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

Mr. JONES:: 1.	Is Dr. Edward Farrel of Halifax, Nova Scotia, in the service of the Canadian National Railways?
2.	If so, what position does he hold, what are his duties, and when was he appointed?
3.	What salary does he receive?
4.	Has he the privilege of free transportation over Canadian National lines, and if so, to what extent and during what period?


Hon. Mr. GRAHAM:: 1.	Yes.
2.	Attached to hotel department in temporary capacity. He is making a study of hotel possibilities along the Canadian National railways in the Maritime provinces from the standpoint of private enterprise with a view to developing tourist travel.
3.	None.
4.	Yes; over the central and Atlantic regions in Canada to June 15, 1924.


INDIAN OFFICERS' RELIEF
[Stage Direction]
* Hon. Mr. BAXTER:
1.	Has the government received from the Legislative Assembly of Prince Edward Island a resolution or ad-
Questions
[Stage Direction]
dress praying that the Dominion government would grant relief to certain Indian officers who had been defrauded by Andrew Fraser Mitchell?
2.	If such has been received what has been the decision of the government in the matter?
Hon. Mr. COPP:: Mr. Speaker, in reply to question No. 1, I may say that the resolution referred to was received by the government on Saturday last. The government has not yet considered its decision in the matter.


CANADIAN NATIONAL RAILWAYS-FREIGHT TONNAGE
Sir HEIMRY DRAYTON:: What are the respective freight tonnages carried from Vancouver and Prince Rupert by the Canadian National system in each of the years 1923 and 1924?


Hon. Mr. GRAHAM:: From Vancouver, year 1923, 104,084 tons; 1924, 84,906 tons. From Prince Rupert, year 1923, 27,516 tons; 1924, 18,645 tons.


CANADIAN NATIONAL RAILWAYS-PRIVATE CARS
Mr. DOUCET:: 1.	What is the number of cars described as private, business or official, on the Canadian National system?
2.	What officials have the right- to use such cars?
3.	What was the total mileage of such cars for each of the years 1923-1924?
4.	What is the cost per mile of the operation of the passenger trains of the system?


Hon. Mr. GRAHAM:: 1.	64.
2.	Superintendents, general superintendents, assistant general managers, general managers, vice-presidents, president and other officers when their duties require.
3.	Car miles-
1923	 1,471,720
1924	 1,386,538
4.	Train miles-
1923	$2 87
1924	 2 90


SUMMER TRAINING CAMPS
*Mr. CHURCH:: Will any spring or summer training camps be held this year for the militia or regular force, and where will they be located, for what time, and for what units and number of men?


Hon. Mr. MACDONALD (Pictou):: Mr. Speaker, in answer to this question, I may say that it is expected that certain spring or summer training camps will be held this year, but where they will be located and for what time has not yet been decided upon by the department.


SOLDIER SETTLEMENT BOARD-WILSON
Mr. ARTHURS:: 1.	Has the property of a man named Wilson, at or near Clandeboye, Manitoba, been sold by the Soldier Settlement Board?

2.	If so, what numbers of stock were sold, and what price per head was realized?


Hon. Mr. ROBB:: 1.	Stock and equipment sold; land and buildings not sold,
2.	Two aged small horses: $32 and $35; four cows .in poor condition and not- in calf: $12, $13, $13.50 and $10. Three horses and seven cattle died in the settler's hands: two cows reserved.


SOLDIER SETTLEMENT BOARD-NORTHCUTT
Mr. ARTHURS:: 1.	Has the property of a man named Northcutt, of Selkirk, Manitoba, been sold by the Soldier Land Settlement Board?
2.	If so, how long after the death of Northcutt was the sale held ?
3.	What proportion of the indebtedness of this soldier was realized at this sale, having regard to each of the various loans made to him?
4.	What was total amount realized at sale?


Hon. Mr. ROBB:: 1.	Land and buildings not sold; chattels sold.
2.	25 days.
3.	27.3 per cent of loans for stock and equipment.
4.	$624.


CANADIAN NATIONAL RAILWAYS-PRIVATE CARS
*Mr. WILSON:: 1.	How many private cars are in the possession of the Canadian National Railways for the use of officials?
2.	How many of these have been secured in the past two and a half years?
3.	How many were used to carry officers of the company to Portland on the occasion of the departure of Mr. C. J. Smith for England?
4.	Who were the officers who used these cars for this purpose ?
5.	How many cars were on this same occasion sent around to Halifax, and for what purpose were they so sent ?


George Perry Graham: Mr. Speaker, I do not see my hon. friend (Mr. Wilson) in his place. When this question was called on a former occasion I suggested that the last three inquiries should not be pressed. I think the hon. gentleman would be well advised to drop them, as to answer them would lead to interminable questions on little matters of detail which I think are not of great interest. However, I will let it stand until he is in his place.


Mr. SPEAKER:: Stands.


MATANE WHARF
Mr. HANSON:: 1.	What has been the cost to date of the Matane wharf ?
2.	Was the contract or any part of same let by tender, and if so, who was the successful tenderer in each case, and at what price, and was the successful tenderer the lowest tenderer?

The Budget-Mr. Lapointe
3.	If the contract was not let by tender how was the wharf constructed, by whom, and on what basis?
4.	What prices were paid for the various classes of lumber used?
5.	Who was the inspector in charge and on whose recommendation was he appointed?
6.	Is it a fact that the wharf has not as yet been used for the purposes of shipment and transit?
7.	Is it a fact that the wharf is now largely in a state of wreck?


Hon. Mr. KING (Kootenay):: 1.	$34,362.60.
2.	(a) The contract was let by tender.
(b)	Messrs. J. R. & J. E. Boulanger.
(c)	$30,972.80 based on unit prices.
(d)	Yes.
3.	Answered by No. 2.
4.	Lumber supplies by contractor-no information.
Lumber supplied by department and taken over by contractor at cost price:-
Protection piles, spruce, 33' x 6" 11602 l.f. at .20 $2,320.40.
Foundation piles, spruce 7" dia. 6399 l.f. at .13 $831.87.
Foundation piles, spruce 8" dia. 4573 l.f. at .13 $594.49.
Black birch 8' x 10" 42 l.f. at .30 $12.60.
5.	(a) J. R. Pelletier.
(b) Appointed by Civil Service Commission.
6.	Yes, wharf not yet completed.
7.	No. The wharf was damaged by the storm of December, 1924, and repairs are now under consideration.


SHEET HARBOUR WHARF
Mr. BLACK (Halifax):: 1.	What proportion of the total cost of the wharf under construction at Sheet Harbour, Halifax County, Nova Scotia, for the use of the A.P.W. pulp and power company, is the government paying?
2.	Where were the plans and specifications for this work prepared, and under whose supervision?
3.	Were tenders for this work publicly called for, in what papers were notices of tender advertised, and on what dates?
4.	Were plans and specifications of this work on view at the A.P.W. pulp and power company's office at Sheet Harbour, to any one wishing to tender?
5.	Were the plans and specifications of the wharf at Sheet Harbour on view at the office of the Public Works department at Halifax, where such plans and specifications are usually lodged, and as has been customary in these cases?
6.	Is the work to be done under the supervision of the Public Works department?
7.	(a) How many tenders were received, and (b) from whom?
8.	Where did the firms who tendered, get the tender forms?
9.	Who was awarded the contract, and (b) what is the contract price?
10.	Where were the tenders opened, and in whose
presence ?


Hon. Mr. KING (Kootenay):: 1.	One half, the total contribution not to exceed the sum of $7,500.
2.	Plans and specifications for work prepared by public works engineers under supervision of Mr. District Engineer Thos. J. Locke, at Halifax, N.S.
3.	Company did not advertise for tenders, but asked reputable firms for bids.
4.	No information.
5.	Yes.
6.	Yes.
7.	(a) Four tenders received. (b) Par-sons-Ed Company, Moncton, N.B.; Halifax Dredging Company; Standard Construction Company; H. A. Russell Construction Company.
8.	From the A.P.W. Pulp and Power Company, Ltd.
9.	H. A. Russell Construction Company (b) at following schedule rates: Unballasted crib-work, 8 cents per cubic foot; Span between blocks, 25 cents per square foot; Rock ballast, $1.40 per cubic yard; making the contract price approximately $17,940.
10.	In the office of the district engineer at Halifax, N.S., in the presence of Mr. District Engineer Thos. J. Locke and Mr. Connors, representing the A.P.W. Pulp and Power Company, Ltd.


THE BUDGET
[Stage Direction]
The House resumed from Tuesday, April 28, consideration of the motion of Hon. J. A. Robb (Acting Minister of Finance) that Mr. Speaker do now leave the chair for the House to go into committee of Ways and Means, and the proposed amendment thereto of Sir Henry Drayton.
Hon. ERNEST LAPOINTE (Minister of Justice):: Mr. Speaker, the feeling of those who have to take part in the budget debate at this stage is well expressed by the French writer: Tout est dit et l'on vien trop tard- everything has been said, and we were born too late. Our particular system has been described as " government by discussion " Well, I am sure that nobody will deny that we are applying the democratic principle to its fullest extent. Our friends opposite have said that the budget offered by my hon. friend the Acting Minister of Finance (Mr. Robb) is a colourless instrument, a standpat budget;-they have certainly done it great honour by discussing it so vehemently and for such a long time. Of course, we knew it could not satisfy them-nothing could satisfy them coming from this government. Remembrance of the past and fear of the future are responsible for the discretion of my hon.

The Budget-Mr. Lapointe
friends opposite in their expression of satisfaction with any action of the party which sits to your right, Sir. Their criticism has been directed against the manner in which the financial statement had been prepared and presented, and more particularly concerning accounts of the Canadian National Railways. They have used very strong language regarding it. Indeed, my knowledge of English has been improved-or otherwise-by listening to this debate, and I have added a few energetic words to my vocabulary. My friend from Fort William and Rainy River (Mr. Manion) has excelled himself, and probably others, in this respect. He did it-if he will forgive me for saying so-with the characteristic zeal, and even furore, of a neophyte. I have always noticed that when circumstances, or perhaps error of judgment, pervert a man into a Tory, he always becomes a very bitter Tory, a very strong disciple of the faith. He has a troubled sense of guilt, and he feels the necessity of justifying himself by all available methods. I have seen it stated in the papers that came from home this morning that my hon. friend will pay a visit to my city of Quebec next Saturday. From here I extend to him a hearty welcome, and as I have already been invited to go to Fort William it is possible that I may pay a return visit to my hon. friend.


Mr. MANION:: I will extend to the minister a hearty welcome in return.


Ernest Lapointe: I knew I would be welcome. It is possible that I shall be offered the opportunity of seeing the dead bodies of two manufactures which have fallen victim to the tariff, as my hon. friend said the other day; because some mischievous citizen of Fort William has conveyed to me in writing the information that these manufactures were closed when the present government came into office.


Robert James Manion: I have not spoken of
these manufactures this year at all. However, there are two in Fort William that have actually been closed on account of the lack of tariff protection which this government has refused to extend to them.


Ernest Lapointe: Oh, I see. Had the protection been decreased on the products of these two industries?


Robert James Manion: No, it has not been decreased.


Ernest Lapointe: 
Robert James Manion: This government is in
power. We on this side cannot increase the tariff.


Ernest Lapointe: Yes, the government is
in power, and it is going to stay in power.
I was reading the other day a very clever French book written by Monsieur Barthou- Le Politique-in which members of parliament taking part in discussions were advised that it is very unwise and very dangerous to interrupt all the time. When we show my hon. friend and his associates that the method of bookkeeping followed by the Acting Minister of Finance (Mr. Robb) was the one in practice when his predecessors presented budgets to the House, even during the time of the member for West York (Sir Henry Drayton) and of Sir Thomas White-well, they tell us that has nothing to do with it. In other words, they are prepared to sacrifice these two gentlemen or anyone else on the altar of political exigency. I commend, Sir, this method of bookkeeping not because it was the method followed by the hon. member for West York but because I think it is the right and fair method. I submit it is fair that all our railway accounts are to be kept separately from the ordinary accounts of the country both as regards the national debt and as regards the operation and the effect of the operation of the railways on the surplus or deficit in connection with our national finances as a whole. And I may say that this practice is followed elsewhere. I have in my hand an issue of the Wall Street Journal of Tuesday, April 21, of this year, in which the accounts of the state of Switzerland are given. There the ordinary debt and the debt of the railways are dealt with separately and given separately; indeed, the debt of the railway is higher than the ordinary debt of the federation. Then, in another account they give the federal railroad statement, the operating surplus, the net capital charges, and either the surplus or the deficit, as the case may be. This is not withholding information; I submit that it is giving full and complete and understandable information. But apart from that it is the only fair method, both to the railway and to the government. We are operating these railways under a system of public ownership and we are obliged to give that system a fair trial. The people of Canada desire that these railways shall be operated free from political or government interference, and it is our policy that this shall be done. Our main responsibility, I claim, is in the appointment of

The Budget-Mr. Lapointe
the head of ithe railway. This government takes full responsibility for the appointment of Sir Henry Thornton, and if that appointment is challenged we are ready to join the issue and take up the challenge before the people of Canada at any time. Of course, when the national railways become a paying proposition-it will not be before a long time, but it will be before my hon. friends come back to office-hon. gentlemen apposite will be the first to ask that the accounts be kept separately. But at present the adoption of that course does not synchronize, to use a familiar term of days gone by, with their present policy of alarm, blue ruin, and panic.
My hon. friends emphasize in every possible way the unavoidable deficits for which they themselves are largely responsible. They magnify the importance of the deficits-and it is a strange way of giving public ownership a fair trial-but they never mention the fact that two years ago the Canadian National Railways had an operating surplus of $20,000,000 and that even last year they had an operating surplus of $17,000,000. What the railways are suffering from is the legacy of debt which has been left to the present administrators, but to refer to this also would not harmonize with the policy of preaching blue ruin and disaster so zealously followed by my hon. friends.
In speaking on the address the right hon. leader of the opposition (Mr. Meighen) complained that I had described him as a Jeremiah, and stated that he would not be deterred from stating the facts as they were. Well, I will never find fault with my right hon. friend or with anybody else for stating the facts as they are. But I protest against misrepresenting Canada in the face of the world. I protest against the demoralizing influence of a campaign which has the effect of supplying erroneous information and mischievous and misleading material to those who are carrying on anti-Canadian propaganda in Europe or elsewhere. Ind&ed, we read in the press that the agents of the government of Canada, both for immigration and trade, are complaining of the effect of that campaign. To say, for instance, that our manufacturers are closing down their plants and failing by the thousands is a statement which I claim should not be made by any public man in this country, unless it be true. If it is not true, it is not fair to the people of Canada and to the Canadian nation. Now, were failures so numerous in this country last year? I have in my hand a compilation of statistics made by Bradstreet's which appeared in the Financial Times, of
Montreal, of February 13, 1925. as to financial affairs in Canada during the year 1924. It shows that the failures in Canada in 1924 numbered 2.312, a decrease of 21.9 per cent from 1923, and of 28.8 per cent from 1922. But what is more interesting in this statement is that this agency of Bradstreet's gives the causes of those failures and statistics as to those causes, and what do we find with regard to those failures in Canada? The figures are
as follows:
Failures due to-	1924
Incompetence	 591
Inexperience	 118
Lack of capital	 887
Surely no one will claim that we should increase the tariff on account of failures due to any of those causes. To continue the list: Failures due to-	1924
Unwise credits	 55
Failures of others	 11
Extravagance	 g
Neglect	 30
Then comes the one under which, if at all responsible for any, the tariff could come:
Failures due to-	1924
Competition	 68
Now competition in the broad sense of the word means competition apart from tariff competition, so out of a total of 2,312 failures only 68 are due to competition, according to Bradstreet's; that is, only 2.7 per cent of the failures in Canada during the last year were due to competition. I claim the liberty of giving this to Hansard.
Mr. Speaker, we are hearing much also about debt and taxes. Canada has been described on all the platforms of the country as being the country where we are most heavily burdened with debt, and where we are taxed much higher than any other country not only in the British Empire, but some have even said in the whole world. You will remember, Mr. Speaker, that last year I caused almost a commotion by stating in this House that Canada was the least taxed country in the British Empire. I was taken to task for having made such a statement, and the Ottawa Journal had an editorial in that connection deploring in gloomy terms the impropriety of a public man being guid.y of such grossly erroneous and false statements. Of course, it meant the falling down of the citadel of misrepresentations that had been erected in the preceding months.
This year I have asked the Bureau of Statistics to make the necessary researches into debt and taxation and prepare a statement to that effect, and I will ask you, Mr. Speaker,

The Budget-Mr. Lapointe
to permit Hansard to print their statement. What do I find there? It is that Canada has the least debt of all the countries of the empire, though larger than that of the United States, the latter being due to the fact that in Canada we own public utilities and railways and their debts are added to the national debt. The debt of Canada per capita is $442.46, and that includes federal debt, provincial debt and municipal debt. The debt of the United States, including all the debts of the states and all municipal debts, amounts to $268.57 per capita; Great Britain, $922.48; the Commonwealth of Australia, $820.58; New Zealand, $884.94; Union of South Africa, $647.52.
When it comes to taxation, the taxation per capita of Canada is $63.51, including taxes federal, provincial, municipal and school; United States, $68.49, or $5 more than in Canada; United Kingdom, $99.36; Australia. $69.22; New Zealand, $77.12; South Africa' $75.92. All the particulars as to the national debt, the provincial debt, and the municipal debt are given in detail in this statement, and I think it is important on account of the lack of knowledge as to this question to put this statement on Hansard1:


AGGREGATE DEBT AND TAXATION OF ENGLISHSPEAKING COUNTRIES
[Stage Direction]
The accompanying figures are taken from the best sources for all the countries included and are given for the latest possible dates. Statistics for the United States, so far as state and local debts and taxation are concerned, are taken from a United States offical report published June 6, 1924. It may seem somewhat remarkable that the per capita debt in Canada should be greater than in the United States, while our total taxation is lower, but the reason is to be found in the fact, that in this country public ownership of public utilities prevails to a far greater extent than across the line and that the capital invested in such publicly owned utilities, being borrowed, appears in our debt, while the revenue derived from such utilities is not tax revenue but is a voluntary payment by the individual for specific services rendered to him. Such payments cannot properly be considered as part of the "burden of taxation."
-	Amount	Per Capita	Per Capita
		£ s. d.	
Debt			
Canada		S 4,095,417,668		
United States		S 29,875,045,000		
United Kingdom		£ 8,322,400^000	192 3 8	922 48
Commonwealth of Aus-			
tralia	£ 976 621 203	170 19 1	820 58New Zealand	£ 246 755,789	184 7 3	884 94Union of South Africa...	£ 212,409,903	134 18 0	64 7 52Taxation	
S 7,565,410,540		
United Kingdom		£ 894,603,000	20 13 2	99 36
Commonwealth of Aus-			
tralia	£ 82,520,286	14 8 0	69 22New Zealand	£ 21,104,188	15 18 10	77 12Union of South Africa...	£ 25,248,343	15 16 5	75 92

[Stage Direction]
Note.-Details will be found in the following tables.
-	Amount	Per Capita
	$	$ cts.
Canada Debt-		
Dominion, March, 1925	12,431,487,113	259 50Provincial, 1922	
Municipal, *Ont., Que., Man. onlv..	640,404,105 674,914,368	71 63Other Provinces (est.)..	348,612,082	Total Debt	4,095,417,668	442 46Taxation-	Dominion, March, 1925	294,000,000 (est.)	31 38Provincial, 1922	
Municipal, *Ont., Que., Man. only.. Other Provinces (est.)..	62,367,260 151,490,189 78,753,201	6 98 } 25 15Total Taxation	586,610,650	63 51
'Three provinces, Ontario, Quebec and Manitoba, compile and publish comprehensive reports on their municipal finances. These three provinces have two-thirds of the population of the Dominion, and the figures fot the other provinces are estimated as being the same in proportion to population.
fAs per Budget speech of March 24, 1925.
		Amount	Per
		Capita
	S	? cts.
United States		
Debt-		
	21,178,045,000 936,000,000 7,761,000,000	188 96 8 57 71 04
State, 1922			
Counties, Municipalities, etc., 1922.		
	29,875,045,000	268 57
		
Taxation-		
	3,340,794,540 871,413,000 3,353,203,000	29	81 7 98 30	70
State, 1922			
Local, 1922			
		
	7,565,410,540	68 49
		
		Per	Per
-	Amount	Capita	Capita£	£ s. d.	$ cts.United Kingdom	Debt-	Debt, March 31, 1924. .. Local debt of England	7,766,400,000	179-1-10	859 64and Wales, March, 1921	556,000,000	13-1-10	62 84
8,322,400,000	192-3-8	922 48
			
Taxation-			
Revenue of National			
Government from Taxation, March 31, 1924		718,060,000	16-11-8	79 80
Revenue from L o c a 1			
Government from Taxation-E n g 1 a n d and Wales and Scotland, 1922-23	176,543,000	4-1-6	19 56Total Taxation	894,603,000	20-13-2	99 36
[Stage Direction]
The Budget-Mr. Lapointe
STATEMENT OF DEBT AND TAXATION OF ENGLISH-SPEAKING COUNTRIES-Con.
_	Amount	Per Capita	Per Capita£	£ s. d.	$ cts.Commonwealth of Australia Debt- Australia, Commonwealth, June, 1924	415,600,079	\ 72- 5- 7	346 94States of, June, 1923....	535,124,442	94- 1- 7	451 58Municipal Debts, 1922..	25,896,682	4-11-11	22 06Total Debt	976,621,203	170-19-1	820 58Taxation- Revenue of Commonwealth from Taxation, June, 1924	50,852,483	8-16-11	42 46State Revenue from Taxation, 1922-23	18,739,558	3- 5- 2	15 74Municipal Revenue from Taxation, 1922	12,928,245	2- 5-11	11 02Total Taxation	82,520,286	14-8-0	69 22New Zealand Debt- Dominion debt, March 31, 1924	208,595,743	154-15- 3	742 86Local Governing Bodies, March 31, 1923	38,160,046	29-12- 0	142 08Total Debt	246,755,789	184- 7- 3	884 94Taxation- Dominion revenue from Taxation March 31, 1924	16,540,438	12- 8- 0	58 52Local Governing Bodies, March, 1923	4,563,750	3-10-10	17 60Total Taxation	21,104,188	15-18-10	77 12-	Amount	Per head of European Population fUnion of South Africa Debt- Net Debt of Union, March 31.	£ 187,180,241	£ s. d. 118-18-7Provincial debt (included in	25,229,662	15-19-5
212,409,903	134-18-0 or $647 52
Taxation-		
	18,818,000 3,738,150 2,692,193	11-15-0 2- 7-4 1-14-1
		
		
		
	25,248,34	3 15-16-5 or $75 92
		
f European Population only. The native population is nearly four times as large as the European, but has a very low tax-paying power. The per capita debt for the total population is $142.56 and the per capita taxation, $16.88.
Of course, nobody likes to pay taxes, and it is a catchy appeal to refer to high taxation. I was reading some time ago the words of
an eminent English writer, who says that that man is highly educated who pays his taxes gladly. I am afraid that if we were to adopt this test as to education, few of us would qualify.
As regards the banks, I have statistics of all the deposits, but I do not think it is necessary to put those figures on Hansard.
Some gentlemen like to make comparisons with the United States. Well, Sir, first, it is not a fair comparison to make, because Canada was in the war from the very first day; it was not so with the United States. But even disregarding that, I think we stand the comparison pretty well. Three years ago our dollar was worth seventeen cents less than the American dollar; to-day it is just as valuable as the American dollar. The exports of the United States have increased to-day over what they were in pre-war times by 22 per cent; the exports of Canada have increased over what they were in pre-war times by 57 per cent.
Yes, Mr. Speaker, these are difficult times. The waters are stormy, and the strongest vessel has to struggle desperately to keep afloat, but our national ship is going along steadily and safely through the crisis which has disturbed and upset the world. The prophets of disaster may continue to stab themselves and cry out after the manner of an ancient pagan priest, but the economic process will go on its way in Canada towards a condition in which the means of well living will exist for all Canadians. We do not ask the leader of the opposition and hon. gentlemen opposite to help us, it is beyond their virtue, but at least will they not refrain from hindering, hampering and blocking the way? Through you, Mr. Speaker, I say to them "Play the game. Do not push your country back. Keep cheerful, or at least keep still". A very able French public man, whose name has again become prominent recently, was convicted and sentenced to deportation during the war because he was a defeatist-what the French call a defeatist. He was preaching despondency and representing that disaster was looming ahead of the French army. In war time, of course, this is a crime. In these times when all the problems of national and international life are coming together for solution, when the nations are still reeling under disturbances which have been unparalleled in history, defeatism although not a crime is at least a most unfair and unpatriotic system of dealing with one's country.
Now, with regard to the budget they describe it as a standpat budget, and the very
[Stage Direction]
The Budget-Mr. Lapointe
same gentlemen who denounce it as being such are declaring vigorously that we must have stability in tariff matters. What do those worshippers of stability mean? Is not stability standpatism under another name? Does their conception of stability mean only non-interference with the budget when it is a question of lowering the duties, but when it is a question of increasing them then it is still stability? I cannot see any logic or consistency in such a contention. Under freedom only can real stability exist; and those gentlemen are the last in the world to desire freedom in trade matters. A protective tariff is essentially unstable. We hear very often the example of Prance given to us in that regard, especially by my hon friend for West York (Sir Henry Drayton). France is a high-protection country. Do you think that she has stability in tariff? In France-and I took the figures from a French financial review a few days ago-the tariff of 1892, which was described as possessing stability, was modified1 348 times between 1892 and 1908, and the tariff was changed in toto in 1910. From 1916 to January 1, 1923. sixty-five changes have afforded 3,294 modifications in the tariff. Well, I do not think that any serious minded man can claim that this is stability in tariff matters.
What about the amendment proposed by the hon. member for West York? Well, there has been a change of attitude. I remember well our first year after the general election when my hon. friend (Sir Henry Drayton) moved an amendment taking this government to task for not having fulfilled its pledges by reducing the tariff. He did not want, ol course, that the tariff should be decreased; on the other hand he was not satisfied with the government for not decreasing It. We were the subject of criticism in any event "You shall and you shan't, you will and you won't, ymu will be cursed if you do and you will be cursed if you don't." Then the word "protection" was in every amendment since, but this year it is sweetly eliminated from it. I read the other day that the style adopted in recent years by young ladies of bobbing their hair was going out of fashion. Apparently my hon. friend from West York was not aware of it. His amendment is outrageously bobbed; it is an emasculated political instrument deprived ,of all virility. My bon. friend from Chambly and Vercheres (Mr. Archambault) said the other day that it was an agglomeration of commonplace platitudes, and I agree with him. I am afraid that my hon. friend next year will move that in the opinion of the House babies are not brought [Mr. Lapointe, 1
into the world by storks. But if the amendment has not been very illuminating the debate has been illuminating in at least one respect. The very opposite lines of attack against our policy, coming as they do from extreme opposite angles, is the best illustration of the necessity of a middle course, of a policy of compromise trying to harmonize to the largest possible extent the apparently uncompromising attitude of my hon. friends _ opposite. Indeed the speeches of my hon. friends in one comer of the House are very well answered by the speeches of my bon. friends in the other corner and the first speeches were a reply in advance to those of my bon. friends angularly opposite. The intention to vote against the budget by gentlemen in this House, as expressed in their speeches is for wholly different and contradictory reasons, the one setting forth the extraordinary contention that a country whose territory is as large as the territory of Europe, and which has only nine millions of population spread over that expanse of country, rich in natural resources and wealth of all kinds, may enr'ch itself by erecting a wall around its boundaries and refusing financial and economic communication with the rest of the world; the other-and I will give my hon. friends of the Progressive party credit for greater sincerity of purpose than I do the official opposition-claiming that an industrial system which has been in force for a large number of years should be subject to a radical and immediate evolution or revolution at a time when normalcy has not yet resumed her position again in the world, and when conditions are most unfavourable to giving changes a fair chance of proving effective and beneficial. Such a conjunction of opposite forces is of a negative and destructive character. If successful it would merely prevent the government from functioning normally and would transform parliament into a crystallized deadlock. It is not a part of our public economy that it should be subject to any party which can paralyse but cannot replace it.
These divergent views show also very strikingly that circumstances and conditions of geography play a large part in determining the fiscal views of communities and individuals. Indeed, only yesterday a gentleman well known in this country, who was Minister of Public Works in the late administration, stated in the city of Toronto that he did not believe any longer in protection, not because of the unsoundness of the doctrine-he did not express any view on that-but because protection was no good for the province of

The Budget-Mr. Lapointe
Nova Scotia. We have a huge country, and we have sectional interests which are not identical and in many cases are widely different. Those who are entrusted with public functions are trustees, not for one class, not for one section of the community, but for the whole people and country of Canada. It is their duty to try to find out the causes of these divergences of interest, and to find if possible the concessions which it may be possible and desirable to obtain. Tariff stability may have its virtue, but national stability is preferable. The decision to be reached may sometimes be a choice of the second best, but then through all history politics have been in the main the acceptance of the second best against the impossible or the ideal. Newspaper editors, professors, or extreme partisans, may be displeased, but the practical man knows that his duty is to deal with practical affairs and not with theories of panic and despair. We need compromise and men of compromise.
Compromise in the sense of avoiding extremes is a truly characteristic British policy. It has made the empire and keeps it together. It is hated by ail extremists, either radical or reactionary. I tell you, in all sincerity, Mr. Speaker, the political party of Canada which will inscribe the word "Moderation" on its banner will stand amidst all others, like the rock of Gibraltar. It will be very dangerous and even destructive for this country-and I think everybody will agree with me on that statement-if extreme views on one side were to be followed in the direction of affairs by extreme views on the other side; in that case we would have to stand a succession of economic revolutions and counter-revolutions in this country. Open-mindedness and a recognition of t'he law of change is part of the Liberal doctrine, and with a reconsideration of policy when required we shall always be ready to face the situation: policies are made for men and not men for policies. May I say to my friends of the Progressive party that I think we have shown where we stand. We have reduced the tariff and have been violently attacked for it. Is it not desirable from the point of view of the advocates of low tariff to let our policy vindicate itself and to show that the high protectionists are wrong when they claim that the loss or decrease of revenue is due to the reduction of the tariff? Surely it is well to give the low tariff a fair trial. Moreover, people should not forget that it is an important and specific phase of our national policy. It is after all one of many thousand other factors that affect our social and national life. The physician diagnoses the disturbance of a single organ and treats it as a correlative part of the whole body. What physicians do
governments must do, and I think it is the only successful way.
Another subject about which I w?ish to say a word is the British preference. It is extraordinary to see the numerous misconceptions and the erroneous notions which exist with regard to this. Why, only recently it was stated in my own city that Sir Wilfrid Laurier had opposed the British preference. No more erroneous statement, of course, can be made. Sir Wilfrid Laurier was the father of the British preference. He pursued that policy to the end of hik life, and in the last speech he made before the Eastern Ontario Liberal Association he claimed that that policy had been back of the Liberal party, and he was proud to be able to say that he had been the originator of it. There are some who think it is a sentimental device in the interests of Great Britain and not in the interests of Canada. I do not hesitate to say-and everyone may take down my words-that if such were the case I would be opposed to the British preference. But the British preference has been conceived and carried out in the interests of Canada and Canadians; it is part of the low tariff policy of the Liberal party. The United States have erected a wall against the products of our farms and other products, and we have to find outlets for our trade. Was it not good policy to build up a trade with Great Britain, where our own goods go free? Was it not in the interests of Canada to build up a trade between the Mother Country and ourselves? Have we been the loser by reason of such policy? What has been the result? The very year after a preference was granted, in 189S, our exports to Great Britain increased from 875,000.000 to $100,000,000, and the progression has consistently continued until last year our exports amounted to $361,160,802. At the same time, last year, our imports from Great Britain were more than $153,000000, a good deal less than half the value ol our exports. Are we the losers? We so'it Great Britain that S361,000,000 worth of goods without paying one cent in duty. Great Britain has paid us over $28,000,000 in duty on the $150,000,000 of goods whicii she sold us. Are we the losers? Thirty-five per cent of our exports go to England while we receive from her only seventeen per cent of our imports. I repeat, are we the losers? Our goods are going to England free. Their goods are paying duty when sent to this country.
Now we have heard very much about the boot and shoe industry.
George Perry Graham: Hear, hear.

The Budget-Mr. Lapointe
Mr, LAPOINTE: I observe that my hon. friend says "hear, hear." Yes, I am interested m the boot and shoe industry. It is a very important industry in the county which I have the honour to represent, and which I think I shall have the honour- of representing in the next parliament. Our hon. friends opposite have been very strong in their criticism of the government's policy in regard to the boot and shoe industry. Well, the boot and shoe industry is a national one. It is subsidized by purely Canadian capital; its raw material is Canadian; [DOT] it is indigenous to our country, and it is certainly entitled to sympathetic treatment and encouragement. But
are our hon. friends opposite fair in regard to the boot and shoe industry and this government? Is it true that imported boots and shoes are flooding our markets to a much larger degree than before? I am going to make another startling statement, but I will back it up by evidence. There are fewer imports of boots and shoes to-day and there were fewer last year and the year before than in any year during the Conservative administration. I claim the liberty of placing on Hansard the following itemized statement prepared by the Bureau of Statistics of the Department of Trade and Commerce:
1. IMPORTS INTO CANADA, FOR CONSUMPTION, OF BOOTS AND SHOES (Fiscal years 1905 to 1922)
Periods	Boots and shoes and slippers of all kinds except rubber and leather	Boots and shoes of leather, n.o.p.	Boots and shoes, pegged or wire fastened with unstitched soles, close edged (leather)	From United Kingdom	From Other Countries	T otal imports	From United Kingdom	From Other Countries	Total imports	From United Kingdom	From Other Countries	Total imports8	$	$	$	S	$	S	?	$Fiscal years ended June 30-	1905	45,035	69,339	114,374	60,499	1,112 614	1,173 113	1906	41,511	58,829	100,340	66,629	1,216,375	1,283,004	Fiscal years ended Mar. 31-	1907	47,722	60,914	108,636	73,672	983 928	1 057,600	1908	49,347	61,338	110,685	106,066	1,408,830	1,514,896	13,240	8,491	21,7311909	43,926	57,997	101,923	127,208	1,143,054	1,270,262	3,842	8,827	12,6691910	74,840	64,029	138,869	167,687	1,332,359	1,500,046	13,267	9,473	22,7401911	81.492	45,983	127,475	292,014	1,753,821	2,045,835	22,387	25,464	47,8511912	84,116	51,430	135,546	356,455	2,415,620	2,772,075	28,330	41,465	69,7951913	180,250	70,670	250,925	485,755	3,522,750	4,008,505	62,867	40,120	102,9871914	209,630	108,014	317,644	577,291	3,652,272	4,229,563	83,474	36,550	120,0241915	169,231	96,673	265,904	491,523	2,909,134	3,400,657	59,692	18,602	78,2941916	72,723	45,554	118,277	215,538	1,905,159	2,120,697	23,932	11,567	35,4991917	92,692	168,440	261,132	173,871	3,274,577	3,448,448	5,359	19,152	24,5111918	102,972	311,850	414,822	146,784	3,017,924	3,164,708	1,603	12,827	14,4301919	50,681	249,683	300,364	78,994	2,615,112	2,694,106	445	14,972	15,4171920	71,470	362,792	434,262	94,009	2,617,613	2,711,622	4,211	15,758	19,9691921	206,406	318,149	524,555	358,451	1,816,758	2,175,209	2,133	22,779	24,9121922	46,035	197,887	243,922	335,761	991,800	1,327,561	2,867	8.347	11,2141923	69,297	358,886	428,183	410,273	794,631	1,204,904	4,291	11,539	15,8301924	140,072	287,225	427,297	707,349	821,838	1,529,187	5,514	11,515	17,0291925	166,188	155,986	322,174	1,044,693	728,393	1,773,086	6,353	9,470	15,823
This shows that for the year just ended, March 31, 1925, the imports are a little above
82,000,000, and1 prior to 1921 they were a good deal more. During the years of the war, they were over 83,000,000. In 1914, they were nearly $4,000,000, and in 1913, they were over $3,500,000. As I say, this shows that imports of boots and shoes were larger during every year of the Conservative administration than during the last, four years o; the Liberal administration. If there are difficulties at the present time, does any hon gentleman claim that that is due to the tariff or to considerable imports? The production of boots and shoes in this country for the year 1923 amounted to a value of $45,596,012. Of course all the reports for 1924 are not in

yet, and while they will be available only in the month of May or June, it is expected that the production will be about the same. The production has increased a great deal since pre-war times and the number of manufacturers is as great to-day as it ever was, being 186. In dealing with this problem we must not forget, since the United States tariff is always set before us as an example, that boots and shoes enter the United States free of any duty. Three million pairs of boots and shoes were imported into the United States last year and there does not seem to be any movement to erect a tariff against them. But I repeat, if the industry could be prosperous at a period when imports were larger

The Budget-Mr. Lapointe
than they are to-day, surely the difficulties must be attributed to some other causes. There are many causes, one of them being high railway freight rates, and many manufacturers have told me that this was a great difficulty with which they had to cope.


Mr. CALDWELL:: Has the minister any
record as to the exports of boots and shoes from Canada to the United States?


Ernest Lapointe: I have not those figures
with me, but the exports, except during the war, are not of such importance as to merit great consideration. During war time exports were very large, and that may be one of the causes of the present difficulties. Our manufacturers enlarged their plants considerably in order to meet the demands during the war, and now the demand has been greatly reduced. As I have said, high railway freight rates constitute one of the causes of the difficulty, and I hope in that article of consumption which plays such a large part in all families, it will be possible to reduce the rates on our railways. We have tried to meet the difficulty in some other ways. Last year the sales tax was reduced on boots and shoes, and even this year the sales tax is taken off materials which are used in the manufacture of boots and shoes. A reduction in the cost of living and a consequent increase in the purchasing power of consumers, farmers and others, would be another great factor in regard to this industry as in regard to any other industry. When a man cannot afford to buy two pairs of boots for every member of his family, he buys only one pair, and this has its effect on the activities of the trade.
As regards the British preference and just to show how opinions vary as to its effect, I will read to the House a letter which was addressed to my hon. friend, the Acting Minister of Finance (Mr. Robb) by the wholesale hardware merchants of the city of Quebec under date of March 14, 1925, after a resolution had been sent to him requesting the repeal of the British preference:
The Honorable J. A. Robb,
Acting Minister of Finance,
Ottawa, Ont.
Dear Sir,-
We, the undersigned wholesale merchants of this city, who handle in large quantities goods manufactured of iron, steel, brass and copper, would respectfully request your government not to alter the present British preferential tariff on the different lines in which we are interested.
We would like to call your attention to the fact that a great many of the iron and steel goods that we sell are ultimately used by the farmer, who we feel at tht present is not in a position to pay any higher
prices than he is now obliged to pay on articles of iron or steel that are necessary for his welfare.
Trusting that this petition will receive your favorable consideration,
We have the honour to be,
Yours truly
Samson & Filion,
Per D. Samson.
The Herman Young Co.,
A. J Teakle.
Jos. E. Lemieux Reg'd,
J. A. Fillion.
J. McD. Wilson,
Managing Director,
The Chinic Hardware Co'y.
Wm. Doyle,
Wm. Doyle Reg'd.
H. S. Scott Co. Reg'd,
A. O. Scott.
Mechanics Supply Co. Limited,
Per Guy H. Simpson.
Vice-President and Manager.
I may say, en passant, that some of these names-and my friends from the city of Quebec will recognize them-are not those of particular friends of the Liberal party, but they are in favour of the British preference.


Mr. ARCHAMBAULT:: Can my hon.
friend state what is the actual policy of the official opposition with regard to the British preference?


Ernest Lapointe: I will answer, as the hon. member for George Etienne Cartier (Mr. Jacobs) did the other day, that it is like the wisdom of God, above all comprehension and understanding.
Our natural market is the United States, but we have difficulty of access to it. The United States made us an offer 4 p.m. of reciprocity in 1911. We cannot complain because we slammed the door back in the face of the Americans in that year; but we are facing conditions as they are, and we must find other markets. The British preference was one means of finding such a market, and commercial treaties with foreign countries are another means.
I am sorry that I do not see the familiar and friendly features of my hon. friend from Lincoln (Mr. Chaplin) as I want to say a word or two about the French treaty. Since that treaty was signed in 1922 it has got on his nerves and disturbed his sleep, and I am afraid I have to bear some of the responsibility for shortening the days of the hon. member. Last year he made a strong criticism of the treaty. There is no nicer gentleman in the world than my hon. friend' when we meet him privately, but last session I had to point out how unfair he was in criticizing the French treaty, and this session he has made the same mistake. He gives us a list of

The Budget-Mr. Lapointe

articles coming to this country, regarding which he says: They have paid such and such an amount of duty; if there had been no treaty negotiated in 1022 they would have paid a larger amount of duty; consequently the country has lost hundreds of thousands of dollars. Well, in 1922, when this treaty was signed, the general tariff was not applied by Canada to the products of France; but my friend is always basing his calculations on the general tariff. As a matter of fact, there had been a treaty in force since 1908. After the war France notified all nations with which she had treaties that those treaties were terminated. For some time there was no trade agreement between France and Canada, blit in 1921 the Minister of Trade and Commerce of the then government, Sir George Foster, entered into another trade agreement with France, which was ratified by this parliament, and under which Canada was applying to all products coming from France the most favourable tariffs that are or may be granted by Canada to the products of any third power except those of the United Kingdom or of the British dominions and possessions. To show what really w'ould happen, I have asked the officers of the Tariff branch of the Finance department to give me a couple of typical items, and they have selected silks and velvets. According to my hon. friend from Lincoln, the country would lose $169,000 on those two items alone. Why, if you base your calculation on the tariff as it was under the agreement entered into by my friends opposite, which was in force in 1922, and was then replaced by the present treaty, instead of losing $169,000 of duties, you will find we have increased our revenue by $30,000. This shows how unfair such a criticism is, and I do not think it should be indulged in.
Now, it may be asked, why was this treaty negotiated and signed when there was that trade agreement in existence. I answer, that it was because the Canadian manufacturers, as represented by the Canadian Manufacturers' Association, were complaining that under that agreement Canadian goods could not enter France on the same basis and under the same conditions as American goods. The treaty was negotiated at the instance of the manufacturers of Canada to give them on French territory the same rights and privileges as those enjoyed by the manufacturers of the United States, and I myself heard representatives of our agricultural implement industry congratulate and thank the government for having given them the privileges which they now enjoy under this treaty.

There is another criticism by my hon. friend, but for which I cannot blame him, because he based his figures on statistics given by the Department of Customs. He said that last year the balance of trade with France was against us by $5,000,000 or $3,000,000,- I do not remember which. As a matter of fact that is how it appears in the reports issued by the Customs department; but I was surprised to see that the reports as given by the French government for 1924 differ substantially from ours. This will be found in the Commercial Intelligence Journal of April 4:
The statistics of the French Department of Customs show that during 1924 the commercial relations between Canada and France can be viewed with considerable satisfaction. The value of merchandise exported to Canada almost doubled in 1924 as compared with 1923 -333,260,000 francs against 183,457,000 francs. The exports from Canada to France show a total increase of 109,130,000 francs-482,826,000 francs in 1924 against 373,000,000 odd in 1923.
So our exports are still much larger than our imports according to the figures issued by the French government; and surely everybody will admit that France would not show a balance of trade unfavourable to her if she could help it.


Mr. MEIGHEN:: Which government is
right?


Ernest Lapointe: I am coming to the explanation.


Mr. STEVEINS:: Was the' exchange the same in both periods?


Ernest Lapointe: There was not any very great difference. This is the reason for the discrepancy between the French and the Canadian figures as given to me by the Finance department. I am advised that of late, especially from Vancouver, owing to the length of the voyage, cargoes are cleared for Britain and attributed in the figures of the Customs department to Britain, but the ships wait for orders as to where they should proceed and unload. The customs papers credit those cargoes to British exports, while in many cases they are actually French or Belgian or those of other European countries. I do not know whether it is possible to prevent that sort of thing, but if it is, it is certainly most desirable to do so, for even when ships are cleared apparently for Britain we ought to have means of knowing -where in reality the final orders will direct the ships to unload.


Arthur Meighen: Can the minister say who gives that explanation? I do not think it can possibly be correct.

The Budget-Mr. LeSueur


Ernest Lapointe: Mr. Russell. He is the
tariff officer in the Department of Finance.


Arthur Meighen: Surely the minister does not suggest that our trade figures are built up upon the basis of the immediate destination of a ship? If so, they are all pure fiction.


Ernest Lapointe: I think our trade figures, as given by the Customs department, are according to the clearance of the ship.


Arthur Meighen: Oh, no.


Ernest Lapointe: That is what I am
told by the officers.


Henry Herbert Stevens: Would not the invoices
and the manifests show the destination or the origin, as the case may be, of the goods, and are not these documents submitted in duplicate or triplicate form for the customs officers at the point of unloading?


Ernest Lapointe: My hon. friend knows-


Henry Herbert Stevens: That is so undoubtedly.


Ernest Lapointe: -I am not acquainted
with that part of it at all. But I am told that owing to the length of the voyage and because of the fluctuation of prices during the twenty or twenty-four days that the ship takes going to Europe by the Panama canal, large quantities of goods are virtually shipped without the final destination being given. But I am giving the explanation as it is given to me. At all events the figures of the French government giving the quantity of imports from Canada should, I think, be relied on.
Now, I hasten to conclude my remarks. In commercial and economic as well as other matters our policy is dictated exclusively by the interests of Canada. Conditions are not what they were in 1878, when the so-called National Policy was launched. There was no west at that time. We have now four different and separate sections, and the true Canadian policy must consider all the interests and divergences of interest of all those sections. We cannot compare our conditions with those of homogeneous countries which are small in territory and uniform in interest; still less can we compare our situation with that of the United States, which though a protectionist country to all outside appearances, is really enjoying free trade among various states having an aggregate population of over 110,000,000. Arguments with regard to the home market which may be valuable there are preposterous in Canada; and to call "national" a policy which has the effect of selling Canadian goods cheaper to the inhabitants of the 166i
antipodes than to our own citizens is not sensible, in my judgment. The true national policy is one that will permit all Canadians to five and will give equal justice to all. That equal justice, I am afraid, cannot come from those who want everything their own way without considering the interests of others. It cannot come from any party which is eastern or western in its character and which policy appeals only to one or the other of our great geographical sections. How many times did we hear the suggestion made by different people in eastern Canada that Quebec and Ontario should unite against the activities of the west? Sir, I would rather see the Liberal party and the government of which I am a member go down to defeat than attain an ephemeral success, an inglorious victory, by such nefarious methods. I believe in Canada, in the whole of Canada, Canada for Canadians is a splendid policy, but it must be Canada for all Canadians, not for any privileged section of the people.
Mr. R. V. LeSUEUR (West Lambton): Mr. Speaker, I believe I should first relieve the Minister of Justice (Mr. Lapointe) of an apprehension which is apparently worrying him by stating at once that I am not a pessimist and that I have no desire to spread blue ruin. I believe that statement may be applied with equal force to all other hon. members sitting in this section of the House. In fact, I can assure the hon. Minister of Justice that we are essentially optimistic here and that our optimism grows every day as the election approaches.
I can say this also, Mr. Speaker: that being optimistic I would be just as happy as the Acting Minister of Finance (Mr. Robb) could possibly be if conditions in Canada to-day permitted the people to practically forget the budget. But unfortunately that is not the case and the budget to-day remains the most important, the most eagerly awaited, and the most carefully studied pronouncement that the government makes during the session. For the same reason the office of Minister of Finance remains of an importance fully equal to that of the office of Prime Minister. I have no desire to detract from the prestige of that office, but frankly I get no satisfaction from the conditions which contribute so largely to that importance. I refer to the difficult financial situation and to the difficult financial problems which to-day face this country and to the prolonged continuance of the depression or readjustment, whichever you like to call it, which this country has been undergoing for the last four years, a
The Budget-Mr. LeSueur

depression or readjustment which is accentuated by the burden of still unreduced war time taxes. Sometimes, Sir, I fear that we have but a vague and hazy realization of our position. I believe the Minister of Finance (Mr. Fielding) fully appraised the situation and that it fairly bewildered him. I believe that the ever-present weight of the problems connected with that situation contributed in no small degree to his ill-health, and for the sacrifice he made in that respect this Dominion owes him a great obligation.
I would like first to glance briefly at our trade conditions; and I may add that I do so partly on account of the divergence of opinion which exists in that regard, and partly in order to serve as a basis for my later remarks. The remarks of the Minister of Justice amply illustrate the divergence which prevails on this question. I shall endeavour to get a reasonably accurate view of it and to base my conclusion, so far as that is possible, on fundamental facts which must be admitted; then I shall see if we cannot arrive at som? remedies which will apply to our present difficulties.
First, we should keep in mind the fact that the last years of the war and the year or so thereafter produced a period of industrial expansion and considerable inflation. Immediately following that we had a period of depression which spread like a great pall over the whole civilized world. That period was marked by a recession in wages and in the standard of living which varied greatly in degree in the various countries affected. It was also marked by a rapid and uneven depreciation in currency and bjr a wild and uneven fluctuation in exchange. In view of these chaotic and highly irregular conditions in the various trading countries certain nations immediately took aggressive steps to protect their nationals. I want to deal briefly with this phase of the subject by way of following up to some extent what I said last year. France, we know, immediately increased her tariff to the highest point in her history. France has since that time been blessed with an expanding prosperity, her basic industries showing 'a marked increase and reaching today perhaps the highest point in her history. Her internal and external trade alike are at a pinnacle at the present time, and unemployment is unknown. I know some hon. member will have in mind the fact of the supposed recent financial difficulty in France. But I may explain that that was a proposal to increase the arbitrary limit which had been set to the note issue of the Bank of France from 41 milliards to 45 milliards. That in-

crease, however, was purely a financial measure to give further elasticity to their currency and enable it to meet the expanding demands of trade. That is the view taken in financial circles, I may say, and is fully explained in a very recent number of the London Statist.
The United States likewise took drastic and immediate measures in the depression of 1921 to protect her internal industrial life against what I have described as the chaotic and highly irregular trade conditions existing in other countries She had a most remarkable recovery and enjoyed ever increasing prosperity from about the first part of 1922 to possibly the end of the first quarter in 1924. At that time hter trade had a recession, but since September, 1924, and especially since she was reassured of a continuance of her strong and stable fiscal policy on November 4, 1924, the United States has recovered remarkably from the recession which she experienced in the second and third quarters of that year. The last number, the April issue, of the Federal Reserve Bulletin is clear evidence of that. It shows clearly that her production in basic industries is materially greater in January of 1925 than it was in January of 1924, and is materially higher than it was in the low quarters of 1924. Likewise her production in minerals, her manufacturing production and her agricultural movements are all greater. If we turn to her bank statements we find that the current loans for this January are much in excess of the current loans of the year before. Her bank debits are likewise higher, and her time deposits have correspondingly decreased, showing an increased activity in trade. I believe that is one of the best criterions. When you have larger current loans and smaller time deposits you know that the money is in circulation, being used in business, and that you have then greater business activity. I could take up other points in the United States, but I will point my remarks as to their prosperous condition by the statement of Andrew W. Mellon, that wizard of finance to whom the United States is so much obligated, and whose statements are generally regarded as those of a business man and not of a politician. He prophesies a continuance of good conditions in the United States, and says that present, conditions are fundamentally sound.
Now if we look at conditions as they exist in Canada to-day, we realize that Canada suffered from the same depression in 1921, and that such depression continued with more or less unvarying monotony during the years 1922 and 1923; that in the early part of 1924 there

The Budget-Mr. LeSveur
were signs of a recovery from our depression, but 1924 unfortunately did not fulfil those hopes, and we had through the greater part of 1924 an even worse trade condition than we had previously. Now I am glad to say that the early months of this year have shown signs of improvement. We have improved from the low point of 1924, so far as I can judge, but I doubt very much if we have yet come to the point where we were in the first quarter of 1924. In judging of that con-, dition, let us look first at our bank statements. We find that the current loans in our banks declined from an average of $938,000,000 in December to an average of about $908,000,000 in February. We must allow for seasonal fluctuation, because December represents possibly our busiest retail trade. But we find that February of this year is about $80,000,000 less than February of last year. If we take our bank debits, almost the same condition prevails. In March our bank debits show a slight improvement over March of last year, but the general result of the quarter is lower than the first quarter of last year. I might say that our time deposits, corresponding to what we find in our loans and debits, show an increase in the first three months of this year, showing that our people are putting their money in the banks on a time basis and business is quiet. Our time deposits again are greater than they were in the first quarter of last year. So it all goes to show that business activity, while it is possibly improving at the present time, is still considerably below what it was in the first quarter of 1924, which was-a period of depression^ I might also take up the question of our basic industries. In our basic industries production is also showing signs of improvement, especially in March, but allowing for seasonal fluctuation the general conclusion must be very nearly the same as is to be drawn from our bank statements, namely, that while we are showing signs of improvement we are still below our condition of 1924. I might take up the question of employment and find out just how we stand there. Taking January, 1920, as our index we find that our employment on March 1, 1923, was 89.9 per cent; on March 1, 1924, 90.7 per cent, and on March 1, of this year, 87 per cent, or about 3 per cent lower than for the corresponding period in either of the years 1923 or 1924. In this regard I might refer to some of the detailed statements which were placed on Hansard referring to specific industries by the hon. Minister of Labour (Mr. Murdock). I note, for instance, that he speaks of the employment in some 47 mills engaged in the manufacture
of woollen yarn and cloth. This table shows that the numbers employed in 1925, while gradually increasing, are less than the numbers employed in the same months in each of the years 1922, 1923 and 1924, exactly proving What I have stated. If we turn to his figures with regard to the boot and shoe industry, in which he takes 91 manufacturers as his test, we find exactly the same thing, that the employment in 1925, while improving, is still below the numbers employed in the years 1922, 1923 and 1924. I may add that I do not think any of the tables presented by the hon. Minister of Labour in his address to this House contradict or even reflect on the conclusion to which I have come. If he were here, I would ask him to point out any that did conflict, because I have gone carefully through them and I believe they are all in accord.
Before I leave the remarks of the Minister of Labour, I would like to point out one thing, and that is that he gives two tables with regard to the boot and shoe industry, one on page 2002 of Hansard, in which he sets forth for 1923, 189 establishments, with 12.439 wage earners, and a product value of practically $45,000,000, and then on the next page, for the same industry and the same year he sets forth the number of establishments as 121, the number of employees 10,903, and the value of production $36,000,000 odd Now, without adequate explanation these two tables are certainly most confusing, and in the minister's statement there is no explanation. Both tables are under the same headings and are for the same years, and show diametrically opposed figures. The~minisfer must either explaiiTthat, oN we can only conclude that he has disproved in the latter part of his speech what he attempted to prove in the earlier part.
Now, I believe that the more or less fundamental facts which I have given form a sufficient basis for the conclusion at which I have arrived, namely, that our condition is gradually improving and has improved from the low point of 1924, but that we are still suffering from a marked depression, and that that depression is as yet below what it was in the first quarter of 1924. Furthermore we have no clear and definite signs as to when this period of readjustment will end. or that we are going to continue improving and come back to normalcy.
Before leaving the subject of trade conditions I should like to indicate two conclusions which to my mind are Obvious. The first is that the actual results and facts have shown that France and the United States were wise in their action in protecting their internal industries against outside chaotic conditions.
The Budget-Mr. LeSucur

By reason of that protection France has enjoyed tremendous prosperity and could to-day, I believe, without serious injury to her nationals increase her taxation. The United States has likewise prospered largely by reason of adopting the same measures, and has been enabled, largely on that account, to decrease her taxation and reduce her war debt. The second conclusion which appears to me obvious is this:	It is inconceivable, at least
to me, how in the face of our present trade depression, and with no clear and definite signs of a recovery from that depression, we can ciaim that we are enjoying great prosperity. I am firmly persuaded that a stable fiscal policy, administered with the advice of a competent tariff board, is a primary factor in the recovery of our country. I would further say that we should not endeavour to spread a measure of optimism among our people by unduly optimistic statements. The better way to proceed would be to inaugurate a campaign of intensive economy as to which I shall have some suggestions to offer, and a rigid reduction of expenditures, apart altogether from political considerations.	One of the
greatest grounds for confidence and one of the greatest factors in inspiring confidence is when a business in times of stress cuts its expenditure to the bone even to the smallest items. Such a course inspires confidence among the people connected with that industry, and not indulgence in unduly optimistic talk.


Mr. CARRUTHERS:: Would the hon.
member permit me a question before he leaves that point? He has spoken of the prosperity of France. Would he explain how that country is more prosperous than Canada when the value of the franc is at such a low figure whereas our dollar is at par?
Mr. LeSUEUR:	In answer to my hon.
friend I would say that if you study the rates of the exchange for the franc during the last year you will find that the franc has remained practically stable at its present rate of exchange. You may say that the value of the frame has been stabilized at that figure, and has remained there for a very considerable time past.
Now, let us look at the question of expenditure, and in order to get possibly a broader and truer conception of our present financial status, I should like to consider not only the last budget but a few preceding budgets. But before doing that let me refer to the question of the guaranteed railway bonds brought up by the hon. Minister of Justice. I can say that so far as I am concerned in this discussion it is of very little concern to me whether we call the bonds
[Mr. LeSueur.J
which are guaranteed and from time to time floated on the security of the Dominion direct obligations or indirect obligations. The substantial nature and the incidence of our railway obligations make them as direct a burden on this Dominion as our so-called direct obligations, no matter what difference in name we may adopt, and while, to avoid argument, I am calling our railway Dominion-guaranteed debts indirect obligations, I am -Hearting both our so-called indirect and our direct obligations as equally active and equally proximate in their burden.
Let me illustrate why this must be the case. For some years back our railways have required a certain amount of money each year. Prior to 1924 it appears to have been the practice to advance the greater part or the whole of the railway requirements in cash, and to meet either a small amount or none at all of those requirements by the issue of bonds guaranteed by the government. Since the year 1924 we have advanced a smaller proportion of the requirements of the National railway system in cash, and a greater proportion by way of bonds guaranteed by the Dominion. For example, in 1923 our railways required about $77,863,000. All that amount was advanced in cash to the system and naturally it appeared in our balance sheet as affecting the direct public debt. In the year 1925 our railways required 82 millions and some odd thousand dollars. Of that amount $18,000,000 or thereabouts was advanced by way of cash and of course appeared as directly affecting our public debt. The balance of $64,000,000 or thereabouts, was raised by bonds guaranteed by the Dominion and then handed over to the railway system and appears as an indirect obligation. The substance was the same; only the form was different. It is merely a matter of convenience with the Acting Minister of Finance as to whether he raises the money by way of guaranteed bonds and hands it over to the railways, or makes direct advances to them in cash. Now proceeding on that basis, and including the cash advanced to the National Railways and the money secured for them by guaranteeing their bonds, we find that our total expenditures were for the year 1923 about $434,000,000; in 1924, about $420,000,000; and in 1925, about $426,000,000. If we go further and look at the estimates for the coming year ending March 31, 1926, we find that the estimates for ordinary and net capital expenditures and the requirements of the National Railways as tabled this year represent about $409,S78,039. If we add to that an amount for special expenditure equal to what

The Budget-Mr. LeSueur
was paid out therefor in the year just closed, and also allow, say, $10,000,000 for supplementary estimates which are yet to come down, we have an expenditure for the coming year of approximately $424,000,000 or $425,000,000. My point is that our total expenditures have been running more or less the same for three or four years past, and it looks as if they will be the same in the coming year.
Now then let us look at the details of those expenditures. We naturally expect that such expenditures as pensions, Soldiers' Civil Reestablishment and so on, will, by their very nature, and apart from legislative addition, decrease year by year. Such is actually the case. The interest charge on our public debt we would also expect to decrease gradually year by year. Money is now more plentiful and interest lower than when that debt was incurred, and with each refunding operation we can expect a reduction. Such is actually taking place. From $137,000,000
in 1923 our interest charge is now $131,000,000, or a saving of about $6,000,000. Likewise in our expenditure for Soldiers' Civil Re-establishment we can expect a gradual and automatic decrease. From about $13,365,000 in 1923 it has dropped to $8,340,000, or a saving of about $5,000,000. Likewise our expenditure for the adjustment of war claims has dropped from $0,784,000 in 1923 to practically nothing to-day. But outside of these expenditures, which are legacies from the war, which must naturally decrease as we get further and further from the war, the expenditure in what is properly civil government remains to-day practically the same as it has been, for the three or four years back. lor the purpose of illustrating this I have prepared a table taken from the Public Accounts of the years 1922, 1923 and 1924, and based on the estimates which are tabled for the years 1925 and 1926. I might go through the whole list, but with the permission of the House I will place it on Hansard:
	1922	1923	1924	1925	1926
				(based on	(based on
				estimates	estimates
				submitted	submitted
				to House)	to House)
Agriculture	,. t 0,758,636	$ 7,169,381	) 7,787,107	$ 6,809,085	$ 6,703,855Customs and Excise	.. 8.250,557	7,779,930	8,017,227	10,052,315	10,688,259,. 8,017 371 (1)	4,895.906	4,905,754	Immigration and Colonization.. ,	.. 2,052,370	2,354,975	3,482,986	4,101,235	3.393,770Indian Affairs	.. 3,217,108	3,306.232	3,830,690	3,827,058	3,779,5167,097,341	6.897,912	6,947,575	Justice	.. 4,113,893	4,191,729	4,252,565	4,111.298	4,073,855Labour.. 	.. 1,884,933 (2)	2,209,631	1,429,274	1,641,715	1,610,930Legislation	.. 3,941,747 (3)	2,653,566	2,367,036	2,378.713	2,288,863Marine and Fisheries	.. 6,518,302	6,316,077	7,345,975	8,612,774	8,502,370Post Office	.. 32,003,188	31,180,814	31,733,351	32,797,725	32,593,363Public Works	.. 12,855,082	12,078,280	14,034,923	15,633,652	14,060,610Railways and Canals	.. 14,504,973 (4)	15,350,295	7,945,908	3,740,501 (6)	3,814,929 (6)Trade and Commerce	.. 5,939,101 (5)	4,641,851	5,075,022	5,210,763	4,401,870
Note 1. This figure $8,017,371 includes costs of loan flotation $3,302,674. Cost of loan flotation for 1923 and 1924 were $3,065,095 and $7,705,543 respectively, though they are not included under this heading of Finance in above figures for 1923 and 1924.
Note 2. These figures include $500,000 spent in relief of unemployment in 1922, $944,877 in 1923, and $4,273 in 1924. which accounts for their variance. Nothing is included for relief of unemployment in the estimates of 1925 and 1926.
Note 3. This figure includes the cost of the 1921 Dominion elections-$1,739,988-which accounts for the variance between the years.
Note 4. The figures for 1922 include $6,326,800 paid to Canadian Government Railway system to make up deficiency in receipts to meet working expenses; the figures for 1923 include $5,695,609 paid for same reason; no such sum paid in 1924. This accounts for the variance between the years.
Note 5. The figures for 1922 include cost of Dominion Census of 1921 which was $1,664,088.
Note 6. These figures do not include any expenditures under Canada Highways Act 1919, which in 1924 was $4,066,210.14.
It will be observed by one who reads these figures that there is no appreciable difference in the expenditures of the various departments during the period covered. Some variance of expenditures in the above years may appear in these tables, but they are explained as noted on the table as being for special items, such as Dominion census or Dominion election and so on. The point that the above facts and this table bring to the attention of hon. members is that the only material reductions which have been made are in those legacies or burdens which we have derived from the war which have automatically decreased, and that in all other departments our expenditures remain at practically the same level. This I say is essentially wrong, and I maintain that we should make a very aggressive attack on the expenditures
The Budget-Mr. LeSueur

of the several departments of our government. Let us now look for a minute at the revenues we are collecting. They are as follows:
1922		About $381,000,000
1923		 394,000,000
1924		 397,000,000
1925		 344,000,000
In that $344,000,000 I am not including the $4,000,000 which we received by way of bonds in lieu of back interest. If we treat that merely as a better security for interest already due, then we should not include it. If we treat it as a receipt then our receipts would be about $348,000,000. I have not seen any estimates for 1926, but if the government expect to get a revenue more or less equal to that of the year 1924, namely $397,000,000, then allowing for the reduction in revenue of $21,000,000 made in the 1924 budget, we have left $373,000,000, or a deficit of nearly $51,000,000; and if we look to our greatest revenue, which was in 1920, of about $434,000,000, and again allowing for the reduction of $24,000,000 as provided for in the budget of 1924, even then we have a deficit, and I would point out that the year 1920, was a year of great boom and inflation, a condition we cannot hope to have recur in 1926.
Let us look at three or four of the salient or outstanding features which obtrude themselves from this statement of facts. In the first place we should note that the war is over and has been over for six years, but that we are still collecting practically full war taxes. The revenue received from these extraordinary-taxes, such as income war tax, stamp tax, sales tax and other nuisance taxes, would run about $181,000,000 for 1923, $182,000 000 for 1924, and possibly about $150,000,000 for this year. But we are still collecting all these war taxes, while the war has been past these six years, and we are still piling up deficits. Our direct and indirect obligations are still mounting, and have increased in the last three or four years about $150,000,000. This is in marked contrast with the United States.


Mr. MARLER:: Allow me to contradict
my hon. friend. It is not $150,000,000 in the last three years. If refundings are taken off my hon. friend would find it about $100,000,-
000..


Arthur Meighen: No.
Mr. LeSUEUR: I think $150,000,000 is the right figure, without refunding.


Herbert Meredith Marler: No. If my hon. friend wiil take the direct and indirect obligations less refunding, it would not amount to that sum.

Mr. LeSUEUR: I must say I still maintain my figure of $150,000,000, which was figured carefully on the basis which I mentioned when I set out to discuss this matter.


Herbert Meredith Marler: saved large sums of money. It is estimated that the Board on Printing, in conjunction with reforms made in the bureau of Engraving and Printing itself, saved over a million dollars a year.
Then leit me refer to their purchasing board This board, composed, as I have said, of members of the different branches of the civil service which were particularly concerned, established a sort of clearing house whereby orders from the various departments could be cleared, and thus avoid as far as possible the purchase of new material when it was not necessary. They established ithe .practice of buying in -carload lots f.o.b. factory, they established the practice of definite quantity purchases; and according to their report they saved in a great many of the principal items so purchased from 8 to 25 per cent on the old method of doing business. In the post office department they saved 15 per cent on the paper purchased; they saved 25 per cent on stationery, and on what -they called "miscellaneous items" they saved 11 per cent. Those are the figures presented in the 1924 report of the Bureau of the Budget. This will give hon. members some idea of the saving effected by co-ordinating the routine business of government. To bring it home, I would say that the director of the bureau of the budget reported in the first eight months' operation of that bureau a saving in the routine business of government of about $250,000,000. Further: At the opening of 1923 the estimated expenditures of the United States government were some $823,000,000 over their estimated revenues. The problem was .put up to the bureau of the budget to eliminate that difference. In the first seven months of that year the bureau saved $321,000,000. In the same period the receipts exceeded expectations by some $408,000,000. In the remaining months of the year the bureau of the budget saved further money; receipts increased; and instead of a deficit of $823,000,000 the United States had a handsome surplus at the end of the year.
There is another side to this question of coordinating government routine business, and that is that the work of those co-ordinating boards, composed, as I have said, of civil servants themselves, shows that there was transfused something of the idea of economy throughout the whole service. General Lord, who succeeded General Dawes as the director of the budget, when speaking of the effect of these boards in inculcating the idea of economy throughout the whole civil service, read as an illustration certain letters which he had received. Here is a letter from a fireman:


, filling position of fireman and drawing laborer pay, I save the diferance between maximent pay of fireman and manuel laborer; then i am economical with materrel; and also assisted in planing the change of grate in boilers which saves quite a bit of coal, which means dolars.
General Lord, commenting on this letter, said:
By making the change in the grates in the boilers in this particular plant 400 tons of coal a year was saved.
He quotes another letter, this time from a caretaker, who says:
By using brooms longer than others would have used them, I have save 4 brooms. In a similar manner I have saved 4 mops, 3 dust pans, 3 brushes, 60 cakes soap, 40 t washing powder. Now saving 30 lb. ice per day. (Signed).
General Lord also quotes this letter from a truck driver:

system. I agree with some hon. members that the people of Canada will very carefully scrutinize any agreement which is proposed whereby' the Canadian Pacific are to take over the Canadian National Railways; in fact, it is possible that no matter what terms that agreement may contain the people would be very chary about accepting it and that even if the powers of the railway board were increased as a measure of protection. On the other hand, other hon. members suggest that the Canadian National Railways should take over the Canadian Pacific. I do not think that that is the easy and simple problem which some of the speakers have indicated. The Canadian Pacific railway system represents not only $260,000,000 of ordinary stock, but about SI ,i00,000,000 worth of assets which would have to be absorbed. It further represents about 20,000 miles of railway trackage, including 5,000 miles outside of Canada; and I fear that the experiment of the Canadian National taking over the Canadian Pacific would be an extremely hazardous and extremely dangerous one. In fact, one of the greatest difficulties. I believe, would be that of financing the transaction. I have grave fears that the attempt of the Canadian National Railways to take over the Canadian Pacific would seriously impair Canada's credit in banking circles both in Canada and in the important financial centres of the world. I do not think that banking circles would look upon the proposal to put the Canadian Pacific under public ownership-though I am entirely open-minded on the question of public ownership-without grave consideration as to the consequent effect on Canada's credit. The government, I believe, should develop the question of amalgamation. Possibly they may find it feasible, but for the immediate present I believe our practical duty is to consider the present situation of our own railway system; and for a few moments I should like to examine that question.
In this connection I want to say that I fully realize that our two great railway systems are the arteries through which our industrial life flows and by which it is made possible, and that their continuance and their prosperity and efficiency are of vital concern to us. But while I realize that, I also think that it is pretty nearly time that we should ask: How and when are the Canadian National railways going to stand on their own feet? The statement brought down by the Minister of Railways (Mr. Graham) showing that $118,000,000 had been advanced or secured for the Canadian National Railway system by Canada during the calendar year 1924 was 
astounding. It becomes more startling when we hear that it only cost $163,000,000 to bund the Transcontinental railway. But what I want to point out is this, that the fixed charges to the public payable in connection with our railways were only $38,000,000, and therefore there must have been in the hands of the railway for expenditure in the calendar year 1924, approximately $80,000,000. Now the question
is,	how was that money spent? We have their balance sheet, and in looking through it I find no statement of receipts and expenditures, which is for the ordinary man possibly the most illuminating statement in an annual report. The only thing I can do is to take the consolidated balance sheet for 1924, and compare it with the consolidated balance sheet for 1923, and try to discover where that $80,000,000 has been spent; and my conclusions are liable to be vague and inaccurate because I am not sufficient of an accountant to be sure that I am right. If I turn to the Canadian Pacific annual report for the same year, 1924, I find on page 26 a statement of receipts and expenditures which shows all the operating net income received from their railway, their income from other sources, the total amount received from the sale of securities, and so on; and then on tue other side a complete, compact, and concise statement of how that money was spent, with references to later tables explaining the different items. I would like to bring to the attention of the Minister of Railways that this House should have a statement of receipts and expenditures from the Canadian National Railways. This House should be informed of how that $80,000,000, over and above the fixed charges of $38,000,000 on the debt to the public, was spent. The sums are tremendous. We are accountable for voting those sums, and I think we should know exactly how they were spent, whether economy was practised or whether extravagance governed. I think that is our duty.


Arthur Meighen: Is the hon. member
right in saying that this House was accountable for voting that sum? We did not vote
it.	We were denied the right to vote it by the government.
Mr. LeSUEUR:	I will accept the statement of the hon. leader of the opposition (Mr. Meighen) on that matter.
In further developing this question as to when and how the Canadian National railway system is going to stand on its own feet, I would like to point this out: I believe that the Canadian people have been very generous in their grants to the railway, and very

The Budget-Mr. LeSueur
patient in awaiting results. I believe they have come more or less to this conclusion: They believe to-day that with the enormous sums granted to the Canadian National Railway by the Dominion of Canada, that railway is now sufficiently equipped with rolling stock, sufficiently equipped with motive power, and has a sufficiently good roadbed and the miscellaneous properties that a railway requires and I note by their balance sheet for 1924 that the Canadian National Railways have on hand about $30,000,000 in cash, and about $50,000,000 in materials and supplies. This is more or less the same as it was at the end of 1923; therefore, surely the Canadian National Railways are now in a position to stand on their own feet, and certainly they should 'be, provided we take care of the fixed charges to the public. The Canadian public are going a very long distance in saying:	We expect no dividends; we do
not ask you to pay interest on the debt represented by cash advanced to you by the government; we are willing to take care of your fixed charges to the public to such extent and so long as may be absolutely necessary, but outside of that $38,000,000 or $40,-
000.000 you cannot ask this House for a cent. If the Canadian National Railways when thus relieved of their fixed charges cannot now carry on and operate, then I think we should have what is commonly called a showdown.


Arthur Meighen: 
Arthur Meighen: Is not that the law today? Has not all capital expenditure first to be submitted to the Governor in Council and approved?	*
Mr. LeSUEUR: I maintain that it should be submitted, but if we are informed correctly, when the Scribe hotel was purchased the Minister of Railways knew nothing about it apparently until after the deal was closed.


Arthur Meighen: Sir Henry Thornton
gave evidence to the distinct contrary.
Mr. LeSUEUR: There is no question that the government should keep in touch from month to month and should know constantly whether the Canadian National Railway is being conducted, on lines of economy or extravagance. The sooner we take means to bring that responsibility home to the government and to let the railways know that they must stand on their own feet the better it will be. Necessity is the mother of invention. If we are ever going to get real results our National Railways have got to know exactly the limit to which they can go.
Now, Sir, I should have liked to express some views on immigration, which I believe is one of our vital problems and the solution of which I regard as a very necessary measure in getting out of the present depression and out of the present financial situation. But that is an entire subject in itself, and I have purposely curtailed my other remarks so as to close before six o'clock. Therefore, all that I will say about immigration is this: I believe that owing to the essentially individualistic and economic character of migratory movements to-day and owing to the conditions in certain countries of Europe and to the regulations as to emigration to the United States, we have to-day an exceptionally good opportunity for an aggressive immigration policy. The essential need in a real immigration policy appears to be co-operation between the Dominion government, the various provincial governments, and the Empire Settlement Board. The next point is that owing to the nature of immigration you have got to have an inducement for the immigrant; I believe the greatest inducement which we can offer is that the immigrant will be taken care of when he locates in this country, and if that inducement is to be solid, it must be on a more or less sound and businesslike foundation. I believe these aims could be accomplished with a great deal of practicalness to-day. I hope at some later time in
The Budget-Mr. Brethen

this House to deal further with that proposition.
Now let me say in conclusion that I have endeavoured this afternoon to present a reasonably accurate view of our trade conditions and the necessity of reducing our taxes in an endeavour to better that position; also to give a fairly accurate view of our financial situation and the way we are heading. I have suggested some remedies. These remedies I may briefly summarize as follows: First, I believe that we must have a strong and stable fiscal policy, administered as I have said with the advice of a competent tariff commission Which will reasonably assure our industries of intelligent, stable and businesslike treatment. Second, that we should have an aggressive attack on our expenditures in the routine business of government that we should deal with our expenditures in the same way as any business corporation would, and should establish inter-departmental boards with the object of bringing up-to-date modem business methods into our routine business and by co-operation and team work, eliminate waste and duplication. Third, I believe that we should establish a check or governor on the expenditures of our railway system. And lastly, which is possibly the kernel of the whole business, I think that our government should stop the policy of drifting along in apparent helplessness without facing squarely the difficulties which confront them; and their slogan should be "Business and results," not "politics."


Mr. G. A. BRETHEN (East Peterborough):: Mr. Speaker. I have listened with much pleasure to the address which has just been delivered. It stands out very brilliantly in comparison with much of the partisan debate that we have heard so far. I will try to follow the ideal set by the hon. gentleman and in doing so will endeavour to speak without prejudice, actuated by the sole desire to examine the question "What is wrong with Canada?" and if possible suggest an answer.
Canada is so diversified in its interests and outlook that no solution can be arrived at unless a spirit of sympathy and genuine cooperation holds sway. Lacking such co-operation between the different units that make up the Canadian commonwealth and between the different classes in each community, any fiscal policy is certain to fail. Enjoying such sympathy and co-operation^I believe that under almost any fiscal policy Canada is certain to succeed.
"What is wrong with Canada?" Answering this question I would say a lack of teamwork; an attitude of pulling apart rather

than one of pulling together: a lack of sympathy and understanding between rural and urban interests within the community, and a prevalence of sectional interests within Canada 'herself. What is the remedy for this condition? Some few years ago when the thought laid hold of the people of Canada that the Canadian National railways were our railways, that we the people of Canada were vitally interested in their success or failure, things began to happen to the Canadian National Railway-it gained the greatest asset instrumental to the success of any organization, the good will of the people. So with the industrial and commercial life of this country. Let the people feel that Canadian industries are our industries, that Canadian farms are our farms, that the interests of both are immutably joined together, that one cannot succeed if the other fail, and that both are worth saving. When the people of Canada are actuated by such a feeling, Canada as a whole will move forward. In this connection the Farmers Advocate of April 16, last, under the editorial "The same road and the same gait" has this to say:
Capitalists, manufacturers, tradesmen, labour and urban people generally were never more convinced than now that poverty and prosperity are closely associated with the economic status and well being of the farmer. It has taken more than words and oratory to make the lesson understood. Only decreased sales, lack of employment and	a general	slowing down	of businesscould persuade	the other	classes of people that	whether they like it or not they will have to keep step with the fanner.What is throttling the life of some of our Canadian industries to-day? Lack of sales. With increased sales follows increased production. lower	overhead	costs and,	with	efficient management, more profitable returns. Develop in	Canada	the morale	that	will
boost the purchase of Canadian products. That does not mean to apply only in a limited sense to made-in-Canada boots and shoes, hats and caps and farm implements, but just as truly to Canadian eggs and cheese, butter and bacon, apples and fish. Let Canada do her best along these lines, and such a revival in trade will result as will make every legitimate industry in Canada as busy as a Canadian beaver.
The heart of the Canadian people is sound. What stands in the way of this much-to-be-desired condition? A cloud of misunderstanding seems to exist in the minds of some people that, given the privilege to enforce a system of still higher taxation upon the consumers of this country that industry and Canada as a whole will prosper. Such a system will always be resented by the people taxed. Such a system will always prove a barrier to

The Budget-Mr. Brethen
that bond of sympathy and co-operation that would ensure maximum sales within the country. When you tax the over-burdened taxpayer of East Peterborough on the implements he uses and the clothes he wears, to give the benefit of such tax to some gentleman in Toronto or Montreal, you do not add to the taxable wealth of Canada. You do hamper and prevent the just and equitable distribution of such wealth.
The United States of America has often been referred to in this debate because of the success it has attained, supposedly to the policy of protection. Mr. Coolidge, making his maiden speech in Washington on December 6, 1923, has this to say regarding United States agriculture, then and still in a deplorable state of distress:
No complicated scheme of relief, no plan for government fixing of prices, no resort to the public treasury will be of any permanent value in establishing agriculture. Simple and direct methods put in operation by the farmer himself are the only real sources for restoration.
If such words were true of agriculture in 1923, have they not been proven equally true to-day? The American farmer was hoodwinked, or hoodwinked himself, into believing that high protective tariffs would alleviate his conditions. Apparently the very reverse lias been true, and he is compelled, as have farmers in Canada, to fall back on simple and direct methods of organization and cooperative marketing.
But if the statement of President Coolidge is correct concerning agriculture, is it not equally true of industry? In Canada we have the spectacle of some industrial concerns, notably the binder twine industry of Brantford, working under simple and direct methods, put in operation by the industry itself, and buying their raw materials in the open markets of the world, working overtime, expanding its operations to the point where it is acknowledged to be the greatest of its kind in the British Empire, and paying regular dividends to its shareholders. Side by side with this industry in the city of Brantford, we have other industries enjoying special privilege in the sale of their products and given prac-ticaly free trade in the purchase of their raw material. Yet according to my hon. friends to my right, these industries are closed or in a ver}' unhealthy condition.
What conclusions can we draw from such a situation?
1.	That altogether too much emphasis has been placed upon the effect of the changes made in our tariff during the past two or three years. These changes averaging between one and two per cent are so insignificant that
they could not possibly be responsible for either the good effects claimed by the government or the bad effects claimed just as vigorously by the opposition.
2.	That the real cause-and admitted so by the representatives of industry themselves -is lack of sales.
I remember during the past year that in our caucus room we met representatives of the implement manufacturers of Brantford and they proceeded to place the industrial situation in Brantford before us. They made the statement that many factories were closed, and I asked one of the gentlemen, the spokesman of the party, "Are all the factories in Brantford in that condition?" And he said, "No, there is the binder twine industry, for instance, that is working night and day." But, he said, "Of course they have a good sale for their product." I said, "Is the question, then not one of lack of sales in all these industries?" And he admitted that if was. "Well then would the proposed increase in the protective tariff alleviate or would it aggravate that situation? Would charging a higher price enable them to sell more, to increase their sales, or would it not?" There was no answer to that question.
Now just on the side, in leaving that meeting I was informed by a gentleman from the city of Brantford that the spokesman of that party started in some years ago-and he was still a man in his prime-with praloticaMy nothing and had recently sold out one-half interest in his business for half a million dollars. He claimed that he got very little assistance from the protective tariff, that he did not use the tariff to fix his price? in any way, and yet he had made good in bis particular industry in Brantford.
Developing this conclusion that the problem is one of lack of sales I will go further and state that I do not believe the increased tariff imposed by the United States against, Canada and the world helped very materially in bringing about conditions in that country, as they exist to-day. I admit it hurt us by dislocating our trade, but it certainly did not benefit the American farmers, and I repeat that I seriously question if industry in the United States reaped any material gain. We are accustomed to this argument advanced by some hon. members; "The United States has a high protective tariff; the United States is prosperous; therefore high protective tariffs briug prosperity". But here I would like to remind my hon. friends that during r.he past winter in the highly industrialized city of Detroit the Ford motor plant, one of the most highly financed, highly organized and efficiently
The Budget-Mr. Brethen

managed industrial concerns in the world, was running but three days a week, and thousands of unemployed were almost on the bread line.
Conditions in the United States have, by way of comparison with those in Canada, entered so frequently into the discussions in this House that I will be pardoned if I refer to them. From first hand information received through personal interviews with people across the line, real estate dealers, bankers, contractors, workers in motor plants and allied industries, I have drawn the conclusion that the happy conditions in the United States we so often hear about from our friends to the right are due, not to highly protective tariff, but to the following reasons:
1.	To the tremendous financial advantage gained by the United States by her late entry into the world war.
2.	To a commendable reduction of some
85,000,000,000 in taxation during the past four years.
3.	To an immense building boom-suspended during the war period-of some $5,000,000,000 or $6,000,000,000 spread over the cities of the central and northern states.
4.	To a system of financing, the very reverse of that practised in Canada, whereby credit instead of cash sales are encouraged. Fully 90 per cent, I believe, of the sales in real estate and business contracts, in fact, almost every commercial transaction is performed on the basis of a cash payment down of 10, 15 or 20 per cent, with the balance on paper.
5.	To the fact that apparently everybody in the big cities, the real estate dealer, banker, doctor, lawyer, worker in the factory, even the nurse in the hospital, subscribes to this financial practice.
At six o'clock the House adjourned, without question being put, pursuant to rule.
Thursday, April 30, 1925