Mr. SPEAKER:: I have the honour to inform the house that I have received the following message:
Ottawa, 7th May, 1936.
Sir,-I have the honour to inform you that the Right Honourable Sir Lyman P. Duff, Chief Justice of Canada, acting as deputy of His Excellency the Governor General, will proceed to the Senate chamber to-day, 7th May, at 5.45 p.m. for the purpose of giving the royal assent to certain bills.
F. L. C. Pereira, Assistant Secretary to the Governor General.



PRIVILEGE-MR. McPHEE

[Stage Direction]
On the order for motions:
Mr. G. W. McPHEE (Yorkton):: Mr. Speaker, I rise to a question of privilege in connection with a matter that concerns the dignity of the members of the House of Commons and

Questions
contravenes the House of Commons Act, being chapter 145 of the revised statutes of Canada. I refer to an article which appears in this morning's Citizen, written by Miss McGee of the Canadian Press. This is headed "Women MJP.'s Give Verdict on Best Looking Men in House." Perhaps I should read just a few short paragraphs of this article in order to lay a foundation for what I am about to say. The article reads:
While the members of the House of Commons have been debating legislation in long hours of argument, the two women members have had ample opportunity to consider their masculine confreres from the standpoint of pulchritude. Yesterday they disclosed their preferences.
They then give their reasons.


Walter Edward Foster: May I ask the hon. member kindly to state his question of privilege?


George Washington McPhee: That will be seen from the next paragraph of the article which reads:
The reasons she gave for not listing any members as "handsome" are that "too many have eyes too close together, ears that stick out. crooked noses, weak chins, avoirdupois and bad carriage."


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I do not like to interrupt my hon. friend, and I hope he will not think I do so because I have not been mentioned in the list to which he is referring, but I do submit that this is hardly a question of privilege and he should not continue.


George Washington McPhee: It affects the dignity of the house.


Walter Edward Foster: This is not a question of privilege. The hon. member is out of order.



QUESTIONS

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

Mr. CHURCH:: 1.	On what date was the grant to the 1936 Olympic games paid, to whom and on what
terms ?
Date
incurred	Amount
April, 1936	 69
March, 1936	
147	52March, 1936	
1	53April, 1936	
20	67April, 1936	
131	02Total	$301 432.	Will the government lay on the table all correspondence as to the 1936 Olympic games?3.	Will further consideration be given to cancel further participation by Canada for 1936 at these games owing to European conditions?


Mr. MACKENZIE KING:: 1.	Cheque for $5,000, being one-half of amount voted in supplementary estimates (item No. 386) in favour of the Canadian Olympic committee, for their use in connection with the winter games, was handed to Mr. P. J. Mulqueen, chairman of the committee, on October 31, 1935. There was no stipulation as to the use to be made of this money. Balance of $5,000 not yet paid.
2.	Yes.
3.	Should such consideration be deemed necessary, it will be given.


CANADA AND GULF TERMINAL RAILWAY COMPANY
Mr. LAPOINTE (Matapedia):: 1.	Does the Canada and Gulf Terminal Railway Company, which operates the railway between Mont Joli and Matane, province of Quebec, owe any moneys to the government of Canada, or to the Canadian National Railways; if so (a) what are the dates upon which these debts respectively were incurred; (b) what are the amounts; (c) what rate of interest is charged; (d) when do these debts mature, and what are the conditions of payment?
2.	Are there arrears of both capital and interest with reference to these debts, and what are the amounts respectively?
3.	Has the government of Canada or the Canadian National Railways provided for these deficits of the Canada and Gulf Terminal Railway; if so (a) on what dates; (b) for what amounts; (c) upon what conditions; (d) at what rate of interest?
4.	What is the total amount actually owing on capital and interest by this company to the government or to the Canadian National Railways?


Mr. HOWE:: 1. Due to government-Nil.
Due to Canadian National Railways:
Interest rate	Particulars
Nil	Telegraph tolls
Nil	Joint facility rent
Nil	Overcharge claim
Nil	Overcharge claim
Nil	Express interchange
All due for current settlement
Privilege-Mr. Bennett

2.	No arrears due to Canadian National Railways.
3.	No deficits of the Canada and Gulf Terminal Railway have been provided for by the Canadian National Railways, or the government.
4.	8301.48 due to the Canadian National Railways.


ROSAIRE BLOUIN AND GEORGES FREMONT
Mr. WERMENLINGER:: 1.	Were Rosaire Blouin and Georges Premont, of St. Jean, He d'Orleans, Montmorency county, named or appointed to their positions by the civil service commission after passing the examinations of said commission?
2.	If so, were their successors appointed in like manner?
3.	If not, why?
4.	If they were appointed by the civil service commission, could they be dismissed without intervention of the said commission?


Mr. HOWE:: 1. Yes, but temporary certificates only were issued by the civil service commission, each season.
2 and 3. Two employees have been taken on in a temporary capacity pending examination and appointment by the civil service commission.
4.	Yes. They were not dismissed however. The temporary certificates issued by the civil service commission expired on the 15th December, 1935.


LEAGUE OF NATIONS
[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, in view of the debate that took place yesterday in the British House of Commons and the intimation given that this government was to be consulted with regard to its attitude toward the League of Nations, may I ask the Prime Minister (Mr. Mackenzie King) whether the government will set a day in the not distant future when this matter can be discussed in the house?


William Lyon Mackenzie King: The government naturally will seek to meet the wishes of the house. There have been reasons why we have thought it inadvisable just at this moment to bring on a debate on the European situation. We shall wish to consider carefully all matters that should be considered in that connection. There is however no desire to delay discussion if hon. members deem it advisable to have league matters debated at an early date.


LOSSES IN OATS
[Stage Direction]
On the orders of the day:
Mr. E. E. PERLEY (Qu'Appelle):: I wish to direct one or two questions to the Minister of Trade and Commerce (Mr. Euler). Has the minister seen the article appearing in the Leader Post, Regina, May 4, headed:
Who pays $200,000 losses in oats deal? Ottawa inclined to deny all responsibility.
If the minister has seen this article would he care to make a statement to the house with respect to it? This article states that the Saskatchewan government is preparing a case to be presented at Ottawa. Has the minister received this report? If so, would he care to make a statement?


Hon. W. D. EULER (Minister of Trade and Commerce):: My hon. friend did not convey to me any notice of his intention to ask the question. I may say to him and to the .house that this is the first intimation I have had of the matter; I had not seen the article. However, I shall be glad to make inquiries and give a reply later.



PRIVILEGE-MR. BENNETT

[Stage Direction]
On the orders of the day:
Right Hon. R. B. BENNETT (Leader of the Opposition):: Mr. Speaker, I think it desirable that I should bring to the attention of the house, purely as a matter of privilege, not so much of my own as of the house, that there has been an apparent misunderstanding of the use of words in connection with the Canadian National annual report. I was very careful the other day when I read from page 18, and the figures I gave were those of "system net loss." The Minister of Finance realized of course that that was entirely different from the cash deficit, and I answered, yes. But apparently in the press the use of the words "net loss," as occurring in the profit and loss statement, has been attributed to me as the use of the word "deficit," which was not so and could not be so, because it is taken for granted that anyone with an elementary knowledge of bookkeeping realizes that cash deficit and net loss in profit and loss account are not necessarily the same thing. I desire to make this correction lest there be misunderstanding, and I do so not only in the interests of the house but in the interests of the railway itself. It is important that the distinction between net loss and cash deficit should always be kept in mind.

The Budget-Mr. Blais



WHEAT POOL


[Stage Direction]
On the orders of the day:
Mr. J. G. ROSS (Moose Jaw):: I wish to ask a question of the Minister of Trade and Commerce (Mr. Euler). From information I have received from the west I understand that certain people are receiving some of the payments that were to be made to farmers in connection with the 1930 wheat pool equalization payments. I want to know whether these payments were made direct to the farmer, using only Canadian Cooperative WTheat Producers Limited for the equalization in the distribution of these funds, and also whether Canadian Cooperative Wheat Producers Limited had any right whatever to deduct from these funds fees for the United Farmers of Canada, Saskatchewan section, or fees for the publication in western Canada of a paper called The Western Producer.


William Daum Euler: Just a moment ago my hon. friend mentioned the matter of which he speaks. I have had no opportunity to make inquiries; I had not complete information on the point. I would suggest that he place his questions on the order paper and they will receive attention.



THE BUDGET


[Stage Direction]
The house resumed from Wednesday, May 6, consideration of the motion of Hon. Charles A. Dunning (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 Mr. Maclnnis.
Mr. FRANK BLAIS (Chapleau) (Translation) :: Mr. Speaker, I should like first to congratulate the hon. Minister of Finance (Mr. Dunning) on the splendid budget which he presented to the house on May 1. With the exception of a few discordant views- always emanating from the same quarters- this budget has been highly welcomed throughout the country, and I feel certain that the resolutions which will be approved shortly will contribute to the improvement of our economic solution.
Bill No. 19, introduced in the house by the hon. Minister of Labour (Mr. Rogers) and passed on April 22 last, is an Act to relieve unemployment, promote agricultural settlement, and assist in the conservation and development of our natural and other
resources. The section of the country which I represent is so closely interested in these important problems that I would be remiss to my duty were I not to indicate here the means whereby this country could benefit from the development of the various natural resources to be found in Abitibi.
I approve this government's policy of undertaking and getting undertaken public works that do not involve too heavy an expenditure for the state, in order to provide work for our people and thus do away, as much as possible, with direct relief, while improving the financial situation of the country. Many unemployed desire work that will permit them to live decently and provide for the future, thus setting a good example to the growing generation, instead of continuing to receive the dole which has developed into national exploitation, as may be readily seen in a number of localities.
I have pleasure, sir, in pointing out a few of the national resources of the Abitibi district, the development of which, I am sure, would alleviate unemployment, which threatens our country with disaster. In the vast territory comprised in the Abitib' district numerous gold mines are being worked and many others will be developed in the near future. Besides the mining industry, agriculture offers great possibilities, as well as the lumber industry, which enjoys an excellent local market for its products. There are splendid water powers which, when developed, will supply electric energy for which there will also be a ready market as this form of energy will soon become indispensable.
I shall speak first of the gold mines of my Northern Quebec constituency. Ten years ago they were absolutely unknown. Noranda Mines Limited, scarcely ten years in operation, already have an annual output of over $14,000,000, give employment to more than
2,000	men and provide a livelihood to a population of 16,000. In the same locality, a number of similar industries will soon be in operation, doubling the town's population, increasing the number of men at work and relieving unemployment.
To the northeast, in the same mining area, nine other gold producing mines have started operations in the course of the last six years. They are: Beatty Gold Mines Ltd, O'Brien Gold Mines, Ltd,, Canadian Malartic Gold Mines Ltd, Siscoe Gold Mines Ltd, Shawkey Gold Mining Ltd, Sullivan Gold Mines Ltd, Greene Stabell Gold Mines Ltd, Lamaque Gold Mines Ltd, and Perron Gold Mines Ltd. All these enterprises are very promising; although only at their first stage of development, they may be expected in the neai
The Budget-Mr. Blais

future, to double, even quadruple their output. At the present time, these mines employ-more than 5,000 men, and have become the mainstay of the farming population of this section and provide an additional market for the products of the lumber industry, the yearly output of sawmills being over 36,000,000 feet of lumber, used in the mines and for building purposes in villages and towns. These industries provide part of the livelihood of a population of 40,000.
I do not think that I am too optimistic or far from the truth when I state that by the end of 1936, at least three other gold mines in that section of the country, will get on a production basis, and gradually increase their output as the years go by, thereby increasing the number of workers and reducing unemployment.
The mining bureau at Amos, which is a branch office of the Quebec Department of Mines, gave me, on the 1st of February last, the following data. There are at present twenty-five mining undertakings showing satisfactory progress to date and likely to produce gold in the near future, that is, as soon as good roads for the transportation of their machinery and other material can be built in the district. I shall refer in a moment to the question of good roads, as they constitute, to my mind, the principal means of obtaining satisfactory results.
Furthermore, 125 claim holders employ at present more than 500 men, and their outlook seems most encouraging. As a sequel to these operations we may expect many industries to be established.
The section of Abitibi comprised in Quebec covers an area of 10,000 square miles. Its natural resources are beyond estimation. This region comprises 3,500,000 acres of good farming land on which 35,000 families could be settled. May I add that this district 'holds a splendid future for the farming class, since, at present, we must import nine-tenths of the farm products required by the mining population. Three carloads of provisions are shipped weekly to Amos alone, yet it would be possible to raise these in our district if agriculture were given more encouragement.
The most practical way to carry out a program of development would be, first, to build a good road from Amos to the district of Chibougamau, then to extend it as far as James Bay with crossroads as the development of the country required. Many of the mining properties at Chibougamau are in the hands of reliable capitalists who have long been asking for a suitable highway for the transportation of the material and machinery required to erect plants.

The	distance between Amos	and Chibougameau is about 154 miles, and many promising mineral prospects are to be found along this projected road which would be a factor in developing this large territory for colonization and farming. It would also be necessary to build 15 miles of road from the Sigma	Gold	mines to	Ovicourt	so as tofacilitate the transportation of machinery to a number of mining properties the outlook of which, to date, is among the promising of the north country. The carrying out of this project this spring, would employ thousands of workers, to the great benefit of the unemployed, while developing our natural resources. I note, sir, that from 1930 to 1936, $189,000,000 have been distributed in direct relief, running the country into debt to that extent,	while	giving no	value in	return. Ibelieve	that	if, in the	last five	years, the
government had expended part of that amount in the district I represent, for the development of its natural resources, we would have to-day a smaller debt and fewer unemployed.
Although I am now engaged in farming I have for a long time been interested quite extensively in business, and I am familiar with the conditions existing in the Abitibi district. I have been living there for the last twenty-three years and have closely followed its development, being in contact with every mining company and the business men of a number of localities. I have come to the conclusion that the most effective way of developing our natural resources would be to build good roads. I am aware that the construction of roads is a provincial responsibility; however in a special case such as this one, I think the dominion government should take charge, as the matter has become a national one.
May I refer to the Trans-Canada highway which has now almost reached the Quebec boundary; it should be continued to Amos and Senneterre, from which points, two roads, now under construction, lead to Mont-Laurier, Maniwaki, Montreal and Ottawa. I know that my good friend, the hon. member for Cochrane (Mr. Bradette), is also eager to see this road, which would be of very great service, continued into the Abitibi district.
Before resuming my seat, may I quote a statement made by the hon. Minister of Mines (Mr. Crerar) on February 14 last, at the banquet of the Mining Institute held at the Windsor hotel, in Montreal. In the next fifteen years, he stated, the future of our country will be found in the development of our mining industry, which is highly prosperous and most profitable, not only for those directly

The Budget-Mr. MacNicol
interested in it, but for the whole country. The hon. minister quoted data found in a publication of the Department of Mines, dated February 14, 1936, and which show that this industry can compare favourably with any other Canadian industry. He added that the small mining district of Cobalt, Sudbury, Porcupine and Kirkland Lake had produced various minerals to an amount exceeding $1,500,000,000, What can we not expect then from our immense district which enjoys the bright prospects I have just shown? The hon. Minister of Mines also referred to the mines of Northern Quebec which, though only at their initial stage of development are on a production basis: Noranda, for example, with an annual output of $14,000,000; Siscoe, which, since its inception has produced approximately $9,000,000; one might also mention the Beatty Gold mines, the O'Brien, Malartic, Lamaque, Sullivan, Green Stabell mines, Bill gold-producing properties still in their primary stage and which will become important mines at an early date.
I wish to congratulate the hon. Minister of Finance for having exempted from the income tax imposed on companies all metalliferous mines becoming producers before 1940. These exemptions will cover the first three years of production. This is a strong encouragement to financiers interested in the development of these natural resources.
I cordially invite all the members of this house, but especially the hon. ministers to pay us a visit, in order to see for themselves the great prospects existing in our district.
What I have suggested is quite feasable and we should immediately set to work in our country's interest so as to provide employment for a large number of people and thus conform to the Divine command: Thou shalt earn thy bread by toiling and not by exploiting the toiler. I have set forth a few suggestions in good faith, in the interest of this country, trusting that they may be seriously considered by the house and even put into practice.


Mr. J. R. MacNICOL (Davenport):: While it is my intention to criticize, I hope in a constructive manner, some of the points advanced by the Minister of Finance (Mr. Dunning) in his speech, I want to compliment him upon the arresting tabulation of facts which he presented in relation to the economic situation of this country as he sees it, and I also want to compliment him upon the evident sincerity of his remarks as well as the non-partisan way in which they were delivered.
I propose to confine most of my observations to the speech made by the Minister
of Finance. If I have any time left I shall refer for a moment or two to the speech made yesterday afternoon by the hon. member for Vancouver East (Mr. Maclnnis).
At page 2362 of Hansard the Minister of Finance referred to the increase in the physical volume of business in this country, and he very clearly pointed out that from a low point of 67 in 1933 there had been a gradual increase in business to 79-7 in 1934, 94-2 in 1935, 102'4 in 1935-36, and the present economic index, he stated, is at 103-3. Then he.added this significant sentence:
The increases are impressive, particularly when one recalls that this index measures the physical volume of output in nearly all our leading industries as well as freight traffic on our railways, building activity and domestic trade.
That was a generous statement for the Minister of Finance to make, and in my humble opinion it was a remarkable tribute to the business ability and foresight of the former prime minister and his government. A little further on the minister referred to manufacturing, and particularly to the iron and steel industry, with which I was long associated, and he used these words:
In the latter half of 1935, this industry showed striking advances, steel output increasing 23 per cent and pig iron 48 per cent over 1934-
Here again was a tribute to what was done by the previous government in connection with the production of steel in this country. When the late government came into power I believe Canada protected steel plates up to 40 inches in width, but not over that. The late government, rising to the occasion, increased the width to 66 inches, and the steel makers themselves went one step further and rolled steel up to 78 inches in width and an inch and more in thickness. During the last three or four years steel plate production in this country over 40 inches in width, and largely over 66 inches, has been what has kept t'he steel makers in the city of Hamilton busier than they have been for many years in the wider sizes. So I hope that when the revision of the British trade treaties, to which the minister referred, comes up later, he will jealously guard the interests of the steel makers of this country and not lower their protection, under any consideration, below what it is now. On the contrary, if possible I hope he will protect plates up to a width of 78 inches, which they are now rolling. In my humble opinion the late government deserves unstinted praise for what it did in connection with steel, and the minister was generous in refering to this subject.
The Budget-Mr. MacNicol

Further down the page the minister used these significant words in connection with construction:
The construction industry, while still operating on abnormally low levels, enjoyed substantial percentage gains in 1935 over 1934, and the present outlook for building appears to be the best in several years.
I want to pause for a moment or two in connection with construction, for I believe this provides a splendid opportunity for the government now in power to provide thousands' of men with work. The minister is correct when he says construction is increasing; for last year the returns from fifty-eight cities of Canada showed construction in this country at the level of 148,000,000 as compared with $27,000,000 in 1934. All constructive work, such as roads, bridges and so on, rose to the total of $160,000,000 in 1935. That is why I said at the outset that the minister was generous in his statements, which were non-partisan. In tabulating our economic gains he 'has paid a well deserved tribute to the former prime minister and his government, and the result of the policies of the late government in t'heir endeavour to advance prosperity all along the line in this country.
Some days ago I read an article dealing with construction in England, which sets out the remarkable progress that has been made in that country, which is one of the reasons why to-day England is leading the nations of the world in providing employment. When the armistice was signed there were eight million homes in England. As a result of their construction policy in England to-day there are 10,804,888 homes. This has given employment not only to a great number of artisans but also to a large number of factory workers in connection with the necessary material that enters into construction. In addition large orders have been placed in Canada for British Columbia, maritime, Ontario and Quebec lumber. It has been said in the house many times since the beginning of the session that this country should get on with construction. I have endorsed that statement before; I am going to endorse it again. Many of our towns and cities have slums, and if it is at all possible those slums should be removed and adequate homes provided instead. Just how the minister is going to get the money I do not know, but during the last four or five years the federal government has put up $400,000,000 for relief and has voted many millions for the rehabilitation of the western provinces. And rightly so; I am one of those who will support anything reasonable that will make condi-
'Mr. MacNicol.]
tions 'better in the west. I believe the minister can find the money in some way.
The late government was one of the first advocates, I believe, of lowering the gold content of our dollar to 25 cents. I know that up at Milton, Ontario, there is a very able man, Mr. Peter Robertson, to whom the late Mr. George Nicholson, who formerly sat for the constituency represented by the last speaker (Mr. Blais), referred in a very excellent speech in this house a few years ago. Mr. Robertson has some excellent ideas on gold. He wrote a book on the subject which was translated into several languages, at his own expense. This book was sent all over the world and bad a good deal to do with the lowering of the gold coverage behind our dollar.
There may be some other w-ay of getting money with which to proceed with construction, but it should be found in some way because in Canada we 'have 240,000 men who in normal times are employed in the construction industry, but thousands of whom are now unemployed. Taking as a basis the figures as to the amount of labour given per thousand dollars of expenditure in connection with the government building now under construction in Winnipeg, which will cost a million dollars or more, it would take something over $200,000,000 to put at work again the 240,000 men who should be engaged in the construction business but who for the most part are idle. In any event, sir, something must be done to provide more employment.
An. hon. MEMBER:	Social credit.


John Ritchie MacNicol: No, not social credit;
I am not in favour of that at all. I have confidence in the ability of the minister to find some sound way of providing money that can be used for proper government support. According to the spring number of Building in Canada construction magazine, taking 1929 as normal, 100. which is different from the usual computation, in 1933, our low point, construction activities stood at 9-2 and by 1935 had risen to 19-7 That is a fairly healthy advance over 1933, and if we continue to advance with increased speed the construction business of this country will soon be back on its feet. But in Great Britain it has got back to 152-5.
I said a moment ago that all works such as roads, and so forth, should be counted in the program to provide work. As we go about this country over our fine concrete roads we frequently come to a narrow bridge. I have in mind two of them on the Dundas road from Toronto to Hamilton, on which

The Budget-Mr. MacNicol
road fifty miles an hour is about the usual speed. But when the motorist arrives at the bridge west of Oakville and the bridge at the next river he finds himself in a regular bottle neck. Numerous accidents have occurred there, because the roadway is reduced from about thirty feet to about sixteen feet. In industry manufacturers are compelled to safeguard their employees with all sorts of appliances to keep them from getting hurt in operating or working with the machinery. But the government, responsible for the roads, is causing more deaths by these narrow bridges than industry is causing, and if the provincial government will not act it is high time the federal government did. It could thus give employment to a large number of men.
On page 2366 of Hansard there is a statement made by the minister with which I have to disagree. I quote:
The fruits of economic nationalism in reduced business activity, shrinking governmental revenues and widespread unemployment are such as to justify in abundant measure the efforts which the present government has made, and will continue to make, to free the channels of international trade and expand the markets for our primary and other industries which must otherwise suffer stagnation and drastic readjustment.
The policy of the late government certainly was not economic nationalism, judged from the results it gave, results which the minister himself so highly praised in the quotations I gave a few moments ago.
I would point out further that one of the results of the policy of the late government was, according to Industrial Expansion in Canada, that from August 15, 1930, to the same date in 1935, 272 branch factories came into this country from the United States, Great Britain and other countries. These 272 factories make automotive parts, electrical parts, foodstuffs, machinery, metal products, chemicals, drugs, wood products, textiles and leather, etc. That is a very substantial amount of new business brought into this country by the activities of the late government. If the present minister and his government can do as well in the next five years they will be doing very nicely indeed.
I have a clear recollection of the last time this same policy, lower and lower tariffs, was introduced in this country, and I hope the same disasters will not result that accrued between 1922 and 1926. On several occasions I had to attend employment conferences of one kind or another, and I know that in September, 1924-the present Minister oi Finance was not then a member of the government, but the Minister of Justice (Mr. Lapointe) was in the house then and he will remember-there were deputations from all
over the country protesting against the free trade policy of the government of that day. There were protests from boards of education, city councils, township councils, county councils, labour organizations and every kind of organization in the country. In September, 1924, a delegation came to Ottawa and presented figures to the government indicating the contraction in business and manufacturing. Taking into account new industries started the net contraction was as follows, as a direct result, I believe, of the trade policy of the government of the day:
_ No. of industries closed
Food product	 87
Tobacco and cigars	 12
Fertilizer	 14
Oil and chemical	 2G
Manufacturers of building supplies.. 32
Agricultural tools	 25
Carriage makers	 8
Iron and steel works	 38
Leather products	 12
Footwear	 21
Rubber	 2
Furniture and musical instruments.. 30
Automobiles	 19
Toys	 6
Textiles and apparel	 48
We do not want anything more like that.
A new plant in this country means a great deal in addition to the direct employment it gives. There is a new can factory going up- I believe it is practically in operation now- in West York. The minister referred to it some time ago, but his facts were inaccurate as I understood him, if he said' that the trade treaties had something to do with its coming here. The trade treaties had no more to do with it than the man in the moon, because the arrangements were made last September; in fact the original designs were prepared some three or four years ago, after the Campbell Soup company itself came to this country. The new can factory to which I refer is about the same size as the Campbell Soup factory, and if it takes the same amount of material as the Campbell plant it will require some seven or eight hundred carloads of material of all kinds, such as sand, gravel, brick, piping, glass, paint, roofing and machinery, etc. So that every new factory started in this country means business not only for the men erecting it but for the factories supplying the building material. I hope the proposals of the government will not result in the lessening of factory building.
A day or two ago I read in a publication of the Department of Trade and Commerce of May 2 something which shows that all is not gold that glitters. In shipments of grain products to the United States for the first three months of this year compared with the first three months of last year there is shown to



The Budget-Mr. MacNicol
be a material decrease. The figures are as follows:
Three months ended March 31 1935	1936
Bran, shorts, middlings,
cereal foods and screenings	
$1,162,746	$342,048Hay	
467,319	13,945Seeds	
272,200	38,182
It is to be hoped that the treaty will result in a different picture.
On page 2367 of Hansard there are two or three items to which I should like to refer. First, the minister referred to the conference in connection with the Ottawa trade agreements. I want to warn the minister and through him the government to be very careful, because every thousand men given employment in England for exports to Canada means a thousand less men given employment in Canada. Our own textile and steel plants are taking care of our requirements. If we have to buy outside of Canada, however, I should prefer to trade with England first, and after that with the United States. Above all I prefer to provide employment in Canada for the Canadian worker.
The minister made a generous reference to the balance of trade. In that connection he used this sentence:
This is the fifth successive yearly balance in our favour and is the largest since 1927.
Immediately prior to this observation he had referred to the fact that this year the balance of trade is favourable to the extent of $216,000,000, whereas in 1931, the first year in which the late government held office, there was an adverse balance of $89,000,000, and when the late government first took office it was met with an adverse balance to the extent of $103,000,000. I hope nothing will interfere with a continuance of balances of trade in our favour.
I was further pleased to read the minister's statement that while the average increase in trade of twenty-four leading countries in the calendar year 1935 was 4-1 per cent, our own trade increase was 11-3 per cent. I cannot help feeling that the leader of the opposition (Mr. Bennett) must have been pleased to hear that statement from the minister, because it was very different from the brickbats that had been hurled at the right hon. gentleman during the last few years he held office. Political parties have the best intentions and do the best they can for Canada, and it is an act of generosity when one of the leaders on the government benches refers to the splendid results brought about by a predecessor in office.
May I hasten along to a discussion of the schedules, touching upon them only briefly.
' Mr- MaeNicoM
My first reference will be to item 362c dealing with nickel-plated ware, gilt or electroplated ware, n.o.p., under which the duty as against the United States has been reduced about 25 per cent from the general rate. I know that in Canada we have some first class nickel plating and enamelware plants. During the Easter recess I made it my business to make a tour of several of the big stores, and I am sorry to say that in one of them I found large quantites of these products which had come from six different states. I have no fault to find with those products, and I cannot blame the Canadian people for buying them because they are well made. But we can make them in Canada, and Canadian housewives whose husbands, sons and daughters are working in Canadian factories should be in a position to buy Canadian material. However, if the government makes it easier for them to buy products made in the United States those housewives cannot be blamed for buying goods made in that country. But if workers in a West Virginia plant are engaged in making the enamelware or nickel-plated ware which is distributed for sale in Canada, the purchase of that article by the consumer does not help the Canadian worker one iota. I saw products of this kind which came from Wisconsin, Ohio, Illinois, Pennsylvania, Massachusetts and West Virginia. I repeat that every thousand men employed in the United States to make enamelware or nickel-plated ware for Canadians displaces a similar number of men in Canadian plants.
Pursuing my investigations, after the agreements came into operation I found in the city of Montreal two full carloads of the common type of thirty-gallon kitchen boiler, with which all hon. members are familiar. I suppose those cars had in them a thousand' boilers, and in that instance they came from the city of Pittsburgh. Men working in Pittsburgh plants made the steel for the boilers, performed the galvanizing operations, put them together and shipped them to Canada. Every man engaged in producing thirty-gallon boilers in Pittsburgh for the Canadian market displaces a man in Canada who could have performed those operations just as well. We make just as good steel in Hamilton as they do in Pittsburgh; we can galvanize boilers as well as they can. But if the duty rate makes it easier to import them, in my humble opinion sucL rate represents a retrograde step. We should be trying to give employment in Canada, not to give it to people in the city of Pittsburgh.
I should like to refer briefly to the agricultural implement industry. This phase of the subject was well covered by the hon. member for Greenwood (Mr. Massey), and for that

reason it is not necessary for me to say much about it. I must say however that on numerous occasions I have been greatly concerned to hear hon. members of this house denounce the agricultural implement people as bandits and everything that they should not be. I have heard the manufacturer denounced as a bad employer, and hon. members have heard statements that he is harsh in his treatment of his employees. On inspection of the plants, however, I found just what I expected to find, after my own knowledge gained from twenty-five years in industry. My investigation disclosed that there is no truth in the allegation. In one of these plants I spent four hours talking to the men, as well as the bosses, and I am free to say that in every case I found that the men spoke well of their company. Men in the Massey plant in Toronto told me that 206 of their number who had served the company for twenty years and had reached the age of sixty-five were now drawing a pension, to which they had not contributed, and which is fully paid by that company. Last year the company's expenditures in that behalf amounted to $95,000. When hon. members rise in their places and say that a company such as that has no soul, I say they do not know what they are talking about.
3-fur. 14-inch, tractor gang
8J-ft. cultivator	
lli-ft. tractor cultivator.. 20 Double D. Drill, LL.. . 28 Double D. Drill, LL. . .
I have not given the whole table. On several of the items the Emerson prices were higher, but taking the seventeen items before me I find that the retail list price at Hallock, Minnesota, is "1808 cents per pound, and in Emerson, Manitoba, it is -1810 cents per pound.


Mr. WEIR:: Where did the hon. member secure those figures?


John Ritchie MacNicol: I have quoted from the Canadian Farm Implement Journal, published in Winnipeg in April, 1936, and I accept the figures as being correct.


Mr. DUNNING:: If those figures are correct, and I assume that they are, why does my hon. friend fear the sale in Canada of farm machinery at prices which-, as he puts it, will put Canadian workmen out of business?


John Ritchie MacNicol: That is a very fair
question. Because- of the cuts in tariff brought about by -this government, the 12739-1651
The Budget-Mr. MacNicol
Up and down the years I have seen the same kind of bogey raised. Some years ago the western provinces denounced tractor manufacturers, and the result was that the government allowed tractors to enter Canada free, thereby destroying the Canadian tractor business. The next cry arose in connection with binder twine, with the result that to-day we have only three small binder twine companies whereas in earlier years we had a much greater number.
If the duties are lowered any further the industry cannot live. In fact, I do not believe it can live under the present rate. Canada a country manufacturing $16,000,000 worth of agricultural implements and machinery cannot compete with the United States manufacturing to the extent of $360,000,000. An industry supplying less than three-quarters of a million farmers cannot compete with one supplying six and three-quarter million farmers. Owing to our exports the Canadian industry is able to sell machinery at a fairly low rate to Canadian farmers. I wish time would permit me to put all the information on Hansard, but I shall take time to give some prices which were not mentioned by the hon. member for Greenwood. The following figures will give a comparison between prices of agricultural machinery in Hallock, Minnesota, and Emerson, Manitoba:
Retail list price Hallock, Minn. $203 40 144 40 202 50 263 00 384 55
Canadian list price f.o.b. Emerson, Man. $202 25 141 00 184 00 250 00 358 00
Canadian manufacturer has had to speed up and cut down his profits, until he has reached the point where he is manufacturing without any profit. As the hon. member for Greenwood (Mr. Massey) has stated these manufacturers are carrying on at a loss. I have asked some why .they did not quit, why they did not close u-p their plants. They told me that it was impossible to get any money for a dead plant in which they had many millions of dollars tied up, and they were carrying on in the -hope that things would improve. If the minister does not believe me-


Charles Avery Dunning: The fact that I do not follow my hon. friend's argument does not mean that I disbelieve what he is saying.


John Ritchie MacNicol: The minister seems to
be listening to the advice of the hon. member for Saskatoon (Mr. Young), the hon. member for Melfort (Mr. McLean) and the hon. member for Moose Jaw (Mr. Ross), but I suggest he consult also with the hon.

The Budget-Mr. MacNicol
member for Ontario (Mr Mocre) and the hon. member for Brantford (Mr. Macdonald), and put into effect the policies they suggest.


Charles Avery Dunning: Will the hon. member
give me some advice himself?


John Ritchie MacNicol: Yes, I would advise the same way. Something was said about shipping to the United States, and I went into this question very carefully. I find in our own Commercial Intelligence Journal, from which I quoted a few moments ago. certain information in connection with the shipment of agricultural implement parts to the United States. It states that $242,000 worth of implement parts were shipped to the United States. Upon inquiry I found that one of the large companies in the United States, with a Canadian plant, had an immediate need for parts which the Canadian plant had on hand. A number of carloads of parts were shipped over to supply this need and in this way the shipments to the United States looked to be much more than they really were.
The minister must have worn the thickest and darkest glasses possible to obtain when he considered item 431b covering many different motor parts. This item which covers many different parts manufactured in two fine plants in Broc-kville and St. Catharines is the cutest thing in the whole budget. The minister must have been wearing these heavy glasses when he considered this item. Among the directors of these companies are to be found the Hon. George P. Graham, a senator; Mr. Fulford, provincial member for Brockville, I believe, and Mr. Gordon Edwards, of the city of Ottawa.


Charles Avery Dunning: I never knew of the
existence of the companies.


John Ritchie MacNicol: It is very cute to see
them overlooked in the cuts, but I am pleased to see that 431b was not reduced. According to the information I have received the automobile industry has received a substantial blow because of this tariff. Perhaps there are some extenuating circumstances, but the trouble is that one manufacturer appears before the tariff board and tells them what he is up against. When he is asked to suggest something, he asks that his raw products be allowed to come in a little cheaper. These industries are being crucified in one way or another by this lowering of duties. I believe there are 82 companies manufacturing automobile parts in Canada. Altogether they manufacture 310 lines; they employ over
12,000	people and their payrolls amount to over $13,000,000. My information is that these factories have received a blow through

this proposed tariff schedule. I hope there will be some way out of it There are many members in this house from Ontario and Quebec reapresenting towns in which are located these factories. The time has passed when members should be so party bound as to be afraid to speak out. I compliment the hon. member for Brantford for getting up in this house some time ago and defending the workmen in the city of Brantford. He had courage, and other hon. members should follow suit. More of the government members who represent fine plants and fine towns should get up to defend them
Members who represent furniture companies in Hanover, in Durham, in Kincardine, in Southampton, in Stratford, in Kitchener, in London, and in other centres of Ontario, should defend them. This industry employs considerable labour. I have associations in the constituency of Grey-Bruce and I know one of many farmers who sold to a furniture factory in Hanover a large quantity of maple, ash, birch and other timber. If these factories are closed down the farmers in Grey, in Bruce, in Perth, in Waterloo, and in some of the other fine counties of Ontario will not be able to obtain such good prices for their timber.
I should like to refer for a moment to the Japanese situation, because I am greatly concerned about what will happen to the magnificent plants erected in Cornwall and two or three other points in Quebec, largely through the efforts of the previous government. I believe there are 4,000 people engaged in the rayon and allied industries, but at the present time this industry cannot compete with Japan. I should like to quote the wages paid in the Tokyo-Osaka areas in Japan, which are conceded to be higher than are paid elsewhere in that country. The daily wages in these Japanese areas, translated into
Canadian currency, are as follows:
Silk reelers, female	 $0.21
Cotton spinners, female	 0.24
Silk throwers, female	 0.22
Weavers, female, cotton, machine..	0.21
Weavers, female, silk thread..	..	0.39
Hosiery, knitters, female	 0.33
Hosiery knitters, male	 0.61
If the minister would listen to me instead of to some of the western free traders, I would tell him what to do-raise the tariff and then regulate prices. If I had control, I would not allow exploitation. The purpose of a tariff is to give men work, and every factory closed throws men out of work.


Mr. YOUNG:: Does the hon. member defend the differential in the prices of automobiles as between Canada and the United States?


John Ritchie MacNicol: This government is going to collect a very substantial tax from

The Budget-Mr. Marshall
automobiles; I suppose it is needed and we will have to pay it.


Walter Edward Foster: The time of the hon. member has expired.


Mr. J. A. MARSHALL (Camrose):: Mr. Speaker, for weeks prior to the introduction of the budget I had a feeling of pleasurable anticipation that the Minister of Finance (Mr. Dunning) would depart from the old orthodox economic forms of taxation and by some means known to himself balance the budget and lessen the burden of taxation. When the Liberal party was swept into power on October 14, 1935, and the Prime Minister (Mr. Mackenzie King) looked over his vast following, there was no one in the ranks who was so capable of balancing budgets as his former Minister of Finance, the present holder of that portfolio. Then we find an urgent call going out to the minister, who had retired from active politics, to "come over to Macedonia," as it were, "and help us out." The cry did not fall upon deaf ears; the invitation was accepted and this amiable gentleman was taken into the cabinet and immediately undertook the greatest of all tasks, the work on the national budget. Since this budget came down last Friday I have wondered whether or not the Prime Minister has regretted his action on that occasion, because in my opinion the present budget differs little from previous Liberal budgets. In my humble judgment there are in the Liberal ranks men who are just as capable of balancing the family accounts-and I would refer to the genial and patient Minister of Labour (Mr. Rogers) and the alert and businesslike Minister of National Revenue (Mr. Ilsley)- as is the present Minister of Finance.
When the budget was introduced last Friday all the galleries were packed and I understand that four of the premiers were present. Had we had the other four or five the family circle would have been complete, and these premiers would have gone back to their respective provinces having received a splendid lesson in the attempt to balance budgets. I wonder whether this budget has had the approval of the Liberal party.


Mr. BLAIR:: Pretty well.


James Alexander Marshall: Pretty well, I hear. When the Minister of Finance announced a reduction of TJ- cents per gallon in the duty on gasoline-it was reduced from 2J cents to 1 cent-I noticed there was a wonderful burst of applause from Liberal ranks. It was evident the party had given its blessing to this particular reduction. To my surprise, however, picking up the Ottawa Citizen on Monday, this was what I read:
Canadian oil companies expressed concern at the government's move in reducing from 2J to 1 cent a gallon the duty on gasoline imported from United States. There was a suggestion the consumer might benefit by a slightly lower price for gasoline. Should conditions under the lower duty become impossible, President John Irwin of the MeColl-Frontenat Oil Company, Limited, said at Montreal, "naturally they will have to consider closing." "As far as Mc-Coll-Frontenac Oil Company is concerned, we believe in continuing as we are now and if we find we cannot operate by manufacturing crude oil into gasoline in Canada, we have already made our plans whereby we will close our Canadian refineries and convert our crude oil tanks at Montreal and Toronto into gasoline tank farms," he said. The Toronto unit would be the first to be closed, he said, but said the company would first do the best it could.
This is the paragraph to which I would draw special attention:
Addressing a Liberal meeting at Sarnia, the member of parliament for Lambton West said he was confident the government would correct the situation if the oil industry suffered from the duty change.
And then:
"I must admit I was disappointed in the reduction of the gasoline tax so closely concerning this city," he said-
, Mr. GRAY: I said that first.


James Alexander Marshall: "-and I am not prepared to say what the result will be until it has been given a chance to work out."
May I suggest to the house that the same consideration be given the farmers in the event of their finding that they are unable to stand the sales tax increase from 6 to 8 per cent. At page 2363 of Hansard the Minister of Finance made this statement with reference to gold mining:
Total output of gold amounted to 3,283,000 fine ounces with a total value at current market prices of nearly $115,000,000.
I want the house to keep that figure in mind-$115,000,000. On the evening of Friday, April 24, just a week prior to the introduction of the budget, at 10.30 p.m. eastern standard time the Minister of Mines wound up a series of addresses with the following sweeping statement:
Is it too much to expect that a production )f gold in Canada of from $200,000,000 to $250,000,000 a year would give the following results?
1.	Decisively and permanently settle the problem of unemployment.
2.	Bridge the gap between the east and the west with mining camps and communities established at numerous points.
3.	Bring a constructive and probably a permanent solution to our railroad problem.
4.	Create an even greater market than at present for foodstuffs, clothing, structural materials, mine machinery and equipment, electrical supplies, electric power, fuel,
The Budget-Mr. Marshall

explosives and innumerable other commodities including household furnishings and automobiles.	_
5.	Revitalize the whole national economic life of the dominion.
6.	Open up careers for coming generations of university graduates.
7.	Ease the financial problems of the dominion, provinces and municipalities.
8.	Alleviate the burden of our international indebtedness.
9.	Assure the stability of the Canadian dollar; and, finally,
10.	Stimulate the opening up and develop-merit of our resources in those north lands about which we know little to-day.
Then he concluded with the words;
We must not fail to grasp the opportunity that lies before us.
May I respectfully suggest to the Minister of Finance that sitting usually right at his elbow-he is not in his place to-day-is the man who holds the key to the solution of our problems.
On page 2384 of Hansard the minister said:
The two major obstacles to a balanced budget are the cost of unemployment relief including relief undertakings and the Canadian National Railways deficit.
I agree with him entirely in that statement. The solution which is proposed is a national commission. We are going to attempt to solve this problem by means of a commission. I say "attempt" because I do not 'believe that the unemployment situation is capable of being solved in its entirety. At the head of this commission is to be placed a man from Montreal named A. B. Purvis. I am very anxious that the people of my constituency, particularly the farmers, should get to know this amiable gentleman, and towards this end I sought out his record. Two sources of information are open to all who are seeking a man's record: one is the record kept by the Department of Justice, and the other is Who's Who in Canada. I found a very comprehensive record of this gentleman in Who's Who, so it was quite unnecessary for me to pursue my investigations further. I may say that my name does not appear in Who's Who.


An hon. MEMBER:: It will.


James Alexander Marshall: This is what I found
about Mr. Purvis. He is (T) president and managing director of Canadian Industries Limited; (2) president and director of Dunlop Tire & Rubber Goods Company of Canada, Limited; (3) president and director of Canadian Safety Fuse Company, Limited; (4) director of the Bank of Montreal; (5) director of Bell Telephone Company of Canada; (6) director of Canadian Investment Fund Limited; (7) director of Canadian Lastex Company, Limited; (8) director of Consolidated

Paper Corporation; (9) director of Liverpool & London & Globe Insurance Company, Limited; (10) director of Sun Life Assurance Company, Limited; and last, but perhaps not least, director of General Motors Corporation of New York.


Mr.  J. C. LANDER YOU@Calgary East: He will never be
unemployed.


James Alexander Marshall: Surely a very imposing record. No doubt a man with a record of that kind is fully capable of protecting the interests of the farmers of western Canada. I have found that if you have a really knotty problem to solve or a difficult task to perform you should always take it to a busy man. That, I imagine, was the reason this task was assigned to Mr. Purvis. If the Minister of Labour is burdened down with the multifarious duties of his office, what must we say of Mr. Purvis? However, there is no doubt he will resign from all these positions and give his full time and attention to the solution of the problem of unemployment.
I know, too, it will be welcome news to the farmers of western Canada that the excise tax on Canadian brandies has been reduced from $4 to S3 a gallop, and that there has been a rearrangement of excise and customs taxes on automobiles designed to lower the prices of small cars to tihe consumers. I know it will be especially welcome news to those in many parts of the west who have found it impossible to feed and clothe their families decently, not to mention, payment of taxes and the interest on their mortgages.
On page 2386 of Hansard I read:
In view of tile decline in interest rates, it is intended to reduce the rate of interest on unpaid instalments of income tax from 6 per cent to 5 per cent, and to lower the penalty rate of interest with respect to overdue tax from 4 per cent to 3 per cent.
It would be interesting to know how many private individuals and how many corporations have given the government promissory notes in settlement of their income tax, and to what extent that is going to help balance the budget this year.
On page 2385 of Hansard I find that the grand total revenue for the coming year has been estimated at $387,850,000. In one place it is given as $385,850,000, but what is a couple of millions between friends? Below that we find:
As the main estimates and the special supplementary estimates call for expenditures of over $509,000,000, to which will have to be added any further supplementary estimates, it is apparent that the deficit for the year would probably total over $125,000,000 without taking into account possible losses on wheat, unless provision is made for additional revenue by the way of new or increased taxes.

The Budget-Mr. Coldwell
After I had scanned that in Hansard I thought I would while away a few dull moments in this house-and you know there are some occasionally-by checking the estimates. Here is what I found. I am taking the estimates from the bluebook and also from the two white papers. General estimates total $384,427,548.64-we must not forget the cents; supplementary estimates, $51,167,229.11, and further supplementary estimates, $131,161,143.42. Making a total of $566,755,921.17. I was out of balance just a small item amounting to $57,000,000, but I suddenly remembered a statement made by the leader of the opposition (Mr. Bennett) on the evening of May 1. It is to be found at page 2445 of Hansard:
In these supplementary estimates we are dealing with about $30,000,000 that this house pased last year, item by item. There was no limitation as to time placed upon these items; in other words the appropriations thus made by parliament, item by item, were not appropriations that lapsed on the 31st day of March. 1936. We are now engaged in passing these same items in their entirety, although part of the expenditure has been made and apparently the auditor general has found them satisfactory. I cannot understand just why we should ask parliament to pass a second time items that have been considered and passed by parliament in detail.


Richard Bedford Bennett: Hear, hear.


James Alexander Marshall: This is not a question of a blank cheque; these are items that were considered and passed in detail; the numbers of the items of last year could be given and were given this evening.
And here is the significant sentence:
In these circumstances it would seem that these estimates have been padded by something like $30,000,000.
I deducted $30,000,000 and I am still out of balance to the tune of $27,000,000. The point I wish to make is this: What are the correct figures? Are we to understand that the figures as given-


Charles Avery Dunning: Will my hon. friend permit me to answer that question now? I should like to explain that the error he has made has been in adding in with the figures he is using certain supplementary estimates for the last fiscal year. He has added those to the estimates for the current year which are now before the house. That is really the explanation of his error.


Richard Bedford Bennett: The $30,000,000 is stated to have been already voted.


Charles Avery Dunning: I am not referring to that at all.


James Alexander Marshall: To me the budget is nothing more or less than a big guess. Municipalities and business corporations are compelled to keep their expenditures within their revenues. If they do not, and I am talking particularly of municipalities, they are not only severely criticized; they are taken to task by the provincial governments. I never could understand why there should be one set of rules for municipalities and a different set of rules for the provinces and the dominion, but apparently such is the case, for with the latter unbalanced budgets are the rule rather than the exception. In my humble judgment the dominion budget should have been balanced this year. It is safe to assume, I think, that any government that does not take drastic measures to balance its budget within the first year will find it increasingly difficult to do so as its term of office gradually draws to a close.
There is a fast growing conviction that the great Liberal party is not fulfilling the pledges it made to the Canadian people, through the Prime Minister, on the evening of October 14. I realize, of course, that such a vast and far-reaching proposal as the restoration to the government of control over credit and currency issue cannot be brought about in a day or a week or a month, but surely the people of this country have a right to expect some declaration from the government before the close of the present session of parliament. It will do much to reassure all Canadians that this far-reaching policy has not been entirely lost sight of.
In conclusion I should like to quote from an article by Colonel E. M. House which appeared in a recent issue of Liberty:
We are now faced by universal insolvency. The entire framework upon which modern society rests is tottering.
1 say, Mr. Speaker, that it rests entirely with the Prime Minister, with the Minister of Finance and their vast array of supporters, whether or not Canada is going to be drawn into this abyss.


Mr. M. J. COLDWELL (Rosetown-Biggar):: Mr. Speaker, first of all I should like to compliment the Minister of Finance (Mr. Dunning) upon the very clear and excellent exposition he gave to the house on Friday afternoon. I think those of us who were privileged to listen to him on that occasion realized that he had an unsurpassed grasp of the problems confronting the country. I should like to commend him also for some things I find in the budget. To those of us who come from western Canada and who represent rural constituencies the tariff reductions are indeed well received. I have particular reference to the reduction in the duty on gasoline, and to something which I think must have escaped the scrutiny of most hon. members, the comparatively large reduction in the duty on dis-

The Budget-Mr. Coldwell
tillate, which, as we all know, is of primary importance to the producers who use that form of fuel for the operation of their tractors in the agricultural sections of Canada.
I am also glad that the duty on agricultural implements has been reduced to 7J per cent, but after listening to the hon. member for Davenport (Mr. MacNicol) a short time ago I wonder why the duty has not been wiped out altogether. If agricultural implements are purchased in the town of Halloek, Minnesota, at higher prices than in the town of Emerson, Manitoba, there is no reason in the world why a protective tariff should be necessary for the Canadian implement industry. May I say to the hon. member for Davenport that those of us who come from western Canada are just as mindful of the interests of the men who work in the implement factories as are any other members of the house. But I should like to point out that an ever increasing percentage of the material and work entering into the production of agricultural and other implements is provided by means of machines, and the human element enters less and less into the production of implements and other commodities. I noted with a great deal of interest and some pleasure that one of these implement companies had set aside pensions for 206 of its work people who had reached the age of sixty-five. But may I point out that in all probability some of the funds for those pensions was provided by farmers who. because of the high prices of implements and for other reasons, lost their equities in their farms and now have no pension except the old age pension to guard them in the future.
The contention is made constantly that the implement companies are losing money, but I am hopeful that the inquiry into the agricultural implement industry which is now going on will demonstrate that at least a part of the losses are due to overcapitalization and overbuilding. Very recently, for example, the British government sent a commission to Canada to investigate the automobile industry in regard to the provisions under which imperial products may enter the British market. I happen to know that this commission refused to include in the overhead of at least one of our great corporations a plant in the city where I live which was not being used, and warehouse space in Walkerville, in this province of Ontario. Overbuilding and overcapitalization will account in no small measure for some of the difficulties of these companies.
We are pleased also to note the reductions, substantial in some respects and small in others, in relation to textiles. That is an industry which for a long time has had not only quite adequate protection but comparatively high protection. And, coming from the west where once in a while the people cross

the border, we are pleased with the provision that we are to have the same privilege that is enjoyed by United States tourists coming into Canada, under which tourists returning to Canada from other countries will be allowed to bring in $100 worth of goods free of duty.
I hope that some day not only the people who are privileged to have automobiles or who can buy steamship tickets, but people who cannot afford these things will be able to bring in one hundred dollars' worth of goods from time to time. But these provisions please me.
There is, however, one thing in the budget which I am exceedingly sorry to see, and that is the increase in the sales tax, which will fall very heavily upon the masses of the people who cannot afford to pay it. In Alberta for example the provincial government has also placed in effect a sales tax of two per cent, so that the people of Alberta will be charged a sales tax of ten per cent, which is exceedingly high. Already the effect of the sales tax can be seen in relation to automobiles; for it has been stated that the price of cars will be raised to the extent of the tax, which will restore the former price that was reduced by the trade treaty with the United States. I had hoped also, having regard to the criticism that was levelled against the sugar tax when it was instituted by the late government, that that tax would be wiped out. It is a tax upon the luxury of the poor. I well remember how a few days after the tax was first instituted I was driving in Saskatchewan with the reeve of a muneipality, who had a large family. He had bought a sack of sugar, paying the increased price of $2 per hundred pounds. He said: "I do not think the government of Canada realize just what that tax means to me." He pointed out that he had to take to the store forty dozen more eggs at five cents a dozen to pay the tax. It is indeed a tax which bears heavily upon the poor, a tax even on the candy used by our children.
Tariff reductions have received a great deal of discussion in this house, but again let me repeat what I and others of our group have said before, that tariff reductions, while useful, will not solve our problems of trade. Why not consider what other nations are actually doing at this time, namely, directing .trade to those who will trade with them? In that connection the policy should be to trade as nearly as possible to the same extent with those who trade with us. Of course that involves controlled exports and imports, something which perhaps the present government is not prepared even to consider, and for which public opinion and public support will have to be moulded as the days

The Budget-Mr. Coldwell
go by. Our sister dominion, New Zealand, is, I believe, taking control of the milling and wheat industry of that country from the first of May. Of course it is not comparable with the same industry in Canada, for in New Zealand wheat production is quite a secondary industry. But on August 1 of this year the government of New Zealand will also take control of all dairy produce, will export it and set its domestic price through a single governmental agency, guaranteeing to the farmer a fair return and selling the product abroad with the government's stamp upon it. That industry is comparable with our wheat industry because it is the primary industry of New Zealand. Switzerland demands direct trading relationships; Germany, Sweden and to a degree France, Italy and some other countries are demanding a quid pro quo in commerce with foreign nations. The world trading relationships are moving in that direction. Russia under a different plan and perhaps for a different purpose has been conducting her externa! trade along much the same lines for a considerable time.
Canada, we are told, faces grave problems. One hon. member has said that unemployment is our greatest problem; another says the railway problem is the most serious. But transcending both in my opinion is the problem of agriculture. In his speech the minister recognized its gravity. But I submit that other than the items to which I specifically referred there is little further hope in the budget for the agricultural producer. One thing that worries me at the moment, in connection with the reports we are getting from western Canada of weather and soil conditions there at the present time, is; What will happen if this year western Canada produces a bumper crop? What allotment of money have the government made to cope with the situation that may conceivably arise? What plans have the government for financing the situation which may come about this autumn? Drought, grasshoppers and rust have relieved us of the necessity of facing that problem in the last two or three years. This year, although the carry-over will be reduced, it will still be large. We congratulate ourselves that during the past year we were able to find a market in the United States for some of our farm produce. But speaking at Lincoln, Nebraska, last Monday evening in the state university, the Secretary of Agriculture, Mr. Wallace, said:
The main fact to bear in mind, however, is that these increased imports were due to an absolutely unprecedented situation. I suppose the same situation is not likely to occur in the same degree for another one hundred years, unless our climate is changing drastically.
There is simply no point in viewing the farm imports of 1935, which were caused by the drought of 1934, as reflecting a normal situation facing the American farmer.
Our recent trade treaty with the United States will not help us in relation to that problem. In the same speech Mr. Wallace went on to say;
One might go on to show the extremely small size of farm imports, even in the face of the terrible drought of 1934, as compared with our normal production. It is truly surprising that quite the worst drought since the Civil War should result in imports of corn representing only about two per cent of our average production; wheat a little over three per cent, beef, including canned beef, three per cent of average slaughter; pork one-tenth of one per cent of average production; and butter one per cent.
Even under drought conditions the American union imported relatively little, and once good conditions return they can probably satisfy their own market to the full. Not only that, but Secretary Wallace indicated that under such conditions he hoped they would be able once again to enter upon the export of agricultural goods. In the same speech he said:
As supplies of wheat and pork and other export products increase with normal weather, we should regain a part of our foreign trade in these products, too.
So that not only are we faced with a loss of the market we had to the south, but we are faced with competition in the world market from surplus products of farms in the United States. This year those United States farms may become a real factor in the world agricultural situation, and should Russia also go on the expor market the situation would be considerably aggravated. Of course, as was shown yesterday by the hon. member for Vancouver East (Mr. Maclnnis), fortunately for Canada farms, Russia has a rising standard of life, and as the standard rises consumption increases; consequently the danger of competition from Russia decreases proportionately. But we cannot lose sight of the fact that Russian agricultural sowings of grain in this year are higher than in preceding years, and with improved methods and a scientific background we do not know what the future has in store for us so far as competition with Russia is concerned.
And so I say: Will not the government realize that old-fashioned or "normal" trade, as it is called, is done? Our producers need blankets, boots, clothing, cutlery and a multitude of other things. One has but to travel and visit the homes of the producers to find that what I have said is abundantly evident, [n Great Britain and other European countires there are people who are unemployed
The Budget-Mr. Coldweli

and who could make these goods. They are underfed because they are unemployed. France, Germany, Great Britain aad other countries need wheat, beef, butter, pork, fruit and so on. "Oh," some one says, "if we attempted to exchange their commodities for ours we would close our factories." Well, gentlemen, the factories are closed now. It is true that we face a dilemma; I realize it. We face that dilemma because of the unplanned and unintelligent economic system to which we hare bound our faith. Sooner or later we shall have to make a choice, and to my mind the choice will be between the encouragement of native, natural industries in Canada and the continued encouragement of tariff-nurtured ventures which are monopolistic and powerful and have sheltered themselves behind tariff barriers of various kinds.
I heard the leader of the opposition use the word "parasitic" in one of his radio addresses, but perhaps in another connection. I use the same word when I say that these parasitic industries, if I may so describe them, are destroying the basic industries upon which they feed. We must face that fact. Much of the soil drifting and soil depletion in western Canada is due to that same kind of economic structure. Again may I quote from the same speech by Secretary Wallace:
Farmers know that the reasons for ruthless exploitation of soil have often been economic- that under pressure of extreme supply and price fluctuations they have been alternately forced by ruinously low returns and induced by boom conditions to mine and sell soil fertility, or to expand the farm plant by turning under millions of acres of grass lands which should have remained in sod. I believe that farmers understand the public and private importance of stabilizing production, stabilizing prices, and of maintaining the productivity of farm land for years to come.
If that is true of the United States it is equally true of Canada. What hope do we find in the budget of stabilizing agricultural conditions in this dominion? Unplanned production with unplanned markets are bringing Canada, in common with may other parts of the world, to the very brink of economic and social chaos; for reduced purchasing power on the farms and in industry reduces consumption. By rational control and by trade exchanges abroad we must increase purchasing power and consumption in Canada. Of course that is a tremendous undertaking, and I do not envy the task of a finance minister who has to cope with it, but I submit that it is not an impossible task.
What preparations are being made by the government, the Minister of Finance and the Bank of Canada to meet the possibility of financial chaos in the near future? When we pick up our daily papers we read disturb-

ing accounts of the financial activities of almost every country in the world-the United States, France, Germany, Italy, of course, and even Great Britain. What preparations are we making to meet the situation which will develop? Are we going to follow the United States in the inflation which at the moment looks almost inevitable? If so, to what extent and how will that affect our trade relationship with our best customer, Great Britain? Conceivably it may assist us for a time, if we follow the American dollar. On the other hand, unless we are prepared to meet the situation, the ultimate dislocation may have disastrous results. Of course this involves a discussion of banking and finance. I do not purpose discussing those matters this afternoon, except in so far as they relate to the budget proposals.
It seems to me the time has come when national ownership of our central bank, our currency and our credit, and their use for national ends, is tremendously important. Before parliament prorogues we should give these matters full consideration.
The minister aims at something more nearly approaching a balanced budget. In the course of observations I made on a previous occasion I said I was not particularly interested in balancing the budget, but that I was more interested in the balancing of human welfare. That is still my opinion. The minister admits that there may be hon. members who will criticize the budget as a move in the direction of further deflation. I should like to hear the hon. members for Vancouver-Burrard (Mr. McGeer) and Rosthern (Mr. Tucker)-the latter is in his seat-comment on that particular opinion expressed by the minister.
In that connection I should like to place on Hansard a quotation as it appears in a publication known as Index, No. 123, of March, 1936, published by the Swedish central bank, and which is an authoritative document on the Swedish financial system. Professor Bertil Ohlin, referring to the improvement in Sweden, has this to say:
This change of circumstances is all the more remarkable if _ we compare them with conditions in a typical gold parity country such as France. As part of their deflationary policy the governments there, in order to wipe out the deficit on the budget, have effected one reduction in expenditure after another, yet they have found, much to their chagrin, that the revenue has declined as speedily as the expenditure and that there is still a huge deficit. This actually applies also to the budget for 1936. Formally it is balanced, it is true, but the equilibrium has been achieved by the transfer of heavy non-profitable expenditure, e.g. considerable defence items, to a special budget. It cannot be said therefore that the budget is effectively balanced.
This course of development leads us to a very important conclusion regarding financial

The Budget-Mr. Coldwell
policy in periods of severe and prolonged depression. The fa!ling-off in government revenues caused thereby and the increase in expenditure that is generally called for, e.g. for combatting unemployment, are so heavy that neither economies nor higher tax rates effected on a scale that is practically feasible can fully compensate for them. In other words, it is not possible to balance a budget so long as a policy of deflation is pursued.
Recent events in a number of countries show, on the other hand, that as soon as the deflation ceases and economic conditions improve the equilibrium in the state finances is restored. Government revenues rise and expenditure on unemployment goes down. It is really something of a paradox that in a country such as Sweden, where no attempt was made during the crisis to arrive at a balance, the budget is nevertheless now balanced, whereas a lack of equilibrium in the state finances has pre-sisted in France, where the governments have made the balancing of the budget the primary object of policy.
It seems to me that that is an opinion worthy of study. In some degree it is the same contention which we in this little group have made so often. The balancing of a budget curtails consumption and to that degree makes economic improvement more difficult. Whilst I mention what Sweden had done in this regard, I am not forgetful of what it has done in the utilization of some of the great monopolies to assist in the financing of social services. Sweden is considering the utilization of further monopolies for this purpose. I commend this suggestion to the government and the minister, not for inclusion in this budget, as that is manifestly impossible now, but for consideration as a means of improving our economic position sometime during the next two or three years, when I fancy the minister will be faced with a financial situation even graver than that facing him to-day.
The amendment moved by the hon. member for Vancouver East (Mr. Maolnnis), in which I concur, advocates a levy on accumulated wealth to reduce the burden of our national debt. I believe this must come. Increased taxation of incomes in the higher brackets will undoubtedly have to come. In this regard may I say I have been told on quite good authority that there are men with comparatively large fortunes made in this country who have transferred their domiciles from one province to another in order to escape death duties or to obtain a reduction in such levies. I heard of one gentleman who has removed himself to the Bahama islands, I believe it is, and obtained domicile in order to escape taxation upon his fortune by the country in which he made it. That is not patriotism, and it is an action which should be prevented by the parliament of Canada. Such things should be treated as criminal offences.


Charles Avery Dunning: How?


Major James William Coldwell: The Minister of Finance says "how." All that a man can remove from a country are the figures and documents pertaining to his wealth; the real wealth remains. If the documents removed are bonds of the Dominion of Canada, then the indebtedness to the dominion can be dealt with.


Charles Avery Dunning: We have no trouble with that now.


Major James William Coldwell: If he has shares in Canadian industries-


Charles Avery Dunning: We have no trouble there either.


Major James William Coldwell: Then I hope the Minister of Finance will do a little better than his predecessors in collecting income and other taxes from those who receive substantial incomes. When we compare our tax rate with the rate in Great Britain-


Charles Avery Dunning: Perhaps my hon. friend will permit me. The dilemma is not precisely as he puts it. It is possible for a resident of Canada to own forms of wealth which do not relate to Canada. That has been so in many of the cases I have investigated. Naturally the first move of the man who contemplates escape from taxation is to transfer his wealth into some form which will more easily enable him to avoid that taxation. Once he has obtained domicile elsewhere, it is rather difficult to act. That is why I asked my hon. friend how he would deal with it. I am always looking for suggestions.


Major James William Coldwell: I thank the minister
for that information. We publish the names of criminals, whose activities have been subversive of the best interests of the country, and we should publish also the names of those who seek to escape their just share of the burdens of this country. We should let the people of Canada know precisely just who they are. I think that would be a salutary method of dealing with them; it might not be wholly effective, but I make the suggestion to the minister.


Charles Avery Dunning: I think in one case that has been fairly well done.


Major James William Coldwell: Not only have we to
consider the public debt of Canada, but we have to consider the tremendous private debt. Of course the budget does not deal with this particular form of debt except in some minor details. At this point I should like to say that I am rather disturbed at the tremendous burden of debt upon people who have produced, who have worked in an endeavour to obtain a competence in the country in which
The Budget-Mr. ColdweU.

they live, and who now find that under present economic conditions the things for which they worked are passing from them. I was sorry to learn from some farmers in my constituency that they had been informed that the payments made in relation to the 1930 certificates were no longer under their control. In many instances they had hypothecated them because of financial obligations and to-day they find themselves in no better position on account of these payments, except for the reduction of their debt, than they were in before. When the matter was before the house I was under the impression that the payments would be made only to the person who owned the certificate and who had delivered the wheat to the country elevator.
I see that my time has just about expired, and in closing I would say this. This house and the country as well will be faced with a tremendous problem in the next two or three years. Every constructive thought should be brought to bear upon the problem that confronts us, and we should not frown upon ideas because they are new, no matter from what quarter they may come. If we study the solutions that have been arrived at elsewhere and examine suggestions that are put forward here and in other places from time to time, I am quite convinced that we shall pass through the difficulties that we face to-day to a better and a fairer social order.


Mr. PIERRE GAUTHIER (Portneuf):: Mr. Speaker, may I be permitted to speak in French, with which I am more familiar and which is my mother tongue. I am well aware of the courtesy of hon. members and I am sure that the house will extend to me the same hospitality that is shown by the old French legislature in Quebec when once m a while a member speaks in English. I am proud of the spirit of fraternity displayed by the different races composing this assembly.
Before continuing my remarks in French I wish to say this to the Minister of Marine (Mr. Howe). A speaker of the unionist party in Quebec, who happens to be the local member for Portneuf, said the other day on the radio that the political spirit and fanaticism had induced federal Liberal members representing the different counties in Quebec to leave the portfolio of Marine in the hands of an Ontario member. I simply say that this local unionist member was talking through his hat, and though a pilot and a director of the Montreal Pilots' Association, he was certainly not speaking on behalf of that body. The permanent members of the Montreal pilots' organization had an opportunity to confer with the Minister of Marine and they were absolutely satisfied with the interview and the interest which the hon. gentleman showed in

receiving them. This organization has always fought for its rights and has never acted in that way before towards the marine and pilotage authorities. It is true the minister is from Ontario, but we see beyond the limits of our own province and we believe that Ontario is a part of Canada just as much as is Quebec. The pilots know that the minister is a Canadian through and through and is doing splendid work, and this isolated attack will not stop him from devoting himself to maritime interests on the St. Lawrence and elsewhere in Canada.
(Translation): Mr. Speaker, may I be permitted to continue in French the few observations I have to offer.
In spite of the eight years I have spent in the Quebec legislature, it is not without emotion that I rise to address a gathering composed of so many of Canada's most eminent public men. I would not wish any utterance of mine to hurt anyone's feelings. A soldier of the valiant Liberal army, I cherish but one wish: to bring to the discussions of the house the expression of my ideas, believing them to be worthy of utterance before the representatives of the nation, and I have but one thought, a thought which, I believe, should fill the mind of every good patriot

that of contributing, in the measure of my capacity, to the welfare and advancement of our glorious country, the finest in the world.
I do not wish to continue, Mr. Speaker, before tendering to you my most sincere congratulations on your elevation to the speakership of the house. The glorious exception whose voice was raised in objection to 3'our nomination as First Commoner of the land only served to confirm the general sentiment. Your personal qualities and your deep knowledge of parliamentary procedure give you an indisputable right to your high office. Your manner of conducting the proceedings of the house has established your worthiness to occupy it.
May I be allowed to congratulate the Minister of Finance (Mr. Dunning) on his clear and frank statement of the financial and economic situation of the country. The Minister of Finance has confidence in the future of Canada and of the Canadian people. He said the other day-and all Canadians should ponder his words-that we must have confidence and that we must preach that confidence without which the nation cannot advance and which is the antithesis of all ideas based on the interests of groups, of cities or of provinces.
To seek to enlist popular support for a theory by holding before the people prospects of ease to be obtained at the cost of

The Budget-Mr. Gauthier
a minimum of effort; to group forces sometimes produced by entirely different energies, in order to ensure the momentary success of a party; to preach a theory the application of which would load on the shoulders of the state all the charges of the country; to make the government the controller of all the activities of the people; to create a sort of national bureaucracy by restraining the hand of the individual; to establish in the nation a system of extreme paternalism; to try to divide a country by calling up questions of rights disregarded and of differences of interests; in short, to create a small state within the larger one, those are some of the ideas-I have certainly not enumerated them all-that are current in the world and in this country to-day, and whose progress we should not fail to watch.
I said a moment ago that I was a soldier of the Liberal army; I may add that I am proud of it and that I have no hesitation in following the lead of my chiefs. Let us open the pages of our political history; let us read the ones that the great Sir Wilfrid Laurier wrote from 1896 to 1911; let us recall the economic situation as it was under his successor the right honourable the present prime minister (Mr. Mackenzie King), and let us compare that period with the years of Conservative rule. On the one hand, we find Canada enjoying a flourishing trade and profitable international relations, the efforts of Liberal governments being always directed to the same end: lowering of taxation and reduction of the debt by the exercise of rigid economy. Under Conservative governments, on the other hand, we find our debt ever increasing, our trade strangled by excessive tariffs and the people increasingly burdened by the weight of taxation. A good Canadian summarized the situation very clearly in saying:	"Conservative governments pile up debts and Liberal governments pay them off."
I do not wish to be too hard on those who have nearly all disappeared1-the Canadian people having made sure that they obtained a well-deserved rest.-but I cannot help remembering the election of 1930, with its butter in the province of Quebec, the numerous conferences that were to raise Canada from its ashes, the manner in which the present Minister of Justice (Mr. Lapointe) was attacked for advocating the repeal of Section 98, and the famous posters, as grotesque as they were insulting. I will refrain from mentioning Mr. Sage's course of economics and apologetics.
In 1930 the people decided to try an experiment. In 1935 they thought better of it. And that government, that cost the people
the large sum of 800 millions of dollars, is still deploring the fragility of things human and wondering at the good sense of the voters.
We, also, hear the cries of the mothers, but we heed them. Instead of treating the symptoms, as inexpert physicians do, the government attacks the disease at its root. Our trade, freed from its bonds, is back into its normal course, and the Canadian people find opening up before them, in consequence of the reciprocity (agreement, a market of 100 millions consumers. The late government had understood at last, but too late. The tories tried, in 1935, to make an issue of their efforts to negotiate the famous treaty that they had killed with the aid of the nationalists of 1911. Their repentance was tardy, but their contrition did not seem to be perfect-them came their penance.
The Liberal party must now reconstruct. As all sound builders, they must start at the foundation. The edifice cannot possibly rise in a night. Being a skilled architect, the Prime Minister of this country has surrounded himself with able men. They are only too ready to place their knowledge at his disposal and, judging from the numerous testimonials which are unceasingly pouring in since the Minister of Finance presented his splendid budget, the Canadian people have regained confidence and hope to live again years of prosperity and peace.
I stated just now that the economic structure of this country cannot be built up in a night; there will be delays and setbacks. Among these will be found unemployment. Many are astonished to hear it still spoken of; it was to have been solved so rapidly! Unfortunately the problem is still with us. I recognize with many others that strenuous efforts were made to alleviate unemployment. Public works, colonization, etc., are so many remedies used to relieve it. Public works are a palliative, a treatment of symptoms; no sooner are they completed than the unemployed reappear as numerous as ever, waiting for further works to start. But governments must find revenues to meet all these expenditures.
The freedom and development of trade, tested remedies resorted to by a Liberal administration, will soon relieve this constraint, anxiety and fear experienced by the victims of an unrelenting congestion. Like individuals, society must breathe, financial organizations must consolidate and expand, trade must be encouraged and mutual trust must revive between nations as well as between individuals. For twenty years, high tariff barriers have prepared the crisis from which we have so long suffered. Let us hope that the same blunder will never reoccur and that the
The Budget-Mr. Gauthier

general interests of countries will displace selfish personal interests, be they those of the financiers, "corporatists" theorists, politicians or individuals.
The Canadian nation owes its birth and development to the loyalty and self-sacrifice of its citizens. It cannot continue if self interest is to prevail. Inhabiting the same country, belonging to different races and creeds, having interests often diametrically opposed to each other, we must even bring a strictly national viewpoint to the solution of the problems with which we are faced. Away with interprovincial boundaries and with racial distrust! Loyal subjects of one king, governed by federal or provincial laws of one country, all Canadians, be they French, English, Scotch, Irish, living in the west or in the maritime provinces, should feel that they are brothers of those belonging to the same races living in 'the central provinces. To each one his rights, his creed, his language and his aspirations! The confederation of the Canadian provinces has survived to this day and it behooves us all to strengthen it, if possible, and cause other countries to envy the harmony that reigns here. May I recall the old but always true saying, dear to my colleague from Quebec South-west (Mr. Parent) "United we stand, divided we fall."
I referred, sir, to the means of relieving unemployment; I mentioned colonization. I reside in a province which has understood the necessity of directing its activities towards that goal; an extensive program of settlement has been carefully prepared by the Quebec government and is now being carried out. Thousands of settlers coming from the cities, many of whom are farmers' sons and urban workers, have been settled on lands chosen by agents or colonization missionaries. New centres appear here and there: Afeitibi, Temiskaming, Gaspe, Temiscouata and others which will open up new avenues to trade and industry, to the worker and even to the professional man, thereby relieving the overflow of our cities by directing it elsewhere. Is this not, sir, a true remedy, is this not attacking the root of the evil, that is the disproportion existing between urban and rural populations? I believe so, and the highest church and civil authorities have realized it long before I did. The movement Should spread to the whole country, in spite of adverse criticism and of opposition from whatever source.
Our fertile lands are great in extent and only require to be stirred to produce. Many of our natural resources still lie idle and only await the appearance of the hardy toiler. Why not have recourse to the strong arms of Canadian citizens?

Canadians are still willing to work and if we direct them well, if we place at their service the means at our disposal, if we furnish their initiative with the opportunity to manifest and develop itself, there will be no need, in order to revive their confidence, to preach so many doctrines, sometimes brilliant but too often deceptive, because of their false conception of the relation between the state, whose duty it is to govern wisely, and the citizen.
The state helps its citizens to live; it cannot undertake to provide a living for everybody. The state, by its laws, encourages and facilitates work. It is not a fountain of plenty in which all may dip without accomplishing any work. The state works; the people must do likewise. I place too much faith in the Canadian people to doubt of their abounding resourcefulness. The Liberal government recognizes this and its entire program breathes work and reconstruction.
Statistics show that nearly 2,000,000 persons still depend on direct relief. Although industrial employment is on the increase-I think it is the young and brilliant Minister of Labour (Mr. Rogers) who made that statement the other day-the number of those who depend on direct assistance is not decreasing. The constant increase of the population with its new contingent of industrial workers, the inventions and use of new machines and new processes explain the present situation. May I, sir, mention another explanation. I wish to speak of the important and delicate subject of immigration, and with that I will close my remarks.
I well recall that in 1930 Conservative speakers decried the Liberal party for having permitted immigration. The Conservative government were going to prohibit it entirely. This promise, like the one in connection with butter, was earned away on the winds as easily as are the autumn leaves. The Conservative government did make an effort and, by order in council No. 695 of March 21, 1931, restricted the flow of immigration. On September 6, 1931, another order in council, No. 2115, was passed in connection with Asiatic immigration. And here is the result. To a question I asked in the house, I received a reply that from March, 1930, to March, 1934, 147,660 immigrants entered Canada. Of this number 73,846 came from the British Isles. From April 1, 1934, to January 31, 1936, 21,996 immigrants entered Canada, which must also be added to the figure given in the first reply, making a total of 169,656 immigrants. And immigration had ceased!
I am not called upon to establish a parallel with immigration previous to 1930 or 1911;

The Royal Assent
it was much greater. But at that time we had not, out of a population of 10,000,000 people, 2,000,000 persons depending on direct relief. When the government is making every effort to find and provide work, why should they add a new problem to the existing one?
A few moments ago I asked that new centres be opened to settlement and that the unemployed be put to work at the development of our natural resources. But if immigration does not cease, there will be no end to unemployment. In spite of all that may be said, I cannot believe that it is only capitalists who are entering the country.
No, sir, to my mind our immigration laws should be revised once more and we should tell those who feel an irrestible urge to come to Canada, to wait until we have solved the unemployment problem and have so amended our laws as to greatly restrict the choice of immigrants.
I quite admit that there is room in this country for many more millions of people. I am in favour of admitting people from the British Isles and British born or French citizens! But it is rumoured, as may be seen by articles in a number of Canadian newspapers, that people from other countries cross over to England, become naturalized, and then enter Canada. I do not wish to ostracize any race. All are entitled to a place on this earth. But each nation is also entitled to choose its new citizens. Let those who are obliged to resort to subterfuges to enter Canada remain in their own country. We wish to ascertain where we are at and know something about those who wish to settle here. That is all I have to say for the present on this question. I trust that the government will accept my remarks on immigration in the same spirit as those I uttered a few moments ago.
Still speaking from a national viewpoint, having but one object in mind, the welfare, harmony, prosperity and progress of Canada, I remain true and loyal to my compatriots, to the Liberal principles which are dear to me, and to the Canadian fatherland for which I cherish a great love. It is my intention to keep posted, by every possible means at my disposal, on the human capital that comes to us.
Mr. Speaker I wish to pay homage to my constituents of the beautiful county of Portneuf. I have their interests at heart and I count on their loyal cooperation and frankly Canadian support to carry out my work on their behalf.
May I, sir, direct the attention of the government to a rather important problem interesting the county of Portneuf: that of the production and sale of charcoal. I have already discussed this question in the Quebec
Legislative Assembly and I now ask the federal government to help us find markets for this product of Portneuf county, especially to help us in meeting a ruinous, I may even say an unfair competition. I rely on the full support of the right hon. Prime Minister and of the Minister of Trade and Commerce (Mr. Euler), to find, in the near future, a satisfactory solution to this question, in order that our producers of charcoal may carry on with the confidence that is essential to the success of their industry. Mr. Speaker, in closing my remarks may I be permitted to express the wish-and in this I feel I have the support of my hon. friends in the far corners of the House-that some day, in order that we might better enjoy the splendid speeches delivered in the house, the government will at the suggestion of His Honour the Speaker, instal microphones with loud speakers in the four comers of the Chamber, thus enabling us, the back-benchers, to hear as well as those more centrally seated.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by Major A. R. Thompson, Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, His Honour, the deputy of His Excellency the Governor General, desires the immediate attendance of this honourable house in the chamber of the honourable the senate.
Accordingly, the house went up to the Senate,
And having returned,
Mr. SPEAKER informed the house that the deputy of His Excellency the Governor General had been pleased to give in His Majesty's name the royal assent to the following bills:
An Act for the relief of Sonya Shenkman, otherwise known as Sadie Shenkman.
An Act for the relief of Louisa Markland Molson Blaildock.
An Act for the relief of Rita Constance Beatrice Gurd Rykert.
An Act for the relief of Helen Elizabeth Ham Lilley.
An Act for the relief of Mary Kaydouh Massabky.
An Act for the relief of Dora Louise Gustiana York.
An Act for the relief of Violet Charlotte Dyke Duiven.
An Act for the relief of Irene Louise Penny
McKee.
An Act for the relief of Esther Shapiro.
An Act for the relief of Thomas John Howard Fox.
An Act for the relief of Ruth Fitzrandolph McMaster.
An Act for the relief of Agnes Mercer Daniels.	.
An Act for the relief of Gerald Thompson Miltimore.
An Act to assist in the relief of Unemployment, the promoting of Agricultural Settle-
The Budget-Mr. Stevens
[Stage Direction]
ment and Rehabilitation, and in the Development, Conservation and Improvement of certain natural and other resources.
An Act to authorize an agreement between His Majesty the King and the Corporation of the City of Ottawa.
An Act for granting to His Majesty certain sums of money for the public service of the financial year ending the 31st March, 1937.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


[Stage Direction]
The house resumed consideration of the motion of Hon. Charles A. Dunning (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 Mr. Maclnnis.
Hon. H. H. STEVENS (Kootenay Bast):: Mr. Speaker, I am happy to note that the Minister of Finance (Mr. Dunning) is in his seat, as I desire to extend to him my sincere and hearty congratulations upon the manner in which he presented the budget. The clarity of his language, the thoroughness of the examination of the public accounts and the general manner of presentation were admirable, and I have no hesitation whatever in extending to the minister my earnest congratulations.
Under our democratic system it has long been one of the cherished rights of the people to present their claims to parliament through their chosen representatives, and for an equally long time the occasion of the presentation of the budget by the Minister of Finance has been considered the most opportune moment for a statement of those claims by the people's representatives. Parliament is supposed, in theory at least, to give earnest consideration to those needs or grievances or claims as the case may be.
The budget itself discloses the maximum that the government is prepared to do to relieve the distress or to meet the needs and claims of the people. I shall discuss the present budget from that standpoint. It is my intention to leave the discussion of all detail until the committee stage when there will be opportunity bo discuss and examine the various phases of the budget and the statement made by the minister, so I trust it will not be thought that because I do not in the limited time at my disposal to-night enter into a discussion of any of these matters, this is on account of any lack of appreciation of their importance.
[Mr Speaker.]
The Minister of Finance said, as reported on page 2384 of Hansard:
I am confident that common sense and sound economic policies can solve our immediate problems.
These words suggest to me two questions: first what are our immediate problems, or what were the immediate problems that the minister had in mind as disclosed in his remarks; and second, what does he mean by "sound economics"? As to the problems the minister had in mind, I do not think it is difficult to recognize them. They are: First, the promotion of foreign trade; second, how to balance the budget, and third, the protection of Canada's credit. I do not think he would disagree with me when I say that these seem to me to rank first in importance in his mind. A vital question is: How does the minister apply his principle of 'sound economics' to the solution of these problems? Let us take first the promotion of foreign trade. I will again quote the minister, because it is highly important that we get a clear understanding of his attitude towards the general situation. On page 2366 of Hansard he is reported as saying:
It is not putting it too strongly to say that foreign trade is the very life-blood of Canada.
These are very strong words. Perhaps I should quote a little further from the same part of his speech. He said:
Every step which helps to provide markets for our agriculture brings nearer that day when the Canadian farmer, receiving more for his products than it costs to produce them, will once more provide, through the stimulus of his purchasing power, a sound basis for national prosperity.
I do not take exception to either of these sentences; that is, I do not take particular objection to their form. I object, however, to the assertion, which they seem to me to make, that the whole solution of Canada's problems, agricultural and others, is to be found in the extension of foreign trade. It will not be possible for me to examine that aspect of the question in detail, and I do not intend to go into figures, but I will make one or two observations about it. I prefer the term "external trade" rather than "foreign trade," because the largest proportion of our outside trade is done with the British empire and I do not think we should speak of that as foreign trade. The government seem to rest all their hopes for recovery on the increase of our external trade. I submit to the minister and to the government that they are blindly ignoring imminent domestic problems the solution of which must come from within Canada. I do not care to what extent our foreign trade is increased, there are most

The Budget-Mr. Stevens
imminent problems, to which I shall make reference later, that must find their solution within Canada. But this is the government's only answer to the appeals of those who are suffering. For instance, the Minister of Labour (Mr. Rogers) has on more than one occasion intimated that the measures which he has introduced for the relief of unemployment are temporary, bridging the gap as it were, until, as he said, our foreign trade restores us to a condition of prosperity. In my own riding of Kootenay East, in and around Fernie, Michel, and Coal Creek, we have a body of miners. Let me tell the minister and the house of the conditions under which these miners have been living for the past six years. A great many of them have not been working at all. Those who have been working, particularly at Coal Creek and Fernie, several hundreds of them, have for six years been getting two or three days' work a week, and no relief, because when they are working two or three days a week they are not allowed to go on relief. These are splendid men, fearless in the hour of danger; they are exactly the type of men who performed heroic service in Nova Scotia the other day. They are good fathers and husbands; most of them have families, and all they are asking is that they be permitted to work. Oh, the minister replies, we have recently arrived at a modus vivendi with Haiti for foreign trade. He says: We have under discussion some arrangements in regard to extending our treaty with France. He says also: We reduced the duty on rabbit skins from Belgium. Are these and other efforts towards the extension of foreign trade an answer to those miners? Is it a common sense answer?


Charles Avery Dunning: If I may be permitted to interrupt, my hon. friend is unfair in making that observation. Taking the duty off rabbit skins from Belgium must in its relation to foreign trade be considered in connection with what Belgium took off Canadian imports.


Richard Bedford Bennett: Which was a violation of the most favoured nation treaty.


Henry Herbert Stevens: I quite appreciate that, but the minister must have a little sense of humour-well, I should not say humour-to understand the ghastly nature of such an answer, when those miners ask for an opportunity of providing food and clothing for their children, to tell them: Our answer is in the extension of our external trade. What I am seeking to impress upon the minister's mind is this, that in the presentation of this budget and in these matters to which I am now referring there is no answer to the miners of Fernie and, of course, to others in similar circumstances. But I say this: I doubt whether 12739-166
there is in Canada any place where men, women and children have suffered more than have the miners and their families at Fernie.


Charles Avery Dunning: Due to the absence of foreign trade in their province.


Henry Herbert Stevens: The minister told us that last year foreign trade increased $151,000,000 over the figure for 1934. That, I think, is very creditable. But in that same year the numbers on relief did not decrease. There was no decrease, but there was a distinct advance in foreign trade. Supposing this year there is an advance of $150,000,000 or $200,000,000; if it has the same effect as it had last year it will not help these people on relief at all. That is the point I am trying to make.
But the minister says, no doubt: See how it helps the farmer. In fact, in my quotation a minute ago from the hon. gentleman's speech he indicated that an extension of foreign trade was the very foundation or basis of national recovery. Well, let us look at that statement briefly. No doubt an extension of foreign trade will help to some extent, but let us bear in mind that about ninety per cent or more of the products of the farm are marketed and consumed in Canada. I have before me a list which I shall not trouble to put on Hansard at present, but with the exception of cheese, wheat and apples, practically every other article produced on the farm is consumed and marketed in Canada to an extent of about ninety-five per cent. So, an extension of foreign trade is not going to help them so much, because world prices are invariably lower than domestic prices, and if there is one thing the farmer needs more than another it is an increase in prices. As the minister himself asserted in his thesis every step which helps to provide markets for agriculture brings nearer that day when the Canadian farmer through the stimulus of his purchasing power will introduce a sound basis for recovery. I have already indicated that the great bulk of these goods are marketed in Canada. External prices are invariably lower than domestic prices. How then can we hope, by an extension of external trade, to make such a recovery in the condition of the farmer, or, as the minister says, to lay a foundation for the recovery of conditions throughout the whole country.
For a moment let us turn to the question of balancing the budget, and here again I quote the minister:
What we can and must do is to make an immediate appreciable approach to a balanced budget.
And then follows what is to me a very strange statement:

The Budget-Mr. Stevens

I feel it necessary to budget for a deficit this fiscal year of something less than $100,000,000.
He is budgeting definitely for a deficit. That is a policy of defeat, and it is disclosing a stubborn adherence to orthodox methods. I submit to the minister that times are not normal, and that this is not a time when we should consider the question of balancing the budget along orthodox and normal lines, because so far they have failed to permit of balancing it. However, let me deal with that later on.
Let me now turn to the third point, namely the protection of Canada's credit. Here again we have the minister dealing in superlatives:
If we continue this process of handing out unds without security-*
And I submit that was not a very fair statement of the case.
*-and without control of any sort, we shall be in danger of undermining dominion credit, which, in my opinion, must be protected at all costs.
I quite agree with the Minister of Finance that we must protect dominion credit. But when one takes that observation in conjunction with these other observations of what I call orthodox financial opinion of to-day it has a sinister meaning. We must protect the credit of Canada at all costs. If we are talking as patriotic Canadians-why, yes; everybody agrees. But if it means that we must protect the credit of Canada so as to ensure security to those who hold federal, provincial, municipal and corporate securities at high rates of interest, and maintain the sanctity, as they call it, of these contracts at their present level, then I do not agree with it.
One of the main criticisms by the orthodox group in 'this respect is the railway problem, or burden. Let me say a few things about it. I shall not sp.eak fully to-night, because I hope to have an opportunity to speak more fully in the course of the discussion of the bill now before tihe house concerning the railways. I do, however, wish to say a few words on this occasion. I submit "that unification means turning over the Canadian National Railways to a great transportation trust. In my opinion that is the plan which is behind all this agitation. So far as Canada is concerned, it is fascism in economics; that is what it is, and it will end in bondage of a more aggravated type than we have ever dreamed possible in Canada. I warn the house of the trend of affairs in that respect. I think the critics of the Canadian National Railways are grossly overstating .the case. The people are being terrified into a surrender of this
	. ...
valuable asset at less than cost; that is my firm conviction. If you tell a man daily he is ill, he will become ill. Years ago when I was a mischievous young fellow a few of us undertook to test this out. We met a certain man. and one after another told him that he was looking badly. In less than a week to my consternation he was in the hospital.
The point is that constant reiteration of a certain statement will fix in the public mind until it cannot be removed, a conviction which may not be true. In this instance I do not think it is true. We hear the statement that the Canadian National Railways problem is such that it is impossible for Canada to survive. I do not agree with that. Let us look at the matter for a minute. Out of the interest charges indicated in the budget about $SO,000,000 are directly due to the war; pensions and civil reestablishment account for $54,000,000 more. These two items add up to $134,000,000 of our present day budget. That sum has been accounted for during the last eighteen years; there has been no diminution and no asset is represented. When we talk about the country surviving and about the enormity of the problem presented by the Canadian National Railways, let us at least have some appreciation of other sections of the financial burden of Canada.
By the way, during the nine years hon. members opposite were in office, and while the succeeding government held office there has been no diminution of any amount in the debt. There was a slight drop for a few years, but it again increased. The point is that $134,000,000 of the minister's problem of $162,000,000 is due to the war, and, of course, we cannot avoid that; it is there and we have to face it. But why point to the Canadian National Railways, which in the last few years has had deficits of alarming dimensions, and say: This is what is going to ruin this country; this is what is going to destroy us? Well, Mr. Speaker, we have not been destroyed after eighteen years of paying $134,000,000 a year in interest and pensions on account of the war, for which expenditure we got nothing. That money all went up in smoke. But in the Canadian National Railways we have, as I said the other night, a magnificent plant. Do not let the people of this country be deluded into thinking they have nothing for the money which was put into the Canadian National Railways.
What is the suggestion of 'the government with regard to the railway problem? It is to substitute a board of directors for a board of trustees. That appeals to me as a sort of playing with tweedledum and bweedledee. It

The Budget-Mr. Stevens
does not make any very great difference which system of management you have except in this one case-and here I am going to say something very plain to the government- have they any serious grounds for this change? Is this action the fore-runner of a deliberate plan conceived by forces inside and outside this house to secure this great national asset at a mere fraction of its real value? Obviously the present proposals to deal with the problem of the Canadian National Railways are meaningless unless they are part of a deliberate plan hitherto undisclosed. And I think before the session closes there should be a full and complete disclosure to parliament of all the factors that lie behind this bill for the restoration of a directorate instead of a board of trustees for the Canadian National Railways.
I am told by those who know more about this question than I do that under the present statute under which the board of trustees was appointed it would be virtually impossible to bring about a scheme of amalgamation. But in the meantime the public mind is being poisoned. Apprehension, alarm, distortion of facts, despair of a solution, are being instilled. into the public mind, which already is harassed to the point of confusion and hopelessness by other troubles and discomforts. As I said a moment ago about the man who is driven sick by continually telling him that he is sick, by constantly instilling into the public mind the idea that our railway problem is hopeless, that we are faced with disaster; by arousing apprehension and alarm, you are going to create a condition of public mind which, I believe, some people hope will lead to the surrender of this asset at something less than its value. Let me ask this question: What, after all, are our real problems? I do not agree with the emphasis that tthe minister placed upon the problem. I would say that these are our two main problems: unemployment and debt.


Charles Avery Dunning: That is precisely what I myself said.


Henry Herbert Stevens: No. The minister's only
reference to unemployment was a wave of the hand and a reference to the legislation before the house.


Charles Avery Dunning: Oh.no.


Henry Herbert Stevens: Now I am going to ask this question: Can anything be done that has not been included in the budget? I think that is a fair question. Personally I think much can be done. The minister fears inflation, and the other day he certainly disclosed in a graphic way that he fears inflation. Of course, whenever the term "inflation" is used the suggestion
12739-X66i
is made that inflation of currency is meant such as Germany indulged in after the war. Usually that illustration is trotted out and it is said there is a long step between the inflation of the present government and what Germany did. I fear inflation of the kind that occurred in Germany just as much as the minister does, but what I fear more than inflation is deflation.


Charles Avery Dunning: I fear them about equally.


Henry Herbert Stevens: I fear deflation more. That is just about the difference between us. After all, there are two degrees of inflation. There is inflation of currency, money, and there is inflation of credit. I am not going to discuss this question at length, but I will say briefly that between 19)25 and 1930 the bankers of the United States, and to a much lesser degree the bankers of Canada, indulged in an orgy of inflation of credit which, it is stated, resulted in a loss to the American people of something like one hundred billions of dollars. I think that is correct. But when you talk of Germany's inflation, there is no doubt that the inflation of credit which took place between 1925 and 1930 in the United States was equal in its effects almost to the inflation that took place in Germany. I see my time is passing and I must hasten on.
What has Britain done? I believe that wc can do much more than is proposed in the budget. Britain devalued the pound. It may be said that we followed, but we did not follow until after the United States, and the United States was about a year and a half after Britain. How well I remember, in the fall of 1931 and the spring of 1932, those who stood for sound money and all that sort of thing pointing to Britain as being the cause of a catastrophe to this country threatening the very life of the nation. I never agreed with them. It was not true, and we do not hear much about it to-day. Oh, no, it is a different story now. True, we have devalued the dollar, but we simply toddled along after Great Britain had given the lead, and after the Linked States had followed Britain's lead.
Britain has also adopted on a grand scale a housing scheme which has been discussed before in this house, and I mention it now to the minister only because we have hardly touched this question at all as compared with what Great Britain has done. The minister in his, speech about Britain referred to what we had done along similar lines, but he differs from the interpretation I put upon it the other night, so I shall not press that point. I simply say that in regard to housing we have not touched the question at all in the sense that Great Britain has.
The Budget-Mr. Stevens

Britain also took up industrial restoration on a wide scale. Let me read very briefly from the Midland Bank Review of July last, and this is worth listening to because, while what I say may not 'be of much importance, this is an authority. It reads:
It was perceived that the restrictive policy was having injurious effects on our economic life, and from time to time its strict eniorce-ment was modified in the interests of British industry and trade.
It goes on:
Stability of the value of the pound in terms of goods has replaced stability in terms of gold.
Do not let us forget that.
The essence of the matter is that Britain s monetary policy since 1931 has come to be formulated with first regard to the interests of British industry and trade.
That is what should be done in Canada, but it is not being done. Finance and banking are the servants of commerce and industry, and the sooner that truth is made cleat in our financial activities the better it will be for this country.


Charles Avery Dunning: Who says otherwise?


Henry Herbert Stevens: It is not the practice;
that is what I am referring to. Let me read another brief extract:
No lasting world recovery can be achieved, and no reconstruction of an international monetary system accomplished, until the complex and irregular web of international debts is cut away where necessary and brought *everywhere within the compass of the new structure of commodity prices.
That is what the Midland bank says. I shall not enlarge upon it; I submit it merely for what it is worth.
Before I pass on let tne say this: Since the deflation of the pound, through the leadership of the Bank of England-I am quoting now from the statement of the Bank of England-they have lowered the average yield on prime commercial paper, business undertakings' securities, from 5-7 per cent in early 1932 to 3*4 per cent. That does not include, as the statement shows, British government issues of any kind. It is a lowering of commercial rates, and that is what this country needs: a Lowering of commercial rates as well as of dominion rates.
What has Belgium done? In one year, Belgium has jumped from a condition of despair into a condition of almost complete release from depression. That was all done in one year, I repeat. A year ago last March she was in that condition; to-day her trade with the United Kingdom is up thirty-three per cent and unemployment has been reduced ,in the year twenty-six per cent.

Let me quote from Wigglesworth's, London, report of April of this year:
Fortunately there are rare examples of progress within the economic field, and Belgium provides an interesting lesson.
An article in the Sphere for 14th March gives a graphic account of the events in that country since the premier of Belgium, Mons. Van Zeeland, took office. On the eve of his retirement after twelve months of brilliantly successful ministry, it is profitable to record the marvellous progress made by this busy, highly industrialized little country of eight million inhabitants, which has blazed a trail for other countries whose financial and economic conditions continue unsatisfactory.... The banking system was the first to be reformed, and there can be no doubt that to this are due in no small part the credit facilities which contribute so much to the well-being of the country.
It goes on to show the result of the devaluation of the franc.
I quote now from the Midland bank review of April of this year:
To compare economic and financial conditions in Belgium to-day with those of a year ago is to observe a remarkable transformation, due mainly to the wisdom exercised in formulating and carrying out governmental policy in respect of business affairs. It is appropriate now to review the changes that have occurred, for the end of March concludes a chapter of economic reconstruction in a country which, through pressure of deflation, had been reduced to a condition of serious distress.
Power was taken to reduce its gold content by" not less than 25 and not more than 30 per cent On March 31 a new gold content was established at a figure 28 per cent below the old, and the exchange rates quickly adjusted themselves to the new level.
But listen to this:
The gold was revalued for the time being on the basis of the minimum prescribed reduction in the gold content of the currency, namely 25 per cent, and the immediate addition to the value of the gold holding, in terms of Belgian francs, was about 3,750 ^ millions. Leaving aside minor sums, 1,000 millions or rather more was allocated to each of three distinct purposes:	the establishment of an
exchange stabilization fund; the formation of a fund for steadying the market in government bonds; and the general purposes of the treasury, in particular, it is thought, the financing of public works.
This sum of 3,750 millions of francs would represent, roughly, $500,000,000.
That is what Belgium has done; she has taken definite steps, all within the ambit of present day law and possibility, but a departure from the orthodox method of financing. The statement is made in these reports that the result has been highly satisfactory:
One further consequence of devaluation needs to be mentioned: the great strengthening of the position of the National bank.
And so on. One might cite Sweden, Norway, Denmark, South Africa and other countries,

The Budget-Mr. Stevens
all of which have openly abandoned the tight money policy and adopted what is known as the easy money policy. The have used the credit of the nation to help agriculture and to restore industry and commerce. The question is: What can we do in this respect? As my time is rapidly passing, I should like to read twelve suggestions which I have to offer. I know perfectly well they will be misunderstood and misinterpreted by some, but I make these suggestions as an indication of what I think could be done in Canada without disturbing what is known as the general economic structure of the country. I am sorry to say to my hon. friends of the Canadian Cooperative Commonwealth Federation that I cannot follow them in their amendment owing to the last clause which refers to a capital levy and, I think, intimates more or less socialistic action.


Mr. MacINNIS:: The hon. member will come around in time.


Henry Herbert Stevens: My hon. friend says that I shall come around in time. Well, I have studied it for a great many years, and while I appreciate their point of view and give them full credit for sincerity, I cannot follow them. But I do not think such action is necessary, for there is ample room for progressive, almost radical action without adopting such measures.
These are the suggestions I have to offer:
1.	Unreservedly determine not to increase our debt for three years-not even for deficits.
2.	Adopt a policy of refunding all existing dominion government bonds or dominion guaranteed bonds at a rate of interest below three per cent.
3.	On generous terms consolidate the dominion, provincial and certain municipal debts, providing such provinces or muncipialities as take advantage of the opportunity will undertake to make no new issues, the same as the dominion.
4.	Make the Bank of Canada in a true sense the government bankers, and utilize its powers of issue to the full extent, consistent with the principle of a twenty-five per cent coverage of gold for all outstanding notes.
5.	Use the system of issuing treasury bills as freely and as extensively as is done in Great Britain, having regard for difference in population.
6.	Utilize all surplus funds thus created for stabilization of exchange, purchase of outstanding bonds and general purposes of the government in relieving unemployment, et cetera.
7.	Retain in Canada a substantial proportion of our annual gold production for purposes indicated in the preceding paragraphs.
8.	Adopt a vigorous policy to encourage mining production by moderating taxation for a five year period and also by assisting smaller but proven properties into actual production.
9.	Relieve agriculture from the dominance of powerful quasi monopolies, especially in the live stock and dairy branch, and substitute friendly government cooperation for monopolistic private dictation. This can be done.
10.	Adopt a housing policy on a nationwide scale, along the lines of that in operation in Great Britain and Sweden.
11.	Provide useful and constructive employment by an extensive reforestation scheme and by elimination of level crossings-not in the petty way indicated in the estimates the other day.
12.	Let parliament declare for a just price to the farmer for his products and a fair wage to the worker; for it is only by the restoration of the purchasing power of these groups that commercial and industrial recovery can be achieved.


Mr. REID:: What about silver?


Henry Herbert Stevens: Well, my views on silver are well known. I would put that in too.


Thomas Reid: But the hon, member left it out.


Henry Herbert Stevens: There are many more suggestions I could put in, but what I am suggesting now are proposals capable of application without, I think, very much trouble. It, has been said of Thomas Jefferson, that great Democrat, that he failed when in office to put into practical operation the fine ideals he had preached when out of office. I think there is very much resemblance in that respect between the two great Democrats, the right hon,. leader of the government and Thomas Jefferson.
I will now quote from a publication which will be accepted, I think, by hon. members on the other side of the house and at my extreme right. I am sure that this extract, from the Canadian Liberal Monthly will be a fitting conclusion to my remarks:
Liberalism recognizes the supreme importance of the individual man and woman and of creating conditions in which human personality can expand in freedom and express itself in works of usefulness and beauty, and on this account Liberalism offers the only practical policy by which the greatest happiness of the greatest number of men and women can be attained.... Liberals have to their credit the achievement of political freedom- the gift of the nineteenth century. Give them the power, and they will achieve economic freedom in the twentieth century.


Some hon. MEMBERS:: Hear, hear.
The Budget-Mr. Lawson


Henry Herbert Stevens: Well, you have power- 170 members out of 245. I say to the Liberals here to-day and I say to the Liberal party, having quoted from the last issue of their monthly review: These are fine ideals, fine words, but are they to be only words? When I read them this thought came to my mind: Almost thou persuadest me to be a Liberal.


An hon. MEMBER:: Come on over.


Henry Herbert Stevens: When I thought of the sentiments expressed, and when I turned to my hon. friend's budget and found how far it was from realizing the splendid sentiments which are expressed in those words, I felt that I could not, as yet at least, offer myself for adoption by the Liberal party.


An hon. MEMBER:: We are on the road.


Henry Herbert Stevens: I am afraid my hon. friends are on the road to the reactionary side of politics. That is not true of all of them, but I can pick them out; there are a lot whom I could pick out who are more reactionary than my friends sitting to my immediate right. But, as I said in my opening speech of this session, there are many of them who came to this house imbued with the very sentiments which are expressed in this Liberal Monthly. I am now calling upon them, at this time of opportunity, the occasion of the budget, when as representatives of the people they are supposed to speak for their people, to make good their faith and to heed the cry of the people for relief from distress, not in the form that is indicated in this budget, which will give little or no relief, but in some practical way. I have made some suggestions. I do not presume to say that they exhaust the question. If there are others, coming from the government, which are better or equally good, I shall gladly support them, but I cannot feel in my heart that in the budget which has been presented the minister or the government has done justice to the problems of this country.


Hon. J. E. LAWSON (Yorth South):: Like many of those who have preceded me in this debate, I desire to extend to the Minister of Finance (Mr. Dunning) my congratulations upon his budget speech. His grasp of Canada's financial problems was commendable; his diction indeed was praiseworthy, and his delivery worthy of the highest praise which I can give him.
I regret that I cannot join with my horn, friend from Rosetown-Biggar (Mr. Coldwell), who spoke this afternoon, in congratulating the Minister of Finance upon the tariff provisions of his budget. I listened with a good 
deal of pleasure and considerable profit, as I usually do, to the address of my (hon. friend from Rosetown-Biggar, but when he was dealing with the reduction in the tariff upon agricultural implements I could not help thinking that he and I approached the problem from different viewpoints. He approached it from the viewpoint of the agriculturist, and his main desire apparently was to procure for agriculturists cheap agricultural implements. I approach the problem from the standpoint of the worker in industry, the people whom I represent, and I am free to confess that my concern is: Will it create jobs or will it not create jobs?
Yet, Mr. Speaker, I could not help feeling that probably the hon. member for Rosetown-Biggar and I would not be far apart in trying to arrive at some solution of our problem if only we had before us the facts relative ito the situation. I am not one of those who have been of opinion that tariffs should be, as some one expressed it in this house the other day, as high as Haman's gallows. I am one of those who have always believed that we should have protective tariffs, and I am inclined to the view that my friend from Rosetown-Biggar would not disagree with that principle so long as he was satisfied that, included in that measure of protection, there was not a return upon watered stock and what was not true capital. But in connection with the provision in this budget for agricultural implements, we had no opportunity to ascertain what was the correct and fair rate to provide protection in that industry, protection to provide jobs for those in whom I am particularly interested, and to provide reasonable prices to those agricultural consumers in whom my hon. friend is primarily interested. Here we had a case where an investigation was pending that would have given us all those facts which we should have. In the midst of it, for some reason best known to the government, there is this drastic reduction made in the protective tariff applicable to the agricultural implement industry. I suggest to my 'hon. friend the Minister of Finance that, as undoubtedly he will be replying in closing this budget debate, in doing so he give me some reason to believe that the action of the government in taking this step in the midst of the inquiry was other than .to pacify an insistent demand from some of his agricultural representatives and supporters in the House of Commons from western Canada who wanted a cut in the tariff on agricultural implements, no matter What might be the result to industry or to the job-hunters of this country.

The Budget-Mr. Lawson
I could almost believe, as I heard the budget, that my hon. friend had adopted some of the psychology which was being advocated by the hon. member for Kootenay East (Mr. Stevens) to-night, except that I think the minister probably proceeded according to that system which is known as Coueism, and instead of dealing in his budget with the major problems of Canada, he proceeded to say: Every day in every way things are getting better and better.
Surely there were in this country problems to be taken care of at this session of parliament, problems for which the Canadian people expect a solution. They were: a balanced budget, which, as far as the business community was concerned, included a solution of the railway problem and the problem of relief and, as far as the ordinary man on the street was concerned, the problems of unemployment, prices of agricultural products, and relief. Since the last election I have heard some hon. gentlemen opposite boast in this house of the results of the election, as far as they were concerned, and of the great majority which they had in this chamber. Well, Mr. Speaker, I have made one or two observations in connection with the last election. Probably a great many will not agree with my conclusions, but briefly they were these: The business community sought a balanced budget, a solution, as they call it, of the railway problem, and the ordinary man on the street wanted employment and he wanted to be rid of relief. They felt that those things had not been done which might have been done by the previous government. They, the people of this country, were not prepared to go the length of voting for what to them were such radical ideas as those advocated by my social credit friends or those advocated by my Cooperative Commonwealth Federation friends, but they were in favour of a change and so the vast majority of them voted for the Liberal party. Why? Because they were led to believe, by the utterances not merely of the leader of that party but also of several gentlemen running under that banner, that if they but returned that party to power their problems would be solved. The other night my hon. friend from Sherbrooke (Mr. Howard) was boasting in this house that the Liberal party made no promises. Well, you do not have to sign a promissory note in order to make a promise. How well I remember the handsome Minister of National Defence (Mr. Mackenzie)-


An hon. MEMBER:: The hon. member should be a good judge.


James Earl Lawson: I am glad my hon. friend pays me that tribute. How well I remember
the Minister of National Defence advocating for this country a national credit, and telling the people how this credit was to be administered in order to meet public needs. How well I remember Liberal gentlemen advocating a reduction of taxes. How well I remember seeing an edition of the Vancouver Sun of the day following the speech of the right hon. Prime Minister (Mr. Mackenzie King) in that city. There listed in flaming headlines were ten policies of the Liberal party, and last but not least on the list was the reduction or abolition of the sales tax. They have demonstrated that reduction or abolition by increasing it from six per cent to eight per cent. How well I remember the present Prime Minister leading the unemployed and those on low wages in this country to believe that if the Liberal party were but returned to power their problems would be solved. Do we not remember how he went about this country and said in nearly every province, "We now have Liberal governments in power in every province. If you will but put a Liberal government into power at Ottawa, then we can all get together. We can sit round the same table; we can agree upon policies, and we shall not have these disagreements as to the jurisdiction of the respective legislative bodies." Well, the people accepted that dictum; they elected a Liberal government. That government did meet with the provincial governments; they did put their feet under the same table and they did agree, but upon what? They agreed on referring the maximum hours of labour measure, the minimum wage bill and the unemployment insurance bill, which might have brought benefit to the people, to the Supreme Court of Canada. So they have succeeded in getting those measures out of the road for some months instead of bringing them into operation. That was the extent of their agreement. I remember further that the Prime Minister not only said, "Put the Liberal party into power in Canada and we shall all be able to agree"; he also said, "Send us back with a great majority; send us back with a large enough majority and you will not require any national government in Canada."


Some hon. MEMBERS:: Hear, hear.


James Earl Lawson: I am glad I am such a good imitator of the Prime Minister that my hon. friends applaud. "Send us back with a large enough majority and you will not require any national government in Canada. We will be a national government, and as a national government we will solve your problems of railways, unemployment and taxation."
The Budget-Mr. Lawson

Some bon. MEMBERS: Hear, hear.


James Earl Lawson: I am glad my hon. friends approve the solution. So far the solution we have for our railway problem is to include in this budget a sufficient number of millions of dollars to pay the deficit.


Mr. BRADETTE:: We have had only five months.


James Earl Lawson: I want to say to my hon. friends that even if they have had only five months they will never have a better opportunity in their lives to deal with Canada's problems. This is the time to do it.


An hon. MEMBER:: You had five years.


James Earl Lawson: But, my good friend, you went on every platform in this country, and you did not tell the people that if you were returned to parliament, instead of bringing in legislation which would solve their problems you would sit in your place and howl across the floor of the house, "What about the last five years?" That was not what you said on the stump in Canada. Oh, no; far from it.
Well, I mentioned the solution that has been offered for the railway problem. What solution has been offered for the problem of unemployment? We have seen the creation of an employment commission, to which has been assigned just one of the jobs that were to be undertaken by the unemployment and social insurance commission which was created months before. By their actions the government have prevented that social and unemployment commission from proceeding with the job, and in spite of the fact that legislation has been passed setting up the new commission it still has not been appointed and has not started to work to solve Canada's unemployment problem.
Then, what solution has been offered for the taxation problem? Is there in this budget a single provision that reduces the taxes paid by anyone. Not a bit of it; instead of that new taxes have been added.


An hon. MEMBER:: What about the gasoline tax?


James Earl Lawson: Well we shall wait and
see what effect the reduction in the gasoline tax will have. We have not found it putting any money into anyone's pocket. As far as I am concerned no one will ever hear me raise a complaint in this house against any reduction in tariff based upon a report of a judicial or quasi-judicial tribunal such as there is now in the tariff board of Canada. That is what I call a scientific approach to

a protective tariff. My complaint is when without investigation, or in the middle of one, a haphazard stab is taken at the tariff, thereby causing the loss of jobs to people in this country.
Mr. McNEVIN (Victoria, Oht.); If I may ask a question, what action did the hon. member's government take to raise it?


James Earl Lawson: Raise what?


Mr. McNEVIN (Victoria, Ont.):: To raise tariffs. Did they take advice from an expert body?


James Earl Lawson: The answer to that question is: No, we did not take advice from an expert body, because there was no such body in existence in Canada when we came into power.
And hon. MEMBER:	Yes, there was a
tariff board.


James Earl Lawson: If the hon,. member talks
about the old tariff board will he tell me who in this country, outside the Minister of Finance, ever knew what the recommendations of that board were? In addition to that, the chairman of that board was elected to and was a member of this house. No, there was no expert tariff board from which we could take advice. What we did was this, we immediately raised tariffs. I offer no apology or defence for that. We did it for the purpose of creating and holding jobs for Canadian workers in Canadian factories. But having Taised the tariff our next step was to set up a tariff board, a board with the standing of a court, before which people could go with their complaints, a board whose sittings and hearings were open to the public, and whose reports and findings must ultimately be * brought to the attention of parliament and the people of this country. I say to my hon. friend: No, we did not have scientific advice, but we created a board that will give to this government scientific advice, and we took the advice of that board once it started to function.


Some hon. MEMBERS:: 0'h, oh.


Thomas Bruce McNevin: Did the hon. member's government's high tariff cure what they set out to cure?


James Earl Lawson: Yes.


Some hon. MEMBERS:: Oh, oh.


An hon. MEMBER:: That is not even
funny.


James Earl Lawson: I was not endeavouring
to be funny. I flatter myself that I have

The Budget-Mr. Taylor (Nanaimo)
a discretionary sense of humour which knows when to be funny and when to be serious. I started to answer my hon. friend to the right and I said yes. We never hoped by the creation of a higher protective tariff in this country to solve a world-wide problem of depression, but we did hope to maintain as many jobs as possible for Canadians in Canada, and we accomplished that purpose.
Now I really intended to be very short, but if my hon. friends keep up this running fire I shall probably fill out my time. I had reached the point where I asked what relief of taxation upon the people was effected by this budget. To almost one-third of all the people in the riding I represent, who are on relief, it is a nearly intolerable burden. To ninety per cent of the people in the riding I represent it is a hardship. Let me point out why. No one, I am sure, would suggest for a moment that the schedules of relief which are in effect in this country afford more than a mere subsistence to those who live under them. As a result of this increase in the sales tax one on relief who has to buy a pair of shoes that cost, say, two dollars, has to pay an additional sixteen cents in sales tax.


Charles Avery Dunning: Is the hon. member sure of his calculation?


James Earl Lawson: I think so, I figure eight cents on one dollar is sixteen cents on two dollars.


Charles Avery Dunning: And he has to pay that much additional?


James Earl Lawson: I did not say additional.


Charles Avery Dunning: Oh yes, distinctly. Hansard will demonstrate.


James Earl Lawson: All right, we will stand by the demonstration of Hansard; I did not use the word "additional." On a $20 suit of clothes the same person now will have to pay a tax of $1.60.


Charles Avery Dunning: What did he pay before?


James Earl Lawson: He paid $1.20. And on all consumable goods there is an increase in the rate of sales tax that is just one-third greater than it was before this government came into power.


Charles Avery Dunning: That is not correct.


James Earl Lawson: Yet this government had enunciated as its policy the reduction or abolition of the sales tax.


An hon. MEMBER:: And we will reduce it.


James Earl Lawson: I hope so. On every
occasion on which you do I am confident you
will have the support for that purpose of all Conservative members of this House of Commons.


Charles Avery Dunning: I did not get it the last time I reduced it.


James Earl Lawson: Did you not, in respect of the reduction?


Charles Avery Dunning: No, it was opposed.


James Earl Lawson: I thought you got it in respect of the reduction, but I think in order to vote for that reduction we had to swallow your sweet pill of countervailing duties, and that was something we could not swallow.


Charles Avery Dunning: Your party spoke against reducing the sales tax.


James Earl Lawson: Well I can only say that I did not speak against reducing it.


Richard Bedford Bennett: It shows how little they knew about world prices. They did not know anything about them.


James Earl Lawson: And I shall not speak against reducing the sales tax. So here we have a government elected to power by the largest majority any government in Canada ever had, a government to which the people of this country looked with high hopes for the solution of their railway, their economic and their unemployment problems. And the solutions we have had offered this session are the appointment of an employment commission, one or two other bills equally ineffective, and now so far as the budget is concerned, the last hope for reducing taxation or providing more jobs is gone. I sincerely trust that my hon. friends of the government, before this session finishes, will bring down some measure of legislation which will more speedily afford a solution of the problems of those who are suffering from unemployment and want.


Mr. J. S. TAYLOR (Nanaimo):: Mr. Speaker, my speech will not be a very long one.


Some hon. MEMBERS:: Hear, hear.


James Samuel Taylor: In answer to that I might say that some day this house will value a speech not for the parvum in " multissimo," but for the multum in parvo.


Mr. LAPOINTE (Quebec East):: That is good French 1


James Samuel Taylor: we shall witness some reduction in the value of the dollar. There will be two alternatives to consider: on the one hand, a new devaluation, on the other, an inflation with the maintenance of the present gold parity.
Again:
If a country cannot bring its budget into real equilibrium, it cannot in the long run withstand an inflation of the currency, no matter what means are tried.
My final quotation is this:
An inflation in America could not fail to affect the currency position in England.
And, of course, by inference in Canada.
In that country too everything is prepared for a price advance. The country is well provided with means of payment, which could be better utilized than is the case at present. The official financial policy, as formulated at the London conference and in the program of the sterling bloc, aims at a moderate price advance, which must be considered desirable also from the point of view of the combating of unemployment. If such a rise of prices could be attained in harmony with the trend of development in the United States, this would no doubt be viewed with favour in England. The conditions in Sweden are similar, and indeed the sterling bloc in general would gladly join in a moderate price advance promoted by England and the United States jointly.
So that the whole situation is that we are face to face with conditions in our financial system which may change overnight, and there is no evidence, none at all in the construction of the budget or in the inferences to be developed from a study of it, that these matters are in the mind of the government.
Again, the hon. Minister of Finance, while regretting the fact, is still content to accept the burden of interest so that thirty-six per cent of the country's revenue is to be earmarked to that contribution. As I have already said, the distressing claim of interest which, like a canker, eats into every part of the body politic, is in every business, every home, every activity of our lives and must be eradicated. I cited Ruskin a few days ago. Can anyone cast a stone at him? Can anyone cast his efforts aside in preference to those of, say the much quoted Carlyle? Ruskin became conscious of the curse of interest and realizing his assets, he eschewed all interest on his investments and spent

capital sums. Thirty-six per cent of our country's revenue absorbed in interest! It is there that the axe must be laid at the root of the tree, and I propose to point this out again and again, for the fact is that interest must go. As I have already said, our personal and social activities will fail where-ever in any particular they transgress the laws of nature or, as some say, - the laws of God. The squirrel does not get interest on the nuts he stores in the hollows of the tree. The camel does not get interest on the fat he stores in his hump or in the water he stores in the cells of his stomach lining. The butter-tailed sheep does not get interest on the fat it stores in its tail. I can discover nothing to justify humanity in prostrating itself before the Juggernaut of interest, that Juggernaut which humanity itself has so laboriously constructed. Interest must go.
Again, I see very little sympathy between the recent trade agreement with the United States and this budget; they do not conform. They have been constructed by minds which have very little in common, for otherwise the minister would stand absolutely condemned for giving with one hand and taking away with the other. I consider the increase in the sales tax an oppression of the poor of the country. I notice in the newspapers that the leading merchants of Ottawa and district, speaking last Saturday of the budget and this sales tax in particular, said that it would not bother them; that they could take it in their stride and still preserve the status quo. If that is correct, it shows a situation that needs investigation, but I cannot think it is true. I am satisfied that the raising of money by this increase in the sales tax is an added burden on the wage earners of Canada. But more important than all else is the awful burden of debt. Year after year big business escapes its just share of taxation. By one plea after another, by one threat after another those who have encourage the government to take from those who have not. The freedom of the big business man from his relative share of the public obligations has continued so long as to develop a condition of immunity which has been very strongly reflected in this budget. There is not a plutocrat in the country who can quarrel with the Minister of Finance in his sublime capitalist effort. But that will not bring prosperity to Canada; it will not reduce our national debt. That can come only by the government inserting itself between the big business man and the successful gouges by which he achieves his wealth. It will come only by a forthright effort to compel the abundantly wealthy to

The Budget-Miss Macphail
tighten the traces when pulling this country out of the slough of despond in which we find it.
A plea was made earlier in the session for pensions for the blind of the dominion. This plea was refused on grounds of budget necessity, but in view of the acceptance of a probable loss in budgeting of 3100,000,000, I am still quite unable to see why the blind should not be permitted to realize some satisfaction entering into their lives even during this session. Apart from all these large issues I cannot sit down without drawing attention to the plight of the small fruit and vegetable farmers all over the country already labouring under the physical disadvantages of a colder climate than that of their competitors to the south. They are having the salt rubbed into their wounds with no possible signs of relief.
I commend that thought to the Minister of Finance.
Miss AGNES C. MACPHAIL (Grey-Bruce): In beginning I sincerely wish to congratulate the Minister of Finance (Mr. Dunning) upon his budget address delivered on the first of May. It. was a pleasing address, interesting in its content and construction, in the beauty and simplicity of its language, and in its forceful and agreeable delivery. Though it lasted two and a half hours the Minister of Finance held the attention of the whole house for that long time. He must have found it an exhausting task, but it was certainly one which was exceedingly well performed.
I find that all budgets are alike in this, that each contains some things which one likes and some things which one does not like. If you vote for a budget you are voting for some things with which you do not agree, and if you vote against it you are voting against some things with which you do agree. It seems impossible, therefore, to avoid that dilemma. I felt that the hon. member for Rosetown-Biggar (Mr. Cold well) expressed my thought almost perfectly this afternoon and there is no use in going over it again in detail. There were in the budget things which anyone representing an agricultural constituency would be pleased with, but I could not be pleased over the eight per cent sales tax. I am opposed to the sales tax because it taxes most heavily those who spend their entire income on consumptive goods, while those who spend only a very small portion of their income on such goods pay a relatively small sales tax.
Then, too, I am unorthodox in the matter of balancing budgets. In times when individuals cannot borrow and when individuals cannot spend, governments must
borrow and governments must spend. I do not say that governments ought to borrow, but under the present financial system they must and they do. The balancing of the budget is not by any means as important as it is generally thought to be, because the payment of sums of money without which it will not balance, would undoubtedly in practice divert large sums of money into already bulging pockets. For, as I said a moment ago, there are people, many of them bondholders, who do not spend their incomes in order to live; and since, as has been stated in this house, I believe, thousands of times, a loan creates a deposit and the repayment of a loan destroys a deposit, the balancing of the budget might conceivably destroy a portion at any rate and possibly a large portion of the $162,000,000 by which the budget does not balance. In other words, it would, as the Minister of Finance admitted, tend to cause severe deflation. I believe there are a great many people both in the house and outside who still think that governments should act like individuals and should not spend, particularly in a time of depression.
I hold the other view, that in times of depression governments should spend, in order to make up the amount which individuals cannot spend; and in good times, when individuals can spend, governments should curtail their expenditures.
We have heard a lot, particularly in this debate, about the need of a change in the financial system. I enjoyed very much this evening the speech made by the hon. member for Kootenay East (Mr. Stevens). I have enjoyed, too, other speeches during this debate which have related to money. A large number of Canadians-not yet a majority, but an increasing number-believe that a change in the financial system is necessary; that we shall come to base our credit and currency upon real wealth; that it will be issued in the first place by a federal authority

possibly the Bank of Canada when it becomes a government bank-without interest, and that we shall benefit largely from it in one way or another. I suggest that one method of using a government issue of money, which could well be considered under such a system, would be the cutting of farm mortgages in two and reimbursing the creditors by the issue of noninterest bearing bonds.
Since the Liberals came into power with such a very large majority, there has been a tendency rather to scoff at monetary reform. If a certain newspaper story is to be believed, pressure is being brought to bear upon two Liberal members who have done great service
The Budget-Miss Macphail

to the party and to the country by the speeches they have made this session in the house. That, during the campaign, other Liberals talked similarly, this little pamphlet shows. It was issued by the Parkdale Liberal Association during the campaign, and it is really a very intelligent production. It states:
At present the privately owned banking system of Canada has the exclusive right to manufacture money (bank credit and currency are both money).
The Liberal party proposes to take this exclusive right away from the banking system and give it to the federal government.
And then the candidate goes on to say:
I agree with the Hon. J. L. Ralston, who says that he does not favour universal public ownership, but that the control of currency and credit is properly a public utility and should be operated as such.
I feel that I must take time to put on Hansard one or two other paragraphs:
The banking system manufactures "money" just as definitely as Massey-Harris manufacture ploughs.
Apparently that is not going to be very definitely.
But they do not "sell" this money-(and they certainly do not give it away)-but what they really do is to rent it and they call the rent "interest."
It goes on:
Now, if the government can authorize private banks to create money, why can the government not create money itself?
For a long time I have been looking for an answer to that question. Then the pamphlet
says:
This is what the Rt. Hon. Mackenzie King means when he says:-
"Usury once in control will wreck any nation. Until the control of currency and credit is restored to government and recognized as its most conspicuous and most sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile."
That is very good. At the bottom of the next page they say, in red letters:
What Difference?
The difference between banker and national control of the creation of money is briefly this:-Under banker control the bank creates money and rents it to the government. Under government control the government creates its own money and pays rent to nobody.
Then- the names of certain people are given.
I quote:
In a pamphlet this size one can only scratch the surface of this all-important, all-embracing subject. There is no other subject of such vital importance to the happiness and wellbeing of 95 per cent of the Canadian people. It is being stressed by an imposing list of people, among whom I mention-
Right Hon. W. L. Mackenzie King.
Hon. Mitchell F. Hepburn.

Ian MacKenzie.
Hon. J. L. Ralston.
G. G. McGeer.
Harry Hallatt.
Major Douglas.
Father Coughlin.
The Dean of Canterbury.
The Archbishop of York-


Mr. JACOBS:: May I ask my hon. friend, is the name of Haile Selassie also attached to it?


Miss MACPHAIL:: likable whip of the Liberal party is going to have apoplexy before the session is over, hustling debates to a close. To proceed, there never was a time when agriculture needed organization more than it does now, and unfortunately the industry is poorly organized at this time. In order to do anything effective towards basing the selling price of farm products upon the cost of production there will have to be one hundred per cent organization of agriculture and there will have to be export and import boards; in other words pretty definite planning of agricultural production and sale, will be necessary and we are coming closer to this all the time.
Before closing, I should like to suggest one other point that, I think, would help agriculture. It is that a good deal of the loss to agriculturists, as is well known to every member of the house, takes place somewhere between the time the goods leave their farms and the time they arrive at the tables of the consumers. Not only is that true; the increased cost to the consumer takes place in the same interval. It will not be so very long before we shall be driven to the construction of cooperative processing plants on a very large scale, with government assistance and direction, or government controlled or owned processing plants, because until agriculture is again able to purchase the goods that are being turned out so rapidly by the machines and until the unemployed and the low paid workers are able to purchase goods there will be no revival of prosperity in Canada. There may be spasmodic upward turns, but they will not last until the mass of the people of Canada are free to use the products and the services which they themselves produce.
Mr. LOUIS P. A. ROBICHAUD (Kent, NB.):	Mr. Speaker, may I crave the indulgence of the house in the few observations that I am about to make in the language better understood by the majority of hon. members. I confess that I do so with some degree of apprehension, inasmuch as I have ventured to make this maiden speech in a tongue not my own. I take the opportunity at the outset sincerely to congratulate the Minister of Finance (Mr. Dunning) upon his able and brilliant expose of the budget. He has done honour not only to himself but to this house and to the country.
Now, Mr. Speaker, may I be permitted to give some of the impressions of a new member since coming to this house in February. Adverting first to the speech of the right hon. leader of the opposition (Mr. Bennett) on

the address, since "a tout seigneur tout hon-neur," may I be allowed to say, with all deference and respect, that despite the no small admiration aroused in me by his great ability, his masterly handling of the English language, and his brilliancy of delivery, I have not as yet been able to shake off the impression I received at the time that the speech was what I would call a "Bourbon" speech.
Coming to the speech of the hon. member for Kootenay East (Mr. Stevens), may I be allowed to congratulate the hon. member most sincerely upon having, after "walking so long in the valley of the shadow of darkness," at long last seen the light. I like to believe in the sincerity of the hon. member's conversion, but if I may be permitted to say so, instead of leaving the fold and venturing abroad to evangelize and convert the Gentiles, would it not have been the better thing to do for him to remain in the "shepberdy" and with his splendid eloquence and great powers of conviction to apply himself to the role of the leaven to leaven the whole inert mass of his party?
Coming next to the speeches of hon. members of the extreme left, I say I am in accord with many of the sentiments they expressed. We all realize that the world this last five years has been passing through a period of travail, misery and pain. But, may I ask, was there ever anything worth while came to this world except through travail, misery and pain? Mr. Speaker, I believe that an evolution, though, perhaps imperceptible, has been operating not only for the last five years but for the last ten, yes, the last fifteen years, and that the world is gradually shaping for and moving towards a rebirth. But let me warn my hon. friends of the extreme left to be careful not to apply the injection used in such cases prematurely lest it bring about a miscarriage.
I am convinced that the heart of every hon. member is in the right place and goes out to poor suffering humanity. Indeed, I believe it is the same old heart wherever man may be found on the face of the earth, and has been the same in all ages, the same old heart that pulsated in the very breast of the father of mankind; with this difference, however, that to-day man has a more profound knowledge of its intense longings and aspirations. The secret of life as I see it is to acquire a better understanding of such longings and aspirations. Indeed, was it not Socrates who set before man as the highest attainment of human wisdom, to know oneself, in other words, to know in all their intricacies the workings of the human heart?

The Budget-Mr. Robichaud
Here, sir, may I compare the old human heart to a finely cut diamond with innumerable facets and angles, slowly revolving upon itself, and that revolving movement accelerated by the passing of generations and the advent of new civilizations, and may I suggest that with the advent of Christianity a powerful impulse was imparted whereby the full revolution was completed at one stroke?
It is sometimes said that the trouble to-day is that man is living in a new world, but so far has been unable to adapt himself to his new world. But I have a different philosophy. The trouble, sir, is that alter a struggle of nineteen centuries' duration man has not yet been able to conquer that world and its ways, and attune it to the vibrating radiations of those new facets and angles of the human heart uncovered by the advent of Christianity. To illustrate: I am sure, Mr. Speaker, that at one time or another you have come into contact with some of those men described in this very house, I believe, as gangsters of high finance. Tell me, sir, as man to man, did you find them very much different from yourself? Yet the moment they enter into their councils of deliberation we are asked to believe that they lose all humane feelings. It is a sad reflection, but can it be that they partake of the nature of the wolf, the lone wolf being very timid and harmless, while the pack wolf is terribly daring and cruel? If that be so, there you have it: the ways of the world versus the human heart.
It has been said in this house that politics is a science. I am not in futl agreement with that view. To my mind politics is more an art than a science. It has to do with the heart rather than the head. In this connection I am reminded of an ex-Prime Minister of this country-he is not now a member of this house-to whom I once listened with great intellectual delight. He certainly was and is an intellectual giant, and one could not help being fairly amazed at his power and keenness of mind. He could split a hair in four and pursue the four splits to their bitter ends. But as a politician and a leader of men he was not a success. To be a successful leader of men one has to keep a fairly even balance between head and heart. Let the heart give in too much to the head and we have the type of government with which my hon. friends to my immediate left have afflicted the country in the immediate past. On the other hand let the head give way unduly to the heart and we would have the kind of government that would afflict this country should my hon. friends on our extreme left take the reins of power. So I say with Bobby Burns:
The heart ay's the part ay
That makes us right or wrong.
One often hears it said that the government should be run on business lines; that there should be more business men in the house instead of lawyers, doctors and so forth. Well all I have to say to that is, that badly as the political business of the country has been managed in the past, the good Lord help the country had it been as badly managed, or rather mismanaged, as industrial and financial business has been. We hear on every side how highly developed and efficiently organized industry is to-day. If that is meant to apply to the individual units of industry, I concede. But I feel that industry considered as a whole and as a single entity has not yet learned to walk. That is a strong statement.
We have heard it said in the house that there is many an industry which should never have been established in Canada because it was economically unsound. But on account of vested interests thus created the question was asked: What can we do about it now? What I am concerned with is this: What are we doing to prevent a repetition of the same course of events in the future? Apparently we are doing nothing. But remember, Mr. Speaker, I am not placing the responsibility on parliament; I am placing it where it belongs, on industry itself, for I believe that the greatest incentive to progress is not so much profit and greed as it is vesting people with responsibility and developing in them a due sense of that responsibility. And so I believe the time has arrived for industry to provide itself with a general staff-call it "The national council of industry," or whatever suitable name you wish to give it-and proceed on really scientific lines. It would be the business of that general staff to keep industry informed as to the needs and requirements of their own people and the people of foreign countries, and to keep a sharp eye on racketeers of high and low finance. It would be the business of that general staff to see that no investment is directed to the building up of a unit of industry economically unsound, or to the overbuilding in any given line such as has been done in the paper industry in Canada, or the textile industry of the United States.
In this connection I am reminded of a mission of English business men who two or three years ago made an investigation of the American and Japanese textile industry. What did they report? They reported that the social condition of textile employees in Japan was just about on a par with that of American and English employees, but that with her
9,000,000 spindles Japan produced as much as the United States did with their 31,000,000 spindles. I leave hon. members to draw all

The Budget-Mr. Robichaud

the inescapable conclusions. May I add that thought would have to be given to the advisability or otherwise of giving representation on that council of industry to the other partners interested, namely labour and the consumers.
I am not a prophet, nor indeed the son of a prophet, but may I venture to make a few predictions which I believe, will see their fulfilment in the not far distant future.
First, I see the day when each and every nation will confine itself to converting its own raw materials only into the finished product.
Second, I see the day when the proletarian army will have acquired a much greater mobility than it has to-day and so, like a nilitary army in the field, it will be directable .0 any needed point on short notice. In view >f that I have my doubts as to the wisdom of encouraging members of that army to build and own their own homes. I believe industry should build the homes needed by that army. They could build on a large scale and much more economically than the individuals themselves, to whom such homes would be let at a cost rental.
Third, and as a consequence of predictions numbers one and two, I foresee the day- I may not see it myself, but verily I believe my children will see it-when we shall have free trade throughout the .world, preceded of course by an evolutionary stage when geographical economic units will constitute themselves along the line of the dream of the late Aristide Briand for the European nations, and of the fact of the forty-eight states to the south of us.
In the nature of things, this is bound to come about. Does it stand to reason that nations should spend millions and billions of dollars in removing natural obstacles from the channels of trade, and the next moment erect artificial obstacles by way of tariff walls. In this connection it is a consolation to think that the insane frenzy of economic nationalism from which the world is just emerging will have been the most potent factor in bringing about this final desired result.
Fourth, I foresee the day when the net surplus exports of a nation will be paid for directly by the people of that very nation, and be considered as an extension of their own domestic market, instead of the indirect way in which those exports are now paid for, namely by the exporting nation investing the pro'ceeds of that surplus in the country of importation. To-day that is the only way. in which such surplus exportation can be paid for, since there is no gold to pay for them and the said exporting nation will not accept

any more goods in return. They simply invest the proceeds of the surplus in the country of importation.
Now, as to the remedies, in addition to the ones already suggested. People will say that what we need is inflation or deflation. We have had considerable of that in the various nations of the world since the fatidic year of 1929, but the inflation and deflation which I have in mind are of another sort. They are not so much a monetary inflation and deflation as an inflation of hearts and a deflation of heads.
Again I could say with the Tiger of France, Clemenceau, who at one time could hardly be accused of being a Christian, "If every Christian was a Christian in fact as well as in name, there would no longer be any social question." But that might sound too much like a sermon. So I would prescribe as the proper tonic for our patient, the world, preparatory to the many operations he will have to undergo, just a little more inflation of hearts and a little more deflation of heads.
I am convinced that, I will not say the doctrine, or even the principles of Liberalism, but simply Liberal and democratic philosophy or Liberal and democratic state of mind will provide the best cure for the economic ills of the world. It has been said in the house by the hon. member for Kootenay East (Mr. Stevens) that because of its history and its ancient principles the Liberal party had an opportunity unsurpassed in scope. May I say that there are no ancient principles of the Liberal party. The principles of that party are ever young and living, constantly rejuvenated to suit the times and always abreast in the march of time.
Mr. Speaker, I trust I have not bored you unduly with these vagaries of mine, and in conclusion may I express my deep appreciation to my colleagues and to you for the kindly forbearance and considerate attention which they and you have accorded me.


Mr.  J. C. LANDER YOU@Calgary East: Mr. Speaker, our industrial, financial and political leaders assured the people year after year during the depression that we were on our way to better and happier days; that prosperity was- just around the comer. At the same time the policy - of wage cutting, "tighten your belt," and other policies of economy were introduced, All this has led to a great shrinkage in purchasing power. Prices to farmers for their products fell below the cost of production; credit -was withdrawn by financial institutions, and this great reduction to the farmers because of

The Budget-Mr. Landeryou
this decline in the prices of their products has been estimated by Premier Bracken of Manitoba at approximately one billion dollars for a period of four years. This great shrinkage in purchasing power has led to a reduction or restriction in consumption, which in turn has been reflected in the slowing up of factories, adding to the number of the unemployed, and thereby increasing the difficulties of municipal, provincial and federal governments in their financing. It has also increased the burdens upon our taxpayers, If we are going to solve this problem we must restore to the people this lost purchasing power.
The years of the depression have caused the people of this country to make a thorough analysis of our economic system. They are becoming convinced that this policy of "tighten your belt," economize, produce below the cost of production, will not solve the problem. Apparently they realize to-day better than ever before, especially those many millions who gaze at the various articles on display in our so-called stores-I refer to them many times as museums-where people go to see the things they would like to buy if they only had the money, or who look at the catalogues sent to them by the great merchandising corporations in this country, gazing at them as they would at the family album, seeing there the things they would like to buy if they only had the money- the great masses of our people, I repeat, realize to-day better than ever before that they must have restored to them the purchasing power necessary to bring back prosperity. This can be done, I believe, by the use and control of national credit by the government, that national credit to be used in the interest of the people to meet the needs of the people. We hear a great deal these days about sound money. What the people of Canada want is more money and less sound. The farmers want more purchasing power for their production, the worker more for his labour, the fisherman more for his fish, and industry in general requires more for new and greater developments.
We in this part of the house are in favour of sound money; we want sound money. We are not-inflationists; we are not deflationists. However we do not believe that money to be sound must be based upon the intrinsic value of gold or silver. We believe that money should be based upon our collective ability to produce real wealth and render service one to. another, and that it should actually-reflect any increase in our ability-to 12739-167$
do so. Our wealth should not be measured only in dollars and cents; it should be measured in our volume of goods that are being or can be produced. The link between production and distribution is money or purchasing power, and we must restore purchasing power to the people to do away with these stored up surpluses that we have in the midst of this distress and suffering.
We have another problem, and that is the problem of debt. This problem of debt must be faced. To-day our money and our credit have been used as an instrument to create debt. By the creation of these enormous interest bearing debts this instrument has been used for the purpose of destruction, and we should bend our efforts to the reduction of private and public interest bearing debts. We do not say, repudiate, nor do we say, default, but if the creditor in this country is going to insist upon the pound of flesh from a debtor already reduced to skin and bone there will be left nothing but a skeleton, of little use to the creditor, the debtor himself or his country.
To-day the banks pay lower rates of interest to depositors. The enormous sum of $600,000,000 has been dropped in one year by holders of life insurance policies. Then we have a decline in revenue from real estate properties. I have in mind the memory of those 600,000 men who went overseas prepared to give their lives in a period of national crisis, and now the question is being asked of those who hold the bonds: Just what sacrifice are you prepared to make at this time of national crisis? The people of Canada are awaiting the answer. They insist upon cooperation. I do not blame the municipal or provincial governments to-day who. faced with bankruptcy, faced with the choice of needs of their people or meeting these interest bearing charges, insist upon refunding their obligations at lower rates of interest. Rather I would place the blame or responsibility, if there is any blame or responsibility to be placed, upon the governments that preceded them and borrowed these huge sums of money and spent them as they have done; They are the ones to blame, if there is any blame to be put upon anyone. .
From time to time people point with pride to the. fact that we have sound money and safe banking institutions. Is it necessary that all classes of society should sustain great losses; that 1,200,000 people should remain on relief; that the farmers of Canada should, produce wealth below cost- of production? Must people lose their , homes and must the conditions of distress now profiling in .the
The Budget-Mr. Landeryou

country continue in order that we may be able to point with pride to the fact that our banks are safe? I believe our banking institutions can remain safe and our money sound and still allow us to solve the problem that faces us. The solution lies in the proper use of the national credit. Many people contend that favourable balanoes of trade will bring prosperity. The United States has enjoyed1 favourable trade balances for many years; in fact it is estimated that all told they amount to over $27,000,000,000. Can we truthfully say that the United States is enjoying prosperity? The answer is no. Canada, for the last five years, has enjoyed favourable trade balances, and yet at the same time, as has been pointed out, unemployment has increased. The problem in Canada is to provide out of our natural resources sufficient to saturate the domestic market, creating at the same time a surplus which could be used to exchange those things not naturally produced in Canada, possibly on a quid pro quo basis or goods for goods.
The question has been asked of us in this house: Just what do you mean by control of credit? We do not believe that the purchase of a controlling interest in the central bank is a solution. Changing the ownership of the monetary system will not solve the problem but changing the policy will do something towards bringing about a solution. We believe that credit should be controlled by the three principles advocated by social credit, namely: a just price which will guarantee to labour a just wage for its contribution; a just price to the farmer and all others who provide the raw materials necessary for the production of wealth, and a fair commission to those who own or supervise our industries. We believe also in the continuous flow of credit, which means the circulation of money or purchasing power that can be assured by various methods, especially by the payment of a national dividend to all citizens of the country, assuring them economic security and providing for them at least the bare necessities of life. This would encourage the spending of money and do away with the fear which seems to grip the consumer to-day. Many people neglect to buy to-day the things they need because of fear of economic insecurity which may overtake them to-morrow. The people of Canada want economic security. They do hot want the feasts or the famines of the past created by a monetary system, possibly I should say by the uncontrolled, unsupervised manipulation of the monetary system by private individuals, which eminent economists and statesmen declare will chill, check and destroy genuine economic freedom. This

question of money has been brought up in the house many times, but apparently the government is not yet prepared to introduce any monetary reforms; at any rate the budget does not disclose any such intention. They still imagine that we can tax our way to prosperity or borrow ourselves out of debt.
We have been referred to as radicals, as leftists, but I contend that we have a' sane solution to offer to the people, and I am looking forward to the day when a social credit minister of finance will bring down a budget which will indicate a solution of the many problems that confront the country today, problems which some of our leading statesmen declare will bring ruin and disaster to Canada. We see no ruin and disaster to the credit of this country if we will but make use of our national credit. We do not fear the collapse of financial credit as long as the real credit of the country remains intact. As long as we have our great railways running; aa long as there are men on the farms; as long as the laws of nature are favourable to the production of goods which we need; as long as we have all the real wealth in the country and the ability to produce, we need not fear anything. The collapse of financial credit is, therefore, not of much concern to us. We say that that which is physically possible will be financially possible under a just monetary system.
Mr. H. E. WILTON (Hamilton West); I wish to congratulate the hon. gentleman who has just spoken (Mr. Landeryou) upon his ideas of old age; I am glad to know he feels that he is going to live to be a very old man. In passing, I noticed in to-day's morning papers that the hon. and might I add charming, lady members of this house can divert their minds from the serious business of unemployment, added taxation and budget overdrafts to tihe more pleasing study of masculine defects due to lop ears, crooked noses and avoirdupois. Perhaps this interesting analysis of our physical defects may have the subduing effect of shorter speeches and thereby prove of great value in solving the perplexing financial problems which confront us. Perhaps when the members for Grey-Bruce (Miss Macphail) and the Yukon (Mrs. Black) next have their teacups read, a Prince Charming will be revealed. Let us hope for the best.
As an individual member, representing an individual but outstanding constituency, I realize my duty to that constituency, but I also realize my duty in a broader sense to every citizen of Canada, particularly to that important majority known as "the taxpayer:"

The Budget-Mr. Wilton
The outstanding feature of the revised tariff act, according to its supporters, is that it will increase the buying power of the Canadian dollar. Last Saturday, while I was in Hamilton, a hardware merchant of that city showed me a certain article on sale in his store retailing at ten cents. He told me that this article was manufactured in the city of Hamilton and that he purchased it at forty-five cents per dozen. Quite recently representatives of Japanese firms had called upon him and offered him this same article at thirty cents per dozen. The point is this, as he said, "Although I may and probably will buy those Japanese goods at thirty cents per dozen, as against the forty-five cents per dozen asked here, I shall not sell them at less than the price I am selling them at now, so that the only person who will benefit by that will be the retail dealer and not the man who buys to use."
Hamilton, because of its hundreds of large manufacturing concerns, is known far and near as the Pittsburgh of Canada. What will this new reduced tariff act do to that great city? It will decrease employment; it has done so already, and it will increase public relief, which in turn will increase taxation to the already overburdened taxpaying homeowner. Of what use is increased buying power to the man out of work and without money? The reduced tariff on automobiles would imply reduced cost to Canadians, but such is not the case, because the increase in sales tax more than offsets the tariff reduction. Last week I was told by a representative salesman of a large automobile sales concern in Hamilton that the agents of that company had been called in to their head office last Saturday morning and instructed to add $18 to the price of every car they offered for sale. I said to him, "Your cars should sell cheaper, due to the reduction in tariff," and the answer was "They should, had it not been for the sales tax, which more than offsets the reduction in tariff and adds $18 to the price of our car." This is a low priced car.
There is an old saying that nothing is so bad but it might be worse. So, perhaps we should be thankful that the situation is no worse than it is. I do not agree with those who say that we have passedi through the worst depression the world has ever known. Ancient history belies the statement. A hundred years ago, yes, and two hundred years ago, the same cry was being made, as is indicated by an extract I have in my hand, taken from the writings of Lord Macaulay Writing in 1830, he speaks of conditions over
a century ago, and also makes reference in this essay to a period one hundred years prior to that time:
The present moment is one of great distress. But how small will that distress appear when we think over the history of the last forty years; a war, compared with which all others sink into insignificance; taxation, such as the most heavily taxed people of former times could not have conceived; a debt larger than all the public debts that ever existed in the world added together; the food of the people studiously rendered dear; the currency imprudently debased, and and imprudently restored. Yet is the country poorer than in 1790? We firmly believe that in spite of all the misgov-ernment of her rulers-
They were complaining about misgovemment then.
-she has been almost constantly becoming richer and richer. Now and then there has been a stoppage, now and then a short retrogression; but as to the general tendency there can be no doubt. A single breaker may recede but the tide is evidently coming in.
If we were to prophesy that in the year 1930 a population of fifty millions, better fed, clad, and lodged than the English of our time, will cover these islands-that machines constructed on principles yet undiscovered will be in every house-that our debt vast as it seems to us, will appear trifling to our great-grand-children, many people would think us insane. We prophesy nothing; but this we say: If any person had told the parliament which met after the crash of 1720 that in 1830 the wealth of England would surpass their wildest dreams-stage-coaches would run frpm London to York in twenty-four hours, that men would be in the habit of sailing without wind, and would be beginning to ride without horses, our ancestors would have given as much credit to the prediction as they gave to "Gulliver's Travels."__
We cannot absolutely prove that those are in error who tell us that society has reached a turning point, that we have seen our best days. But so said all who came before us, and with just as much apparent reason.
So, after all, we find that two hundred years ago, and again one hundred years ago, the same cry we hear to-day was in evidence. Perhaps we may be glad that conditions are no worse than they are. Regardless of tariffs, budgets, polities and pessimists, the great problem of unemployment, public relief and a rapidly increasing national debt will never be solved by the vicious system of borrowing money with which to pay debts. Borrowed money never paid a debt. It simply adds to the 'burden, and finally finds its way to the tax bill of the homeowner. We reduce national income by reducing tariffs, and adjust the financial loss by increased taxation. This tariff act in its present form will divert Canadian manufacturing concerns to the United States, and put Canadians out of work. The only solution is new, additional sources
Criminal Code

of revenue, which I think I referred to a few days ago, other than by direct taxation. If I had in my garden a good crop of potatoes, it would be most ridiculous for me to borrow from my neighbour money with which to go out and purchase potatoes. It would be no more ridiculous, however, than what our governments are doing. With our na-;ional back yard filled with gold, silver and valuable minerals of various kinds, we go out and borrow money, leaving our rich mineral deposits in the hands of private concerns to exploit and profit by, while we as a government continue to sink deeper in the mire of borrowed money debts. So long as we continue this kind of thing, this vicious circle of borrowing money with which to pay borrowed money, we shall have no good reason to complain if the lady members of this house refer to us, not only as lop-eared, but as irresponsible incompetents.
On motion of Mr. Rowe (Dufferin) the lebate was adjourned.
On motion of Mr. Lapointe (Quebec East) the house adjourned at 1053 p.m.
Friday, May 8, 1936