cars are adding not only the 35 per cent but two or three per cent extra, which they are able to do because of this excise tax in the United States, I would like to quote here a list of prices at the factory on cars in the United States and in Canada, with the percentage of increase of Canadian price over that of the
United States. I would like to have this
list also placed on Hansard,		if there	is no
objection.			
The list is as follows:			
	United		Per-
	States	Canadian centage	
Price	Price	IncreaseFord touring car	$375	$520	38.6Ford Tudor sedan	580	755	Ford Fordor sedan .. ..	660	895	Extra for full balloon	tires	25	50	Chevrolet touring car ..	525	730	Chevrolet coach	735	1,015	38Essex coach	895	1,225	37Maxwell sedan	1,095	1,535	40Chrysler sedan	2,170	3,025	40McLaughlir.-Buick coach..	1,295	1,820	41Oldsmobile coach	1,075	1,495	39Oakland coach	1,215	1,695	39Hudson coach	1,345	1,840	37Overland touring car .. ..	495	710	40Canadian prices are from	37 per	cent to 41	per centhigher than United States	prices.	
To show hon. members what these cars cost in some districts in Canada, where we have to add a high freight rate, I would like to quote the following:
A Studefoaker coach in the United1 States costs $1,295; the same car at Calgary cost $2,145.
A Star touring car in the United States costs $540; the same car in Ottawa costs $845.
A Star sedan in the United States cost3 $820; in Ottawa $1,285.
An Overland five-passenger sedan in the United States costs $715; in Ottawa $1,275.
A Dodge special touring car in ithe United States cosits $985; in Ottawa $1,515.
A Dodge sedan in the United States costs $1,095; in Ottawa $1,940.
A Ford touring car, fully .equipped with starter and demountable rim, in the United States costs $375; the same car in Calgary costs $675 or an increase of $300 on $375.
I am quoting these figures just to show what these cars are costing consumers in distant parts of Canada. I go on:
A Fordor sedan in the United States costs $660; the same car in Calgary costs $1,085.


Mr. MacLEAN (Prince):: The hon. member has given the percentages of increased cost in Canada as compared with the United States. Can he tell us why there is a difference of from 35 to 40 per cent on different makes of cars, when the duty is all the same?


George Gibson Coote: I think it is from 37 to 41
per cent; I have no explanation of that, although one hon. member suggests that they add all that the traffic will bear. They have
Tariff on Automobiles

certainly got very close to the price which we would have to pay in the United States plus the 5 per cent excise tax there, and then they have added the duty and our own sales tax as well.
I have a list here of several makes of cars giving the price in the United States and the price in Toronto, which is the closest point to the United States where I could obtain prices. I may say that I had no difficulty in securing the prices of all American cars, but it is a little more difficult to secure the same data in regard to Canada; at least, I had trouble in finding any publication that would give me all the prices in Canada. If I have the permission of hon. members I will- insert this list on Hansard. It is not very long, and simply goes to prove that this practice is almost universal among Canadian companies of pricing their cars at the United States price plus all the duty which they can add.
Tax paid U.S. Toronto
Chevrolet 5-passenger touring car..	$ 525	$ 817Chevrolet coach	
735	1,118Chevrolet 5-passenger sedan	
825	1,279Star 5-passenger touring car	
540	844Star sedan	
820	1,276Dodge 5-passenger touring car..	..	885	1,404Dodge special touring car	
985	1,506Overland 5-passenger touring car	..	495	783Overland 5-passenger sedan	
715	1,199Jewett 5-passenger touring oar..	.	1,205	1,895Jewett coupe	
1,340	2,125Nash special 5-passenger touring car.	1,095	1,750Durant touring car	
830	1,395
I would now like to make a few remarks in regard to the duty on second hand cars which Canadians sometimes import from the United States. I took this matter up with the Department of Customs and in a memorandum which they prepared for me on the subject of used cars they state:
Used motor cars are subject to appraisal at the time and place of importation according to the condition of the imported cars. The practice of appraisers is to base the valuation on the list price of corresponding current models of imported cars and, under average conditions, to allow discounts for depreciation as follows:
Cars listed at less than $1,000 1 year's use	25 per cent
Mr. Speaker, you can go to the United States and buy these cars at a depreciation of 50 per cent. Why should the customs authorities take it upon themselves to arbitrarily say: No matter what you paid for this car you are going to pay duty on the basis of the list price of the car less depreciation of 25 per cent? On a car that has been in use two years they allow depreciation of 35 per cent; on a car in use for three years, 45 per cent; on a car that has been in use four years, 50 per cent. Now you can go to the United

States and secure a car that has had four years use at a depreciation of at least 80 per cent on the list price. On cars listed at $1,000 and over, after one year's use, 30 per cent depreciation is allowed. That should be at least 50 per cent. After two years use of the same car depreciation of 45 per cent is allowed; after three years use, 55 per cent; after four years use, 60 per cent.
Now you can get a used car costing originally $1,000 at a depreciation of from 80 to 90 per cent in the United States at any time, and anyone who will take the trouble to take an American newspaper and look at the advertisements for used cars will find that I have stated it conservatively.
I would like to give just two examples that have come under my notice of the valuation that has been placed on used cars by customs officers for duty purposes. In one case a Ford motor car was purchased in Spokane for $50 by two young men who were coming up to harvest in Alberta. When they got to the line the customs officer demanded $50 duty and tax on that car. They told him they had only paid $50 for the car and did not intend to pay $50 duty, and he could take the car.
The other case was of five young men coming up to harvest in Alberta who had a Chevrolet, 19201 model. I am sure that car could have been bought second-hand any place in the United States1 for $100 or less. They were required to pay $97 duty on that car. I am sure that statement is correct because I know these young men. As a matter of fact, when they got as far north as my place they were absolutely broke, and could not go any farther because they had no money to buy gas. They had to get work. It had taken all their money to pay the duty.
I feel this is a matter of very great importance to Canadians. A world car census recently made places Canada third in the number of cars used. The United States is first with 15,222,000 cars, or one car to about every seven people. Great Britain is second with
655,000,	and Canada third with 642,571, or one car to about fourteen people. With our sparse population scattered over such a large territory we need more motor cars and trucks. After all, Mr. Speaker, this is, I think, a question of transportation. Can we afford to pay 50 per cent more for our cars and trucks than the people of the United States? As a matter of fact, I believe this is one of the factors which is responsible for so many of our people having moved to the United States. People to-day are bound to have motor cars, and if they can get a motor car across the line for 50 per cent less than they have to pay here,

Tariff on Automobiles
other things being equal, they are very likely to go across the line. In many cases the price is prohibitive here, and they feel that if they go to the United States, where used cars particularly can be had very cheap, they will be able to enjoy the advantages of a car.
Transportation is one of the great-9 p.m. est questions confronting this country to-day. That is stated in the Speech from the Throne, and I take it that it must be a fact. Here is what the Ford Times says about one phase of this question:
The development of the automotive industry is only a logical sequence of the demand for transportation facilities, which have always played a major part in opening up a land to its fullest possibilities. With vast unopened areas in our land of huge distances, proper railroad service could not be a paying or a practical proposition. The need for transportation still remains and is of prime importance in changing these waste spaces into productive areas. No country can rise to its full height of importance without adequate transportation. Those who wonder at the continued increase in the sale of automobiles must realize that the big increases are in cars selling for less than $1,000. These constitute more than 80 per cent of the present market. Such cars are bought for their money-earning power. They earn their cost and keep. The automobile industry could never have attained its present tremendous totals over a period of 23 years had not its product more than justified itself economically. Its proper use lengthens life, increases efficiency, stimulates general business and promotes the wealth and stability of the nation.
Cars, Mr. Speaker, are a necessity for many people-doctors, merchants, travellers and I would also say many of our preachers, particularly in the western provinces, and more particularly our farmers. I have heard it. estimated that our farmers in Alberta live on an average about twelve miles from the railway station, but that not more than one-third of them have motor cars. This government has always been preaching to these people that they should engage in mixed farming. The government want these farmers to milk cows, and if the farmers are to milk the cows, as we have very few cheese factories in that country, the cream must be taken to the creamery or to the station. It should be taken at least twice a week, particularly in warm weather. The man who lives ten or twelve miles from the station and has to make two trips to town during the week, is going to lose two days off the land, if he has to drive a team, because he cannot make the trip in half a day. If he has a car he will likely take the cream can to town in the evening, after he has done his day's work. We have many farmers in the west who are hauling their grain twenty or twenty-five miles or even further to the railways stations.
When they used horses these men took two days to make the round trip to town and back. 1 want hon. members to consider what a task that is. They must go to the hotel at night, pay for a bed, and two meals, put their horses in a livery stable and pay a livery bill for them. But with a motor truck many of them can make two trips to town in one day. I was told that in one district in my constituency there were over twenty farmers this fall who were using motor trucks, most of them hauling their wheat twenty or twenty-two miles to the station. These men complained! that their trucks cost them practically fifty per cent more than they cost across the line. Do hon. gentle,men think these farmers are prosperous enough to be able to pay the increased price? With regard to this question Henry Ford says:
The great trouble with farming is that it involves too much unnecessary work. There is no reason why agriculture may not hope to come abreast of the other industries in the near future, if the farmer will turn his attention to modern industrial methods, instead of to the problem of borrowing money. There is no food scarcity. The problem is not one of how to increase production, and thereby pile up a surplus for speculators to play with, but how to simplify production and distribution so that less human energy shall be wasted in the process.
Thus is America's industrial genius quoted in a recent issue of Farm and Home.
This government has spent millions of dollars to get people on the land, and one trouble they have is that after they get people on the land many of them will not stay there. If there is orte thing more than another necessary to keep people on the land it is improved transportation facilities which implies liberty to purchase automobiles at a reasonable price. Here is another article taken from the Ford Times. It reads:
Autos Reduce The Farm Migration Easy to Get to Town Now; Just a Case of Starting the Family Car
The farm telephone, the coming of labour-saving devices and the low-priced auto are three of the greatest factors in checking the admittedly large migration from the farm.
I want to say a word particularly in behalf of the farm women. Many of these women living on a farm anywhere from ten to twenty miles from town live a very lonely life indeed, and I do not wonder that they leave their farms. The only wonder to me is that so many of them stay as long as they do. This article says:
Many a farm wife will testify that it has meant the disappearance of monotony, since in pre-auto days to get away meant harnessing up an already tired horse, with a limited radius. Now it is just a case of starting the family car, with a triple radius of possibility.
Tariff on Automobiles

As I said before, Mr. Speaker, I think it would be a very liberal estimate to say that one farmer out of three in the province of Alberta is able to own a motor car. The importance of this subject is demonstrated by the fact that we spent in the year 1923 in Canada probably a hundred million dollars in the purchase of automobiles and trucks. The value of cars manufactured in Canada for home consumption was $63,541,000 and the value of imported cars and trucks, $11,443,000, making a total of $74,984,000. If you would add to this the amount of duty paid on imported cars, the sales tax, excise tax and retail commission, it would probably run over one hundred million dollars. A reduction of ten per cent in the selling price of cars in Canada would make available ten million dollars of new purchasing power, which would be used to purchase more automobiles and more of the common necessities of life, and the taxation incident to the spending of that ten million dollars would bring in considerable revenue to the Finance department.
Now, Mr. Speaker, I presume that the question will be asked-I am a little surprised it has not been asked already-what are you going to do to make up the loss of revenue? Because there would be some loss of revenue. For the fiscal year ending 31st March, 1924, the duty on automobile parts not otherwise provided imported into Canada was $5,123,000, on engines $1,389,000, on rubber tires for vehicles of all kinds $351,000, giving a total of $6,864,000 duty collected on .automobile parts. Forty-seven per cent of the cars and trucks made in Canada were exported, so that you would deduct forty-seven per cent of this amount for drawbacks and that would give you an amount of $3,226,000. The total of drawbacks paid to automobile manufacturers was $5,223,000.
If you take off $3,226,000 drawback, that would leave a net balance of $3,637,000; then add to that the customs collected on motor cars, $3,316,000, and the customs collected on trucks, $661,000, and you have a total of $7,615,000.


Mr. EULER:: I understood the hon. member to say there would be a reduction in the revenue if the duty were decreased. Does he assume that there would be no greater number of importations than we have now, or does he think that it would follow that because there is a reduction in duty and consequently a reduction in the price of American cars, that the Canadian manufacturer would merely reduce his price and sell just as many cars?


Thomas Wakem Caldwell: Sell more.


George Gibson Coote: I would not anticipate any
greater importation of American cars. I think the Canadian manufacturer would reduce the price and we would buy Canadian cars just as we are doing now, and I may say I think it would be a good thing so far as general industry is concerned. I believe there would be more motor cars sold and more men employed in Canada than there are to-day in that particular industry. Supposing that a reduction of 17-J per cent even were made in the present tariff, there would apparently be a net loss of $3,807,000. The excise tax collected in 1904 was $2,689,399. Supposing we added 7^ per cent to the excise tax. This would give an increase in revenue of approximately $4,000,000, which would a little more than offset the loss of revenue by the reduction in the tariff if we made the same number of importations of foreign cars. You could thus reduce the price of automobiles 10 per cent without interfering in any way with our revenues through customs and excise.
Statistics for the year 1923 which I have here show that the value of cars manufactured in Canada in 1923 was $97,369,814. Deduct from that the value of passenger cars exported, $29,325,000 and the value of trucks exported $4,503,000, and you have a total manufactured value of cars consumed at home of $63,541,814. This value is about one-third more on account of the tariff of 35 per cent, or it actually works out at a little more than 35 per cent, as I tried to show earlier in my remarks. Let us assume that we paid $20,000,000 more for these cars on account of the duty. The number of men employed in the industry last year was 9,305 persons at an average wage of $1,600 and the total amount paid in wages was $14,998,000. Or in other words, we paid in increased prices on account of the tariff $5,000,000 more than the total salaries and wages paid by the industry. Is it good business for us to pay such a price for the establishment of this industry in Canada, or I should say, after the industry is established, should we continue to pay this price? After all, who is going to benefit from the tariff? The Ford Times of June 14, 1923 refers to the erection of its new plant at Ford, Ontario, in these words:
Hard by, the new $10,000,000 Ford factory is rapidly nearing completion and when the wheels of production start turning there, Canada can boast the largest automobile plant in the British Empire.
Canada does not own that plant. The bulk of the stock and bonds in that industry is owned in the United States. It is hard to get definite figures in regard to the percentage

Tariff on Automobiles
of capital in this industry controlled in Canada and in the United States, but the latest figures I have seen state that 80 per cent of the capital invested in this industry is owned in the United States. As I have shown in the case of at least one large company, it has all been built up out of earnings in Canada, yet it is largely owned now in the United States. In a clipping from the Financial Post of February 29, 1924, there is this statement:
Practically all the manufacturing plants in Canada are either branches of American factories or are controlled by American cap:+al their location in the Dominion enabling them to take advantage of the preferential tariff treatment in certain countries of the British Empire.
This is a little clipping also from the Post in regard to the Dodge Brothers plant being established in Canada:
Establishment of this plant overcomes the handicap in Canadian operations resulting from tariff requirements and enables the company to market its cars at prices more in line with those in the United States.
When I think of how we have bled ourselves for the benefit of these American millionaires, I am tempted to exclaim as did the hon. member for Hants (Mr. Martell) a year ago: "How long, Oh, Lord, how long?"
I have here, I think it is an editorial originally printed in the Vancouver Sun, but it is reprinted in the Ford Times of Ford, Ontario. I presume when they reprint it in their editorial column they must approve it:
To-day, the purchasing power of the American dollar is 100 cents. Compared with the goods which that American dollar will buy in United States, our Canadian dollar, spent in Canada, will buy goods worth not more than 70 cents, and it makes no difference whether the purchase is an automobile, a pound of sugar, or a cotton dress.
I believe as regards automobiles I have proved that is the case. If the Ford Times published this editorial, surely they must approve the sentiments contained therein, and I do not believe they would seriously object to a reduction in the tariff. Later on in the editorial, there is this statement:
The question is, do we Canadians really want Canada to prosper and grow? If we do, we must cut out sentiment and get down to economics. We must abandon some of our hopeless, helpless, tariff-bred weaknesses and get down to business. We have lived so long on government subvention and government protection that we have forgotten how to do business without it.
In conclusion, I believe that all members must admit the importance of motor cars and trucks in the economic and social life of this country. I think I have produced evidence to show that the prices of these articles have been advanced to the very limit allowed by the protective tariff. The ability of our
manufacturers to export their product has been amply proven, and I have also proved that the financial position of firms engaged in this industry is such that a substantial reduction in the tariff might safely be made and I believe it would be in the interest of this country if such a reduction were made.


James Alexander Robb: Mr. Speaker, the resolution presented by my hon. friend to-night appears to be one that might well be left over until the budget is brought down.


George Gibson Coote: Too late.


James Alexander Robb: I am not finding any fault
with my hon. friend for introducing this resolution to-night. He apparently has given it considerable study and has dug deeply into the accounts of the importations and the revenues. I wish to deal for a moment with one feature of the observations of my hon. friend regarding the ' capitalization of companies engaged in the manufacture of automobiles in Canada, If I followed the hon. gentleman closely, I think he said that 80 per cent of the capital invested in the automobile industry of Canada came from the United States.


George Gibson Coote: Eighty per cent.


James Alexander Robb: I was wondering whether the
hon. gentleman had later statistics than those he quoted last year, because I find that when he discussed this question at that time, and with considerable interest, he made the statement, as will be found at page 2493 of Hansard, that 77.7 per cent of the invested capital in this industry in Canada was from the United States. If his statement to-night is correct it would seem that there has been some United States capital invested in the business since then. But without going into that feature, I would remind the hon. gentleman that no matter where the capital comes from, the industry gives employment to Canadian labour. There are 78 plants engaged in the manufacture of automobiles and their accessories in Canada, employing Canadian labour, and subject to Canadian taxation, a considerable amount in taxes finding sits way into the Canadian treasury.
My hon. friend quoted some prices to show the difference in value between an automobile in the United States and one of similar pattern and style in Canada. I know of course that there is some discrimination, but we account for part of it ourselves. The hon. member will bear in mind that we place a sales tax on the automobile of 5 per cent, and we also impose a luxury tax of 5 per cent on
Tariff on Automobiles

automobiles costing up to $1,200, and 10 per cent on those over $1,200. I mention this figure to remind my hon. friend that the difference in the duty, even admitting his figures does not account for the difference in the respective prices. I agree with the hon. gentleman that in many parts of Canada the automobile has become a necessity. But it is not always a necessity for there are many people owning and operating motor cars who in my opinion would be better off without them. And when I make this statement it is not because of the fact that I have never owned an automobile myself; I have never owned one for the reason that I never felt I could afford to keep and operate it. In the first place, I do not like to dig down for the price, and in the second place owning a car takes you away from your business, whether you are farmer or manufacturer, when you might well be at home. However, I will not pursue that thought further.
I wrould observe that there are two sides to the question the hon. member has advanced regarding the cost of automobiles to the Canadian people. I will admit that automobiles do cost the individual a lot of money. But I suppose that every hon. member in this House can recall the day when there were no automobiles in Canada; and when these machines were first introduced they stalled on the road about as often as they were made to go. In those early days a man who wanted an impressive turnout did not send to England for a Rolls Royce nor to the United States for a Marmon; and of course he would not have to pay any revenue to the country. What he did was to buy a pair of high steppers, so that neither the municipality nor the province got anything out of him in the way of taxes for driving his equipage along the highway. But the advent of the automobile has changed all that, and I submit that the provinces through their legislation have recognized that the automobile is a luxury, or at any rate if mot a luxury a great expense to the country.
As my hon. friend has truly said, we have in Canada a considerable number of cars. I do not remember the figures he gave but the record I have is 513,821. From the owners of these cars the provinces collect in taxes the sum of $9,290,900.82; in the Yukon Territory-and one must wonder what they can do with cars away up there-there are 86 automobiles. I am not sure what the population of the Yukon is outside of government officials. In the various provinces the number of cars owned and the revenue collected on

account of them will be	seen in the	followingtable:	No. of Cars	RevenuePrince Edward Island.. .. ,	.. 2,167	$ 46,801 20Nova Scotia	.. 16,159	418,241 79New Brunswick	.. 13,746	301,272 16Quebec	. 61,995	1,891,626 53Ontario	.. 240,933	3,823,704 60Manitoba	.. 42,200	588,369 95Saskatchewan	61,367	701,492 50Alberta	40,642	716,873 25British Columbia	,. 34,526	802,518 84
The foregoing table will show the revenue collected in each of the provinces. But there is also another source of income to some of the provinces from the operation of automobiles. British Columbia, Manitoba, Quebec and Prince Edward Island impose a tax on gasoline, so that these provinces regard the automobile as a fair object of taxation. In the early days, when people bought high steppers rather than Rolls Royoes and Mar-mons, no one thought of levying a tax on oats as some of the provinces to-day impose a tax on gasoline. The whole situation therefore has changed. The fact of the matter is that the automobile has cost the different provinces of Canada millions of dollars to improve their roadways besides huge sums annually to maintain them. I submit to the hon. gentleman that the automobile is a fair source from which to collect revenue.
As I said in opening, it is on the eve of the budget, and the government must have revenue from some source. Demands1 come to the government from those who desire expenditure for new railways, the extension of existing railways, harbour improvements, bridges, grain elevators and other public works,-these alternating with requests that we part with various sources of our revenue. If we are to meet our national obligations-the interest on the national debt, the pensions that we owe to our soldiers and the widows and orphans of those who will never come back, and the cost of administration, we must have revenue from some source, and if you take away the revenue we are getting from automobiles we must secure it by imposing duties upon some other commodity. My hon. friend has suggested that we impose an additional excise tax. Well, that is a subject worth considering. We are now imposing a 5 per cent sales tax and a 5 per cent luxury tax upon automobiles up to a value of $1,200, and a further 5 per cent luxury tax upon automobiles above that value. I submit that my hon. friend having debated the resolution, might very well not press it to a conclusion but await the bringing down of the budget.

Tariff on Automobiles


Milton Neil Campbell: Mr. Speaker, the Acting Minister of Finance (Mr Robb) seemed to place a great deal of emphasis upon what he considered would be the result of putting the principle of this resolution into practical effect, that it would necessarily entail a loss of revenue. I am not altogether certain that this would be the result, and in support of my view I propose to quote a few figures of the manufacture and sale of automobiles in Canada. In 1920 the value of automobiles and automobile parts manufactured in Canada was $137,420,000. The wages paid amounted to $19,368,000. Autos and auto parts to the value of $20,911,000 were exported, leaving the balance sold at home at $116,509,000. On the basis of the wages involved in the manufacture of the total, the wages chargeable to home production would be $16,376,000. [DOT] If we reduce the purchase price of these to an import basis, that is, eliminating the amount of duty, which of course the manufacturer had the advantage of, the import value would be $101,792,000. Had these cars and parts been imported instead of manufactured here, they would have turned into the treasury of the Dominion in 1920 a sum of $35,627,000. So that we would have been considerably better off if we had not manufactured any automobiles. It will be said we would have thrown a great many men out of employment. Taking the wages involved, had we turned this $35,627,000 into the treasury, we could have permitted all these men to go idle, pay them their full wages, and still have a balance of $19,251,000


James Alexander Robb: Would my hon. friend apply that theory to every industry in Canada? Is that his policy?


Milton Neil Campbell: We are discussing automobiles now, but in a general way it is true. It is more true of automobiles, though, than of any other industry. Some industries have been struggling all these years and are still not making very much money; I know a good many manufacturers are not. But that is not true of the automobile industry. In fact there is no story in the Arabian Nights, for instance, Aladdin's Lamp, that is more wonderful than the financial history of some of our automobile manufacturers.
After all, I am not so much concerned in having the price of automobiles reduced as I am in having the treasury enriched. I believe that if we cut the duty by 10 per cent, still leaving the home manufacturer with a tariff protection of 25 per cent, and impose an excise tax of 10 per cent, we would make a substantial increase in the revenue without adding anything to the cost of automobiles
to the consumer. And I think it is revenue that the minister is after.


James Alexander Robb: Does my hon. friend mean to add an additional 10 per cent to the 10 per cent already imposed on high priced cars?


Milton Neil Campbell: In a way I would.


James Alexander Robb: That would be 20 per cent?


Milton Neil Campbell: My suggestion to the
minister is that he reduce the tariff from 35 to 25 per cent, and impose an additional excise tax of 10 per cent.


James Alexander Robb: That would be a 20 per cent excise tax? I want to be correct.


Milton Neil Campbell: Yes, only I would apply it on low priced cars as well. That would not mean any extra cost to the consumer, but it would mean a substantial increase in the revenue, and I think that is a very important point. I am quite sure this can be worked out without any very great hardship to the manufacturer. If you take the history of one particular concern in this country, certainly my suggestion could be applied without inflicting any hardship on them at all.


Mr. SPEAKER:: Is the House ready for
the question? Any hon. member wishing to speak now will please do so because the mover of the resolution will close the debate.


Mr. SPENCE:: Would the minister inform us what is the duty on automobiles now and what is the tax?
Mr. R.OBB: On item 438 the customs rates are, 22J per cent British preference, 30 per cent intermediate, 35 per cent general. In addition, we charge sales tax of 5 per cent on the duty paid value, a luxury tax of 5 per cent on automobiles up to a value of $1200, and a luxury tax of 10 per cent on those in excess of that value. If I understand my hon. friend correctly, he would make the luxury tax 20 per cent instead of 10. I hope I have not done my hon. friend an injustice in putting that interpretation on his proposal.


Mr. CLARK:: Do the luxury and sales
taxes apply to both the American made and Canadian made automobile?


James Alexander Robb: Oh yes.


Mr. MORIN:: When we import American
cars do we pay the excise tax of 5 per cent to the United States government?


James Alexander Robb: No, to the Canadian government.


Hewitt Bostock: Is the House ready for
the question?
Tariff on Automobiles


William Charles Good: I was waiting,
Mr. Speaker, for the minister to answer those questions before I rose, but I will proceed. I would venture to call the attention of the House to some figures that I presented in detail two or three years ago in connection with the earnings of the Ford Company of Canada. It does seem to me that the net result of our tariff policy with respect to the automobile industry has been to put enormous sums of money into the pockets of American millionaires at the expense of the average Canadian user of automobiles. I think this is something that ought to come home to us very seriously, and I do hope, as I urged on the former occasion, that the government will increase the excise tax and decrease the customs duty. This will bring more revenue to the treasury and not increase the price of cars to the consumer at all. In fact, we will probably increase our revenue two or three times while lowering the .price of cars to the Canadian consumer.
The Acting Minister of Finance (Mr. Robb) spoke as though the automobile was purely a luxury.


James Alexander Robb: No.


William Charles Good: I am glad to hear him correct that impression. At all events, so far as the farmers are concerned, particularly those in the west-and this applies also to many sections of Ontario and the east-the automobile is becoming just as necessary, just as useful as any farm implement; it is primarily a necessity on the farm, not a luxury; I think that ought to be borne in mind. I will admit that in many cases-and this applies more to city residents than to those in the rural districts-the automobile is a luxury and might well be dispensed with. Perhaps it would be interesting to inquire how it is that so many city people who do not need them are able to purchase expensive cars and ridfe around in them from one end of the country to the other.
Just one other point so far as the giving of employment is concerned. It has already been demonstrated, I think beyond all controversy, that we might well pension off ail those who are engaged in the industry and still be money in pocket. Let them be pensioned for life.


William Daum Euler: Do you advise that?


William Charles Good: No, I do not advise it, but
we are not under the necessity of doing anything of the sort. Just as soon as you relieve the burden upon the consumer of automobiles he has purchasing power, and if these men have to find another occupation he can

employ them in farming, for instance. Farming in Canada needs a lot more men than it has now, but the farmers cannot hire men because they have no money. If you make the cost of automobiles less to the farmer he can hire more help and he can farm better than he does at the present time.


James Shaver Woodsworth: Would that not
solve the problem of providing for the widows and children who are worrying the minister so much?


William Charles Good: Yes, I am sure it would.
There is no need to complain of a lack of useful emplyoment in Canada ; it stares us in the face whichever way we turn. It strikes me that the argument with regard to throwing them out of employment is rather far fetched, in the present instance at all events. I trust that this matter will be pressed to a vote; I should like to see hon. members declare themselves either for or against the resolution.
Mr. PIERRE F. CASGRAIN (Charlevoix-Montmorency) (Translation):	Mr. Speaker,
before closing this debate, I think, perhaps, it would be proper to submit to the House certain reasons which, moreover, have already been given by the hon. acting Minister of Finance (Mr. Robb). The resolution moved by the hon. member for Maoleod (Mr. Coote) is perhaps one of those that all classes of the community would like to see adopted for the very reasons submitted this evening to the House by the mover of the resolution himself. Indeed, business and trades people, the most humble classes among our farmers, the rural districts as well as towns and cities, in fact everybody would like to be in a position to purchase automobiles for the convenience of business as well as for pleasure, but on better terms than those existing to-day. On the other hand the hon. Acting Minister of Finance explains to us the government's policy on this subject; he points out that they are busy preparing the budget and that within a few days the budget for the next fiscal year will be laid on the table. Under these circumstances I do not see what harm there could be in postponing this resolution until the budget is brought down. On more than one occasion have we witnessed certain resolutions adopted in too great a haste cause great embarrassments to certain clauses that we wished to favour. I think that everybody agrees in admitting that the resolution has some good points, but should be more carefully studied, as the hon. minister stated, so that we might

Tariff on Automobiles
carry out reductions, if necessary, without however being exposed to the disadvantage that such an adoption of a resolution might create. That is why I would ask the hon. member for Macleod (Mr. Coote) to kindly postpone the vote on this question until the budget is brought down, when, knowing what it contains, we may be able to act with a thorough knowledge of the matter.


Mr. DONALD SUTHERLAND (South Oxford) :: Mr. Speaker, I wish to make only a
brief reference to the resolution. It must be apparent to everyone that a good deal of favouritism is 3hown in regard to our tariff and that there is need of having a tariff based on a sounder principle than that upon which the present tariff is based. I notice in the Montreal Gazette to-day that during the past week 29,452 boxes of New Zealand cheese were sold on the Montreal market and that 16,878 cases of American eggs were imported during the same week. Do hon. members realize the difference between the tariff on these commodities and the tariff on automobiles,-9 per cent in one case and 35 per cent in the other? It is quite evident that the tariff on farm products is not in keeping with the tariff on automobiles. I do not agree with the Acting Minister of Finance (Mr. Robb) that automobiles are a luxury. An automobile, particularly on the farm, is just as necessary as almost any other implement used on the farm-[DOT] and I am speaking in regard to farming that is carried on in an up-to-date manner. In fact, many farmers to-day require not one automobile, but two, and some of them a motor truck in addition in order to overcome handicaps as a result of the scarcity of farm labour. The minister pointed out that the provinces were taxing the automobile owner very severely, and I quite agree with that. But let me remind him that the federal government have discontinued the contribution that was formerly given toward the building of 'highways, and that the provinces themselves have to build the highways to-day unassisted by a federal grant.


James Alexander Robb: But the advent of the automobile was one of the reasons why a former government enacted the good roads legislation and thereby added considerably to the interest account of this country.


Donald Sutherland: I qu te agree that the automobile has been responsible for the building of expensive highways, which, I may say, are considered to be almost a necessity to-day on account of the high cost of transportation on our railways. A great deal of freight traffic, particularly on short hauls, that was
formerly carried by rail is to-day carried by automobile, so that not all the expense in connection with highways is to be charged against the automobile which is used for conveying passengers. I rose simply to call attention to the difference between the tariff rates on imports of these commodities referred to in the statement in the Montreal Gazette to which I have referred. While this has no direct bearing on the resolution before the House, I would point out that there is much need of having our tariff so adjusted that we shall have reasonable protection for all the people of this country, rather than have a few singled out and given a preference, by an unreasonably high tariff while others suffer as a result of an altogether too low tariff.


George Gibson Coote: Mr. Speaker, in dosing the debate-


Arthur Meighen: I do not wish to vote on this without making a statement to the House in relation to the motion. I have been rather disappointed at the display of ardour evidenced by hon. gentlemen to my left on this subject; I have ceased to be disappointed with hon. gentlemen opposite, for they seem to have entirely lost interest in all the questions that agitated them so much not so very long ago. If I remember rightly, in the province of Ontario the lanes and the highways rang with denunciations of this vicious automobile tax. Is it not on this subject that Hon. Mr. Raney gathered the flag of free trade about him and wandered through the province of Ontario, and on platform after platform directed his shafts against the government of the time as the friends of monopolies and trusts. Nothing aroused his ire so much-and in this he was supported by eveiy hon. gentleman to my left whose speeches I read-nothing aroused his ire so much as the automobile tax. But now this question comes up on a motion of the hon. member for Macleod (Mr. Coote), a prayer meeting would be a tumult compared with the vigour that is displayed in this debate. The leader of the Progressive party was allowing the hon. member for Macleod (Mr. Coote) to reply without even expressing an opinion on this question, and hon. gentlemen opposite were silent as the grave, except for one who took care to speak in a language that most of us are unable to follow. WThere is the Minister of the Interior? This was a topic that he was one of the most eloquent upon.


Charles A. Stewart: Will the right hon. gentleman quote any of my speeches at that time?
Tariff on Automobiles


Arthur Meighen: I quoted one a few months ago to the hon. minister, and invited him to make an explanation of it the next day on the orders of the day, but I have waited now several months and have not got it yet; so I do not see very much value in quoting to the Minister of the Interior.
The minister who answers for the government is content to plead the necessities of the revenue. This is the old story from protectionist Liberal governments-they cannot reduce because of the necessities of revenue. Now this government knows that there is many a schedule in the tariff to-day where reduction would add to the revenue, many a one. and I am not sure that this is not one. I do not say I am convinced it is one; but I am not sure it is not. The minister certainly did not show that it was not. The minister knows just as well as he knows he is sitting in his seat, that even though reduction may add to the revenue, it may be the worst thing in the world for the country; and that is what he should have argued before the House. That is the reason he maintains the tax where it is, and the only reason he can justify maintaining it where it is, because to do otherwise would do injury to the business of Canada. Hon. gentlemen take a single industry; they assume that the whole duty is added to the sale price, and that every manufacturer puts in his pocket that extra duty. Then they say: We paid into the manufacturer's pocket so much; we would have been better off to have paid that to the workmen and kept them in their homes idle. This simply shows an inappreciation of the whole situation. One industry depends on another; one industry makes work for another, and the loss of one industry is not the loss of one alone; it is the loss of several. The. whole thing reduces the commercial life and industrial life of the country. The minister himself takes care that he reduces no duty beyond the point that will give the industry a chance for its life, and a chance to progress and develop in this Dominion, and I would have welcomed from the minister a defence along the line that he knows to be sound-and not this lame defence behind the shade of the revenue, which he always fears is going to diminish.
Now what has been the case made out by the hon. member for Macleod? He first of all started with a quotation from this speech I made in 1911, which, if it did no other good, has constituted the intellectual nourishment of hon. gentlemen to my left for several years, a speech in which among other arguments I sought to advance for a reduction of the duty on farm implements was this one: that the hold the Canadian manufacturer 
had obtained not only on his home market but on the foreign market was such as to demonstrate that the tariff at that time was beyond the necessities of that manufacturer. I did state, and stated very plainly that he was entitled, or rather the country was entitled, to such a tariff level on the goods produced by the manufacturer of agricultural implements as would maintain his hold on the Canadian market and enable him still to advance in the markets of other countries in the world; but he was not entitled to any more. But I did not rest with that argument. I went further and produced evidence to show that factory heads in this country
10 p.m. had admitted that such had been their success under a comparatively fair tariff in developing the industry here that they were able to produce on a scale comparable with the scale in the United States, and at very little, if any, greater cost. I thought I made a pretty strong case, and I did advance facts in addition to those advanced by the hon. member for Macleod to-day. But as I said last session, and have said frequently in this House, there was, I think, one defect in the presentation I made at that time. I do not think I took into account as of sufficient strength the advantage that export trade gives the Canadian manufacturer in enabling him to increase the scale of his production, and thereby enabling him to diminish the price at home. That is the feature that everyone who is acquainted with and follows Canadian industry or that of any other country for any length of time must be impressed by, and in countries where the protection is the highest, in, for example, France to-day. In countries where the tariff wall around this country would be scarcely visible compared with theire, you do not find the people arguing that they are paying the cost of keeping up great, rich millionaire manufacturers. As a matter of fact, just because of that tariff, they to-day are able to sell and are selling within the borders of France their products at prices lower than are enjoyed by the consumers of other countries of the world, even lower than the prices that are enjoyed by Great Britain at this very time.
Now I am not certain-I certainly am not convinced by anything advanced by the Acting Minister of Finance-that it would not be possible to lower the tariff on automobiles and at the same time maintain the industry. He advanced no argument on the subject at all. At the same time, I am not convinced by the argument presented by the hon. member for Macleod. I am aware that there is much criticism of the difference in price to the Can-

Tariff on Automobiles
adian consumer from that which obtains to the American consumer. It is largely due to the fact that we have this 10 per cent luxury tax. That luxury tax is always looked upon by the ccAisumer as a tariff; it is looked upon as part of the protective structure, and the protective tariff gets the blame that is attributable in a considerable degree to the luxury tax.


Mr. SALES:: , Was there not the same difference between the American and Canadian prices on automobiles before the luxury tax came into effect?


Arthur Meighen: If there was, then without the luxury tax the difference is a great deal less now, showing that as the industry develops, the margin between the American purchase price and our own is constantly reducing. I went into this matter with a large Canadian concern some few years ago and their books demonstrated, so far as I was able to examine them-I am not an accountant-the correctness of their assertions that because of the scale of production they were now able to maintain due largely to their export trade, they themselves had reduced the price to their factories until it was within ten per cent of the price to the American factory just across the river. This is not a very great margin, but when you add to that the ten per cent luxury tax, you have twenty per cent, and when you add to those two, some larger costs of distribution in this Dominion, where the population is more sparse and the cost of distribution greater, there should be quite a margin between the price to the consumer in the United States and the price in Canada. The sales tax adds to that margin because the American has no sales tax to pay, so that even though the cost to the manufacturer here was only ten per cent above the American cost, the cost to the consumer would be twenty-five per cent above, plus the extra cost of distribution; so that in respect to automobiles the protective tariff is charged with much that it is not responsible for. The protective tariff may be responsible to a degree for the difference that at present exists. I would not like to see any step taken which would Shatter still more 'confidence in this country. We all know it has been shattered enough. It has been shattered so much that to-day, while this government remains in power, there is no hope of business expansion in this Dominion. There is none to-day and there is no hope for any for years to come, because the conduct of this administration has undermined and destroyed confidence in Canada, and if the government 77
accede to this demand and invade still another field, then the condition will be even worse than before. No case has been made out by the bon. gentleman and no case has been made out by the minister in reply. Let us hear from the Minister of Justice.


Ernest Lapointe: There is nothing to
answer in my hon. friend's remarks.


Arthur Meighen: Nothing he can answer? Is that what the minister said?


Ernest Lapointe: The people will answer.


Arthur Meighen: The hon. gentleman
tried to answer in the last parliament. I am glad he desists now.


Ernest Lapointe: My hon. friend may
receive some answer some day.


George Gibson Coote: I am sorry my arguments
were not sufficient to convince the right hon. the leader of the opposition (Mr. Meighen) that this reduction might safely be made with advantage to this country. I understood him to say that he had been told that the factory price of cars in Canada was only ten *per cent higher than the factory price of cars in the United States. I do not know whether I heard him correctly or not, but he said something to that effect. I am sorry that I have sent my list of prices of these cars to the Hansard room.


Arthur Meighen: I stated, in a certain factory.


George Gibson Coote: I have before me a list which was furnished by a reliable clipping agency in Canada, and this shows the factory prices. He says in a foot note:
The above prices are f.o.b. factory, United States or Canada, exclusive of taxes.
These prices are as follows:
United States	Canada
Chevrolet, coach	..	..	$ 735	$1,015	or	38%	higherOakland, coach	..	..	1,215	1,695	or	39%	higher
McLaughlin-Buick,
coach	
1,295	1,820	or	41%	higherOldsmobile, coach..	..	1,075	1,495	or	39%	higherHudson, coach	
1,345	1,840	or	37%	higher
I could1 give many more. I have gone over a great many makes of cars, comparing the prices, and have found nothing under 37 per cent. The prices to the people in this country after the taxes are paid are in nearly every case over fifty per cent higher than in the United States. I may also say, Mr. Speaker, that the tariff on cars entering the United States is, I am told, twenty-five per cent, and it is rather strange, if a high tariff really creates low prices that we, with a tariff ten per cent higher than the United

Tariff on Automobiles

States, should pay at the factory thirty-seven per cent more for our cars than they do in the United States. I cannot understand that. The right hon. leader of the opposition said that prices were lower in France than almost any other country. Possibly that is correct, but if they are it is owing to the fact that France is working on a depreciated currency, the thing that the manufacturers and big business men and bankers in this country are so desperately afraid of, but at enables France to manufacture cheaply.
I do not wish to take time to refer to all the arguments advanced by the right hon. leader of the opposition or by the Acting Minister of Finance, but there are a few I think I should refer to very briefly. I think the first argument was that there were discrepancies in the figures which I quoted in regard to the percentage of capital in this industry which was owned in the United States: that last year I quoted it at 77.8 per cent and this year at 80 per cent. I will admit there is a discrepancy there of 2.3 per cent. I did not have the actual figures in regard to this matter. I may say it is a matter that has not been very definitely settled, but I was told a short time ago by a gentleman who has given a little study to this question that he thought it was about 80 per cent, that the establishment of American branch factories in Canada was going on all the time, and that most of the companies that were establishing branch factories over here now owned practically all the stock in their Canadian branches, but at any rate I do not think the discrepancy is big enough to make very much difference to that argument.
Now, Mr. Speaker, I want to refer very briefly to the question of motor trucks, which I think possibly I did not deal with at any great length before. I think this is a very important matter not only to farmers but to our manufacturers. They are nearly all employing motor trucks, and you can see at the present time that this duty of thirty-five per cent on motor trucks, which really amounts to thirty-seven per cent, is placing those who must buy motor trucks under a handicap, is imposing a great hardship and is very unfair to the farmers who are a long distance from railroads, and who need those motor trucks badly. I have no particuliar wish to see the duty on the high priced cars reduced. I do not think that matters very much, but I think it must be reduced on the cheaper cars. The people are demanding it, and I believe they will adopt some method of achieving that result before very long. The

Acting Minister of Finance (Mr. Robb) I think made the statement that he never owned an auto,-that he could not afford one. I would suggest that if he would reduce the duty on automobiles, he might tfe able to purchase one himself.


James Alexander Robb: I have no time to drive one.


George Gibson Coote: If the Acting Minister of Finance, with a salary of $14,000 per year, feels he cannot afford a car, I would like him to consider the position of the poor farmer living fifteen or twenty miles from town. How is he going to get a car? While I am on that subject I want to refer to a very good settler in my district, a splendid type of settler, who came from Sweden-who said to me a year ago, "When I cannot afford an auto, I am going to leave the farm. I do not think I and my family should be away out here on this farm without an automobile, and I am going to leave it if I cannot make enough to keep a car." It would be good business for those people who are trying to get settlers on the land to do what I suggest if they really want them to stay on the land. The Acting Minister of Finance referred to the large tax the provinces collected out of these cars. That is only an added argument in favour of the motion which I have presented. Is the automobile to be singled out as paying the greatest tax of any industry in this country? I do not see why it should. He stated that there was a time when there were no automobiles at all. I thought he was inferring that probably those who have not automobiles ought to do without them. There was a time in this country when we did not have any railroads. Does the minister suggest that we should do all our transportation with horses again? There was a time when the farmer had no binder, no mower. Does the minister suggest that we should go back to the cradle and scythe again? He referred to the large amount of taxes which manufacturers of automobiles pay. I find in Hansard of last year, March 17, at page 379, these remarks by the hon. member for Springfield (Mr. Hoey), who mentions the amount of taxes some of these men pay:
During the years 1915 to 1918 inclusive a certain factory in this country produced 113,542 automobiles, and the excess price charged to Canadian purchasers over the prevailing price in the United States was $13,394,941. The wages paid by that concern during that period on the cars actually made and sold in Canada amounted to $9,083,360, and their total wage $11,960,807. That is their total wage bill on cars made for sale in Canada and for export. They paid in taxes during that period $2,285,145, leaving a surplus of $2,027,436. What do these figures mean? They mean that during this period the people of Canada would have paid all the wages this firm

Tariff on Automobiles
paid, all the 1axes this firm paid, and had a surplus in the national treasury of $2,027,436, or a sum sufficient in itself to pay more than half the duty paid by this firm on their raw material entering into the manufacture of this article.
I regret that the Acting Minister of Finance did not give a 'little more consideration to my proposal for increasing the excise tax so as to make up any loss of revenue that would occur through the reduction in the tariff. He simply said that it was worth considering, and I suppose he thinks we should be satisfied with that. I hope he will consider it.
I am disappointed at the attitude taken by the Acting Minister of Finance, and if this government will not reduce the duty on automobiles and trucks, particularly trucks and lower priced cars, it should give up all pretence of making any reduction in the tariff. As regards the actual reduction, the motion, as worded, leaves it to the interpretation of the government, if the resolution should be fortunate enough to be passed by this House. I do not think it would be my place to say what amount should be taken off the present duty, but something very substantial should be taken off in regard to lower priced cars and trucks. Personally, I do not care whether anything is taken off the higher priced cars or not. When I come to eastern Canada and visit the cities, Ottawa included, I am always struck by the large number of handsome, high priced cars that are driven around the streets. The government would save some money on their own high priced cars if they would reduce the duty. When I see the number of old, dilapidated, practically worn-out cars that are in use in some of the rural sections of Canada, I cannot help feeling that there is something very wrong in this country. People out in the country doing at least their fair share of the work are not getting a fair return. It may be hard to convince hon. members who spend most of the time in these cities that there is any necessity for reducing these duties, but if they will visit the rural sections and see the cars that some people are using and the number of people who are not able to purchase cars at all, they would be ready to give t'heir approval to this resolution.
As a final word, I would say that I hope the majority of the members to-night will give their support to this resolution, because it is something that the people of Canada generally would appreciate and they would back up those members who would support such a resolution.
77i


James Alexander Robb: Does my hon, friend advocate adding the same excise tax as he would take off the customs tariff? Is he of the same view as the hon. member for Mackenzie (Mr. Campbell) who advocated taking off 10 per cent and adding 10 per cent?


George Gibson Coote: I did not advocate such action, because the excise tax should be added to all cars, both imported and manufactured at home, and a much smaller addition to the excise tax than the amount taken off the tariff would bring in as much revenue to the country as is now being received.


Lewis Herbert Martell: During the polling of
the vote, Mr. Speaker, through a misunderstanding due to no fault of my own, my vote was not taken. If the vote had been properly polled, as I contend it was not, I would have registered in favour of the motion of the hon. member for Macleod (Mr. Coote), because I am in favour of his resolution. But while the vote was being taken hon. members did not know what they were voting for.


Some hon. MEMBERS:: Order.


Lewis Herbert Martell: I simply want to explain my own position as representative of the county of Hants and to state that I support the hon. gentleman's resolution.


Mr. CARROLL:: My vote was not recorded. I understood that after the Clerk Assistant had taken the vote on the other side of the House it was expected that he would turn to this side of the chamber and call the names of those over here who supported the motion. I rose in my place to vote for the motion but my vote was not registered.


Mr. LOVETT:: I was paired with the
hon. member for Charlotte (Mr. Grimmer). Had I voted I would have voted for the motion.



NATIONAL COAL POLICY

Thomas Langton Church: That, in the opinion of this House, the time has arrived for Canada to have a national policy in rela-

tion to its coal supply and that no part of Canada should be left dependent upon the United States for such supply.
The government should immediately consider the initiation of an all British and Canadian coal supply and that such a policy is both a social and economic necessity and in the best interests of the future of Canada.
That a duty should be placed on coal from the United States to ensure an all British supply for Canada and thus afford adequate protection to coal mined and coked under the British flag.
That, whereas coal is in effect a food, it should be carried on a preferential toll basis by the railways on the same basis as food.
He said: I do not propose to make any lengthy speech to-night on this subject inasmuch as my views are already recorded in Hansard. For three sessions now I have brought this matter to t'he attention of parliament and I have already given at some length my reasons for the proposal I make in this resolution. Since last session some $200,000 has been voted as a bonus for the carrying of coal from Alberta and the Maritime provinces to central Canada, but we have not had any particulars as to how that money was spent. I understand that it was devoted altogether to the carrying of coal from the Mari times to the province of Quebec. The resolution, as will be observed, also relates to an embargo on coal. It is my opinion that a duty should be imposed on coal coming from the United States in order to ensure an all British supply for Canada. We want to develop our own resources, and I think it is necessary that we should have some adequate protection so that all the coal Canada uses will be mined and coked under the British flag. Recently some supporters of the government in the Maritime provinces, notably Premier Armstrong, have been inviting the government to impose a duty on coal in order to stimulate the industry in that part of the country. Some five million tons of coal are used in the province of Quebec annually and of this only two millions come from1 the Maritime provinces, the other three millions from the United States. As I said a moment ago, I do not intend1 to discuss the subject of this resolution at any length seeing that the principle of it was adopted last session by a unanimous vote of the House, that is to say, as regards the desirability of having a national policy in relation to the mining of coal in Canada. The reasons I gave for a national coal policy for Canada are the same to-night as those that I have advanced during the past three years in parliament, and are so well understood by the House, that I will not labour the matter further. I will simply content myself tonight with moving the resolution for a na-

National Coal Policy
tional policy for Canada so that every ton of coal used in Canada shall be mined and coked under the British flag whether it is from Wales, Alberta or the Maritime provinces thus keeping labour and wages in Canada.


Charles A. Stewart: The resolution
which the 'hon. gentleman has moved, except in regard to the question of the imposition of the duty, was adopted by the House last session, and with that single exception the government will offer no objection to the motion. The question of an increase of duty is however a departure from the principle that was voted upon last session, and I may say frankly that the government do not feel that they can agree to the levying of a greater duty. It is quite true that Premier Armstrong and a number of the coal operators and other interested parties came from Nova Scotia to interview the government during the recess. They asked for an increase in t'he duty on slack coal from fourteen to fifty-three cents, and that is the only request they made with respect to the imposition of a duty.
It strikes me as being too late in the evening to discuss this coal proposition thoroughly. It is a matter that I have given a great deal of attention to during the past two years. Last session the House voted a subvention of $200,000 to assist in the transportation of coal. Owing to the strike in Alberta last year no arrangement was made for the transportation of coal during t'he season when it could be economically hauled 'by the railways. Later in the year when in western Canada I had an interview with Premier Greenfield at which Sir Henry Thornton and Mr. Stutchbury, the fuel commissioner for Alberta, were present. It was then decided that although the mines were again under way and producing coal, it was getting too close to the season when the wheat movement would begin for the railways to embark on the experiment to establish the freight rate on coal from Alberta to Ontario. Alberta coal has been used in all parts of Ontario to the entire satisfaction of everyone. The question is one of freight rates and freight rates alone. Let me say for the information of my hon. friend from North Toronto (Mr. Church) and other hon. members that we have agreed to have the experiment carried on this spring. I suggested there should be an arrangement that the coal should be mined and placed on board car at $3.50 a ton, that the railways should be handed the coal in trainload lots to be carried to common distributing points in Ontario, and that every
facility should be given to try to establish a lower rate than that prevailing. Sir Henry Thornton intimated at the interview that the lowest rate at which the railways could transport that coal was $9 a ton. I see by press despatches that catne through no later than yesterday-I have not received the information in any other way-that negotiations between the Alberta government and the railway are proceeding and that they propose establishing a rate of $7 a ton for the trial shipment of 50,000' tons. That shipment, as I say will be made next, spring. It is estimated that if a rate of $6 a ton could be granted, and if the mining and loading on car could be done at $3.50 per ton, it would make it possible to bring Alberta coal into Ontario and meet the competition of American anthracite.
In the investigations carried on by the Dominion Fuel Board we have been devoting our attention to see if it is not possible to supplant anthracite coal coming from the United States into the provinces of Ontario and Quebec. Naturally fuel coming from Alberta will be largely, if not altogether, lignite suitable for domestic purposes, and we hope it will supplant, the American anthracite supplied to those provinces.
The coal fields of Nova Scotia have been having rather a difficult time. This year we offered them a subvention to assist them in getting their coal to points further west to the extent of 50 cents a ton as the maximum on any shipment. I am sorry I did not know this resolution was coming up to-night or I would have had full details for my hon. friend; I will be prepared to lay them on the table of the House before very many days showing exactly what has happened. Briefly, Mr. Speaker, it is estimated that we have extended the market for Nova Scotia coal 100 miles westward by the assistance given to the coal movement.


Henry Lumley Drayton: To what points?


Charles A. Stewart: As far west as Cornwall, and in a line directly north of Cornwall.


Henry Lumley Drayton: What does the minister say to the position taken by the Nova Scotia government and by the Nova Scotia Coal Company, that it is impossible to sell Nova Scotia coal in quantity to-day even in Montreal owing to their inability to meet the American price? It was for that reason a duty was so strongly urged.


Charles A. Stewart: I do think even with high production costs in Nova Scotia to-day they can meet the American
National Coal Policy

competition because they have the advantage of a very low water rate to Quebec and other St. Lawrence river points.


William Findlay Maclean: Does the minister expect that the Americans will keep up their present price on anthracite? I say they will reduce it.


Charles A. Stewart: I am coming to that, Mr. Speaker.


Henry Lumley Drayton: Before my hon. friend leaves that point, perhaps he will be kind enough to give the House information as to the price at which Nova Scotia coal can be laid down in Montreal compared with the American price?


Charles A. Stewart: I have not the exact figures before me, but it is somewhere in the neighbourhood of $6 a ton. It would be absolutely impossible for the Nova Scotia mines to meet the American competition in Montreal but for the approximately 70 cent rate that prevails on ships coming up the St. Lawrence.


Henry Lumley Drayton: The information I have is that the National and Canadian Pacific Railways have bought American coal in Montreal at $5.10 and $5.25 against $6 quoted for Nova Scotia coal.


Charles A. Stewart: If they have bought it for $5.10 it is very recently. Of cour.ce, the price of American coal has dropped 25 cents a ton.


Henry Lumley Drayton: Say $5.25?
Mr. STEW'ART (Argenteuil):	When investigation was made the price of coal in Montreal and Toronto was about $6 a ton; they were both about on a parity. But that only comes about owing to the facilities provided for water shipment. With reference to the question by my hon. friend from South York (Mr. Maclean), we do hope to supplant all the anthracite coal coming from the United States by providing a cheaper product. That is another experiment we have been carrying on. I may say that I hope to continue the subvention to assist in the transportation of coal this year, and I also hope to bring down legislation for the assistance of the manufacture of coke, to which we have been devoting a very great deal of attention recently. My hon. friend is probably aware that in the city of Hamilton there is a splendid by-product coal manufacturing plant that is giving excellent service and producing a fuel from bituminous and low grade coals which is superior to the anthracite and which can be produced at from $2.50 to $3 per ton less. So 
we hope to convert a product that is plentiful, in which there is not liable to be a famine. The anthracite field of the United States is becoming somewhat depleted and in all probability in the very near future we will be faced by an embargo on their anthracite coming into Canada. So we have been working along the line of the conversion of bituminous fuel into high grade coke for domestic purposes. There is always some difficulty; these small tests are not always successful from the commercial point of view. But the transference of bituminous coal into coke is no longer an experiment; its success has been amply demonstrated and the resulting fuel has proved its superiority over anthracite. WTe know now that this is the solution of the problem of supplanting the present anthracite fuel supply throughout Ontario and Quebec,


William Findlay Maclean: The coking will have to be done here in the central provinces?


Charles A. Stewart: Yes. If
we can transfer Nova Scotia fuel into high grade coke say in Quebec-at Montreal, perhaps, where there is a market for the byproducts-we can use a million and a half tons of that coal to take the place of anthracite coal at present coming from the south to this part of the country. That is what we hope to do. I intend to bring down legislation at a later day, of which I will give due notice, and we can then discuss the matter more fully.


Mr. BROWN:: The amount of coke that
could be profitably produced would necessarily depend upon the extent of the market for the by-products?


Charles A. Stewart: Perhaps my hon. friend is aware that at present the Ontario Hj'dro-Eleetric people are seriously considering the establishment of a large steam plant to supplement their hydro operation in Toronto and vicinity. We are carrying on negotiations with the engineers for the purpose of determining whether it is possible for them to establish coke ovens in conjunction with their steam plants, using gas for fuel under the boilers and turning out this fuel to take the place of anthracite. The suggestion may not be realized, but having regard to the figures we have placed before them and the data we have been able to give them, the engineers are very much interested in the possibilities in that direction. The larger cities throughout the eastern provinces-Ottawa, Montreal, Quebec and so on-would eonswme all the by-products resulting from the coking of a million and a half

National Coal Policy
tons of Nova Scotia coal which now has difficulty in finding a market, and we would then be put beyond the necessity of looking to the American market for anthracite fuel. So much for the eastern area; and if we can make a success of the transporting of Alberta coal into the northern and western portions of Ontario, then we can cover the whole field so far as domestic fuel is concerned.


Mr. WARNER:: In connection with the
minister's remarks regarding Alberta coal, did I understand him to say that 50,000 tons of coal were to be shipped?


Charles A. Stewart: Yes; a
sufficiently large amount to establish definitely at what rate the coal can be transported in trainload lots-full trains of coal from the point of shipment to central points in Ontario.


Mr. KELLNER:: Has the minister had any requests from Alberta for assistance under that vote of last year?


Charles A. Stewart: No. As I
have pointed out, the whole matter was held up in Alberta last summer when the shipment could have been undertaken, owing to the strike. When the strike was over it was thought to be too late in the
11p.m. season to attempt the shipment, on account of the probability of interfering with wheat shipments from the western provinces. The idea is to have the shipment made in May or June when there is plenty of rolling stock available and when the larger cars may be had for the purpose, thus making possible a real test of the actual cost of the transportation of this fuel.
I am quite willing to accept my hon. friend's resolution, with the exception of the statement with regard to increased duty. If he will withdraw that portion of the resolution the government will be quite prepared to accept the remainder of it.


Edward Joseph Garland: May I ask the minister, before he concludes, in what form the necessary vote will be provided this year?


Charles A. Stewart: It will be in the supplementary estimates-that is, the subvention vote.


Edward Joseph Garland: As a revote?


Charles A. Stewart: Oh, yes.


William F. Carroll: I was not aware, Mr. Speaker, that the resolution standing in the
name of the hon. member for North Toronto (Mr. Church) would be taken up this evening, and I am not prepared to discuss the question in detail as I should like to do. There are, however, a few observations which I desire to make with respect to the resolution so far as it pertains to the question of duty on coal. The hon. member for Vancouver South (Mr. Ladner), I think it was, during the course of a discussion in the House on another subject, asked me where I stood on the question of coal duties. I am always prepared, Mr. Speaker, to say where I stand on any queition when the proper time comes, and to-night I am going to express my views, for what they are worth, with regard to the question of duty as it affects slack coal in the province of Nova Scotia. I shall also have something to say as regards the duty on coal as it would affect the western provinces if the duty on slack coal was made as I think it should be.
Let me outline briefly the history of the duty on coal. In 1879 a duty of 50 cents a ton was imposed on all coal imported into this country, whether anthracite, bituminous or coal dust. A year or so later, about 1880, this duty was increased to 60 cents a ton on all kinds of coal imported. In 1894 further changes were made in the tariff: the duty on bituminous coal was left at 60 cents a ton; the duty on coal dust-which meant, I presume, what we now call slack coal-was placed at 20 per cent ad valorem, and anthracite was put on the free list. There was, of course, a reason why anthracite was put on the free list. We do not mine anthracite coal in Canada. So far as our geologists have been able to establish up to the present time we have not anywhere in Canada anthracite coal of the quality of that which we import from the United States. It therefore became a dire necessity in Ontario and the western parts of Quebec-in fact, everywhere in Canada, but particularly those sections-to get the best fuel at the lowest possible rate, and I presume that is why in 1894, the government of the day saw fit to remove the duty on anthracite coal. The duty has remained off anthracite coal from that time to this.
In 1906 there was another change in the duty on coal. Slack coal was given a duty of 14 cents a ton. This was coal that would go through a screen with a half inch mesh-the requirement had previously been three-quarters of an inch, I believe. Run of mine and screened bituminous coal was loft at 53 cents a ton. In those days slack coal was scarcely marketable in this country, and I am going to point out an anomaly that grew up. Slack
National Coal Policy

coal in those days carried an ad valorem duty of 20 per cent and the slack coal that came in here was so cheap that the government of the day finally set a recognized value of 65 cents a ton on all slack coal imported. So it was a very cheap commodity in those days, because it was not used for any particular purpose. That ad valorem duty of 20 per cent on 65 cents made the duty 13 cents per ton, and in 1906-1907 the duty was made 14 cents a ton. I want to point out that the duty on run of mine coal or screened bituminous coal, and the duty on slack coal, presents to-day an anomalous situation which cannot be understood in this country. Slack coal to-day is practically as valuable as run of mine coal, for the reason that the manufacturers in central Canada have so developed their plants that they can use slack coal better than run of mine or screened bituminous coal. As a matter of fact, many of them break up their run of mine or screened coal into very fine dust, which they use in their furnaces.
Another point is this: It is said on the very best authority that large coal barges come from the United States across the Great Lakes to Montreal, and these boats are divided into two compartments. One compartment contains say 2,000 tons of slack coal, which comes into this country at a duty of 14 cents a ton, and the other compartment contains run of mine or screened bituminous coal, which carries a duty of 53 cents a ton. That coal is taken to the dock at Montreal-and I am speaking of Montreal because it is the largest consumer of this sort of coal-and the duty is paid, and then the slack coal and the screened coal is mixed and sold in Montreal as run of mine coal. It could not all come in as run of mine coal or it would have to pay a duty of 53 cents a ton; but by mixing it they pay only 14 cents on half the cargo and 53 cents on the other half, and then the whole cargo is mixed and sold as run of mine coal in Montreal. I say that is a fraud on the customs of this country; but it is being done. The only way to stop it is to level up the duty on slack coal from 14 cents to 53 cents. I am not going into a lengthy argument, but I stand for that because I think it is fair, and because I think it will bring the duty on coal up to a point where we will be able to get a bigger market in Montreal for our slack coal. Slack coal constitutes, I am told in some cases as high as 55 per cent of the output of certain of our mines in Nova Scotia; in many of the mines with which I am more familiar I know it constitutes at least 40 per cent of their output.

I agree with those who say that we should give to the people of this country fuel at the very lowest possible cost.. I agree with those who say we should not raise the duty on coal to such a point that the people in central Canada might be, so to speak, crucified in the matter of heating their homes, or the manufacturers of this country, who are entitled to a fair deal, charged too much. But I say that if the government imposed this duty they would be doing nobody any harm. The bogey of British Columbia and of Alberta is set up, and I will tell you why. In British Columbia they have a market for considerable of their slack coal in the United States. Their coal goes into the United States at 14 cents a ton for slack coal, and run of mine at 53 cents a ton, exactly the same duty as coal carries entering this countiy. Now if we raise the duty on slack coal to 53 cents, which is where the duty on bituminous coal stands to-day, the American duty would go up to the same point, and our British Columbia friends argue that their export trade to the United States would be injured. But may I point out that British Columbia is in an entirely different position in this respect from Nova Scotia, and also Alberta. If you will look at the map, you will see that Washington and Idaho are the states adjoining British Columbia, and in neither Washington nor Idaho is there any quantity of slack coal, scarcely any in fact; and if the Americans over there are taking slack coal to-day from British Columbia, a duty of 53 cents a ton would not prevent British Columbia coal from entering those two states, because from its geographical position British Columbia would continue to enjoy the identical market it has to-day.


Alfred Edgar MacLean: Are there any
large importations of coal there?


William F. Carroll: There is very little slack coal imported, but they use some in their factories.


Edward Joseph Garland: Is it not true that if Canada imposes a tariff duty on slack coal, then under the reciprocal agreement the United States will impose a corresponding duty on our coal entering that country, and would not that react against our coal entering the Washington market?


William F. Carroll: I said that was the argument, but perhaps not as well as my hon. friend has said it. I said that the moment we place a duty of 53 cents a ton on slack coal entering this country, a similar duty will be placed on our exportations of Slack coal to the United States; but I also said that from

National Coal Policy
the geographical position of British Columbia in relation to the states of Washington and Idaho, British Columbia is not going to lose any market they have to-day for their coal by reason of that additional duty being levied. Alberta is in perhaps a little different position.
I do not know what percentage of the coal of Alberta is slack coal, but I do know that some of the states adjoining Alberta are in the very same geographical position relative to Alberta as are Washington and Idaho with relation to British Columbia, and if we should Level up the duty on slack coal entering this country to where it should be, and where it was at one time, and do away with this anomalous situation that exists to-day, I do not think it would hinder one ton of Alberta coal going to the states adjoining.
A year or two ago, in 1923 I think it was, representatives of the miners of Alberta came to this government and took up the question of lignite. I am not speaking by the book, but I think Alberta is the only province that has any amount of lignite coal, and they have a chance of getting a market for that in the United States. We do not import any lignite from the United States that I know of; if we import any, it is only a very small quantity. Those of us interested in coal made no kick when Alberta asked for the removal of the duty on lignite, in order that the reciprocal agreement which the hon. member for Bow River (Mr. Garland) has mentioned might apply and the lignite of Alberta enter the United States free, it is done to-day, and as far as lignite is concerned, I believe it did the industry of Alberta some considerable good.
Speaking about Alberta, I said a moment ago that I was sorry my hon. friend brought up this resolution so late at night. I sent up for my papers but have not got them yet. I have a copy of a resolution passed by the Edmonton Board of Trade in December to the effect that they stood for the levelling u,p of the duty on slack coal to where the duty on ordinary run of mine and screened bituminous coal stood. I observe one of two of my hon. friends from the west smilling. I do not know the complexion of the Edmonton Board of Trade, but it seems to me that the boards of trade in the west probably are composed of business men, as boards of trade in central and eastern Canada are, and I would think that before the Edmonton Board of Trade would seriously propose and pass a resolution of this kind, they would consider what the effect of it would be on the slack coal industry of Alberta. I am taking for granted that, having passed that resolution, agreeing that it was an anomalous position for
this country to occupy in regard to its coal trade, that they must have given very serious consideration to the question of how the levelling up of the duty on slack coal would affect the slack coal industry in Alberta; and I am concluding that, after having given it that consideration, they must have come to the conclusion that it would not affect that industry to the disadvantage of the miners or operators of the province of Alberta.
I say that it is an anomalous position for the government of this country to occupy. It is going to help our coal industry in Nova Scotia and it is not going to affect disastrously the coal industry in either British Columbia or in Alberta, which are the other two great sources of supply. I point out this fact, tha* in the past year we did not come within
1,350,000	tons of the quantity of coal used on the Montreal market, as compared with the quantity used in 1923. We were about 1,400,000 tons short on the Montreal market, and I believe had we mined that 1,400.000 tons and placed it on the Montreal market, there would not be the distress which exists in certain areas of Nova Scotia and especially in Cape Breton. It is reckoned by those who are in the trade that they could market one million tons of slack coal in the district of Montreal. They could land it there for distribution if the duty on slack coal were levelled up to where it should be. I could give the House innumerable figures in this regard. I am simply placing myself where I think every Nova Scotian should be placed, I say that they should stand for the levelling up of the duty on slack coal from fourteen to fift3^-three cents per ton.


Alfred Edgar MacLean: What about reducing the other?


William F. Carroll: If we are going to have
any duties in this country I believe in having them uniform. We buy practically every suit of clothes, almost all our shoes, all our manufactured goods in Canada from manufacturers who are protected in the market to the extent of twenty-five to thirty-five per cent ad valorem duty, and we in Nova Scotia who have to buy those goods bearing that duty are in the position of getting between a five and ten per cent ad valorem duty on coal. If my hon. friend wishes to suggest that we in Nova Scotia should occupy that position relatively to the people of the central provinces, then I say to him that he is not a good Maritime man. The farmers of the country have thirty per cent on their goods. My western friends say they do not want it. I say nothing about that. They know more about it than I do.
National Coal Policy

I am talking of a matter which I know something about.
With reference to the subvention granted last year in the matter of rates on coal to points west of Riviere du Loup, I want to point out what a very small thing is capable of accomplishing. This subvention was voted about the 15th or 16th of July, and did not become effective till the latter part of July. This government voted $200,000 and gave a subvention of one fifth of one cent per ton per mile for every ton of coal which came west of Riviere d'u Loup. What was the result of that? It was a very small thing, but ,it enabled the coal operators of Nova Scotia to market in that short period, from the latter part of July to the close of navigation, one hundred thousand tons of coal in the market west of Montreal which market up to that time they were never able to reach. That was what the subvention meant to us. We are thankful to the government for what they did last year. It will mean a great deal more this year because the operators can take advantage of that one-fifth of one cent per mile from the very opening of navigation to the close, and if we go by comparisons, it would not surprise ime if this enabled them to reach, perhaps, with two hundred thousand tons of coal this year, markets which they were unable to reach some years ago.
I am in perfect harmony also with the project to establish coking plants. I am proud of the fact that I raised this very question in the House in the session of 1922. I gave it as my opinion then that the only way to combat in this country the high price of anthracite coal was for this government, or any other government that might be in power, to have some great national policy on the question of coking; so that the people of Ontario and Quebec and the other provinces that are forced to use anthracite coal might be given something as good as anthracite at two or three dollars a ton cheaper. I was glad to hear the Minister of Mines (Mr. Stewart, Argenteuil) say to-night that that was the policy of the government, and I am proud to be in a position to say that it was I who brought this to the attention of the government in the session of 1922. I believe it will work marvels in connection with the coal trade, in giving the people of this country a cheaper fuel as good as anthracite. It will work marvels in doing the very thing which my hon. friend from North Toronto (Mr. Church) had in view every time he moved this resolution in the last two or three years for a national policy on the question of a supply of coal for Canada. The trouble with

the proposition, Mr. Speaker, is that, as with all other innovations, it will probably take some considerable time to work out, and to get men sufficiently interested to place their money in it. But I am given to understand by some financial men who to-day have nothing to do with coal operations that, if a proper bill is brought down this session in connection with coking plants, it will work marvels in giving the miners of Nova Scotia and, I am in hopes, the miners of Alberta, when they have proper freight rates, a chance of getting clear of their surplus of slack coal which, at the present time, they are unable to market in the large centres of Canada. This may take two or three years, and in the meantime we are at the mercy of United States operators.
While I am a low tariff man, while I voted to-night for the reduction especially on trucks, as I did not swallow the whole of my hon. friend's resolution and while I believe motor trucks which come into this country for business purposes should come in at a reduced rate of duty in order that business men, farmers and others who require trucks in their actual business may get them a little cheaper, I do not think this is the time that we should have lower tariffs in view of what our neighbours to the south have been doing with their tariff for the last two or three years. In Nova Scotia we are practically shut out from the markets which we had there for our fresh fish. The result to-day is that men who were engaged in the fishing trade along the south coast of Nova Scotia and particularly the island of Cape Breton, are forced out of that business for want of a market and they must go to the coal mines of Nova Scotia to make a living, as that is the only other large industry we have. If I had time I might go into the way in which our customs officials are looking after the dumping clause of the act. We are not well organized in this regard, and I am of opinion to-day that this is one of the things that should be remedied owing to the fact that while United States' operators are not dumping their coal into this country, they are defrauding the tariff getting it in at a much lower duty than it should come in at. I hope I have satisfied the hon. member for Vancouver South (Mr. Ladner), who asked me the other night regarding my position in regard to the question of coal duty. I have placed it before the House in a much briefer way than I would like to have done, owing to the fact, as I said at the outset, that I was unaware that this question was coming before the House this evening.


Donald Ferdinand Kellner: Mr. Speaker, I was wondering if the Minister

National Coal Policy
of the Interior could clear up a little confusion that seems to exist between this government and the provincial government. I understand when he was out west recently he made a speech in which he made nearly the same statement as he has made to-night. I have before me a copy of the Edmonton Journal in which there is a report of an interview with Premier Greenfield of Alberta, who states that they knew nothing about any $50,000 being specially ear-marked for moving Alberta coal.
I do not wish to read these articles as they are a little long, but further down, on April 28, the trade commissioner, Mr. Stutchlbury, says that he wrote the Hon. Mr. Stewart asking for this assistance, and that on June 23 he renewed the request, so I cannot see how the minister can state to-night that he did not have any application from Alberta.


Charles A. Stewart: Mr. Speaker, when the subvention was voted last year, both the Alberta government and the eastern coal interests knew it was for the purpose of assisting in transportation. When we passed the order in council after a definite arrangement had been made for the assistance of eastern coal, we set aside $50,000 to be applied to the movement from Alberta.
It was always there. The one difficulty was that arrangements were made to call on the government to put up the amount. Furthermore, I told Mr. Stutdhbury, the trade commissioner, last spring, while the strike was on, that I would expect lignite coal would be loaded at a rate of $3.50 per ton. He doubted very much whether that could be secured. I told him I thought, in fairness to the consumer and to the government that were giving assistance in this movement, that would be a reasonable rate, and I understood afterwards he secured the rate from the Drumheller mines.


Donald Ferdinand Kellner: He made application on April 28 and June 23.


Charles A. Stewart: He did not make any application for any specific amount. That has not been done yet, because they have no arrangement with the railways. The arrangement I mentioned to-night is one I saw through a press despatch.


Henry Lumley Drayton: Mr. Speaker, the issue is extremely plain, and it affords us a pretty good opportunity of showing whether there is any real sympathy in this House with Nova Scotia and Nova Scotia miners, some of that sympathy that we have heard so much about from people that I had hopes (were entirely sincere
in their expressions of sympathy. The minister gives us very cheering news in connection with coking. It is a very excellent thing, something which we certainly ought to have. The minister said that there was another good thing about coking besides supplying this coke. He said it would also enable the Nova Scotia people, who now have considerable difficulty in finding a market, to sell another million and a 'half tons of coal. The hon. gentleman nods his head. When the hon. gentleman said that, he admitted the necessity for the duty. When he nods his head, he corroborates the necessity for the duty-


Charles A. Stewart: No.


Henry Lumley Drayton: -and yet he tells us that there should be no duty. He shook his head. Let us see why he did so. In the first instance, as we understand the matte!, there is difficulty in Canadians selling bituminous coal in this country, while at the same time we are importing millions and millions of tons of bituminous coal. Under those circumstances, if anything like a fair consideration be given, if the question of Canadian markets for the Canadian worker is to apply at all, surely it is supposed to be the policy of this government that it should apply in matters that are indigenous, in matters of first production, the mines, agriculture, fisheries and forests. Certainly we have in the mines in Nova Scotia a condition which is such that the companies cannot market their coal, and my hon. friend knows that. He knows further that not only can the companies not market their coal, but .that they have banked coal and this means loss in the coal itself, deterioration of the coal, losses in the trade. My hon. friend has also admitted that it costs $6 a ton to put Nova Scotia coal into Montreal. If he has looked into the matter at all he will know, what is the fact, that American bituminous can be sold easily at lower rates, and that company contracts are given freely on that reduced Scale. I do not really know why the government wants the reference to the duty withdrawn; I cannot see the reason. Here we have something which is absolutely indigenous to the soil, something which is intensely vital to a whole province; we have something passed upon by the Liberal party of that province through its official chief in regard to which there is a demand for a duty. We are not asking for any specific duty in this matter. We are merely asking that there be a protective duty which will enable Canadians to work in Canada. It does seem to me that under these circumstances the gov-
National Coal Policy

eminent, if they desire to give any consideration at all to the Nova Scotia miners, will accept the resolution.


John Evans: I want
to have a little information regarding this resolution; I want to know exactly what a national policy in regard to fuel means. The resolution calls for a duty on United States coal; but that cannot possibly help the householder, whether in Ontario or in western Canada. In this country we are in the anomalous position of having created an industrial area that possesses neither coal nor steel, an industrial area that is devoid of these two great commodities necessary to a manufacturing centre. The situation regarding fuel is acute only in this area of Ontario. Now, if a national policy on fuel means that the treasury must again be drained in order to give a subsidy to the railways to haul coal from Alberta and from Nova Scotia, I think we should carefully consider it before entering on this kind of project. This industrial area, as I have said, is in a most anomalous position. The fuel situation no doubt is sometimes acute, but we cannot better it by this means; and after we have protected this area by a high tariff from competition without, and also by means of a discriminatory freight rate from competition on the part of the rest of the Dominion, I for one will want to know exactly what a national policy on fuel means. I see it calls for a duty, and it also calls for a preferential rate on the railways. Western Canada will not be in favour of this resolution, and I for one must oppose it.
Mr. HANCE J. LOGAN (Cumberland): It is now nearly midnight, and this is no time to discuss a national coal policy. I regret that we have not a whole day to consider the matter in view of its supreme importance. I shall not take more than a few minutes therefore to express my opinion on the subject. Last year when the resolution was moved, I endeavoured, speaking at some length, to show the necessity for a readjustment of the coal tariff.
We are asking in Nova Scotia that the duty on Slack coal be made the same as that on run of mine. When run of mine coal was given a duty of fifty-three cents a ton, a duty was placed on slack coal of fourteen cents, the idea being that the tariff from an ad valorem standpoint was about equal; because at that time slack coal was a cheap commodity. As a matter of fact, if you travelled throughout the United States then you would find around every colliery mountains of slack coal which you could buy at fifty cents or 
less a ton. Owing to improved apparatus, however, stokers, feeders and so on, slack coal has become almost as valuable as run of mine, so that to-day there is only a few cents difference in the price. And yet the duty on slack coal remains at only fourteen cents a ton as against fifty-three cents on run of mine. We in Nova Scotia are asking that the relative' ad valorem percentage be made the same as it was when the duty was established. I do not think we are asking anything unreasonable; I do not think that an increase in duty will affect the consumers of this country to any great extent. But we shall certainly prevent the fraud on customs referred to by my hon. friend (Mr. Carroll), whereby importers to-day make a mixture of about half slack and half run of mine. They screen it at the mine in Pennsylvania and enter it for customs about half slack and half run of mine. The actual duty they pay is about thirty-three cents a ton. Thirty-three cents a ton on coal at the price it is to-day is not a protective tariff.
Let me read, for the information of the House, some figures in regard to the value per ton compared to the percentage of duty as collected on run of mine coal and slack coal. In 1916 the percentage of duty to value was 46.5 per cent, on run of mine. In
1923	it had gone down to 13.5 per cent. In
1924	the percentage of duty collected on the value of run of mine was 17.7. In 1916 the percentage of duty to value on slack coal was 162 per cent; in 1923 it was 3.8 per cent, and in 1924 5.9 per cent. In that time the importation of slack coal had increased by leaps and bounds until last year there was imported into this country over 3,000,000 tons of slack bituminous coal, paying a duty of only 5.9 per cent of the value. Yet when we in Nova Scotia ask for an increase in that duty we are charged with being high protectionists. We are only asking for the lowest kind of revenue tariff on slack coal
We know to-night something of the conditions that exist in some of the collieries of eastern Canada. I will not go over the harrowing state of affairs that prevails there, and which existed even before the strike. Let me tell you, Mr. Speaker, that whereas Nova Scotia in 1913, the last normal year- that is, the last year before the war-produced over 8,000,000 short tons of coal, in 1924 we produced only 5,500,000 short tons. In other words, our production of coal in Nova Scotia instead of advancing, as it should have done, has gone down since 1913 two and a half million tons annually. And yet you want to know what is the reason for the conditions

National Coal Policy
that prevail in Nova Scotia to-day! One of the chief reasons why there has been that great decrease in production is the admission of slack coal at a very low rate of duty. We are now asking that that be rectified and the duty upon all coal put at the same rate.
I go further, although all my friends do not agree with me, and say that when we need a tariff so badly that we are taxing our people here, there and everywhere in all sorts of ways, we should insist on putting a duty upon what is a semi-luxury-anthracite coal. No man can advance any argument in favour of the policy that makes the poor man who lives in a hovel pay a duty upon his coal while the man who lives in a mansion is allowed to bring in his coal duty free. I also advocate of course that we should put a duty upon anthracite dust, because that is another commodity which came in here last year to the extent of 300,000 or 400,000 tons to supplant coal mined by the miners of Canada.
Now, what is the objection to this course? The only objection I have heard raised is that if we increased the duty on slack coal the Americans would also increase the duty upon slack coal from British Columbia. If I am wrong I want to be corrected, but I am informed that, whereas in Nova Scotia we produce over 40 per cent of slack coal owing to the friable condition of our coal, in British Columbia they do not produce more then 20 per cent of slack coal, nearly all of which they use for manufacturing purposes in that province. They are not sending slack coal from British Columbia into the United States. Therefore there is nothing to fear in the way of reprisals.
I congratulate the government upon the policy they propose to adopt with reference to coking. It is a policy which can be discussed at considerable length when the measure is brought down. I endorsed the policy last year of giving a subvention in aid of freight rates on coal. It has brought good results, for over 100,000 tons of coal have reached Quebec and Ontario from Nova Scotia that would never have been sent there but for that subvention. I wish, however, that the limit of 50 cents could be increased to at least SI, because under the present rate no coal has been shipped from the mainland of Nova Scotia into, these western markets. This matter will take considerable time to debate, and I am not going to weary the House at this late hour. I only make this plea to the government, to remember that we have in Nova Scotia 14,000 honest, hardworking men-that is, they would like to work if conditions were right. We have down there
men who have been mining coal under difficult circumstances, and we find that instead of our production going up it has gone down two and a half million tons per annum during the past twelve years. Taking the average price of coal at the mine at S4 per ton, we are receiving $10,000,000 less in Nova Scotia in 1925 than we were in 1913.


Mr. J. J. HUGHES (Kings, P.E.I.):: Mr. Speaker, this is a large question, and it has been discussed from several angles this evening. Most of those who have spoken have viewed it from the standpoint of the mine operators and the miners. Now, a large body of people are vitally interested in this question-the people who consume coal. Nearly everybody does that. This is a country in which artificial heat must be provided during the winter months, and I know as a matter of fact that the ordinary householder in the Maritime provinces finds it difficult at the present price of coal to 'warm his house sufficiently to make it comfortable. He finds his coal the largest item in his bill of expense. Therefore I should like to say something from his viewpoint. But the evening is so late, Mr. Speaker, that we cannot do the subject justice, and therefore I move the adjournment of the debate.
The House divided on the motion (Mr. Hughes) which was. agreed to on the following division:
YEAS Messrs:
Archambault,	Logan,
Benoit,	Lovie,
Binette,	Low,
Brown,	McBride,
Cardin,	McConica,
Casgrain,	Mclsaac,
Davies,	McKay,
Delisle,	McMurray,
Desaulniers,	McTaggart,
Deslauriers,	Mercier,
Evans,	Motherwell,
Finn,	Murdock,
Fiset (Sir Eugene),	Ouimet,
Forrester,	Pelletier,
Hainimell,	Raymond,
Hanna,	Rheaume,
Hughes,	Rinfret,
Johnston,	Sinclair (Queens, P.E.I.),
King (Huron),	Snowball,
King (Kootenay),	Stewart (Argenteuil),
Lapointe,	Stork.-42.
 NAYS Messrs:
Bancroft,	Coote,
Bowen,	Doucet,
Carroll,	Drayton (Sir Henry),
Chisholm,	Drummond,
Church,	Elliott (Waterloo),
Clark,	Fansher,
C.N.R.-Rouyn

Gardiner,
Garland (Bow River), Hodgins,
Hoey,
Hubbs,
Kennedy (Edmonton), Ladner,
Maclean (York), McKillop,
Marler,
Martelil,
Meighen,
Preston,
Ross (Kingston), Shaw,
Speakman,
Spence,
Spencer,
Stewart (Leeds),
Stirling,
Sutherland,
Thompson,
Thurston,
Wallace,
Ward,
Woodsworth.-38.

(The list of pairs is furnished by the chief whips.) Messrs:
Robb,	Stevens.
On motion of Mr. Lapointe the House adjourned at 12.08 a.m. (Tuesday).
Tuesday, March 17, 1925