Right Hon. W. L. MACKENZIE KING (Prime Minister) moved:: That on and after Wednesday, 4th March next, to the end of the session, government notices of motion and government orders shall have precedence on Wednesday over all business except the introduction of bills, questions by members and notices of motions for the production of papers.


[Stage Direction]
Motion agreed to.

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

Mr. HEAPS:: 1.	How many loans were made by the dominion government under the Dominion Housing Act, 1935?
2.	What was the amount in each case of such loans?
3.	What was the total amount of such loans as at January 31, 1936?

Questions


Mr. DUNNING:: 1. Number of loans approved under the
Dominion Housing Act		to February 25,	1936
-113.			
2. Classification	of loans to February		25,
1936:			
Not exceeding $3,000			8
Over $3,000 not	exceeding $4,000....	17" 4,000	(i	5,000.. .	22" 5,000	U	6,000.. .	12" 6,000	u	7,000.. .	17" 7,000	it	8,000.. .	20" 8,000	a	9,000.. .	9" 9,000 " 10,000.. .	it	10,000.. .	1 73.	To January 31, 1936-$666,508; to February 25, 1936-$755,900.
Note.-In this answer the amounts in dollars include the share of the dominion government and of the approved lending institutions.



CHAMPLAIN COUNTY EXHIBITION

Mr. BRUNELLE:: What was the amount of the annual grant given by the federal Department of Agriculture to the exhibition of Champlain county from 1925 to 1935?


Mr. GARDINER:: No federal grant has been given to any exhibition in Champlain county during the years 1925 to 1935, inclusive.



JANSEN, SASK., POST OFFICE

Mr. FLEMING:: 1.	Who conducted the investigation into the Jansen post office resulting in the dismissal of Ernest J. Symons, former postmaster?
2.	At whose request was the investigation made?
3.	Is the person who requested the investigation, any relation to the commissioner who conducted the investigation?


Mr. ELLIOTT (Middlesex):: 1.	George Wilson, barrister, Kinistino, Sask
2.	E. S. Wilson, of Humboldt, Sask.
3.	Yes. Brother.



LAC VERT, SASK., POST OFFICE

Mr. FLEMING:: 1.	Who conducted the investigation into the Lae Vert post office resulting in the dismissal of D. N. McRae, former postmaster?
2.	At whose request was the investigation made?
3.	Is the person who requested the investigation any relation to the commissioner who conducted the investigation?


Mr. ELLIOTT (Middlesex):: 1.	Inspector of postal service L. S. Cummings (Saskatoon District).
2.	Complaint was received by district superintendent from F. A. Rose, a merchant of Lac Vert, regarding mistreatment of mail matter.
3.	No information.



SOCKEYE SALMON INVESTIGATION

Mr. REID:: 1.	What persons were appointed under the direction of the biological board in charge of the soekeye salmon investigation at Cultus and Harrison lakes?
2.	When were they appointed and what were their official positions?
3.	When did they conclude their investigations?
4.	At what date was their report sent or given to the biological board?
5.	At what date was their report received by the Deputy Minister of Fisheries?
6.	Was the report, when first received by the Minister of Fisheries, the deputy minister or any official, sent back suggesting any alteration or amendment or for further consideration?


Mr. HOWE:: 1.	Dr. R. E. Foerster.
2.	1925. Assistant biologist.
3.	The board decided to bring the investigation to an end with the counting of migrants from Cultus lake during 1935.
4.	The final report was submitted to the executive committee of the board in November, 1935.
5.	In November, 1935.
6.	No. The report and conclusion reached by the board are now receiving consideration.



SALARY DEDUCTION

Mr. CRETE:: 1.	What is the total amount of the five per cent salary deduction affecting civil servants according to the estimates for the year ending March 31, 1937?
2.	Do such estimates make provision for salary increases to certain members of the public service?
3.	If so, what is the name and occupation of each such person, the amount of the salary increase in each instance and in what department is he employed?
4.	Will such salary increases, if any, be paid out of the five per cent deduction applicable to other civil servants?
5.	If the estimates make provision for salary increases to certain members of the public service, who recommended such increase in each case and to whom was the recommendation made?


Mr. DUNNING:: 1.	Approximately $3,100,000.
2,	3 and 5. Yes, for statutory increases as provided by section 14 of the Civil Service Act, and a small number of other increases specifically mentioned in the estimates as tabled. (To furnish names and occupations

Questions as Orders for Returns
of all persons receiving statutory increases would entail returns from all departments and a great deal of clerical work).
4.	No.



EMPLOYMENT AND SOCIAL INSURANCE COMMISSION

Mr. POULIOT:: 1.	Who are the members of the Employment and Social Insurance Commission, and on what date were they appointed?
2.	What salaries have they been paid to date ?
3.	How many persons are employed by the
commission?
4.	What is the amount of salaries paid in that respect to date?
5.	What is the total cost of the _ Employment and Social Insurance Commission since its inception to date?
6.	How many unemployed has it been instrumental in providing with employment in each province?	, _
7.	How many reports has such commission made to the government, and what is the date of each such report?


Mr. MACKENZIE KING:: 1. Tom Moore and Nazaire	Romeo Beaudet. Appointed July 20, 1935.
2.	Tom Moore, July 20, 1935, to February 29, 1936, S5.263.31. Nazaire Romeo Beaudet, July 20, 1935, to February 29, 1936, $5,263.31.
3.	Three.
4.	Sl.563.79.
5.	To February 29, 1936, $37,894.92.
6.	Administrative staff not appointed to operate part II (employment service) of the act.
7.	None. The act provides for an annual report to be submitted one month after March 31 each year or within such longer period as may be approved by the governor in council.



QUESTION PASSED AS ORDER FOR RETURN


Mr. CRETE:: 1.	How many petitions have been submitted to the present tariff board since its establishment by companies or persons: (a) of Great Britain; (b) of Canada; (1) prior to October 14, 1935; (2) since such date?
2.	How many petitions by companies or persons: (a) of Great Britain; (b) of Canada, were: (1) granted; (2) rejected; (3) are still pending, with respect to each of the above-mentioned periods?
3.	Is there in Great Britain a public body similar to the Canadian tariff board to which Canadian manufacturers or citizens may submit requests for a reduction of customs' duties?
4.	If so, what is the name and address of such public body?
5.	In how many cases has the government acted in accordance with the recommendations

of the present tariff board since its establishment:	(a) prior to October 14, 1935;	(b)
since such date?
6. What are such cases?



MOTIONS FOR PAPERS


Mr. FLEMING:: For	a	copy	of	all letters, correspondence
and other documents respecting the dismissal of Ernest J. Symons, former postmaster at Jansen, Saskatchewan.



LAC VERT, SASK., POST OFFICE

Harry Raymond Fleming: For	a	copy	of	all letters, correspondenceand other documents respecting the dismissal of D.	N. McRae,	former postmaster at Lac
Vert, Saskatchewan.



GROSSE-ILE, MAGDALEN ISLANDS, PUBLIC WORKS

Mr. BRASSET:: For	a	copy	of	Public Works department
pay-lists covering the months of November and December, 1935, with respect to all works carried out by such department at Grosse-Ile, Magdalen islands.



SUPREME COURT BUILDINGS

Mr. POULIOT:: For a copy of the report of the inspection of the supreme court buildings by the officials of the Department of National Health, according to instructions given in November, 1935, and submitted to the Department of Public Works for consideration.


Mr. POWER:: Return tabled herewith.



POWER COMMISSION ACT, 1935

Mr. STEWART:: For a copy of all petitions, resolutions, letters and telegrams making representations in favour of or in opposition to the disallowance of an act of the legislature of the province of Ontario, intituled, "The Power Commission Act 1935," being chapter 53 of the statutes of said province for the year 1935. Also a copy of all communications in reply to the said communications.


William Lyon Mackenzie King: The Minister
of Justice, I believe, desires to have a word with my hon. friend in regard to this proposed order of the house. If the order is passed as requested, it will involve an enormous amount of copying of correspondence. If it will serve my hon. friend's purpose to have the names of all the persons who have communicated with the government, both for and against the disallowance of the act referred to, it will simplify matters very much. If my hon. friend wished to see any of the communications they could of course be made available to him. But to have them all copied would make the return an enormous one.

League of Nations-Mr. Douglas


Hugh Alexander Stewart: I have no desire unduly
to handicap the permanent officials in connection with this matter. I am content with that as a beginning, with a reservation of the right to ask for further information if what is brought down by the Prime Minister is not satisfactory.


[Stage Direction]
Motion agreed to.


Mr. T. C. DOUGLAS (Weyburn) moved:: That this house urge upon the government the necessity for sincere and complete fulfillment of all obligations assumed under the covenant of the League of Nations and especially the prohibition of direct or indirect export to an aggressor nation of all raw materials and manufactured articles necessary for war purposes:
And be it further resolved, that this house, realizing the danger and futility of sanctions unless collectively imposed and unless accompanied by a determined effort to remove the causes of war, urge that, as now provided for in the covenant of the League and the resolutions of the assembly, the Canadian government initiate proposals to achieve the more complete fulfillment of the following purposes of the covenant:
(a)	Collective reduction of armaments;
(b)	Open and collective diplomacy with reference to international disputes;
(c)	Abrogation of treaties and agreements not in accord' with the covenant;
(d)	Definite steps under article 19 of the League covenant to revise the peace treaties and to apply the principles of international justice to the solution of those economic territorial and racial problems most frequently the cause of international disputes;
(e)	Prohibition of unilateral agreements and unilateral mobilization likely to undermine the efforts of the League to establish conditions of peace;
And be it further resolved, that, unless and until, there is a sincere acceptance and application of the above by the member-nations of the league, Canada will refuse to participate in any foreign war no matter who the belligerents may be.
He said: Mr. Speaker, no person in the house realizes more than I do how unfitted I am to deal with this task with any degree of thoroughness. Even if I were adequately fitted, how limited the time is at my disposal to deal with so great a subject.
At the outset I wish to lift this whole matter out of the realm of party politics.


Mr. CAHAN:: Is it in it?


Thomas Clement (Tommy) Douglas: The desire for peace is
not a monopoly of any party in this house. I believe it is true that the great majority of members of this house, as well as the great majority of the people of Canada, are in favour of peace. During the last year a most
remarkable thing has taken place in Great Britain. The result of a peace ballot, taken under the direction of Lord Cecil, one of the great crusaders for peace, and in which almost thirteen million ballots were returned, shows the following facts:
In answer to the question: should Great Britain remain a member of the League of Nations, 97 per cent answered "yes" in relation to those who answered "no."
In answer to the question: are you in favour of an all round reduction of armaments by national agreement, 92-5 per cent answered "yes" in relation to those who answered "no."
In answer to the question: are you in favour of an all round abolition of national military and naval aircraft by international agreement, 85 per cent answered "yes" in relation to those who answered "no."
In answer to the question: should the manufacture and sale of arms for private profit be prohibited by national agreement, 93-1 per cent answered "yes" in relation to those who answered "no."
In answer to the question: do you consider that if one nation insists on attacking another, the other nations should combine to compel it to stop by economic and non-military means, 94-1 per cent answered "yes" in relation to those who answered "no."
To the last question: do you consider that if a nation insists on attacking another, the other nations should combine to compel it to stop, by if necessary, military measures, 74-2 per cent answered "yes" in relation to those who answered "no."
We have no statistics of a similar nature in Canada. But the resolutions passed by several national bodies and by church organizations, and the general sentiments expressed in the press, would lead one to believe that, like the motherland, the great majority of the Canadian people are opposed to war and are in favour of taking whatever steps are necessary to maintain peace.
I draw these facts to the attention of the house because I want to make it clear that we in this corner are not presenting this resolution with the self-righteous attitude that we are the sole champions of peace. I think we all want peace. The question is, how can we 'best maintain peace? It is not a question of peace or war. It is a question of what is the best policy that shall make for peace for the prevention of war. A year ago this was a very simple question to answer. To-day it is not quite so simple. The whole confusing subject of sanctions has arisen. Certain events of the last year have confused the minds of those who desire peace, with the

League of Nations-Mr. Douglas
result that the ranks of peace lovers have become somewhat disorganized and it is necessary now to think the whole question over again.
May I in leading up to the subject review very briefly what has occurred since the beginning of what is called the Italo-Ethiopian question. The whole dispute began as a result of a border incident known as the Walwal incident, which took place on November 23, 1934. Subsequently a commission was set up to investigate the matter, and it finally decided that neither nation was to blame. From January, 1935, until last July, friction increased rather than decreased. The Italian government continued to pour troops and munitions into Africa, apparently with a view to military aggression. The major powers of Europe who were concerned endeavoured- I think unfortunately-to settle this matter outside of the machinery of the league; that is, their negotiations were based entirely on the Tripartite Agreement of 1906 and the revision treaties of 1926 and 1928. There was no recourse to the machinery of the league during the whole of the time that the Italian government was massing troops in Africa. It was not until July last that the major powers referred the case of Italy and Ethiopia to the League of Nations. I think we may be proud of the fact that on that occasion the lead was given by Right Hon. Sir Samuel Hoare, then British Secretary of State for Foreign Affairs. At that time, in a brilliant and spirited defence of the League of Nations, Sir Samuel Hoare placed the British government and the British people solidly behind collective action to maintain collective peace. I shall read just the closing part of that address:
In conformity with its precise and explicit obligations, the league stands, and my country stands with it, for the collective maintenance of the covenant in its entirety, and particularly for steady and collective resistance to all acts of unprovoked aggression. The attitude of the British nation in the last few weeks has clearly demonstrated the fact that this is no variable and unreliable sentiment, but a principle of international conduct to which they and their government hold with firm, enduring and universal persistance.
I say, I think we may well be proud of the fact that a British foreign minister, backed by the peace ballot to which I have referred and by the growing sentiment in Great Britain that the British people were prepared to make tremendous sacrifices in order to maintain collective peace, placed the British people solidly behind the League of Nations on that occasion. I should like to point out also that on that occasion Canada as well was placed

solidly behind the League of Nations. I quote the closing paragraph of the speech delivered by Hon. Howard Ferguson on September 14, 1935:
Impressed, then, by the gravity of the situation, my government has requested me to make its position clear with regard to this matter. Canada believes the league of nations is an indispensable agency for world peace. We cannot agree that any member is warranted in resorting to war to enforce its claims in violation of its solemn pledges to seek and find a peaceful settlement of every dispute. We hope that an honourable and peaceful solution of the Ethiopian controversy will yet be reached. If, unfortunately, this proves not to be the case, Canada will join with the other members of the league in considering how, by unanimous action, peace can be maintained.
Thus in July last the machinery of the League of Nations was invoked as a means of settling what had become a very critical question. Ten years ago, when the league was being discussed somewhat critically, there were those who said it was so weighty that it would be simply impossible to get it to function quickly in a time of crisis. I am sure, however, that even the most optimistic supporters of the league hardly believed that the league would actually function as quickly as it really did. I have little doubt that the period from October 7 to October 14 will go down in history as a most remarkable phenomenon of international collective action. You will remember, sir, that hostilities were begun on October 4, and this is actually what happened in the following few days. On Monday, October 7, thirteen members of the council of the League of Nations found Italy guilty of resorting to war in disregard of her covenants. On Wednesday, October 9, the verdict of the council was referred to the assembly of the League of Nations, consisting of fifty-four nations. On Thursday, October 10, this verdict was passed upon by the assembly of the league, which found Italy guilty; fifty-one nations, representing four-fifths of the population of the earth, concurred in that decision; five nations were absent and three nations voted against the verdict. On Friday, the 11th, the committee on sanctions formally approved an embargo on arms to Italy and the removal of restrictions against Ethiopia, and on Saturday, October 12, financial experts proposed credit restrictions against Italy and Mr. Anthony Eden proposed a boycott on the import of Italian periodicals. Thus in this short period from October 7 to October 14 the league-though somewhat late, I think-swung into action and took the necessary steps, first of all to condemn the aggressor and second to set machinery in motion to prevent that aggressor receiving

League of Nations-Mr. Douglas
the necessary materials with which to carry on war.
In order to keep the logic of our sequence intact let us look for a moment at what was done by the Canadian government at this time. Hon. Howard Ferguson, undoubtedly under orders from the government of Canada, -the previous administration,-made this statement on October 11:
The sole problem before the committee was to decide what sanctions the delegations could all agree upon that afternoon and put into application immediately. Let them show the world that the league was no longer to be scoffed or laughed at, but that it meant business, and that when a breach of its covenant took place it proposed to deal with the aggressor in the proper way. Otherwise the league and the assembly would lose prestige and influence in the world and might as well be dissolved. If the delegates were not at Geneva to see that the covenant was carried out, there was no purpose in their being there at all.
This was followed, on October 29, by a statement from the present Prime Minister (Mr. Mackenzie King), who said:
The government has no doubt it expresses the overwhelmingly conviction of the people of Canada in declaring its continued and firm adherence to the fundamental aims and ideals of the league of nations, and its intention to make participation in the league the cornerstone of its foreign policy in the general field.
I think, Mr. Speaker, that the government of Canada, both the previous administration and the present government, interpreted correctly the psychological attitude of the Canadian people, in that they desired in the main a firm adherence to the policies of the League of Nations and were prepared to take any reasonable steps to preserve peace and prevent a recurrence of war.
There is no need for me to do more than touch very briefly on the sanctions that were suggested and proposed by the coordinating committee. They were five in number: First, an embargo on arms, munitions and implements of war; second, a restriction on loans and credits to Italy; third, a restriction on imports from Italy consisting mainly of periodicals, magazines and papers; fourth, an embargo on key products used by Italy to carry on war, and fifth, mutual economic support given to nations participating in this economic boycott. Canada agreed with all five, the last one in principle and the other four in their entirety.
I have given, sir, this brief review of what has happened during the last year, so that we might understand more clearly just what the problem is that confronts us at the present time. No doubt many people who desire peace are asking themselves if it is wise to
apply sanctions, if it is wise to extend these sanctions, and exactly what the policy of those who desire peace ought to be. There are those, quite sincere people, who take the attitude that we ought to remain neutral, to isolate ourselves; they agree with the great body of public opinion in the republic to the south, that we should cut ourselves adrift from the League of Nations and from European diplomacy. To that argument it may be said, first, that such an attitude is scarcely morally justifiable. I need only quote a statement of Lord Cecil, who said:
Loyalty to this principle of "pooled security" is as necessary to the great society of nations as it is to the society of citizens within the nations. We have to "respect" the broad rules of peace ourselves; but we must also "preserve" them against violence, as the covenant affirms. Every isolationist who challenges this principle and who says in effect "am I my brother's keeper?" is a contributor to anarchy: he is keeping alive the anarchic conception of "security" as meaning a precarious "supremacy" in a world of competing armament, and is preventing the emergence of a new, rational conception of "security" as meaning the public assurance of solidarity against violence and wrong.
Then, Mr. Speaker, even if a policy of isolation were not morally unjustifiable, practically it is not feasible. The one nation in all the world which might have remained neutral in a time of war was the United States of America, a self-sustaining nation which in 1914 decided that she would have no part in the war, and in 1917 elected President Wilson on the platform that he would keep the United States out of the war; but five months later she was plunged into the conflict. In a time of war an exporting nation must send out its ships unless it is to succumb to economic stagnation. If its ships sail the seas they are likely to be attacked or sunk, international complications set in, and the policy of isolation becomes next to impossible.
There are those who maintain to-day that if we invoke economic sanctions they will lead to military sanctions, and that economic sanctions will lead to war. May I point out, first, what sometimes we do not recognize, that failure to apply economic sanctions may lead to war. The League of Nations cannot stand the loss of prestige that would result from permitting the Italo-Ethiopian dispute to go on without intervention. The Sino-Japanese affair caused the prestige of the League of Nations to suffer greatly. If the league again suffers a diplomatic defeat the only remaining agency for international peace will be completely dismembered. I am not one of those who give unswerving allegiance to the League of Nations; I believe it has its
League of Nations-Mr. Douglas

shortcomings, and that it has been used again and again to pull the chestnuts out of the fire for certain imperial interests. But I maintain that it is the only available agency to-day for collective action and collective security. Those who say that if we invoke economic sanctions it will lead to military sanctions forget that if all the fifty-two nations which have promised to invoke those sanctions cooperate, military sanctions will become unnecessary. No nation, no matter how great, could long stand the pressure of an economic boycott on the part of fifty-two other nations. But may I point out that economic sanctions do not necessarily mean military sanctions. I have not time to read article 16 of the covenant of the league, but most hon. members know that in that article economic sanctions are absolute; military sanctions are conditional. It will be remembered, too, that in 1920 Canada made a reservation to article 16. This is it:
It is in conformity with the spirit of article 10 that, in the event of the council considering it to be its duty to recommend the application of military measures in consequence of aggression or danger or threat of aggression, the council shall be bound to take into account, more particularly, the geographical situation and especial condition of each state.
May I remind hon. members that in 1921 the League of Nations in sending a note to Germany made it quite clear that military sanctions would not be compulsory, but were dependent entirely on the regional and geographical situation of the nations. Therefore the argument that the application of economic sanctions must lead to the application of military sanctions and thus to war is not well founded.
In the resolution which I have the honour to present to the house we are asking for a more sincere fulfilment of our obligations under the covenant of the league. We believe that can be done in two ways: first by tightening up the present sanctions, that is by extending the list of things that shall be prohibited from export to include all articles necessary to carry on war. I have no wish to bring up what is sometimes called the Riddell incident; it has been discussed in a more or less partisan way, and we are dealing just now with something that rises above party politics. But I would remind the house that when we are talking about collective action someone has to initiate that action; that when the members of the League of Nations gather to decide what steps they shall take for the maintenence of peace, somebody must propose the steps that should be taken. I submit that there is perhaps no nation represented at the council table of the league that is in

a better position to initiate such steps than Canada. By asking for a more sincere application we mean not only an extension of the list of articles now under embargo but also a tightening up, with a view to investigating what commodities are being shipped indirectly to countries engaged in active aggression. I have the figures here for the export of nickel. It is a remarkable thing that last year, 1935, we exported more nickel than in any year of the last ten. That some of this nickel is being used indirectly to provide armaments for war is almost beyond question. I know it is very difficult to deal with the question of indirect exports. I know there arises the question of remuneration of those who stand to lose by such an arrangement. Yet I submit that the great majority of the Canadian people would support any steps the government might take to see that goods produced in Canada are not being used to enable one nation to carry on a brutal and ruthless massacre of a primitive and defenceless people.
In the resolution I have presented we point out that sanctions are not in themselves sufficient. We point out the danger and futility of sanctions. In the first instance they are dangerous because they may 'be used for the advancement of imperialism. There are those to-day who are pointing with a critical finger to the fact that Great Britain, who was so active in applying sanctions against Italy, was loth to apply them against Japan. They say the reason is that there is a Suez canal in Africa, but no Suez in Manchuria. I am not one who holds that point of view. However, there is a decided danger that sanctions with a view to maintaining peace may be used to maintain and advance imperialistic means of aggrandizement.
There is a danger of sanctions being used to maintain the status quo. I believe President Wilson was the man who, perhaps more than anyone else, was responsible for the drawing up of the covenant of the league. He saw the danger that the league, which was to be an instrument of justice, might become an instrument of injustice, and that as the years went by certain international problems might crop up and necessarily international readjustments would have to be made. He saw that from time to time there would have to be a rearrangement of treaties, particularly a revision of the treaty of Versailles, and that it would be necessary to set up the machinery whereby that revision could take place. For these reasons we point out that in themselves sanctions may constitute a danger, and not only may they be dangerous but they may be futile in the prevention of war. To-day sanctions may postpone war; they may pre-

League of Nations-Mr. Dowlas
vent its happening in the immediate future, but unless the League of Nations is prepared to deal with the underlying causes 'leading to war we cannot hope to maintain peace. Unless we are prepared to see that there are economic problems, that there are colonial problems, that there is a pressure of population in certain areas of the world which inevitably must lead to war, and unless we set up the machinery necessary for peaceable change, the mere application of sanctions will only postpone the inevitable day of reckoning. That is why we have made these proposals.
As I have not much more time to speak I shall not deal in detail with the proposals, but we ask that first of all Canada shall take the lead in securing collective reduction of armaments. If we are going to condemn Italy for breaking article 10 of the covenant, and Germany for breaking the treaty of Versailles, we must be prepared to observe article 8 by which we promise to reduce armaments. There must be collective and open diplomacy, and an abrogation of treaties not in accord with the covenant. Above all, under article 19 we must set up the machinery whereby the problems of territorial expansion, pressure of population, and economic stagnation and suffocation shall be submitted to some body with authority which will be in a position to suggest possible ways of peaceable change.
Change is coming; it is bound to come. The only sensible procedure would seem to be that of setting up the machinery whereby it may be done peaceably and without recourse to force. Unless we recognize this fact, all our talk about sanctions is beside the point. The founder of the league and Right Hon. Sir Samuel Hoare, Lord Lothian and a number of other prominent men who have worked tirelessly for peace, have made this point dear.
I suggest further that we do away with unilateral agreements.


Charles Hazlitt Cahan: What is a unilateral agreement? That is puzzling to me; I never heard of one before.


Thomas Clement (Tommy) Douglas: I have this in mind: From January to July of last year Great Britain, France and Italy, working outside the league, endeavoured to settle the dispute in Ethiopia by giving to Italy certain concessions of land.


Charles Hazlitt Cahan: It would be a tripartite agreement.


Thomas Clement (Tommy) Douglas: Yes.


Charles Hazlitt Cahan: That was not unilateral, then?


Thomas Clement (Tommy) Douglas: It was suggested that they would be unilateral between Ethiopia and Italy.


Charles Hazlitt Cahan: Would that not be a bipartite agreement? I never heard of such a thing as a unilateral agreement.


Thomas Clement (Tommy) Douglas: It is the term we use, I believe.


Charles Hazlitt Cahan: I never heard of it.


Thomas Clement (Tommy) Douglas: The idea is that machinery outside of the league is used, and in the solving of problems which may come up resort is had to old imperialistic methods rather than to the machinery of the league. In this morning's issue of the Montreal Gazette we see a very good example. It appears that Italy, having had a number of successful encounters with Ethiopian troops, is now saying to the French government that she is prepared to enter into negotiations with Ethiopia. However she is not making that statement to the league, nor is she using the machinery of the league. I maintain that if Italy and Ethiopia settle their differences outside the league by a mere juggling of territory we are sowing the seeds of another war. We cannot drive two horses in different harness. We must either work through the machinery set up by the league or resort to the old diplomatic balance of power which inevitably must lead to war.
Summing up, we take the attitude that if the League of Nations is to be used to maintain the status quo; if it is to be used so that the major nations, who have eaten their full in the race for colonies, may use the league to prevent the growth of other nations and to prevent economic expansion, and if it is to be used merely as a machine to enable those who have to keep what they have, we do not feel that such a league can be a satisfactory agency for peace. We maintain that if the League of Nations is used for what we believe it can be used, namely, an instrument of collective action, guaranteeing collective security and giving collective peace, if it is prepared to set up the machinery necessary to bring about revisions and readjustments in the international field, and if it is prepared to become a tribunal to which nations may go to air their grievances, it can, and I believe will, bceome a great power and a great force in the maintenance of world peace.
My submission is that no nation in the world has a greater responsibility or opportunity to that end than has Canada. We have no desire for colonies and no imperialistic dreams. We have no neighbours of whom we are afraid. Our relationship with our neighbours to the south stands a monument to peace and good will, and I suggest we are in a first class position to set up machinery

League of Nations-Mr. Marshall
which would give moral leadership to the nations of the world to the end that men of all races, colour and speech ultimately may come to sit in the parliament of man and the federation of the world.


Mr. LENNARD:: What position would
Canada be in if it were not for the protection of the British empire?


An hon. MEMBER:: Answer it.


Mr. J. A. MARSHALL (Camrose):: Mr. Speaker, in rising to speak to this resolution I do so with a certain amount of trepidation. As a new member may I express to you, sir, and to the older members of this house- older not so much in point of age but in length of service-our appreciation of the courtesy and kindly tolerance which has been extended to us as a group of social crediters on account of the fact that we are new to this particular sphere.
The resolution before us is rather a long one, and it is not my purpose to discuss it in its entirety. I think it can be summed up in four words:	We want international
peace. I believe it is true, sir, that in the multiplicity of words there is much confusion, and in my own mind at least-I do not know whether in the mind of other members of the house-there is a certain amount of confusion as to exactly what this resolution means and exactly what it asks. I believe, too, that on account of conditions as they exist in Europe to-day it perhaps might be better if a resolution of this nature were not brought up for discussion.
Going back into the record of the proceedings of this house I find that discussions of international peace have taken place almost yearly since the great war ended in 1918. The hon. member for Grey-Bruce (Miss Maophail) has been most persistent in her demands for action by Canada in the cause of international peace, and she is to be commended for her action in that regard. I believe it is the duty of every red-blooded Canadian to seek every possible avenue which might lead to a solution of this problem When the war ended in 1918 we said that never again would we permit nations to bring such another catastrophe upon the world. We meant eveiy word we said in those days, and yet in spite of that we find the nations today flying at each other's throats. They have forgotten the expression "peace, perfect peace."
At the close of the war the League of Nations was set up, and it had two great aims: first, to preserve peace and to seek a peaceful settlement of international disputes,

and second, to organize in the most varied spheres the cooperation of peoples with a view to the material and moral welfare of humanity. These were very excellent aims, but I fear that to a great extent we have lost sight of that first aim, the preservation of peace.
To find out exactly what some of our leaders in this parliament have said and thought in regard to international peace I went back over the record of Hansard, and I find that the opinions expressed are very divergent indeed. They do not throw any new light on an old subject. Here are some opinions which were expressed on March 26, 1928. The present Prime Minister (Mr. Mackenzie King), speaking on the subject of international peace, used these significant words:
This government and this parliament have identified themselves in a very real and immediate way with the League of Nations.
Everything we do in connection with the League of Nations we are doing along lines that are promoting this very objective-international peace.
The leader of the opposition (Mr. Bennett), on a subsequent occasion, used these striking words:
There can be no educated public opinion so long as the machinery of parliaments is utilized for the purpose of providing armaments with which man may go to war.
The Minister of Justice (Mr. Lapointe) in 1930 used these words:
The old system has failed and a new structure is being built-
Those are very significant words indeed today. He continued:
-I hope on a basis of justice and solidarity. The League of Nations is no longer an idea; it has become a reality and its strength is continuously increasing.
Then we have the member for East Kootenay (Mr. Stevens) saying this:
You will never bring about peace by philosophical dissertations. There is only one method I know of and that is by promoting the principles of the Prince of Peace.
These, sir, are significant words, non-committal it is true, and general in their scope. Let us turn to some other comments. Let me read one which was made by the member for Broadview (Mr. Church). Commenting on an article written by George Bernard Shaw, the hon. member said:
Now let us see what Bernard Shaw has to say in regard' to this wonderful mock parliament known as the League of Nations, which is doing more to create strife than any other agency I know of. In my opinion they should change the name from League of Nations to League of Humbug, because that is all it is.

League oj Nations-Mr. Marshall
Then he goes on to quote the words of Bernard Shaw, who, I am sure you will agree with me, Mr. Speaker, is a man of thought, a master of English, and a moulder of public opinion. Bernard Shaw said:
Roughly and generally it is a fact that the pacifist oratory at the assembly is Christmas card platitude at best and humbug at worst. The permanent departments of the league have to fight hard to defeat the frequent attempts to sabotage it by the big powers through their deciduous members.
There you have, I think, the two schools of thought, one leaning towards the idea that the league is a successful institution, and the other suggesting that it has in a measure failed in its purpose, the purpose for which it was brought into being. Those who have criticized the League of Nations, it must be admitted, have had courage and daring. They may possibly be branded as men of warped intelligence, but notwithstanding that we ourselves in our hearts can criticize some of the actions of the league. No one will deny that the aim of the league, namely, the abolition of war, is a very worthy one indeed; but its sphere of activity has been so greatly widened that the primary aim, the abolition of war, has been lost sight of.
War is an inevitable result of the present financial system. I emphasize that with all the power at my command: war is an inevitable result of the present financial system. It has been said that war is economic peace and conversely peace is economic war. In peace nations enter into competition with one another for foreign markets in which to dispose of their surplus goods. I do not thinlj that anyone will gainsay that fact, and that invariably leads in practice to war. When there is war goods are destroyed almost as quickly as they come into existence; people are in possession of plenty of money and we have an all round stimulation of business; in other words, we have economic security. Some suggest that we should abolish entirely the manufacture of war materials. I heartily agree with that; and I think we are all agreed that the main reason for the boom which Great Britain and other nations are experiencing at the present time is the manufacture of war materials. But the question arises then: If you ban the manufacture of war materials what are you going to do with the unemployed? You will immediately throw people out of work; you will swell the ranks of the unemployed, and your problem is accentuated.
What is the solution of the problem? I think the solution lies in endeavouring to
bring to the consumer more than he is obtaining at present. Make your people happy and contented by giving them all they want to eat, all the clothes they can wear and decent homes to live in, and you will banish the incentive to go to war. The problem of peace is one that lies within our own border, and it lies in the realm of finance. I cannot stress that too strongly. Give the consumers of this country or any other country for that matter the necessary purchasing power to buy goods as produced and you will solve this problem of war.
Let me say this in conclusion. While I sympathize with the aim of this resolution, yet in a measure I am opposed to the means of attaining the end it sets forth. I wish to make a statement on behalf of this group with which I have the honour to be associated. We are opposed to war, but we are convinced that its prevention does not lie in its prohibition but rather in a removal of the causes that make war inevitable. The chief of these causes is the drive for foreign markets, and the reason for this struggle for markets is the present financial system, which makes it impossible for any nation to distribute its wealth amongst its own people. Until this fundamental cause is removed all talk of permanent peace is not only idle but misleading. Attempts to prohibit war without removing its causes must aggravate the disease. Prohibitions by sanctions may postpone war but will inevitably cause offensive alliances, thus in the end enlarging the scope of war.
Recognizing that we are a small nation, we realize that our only hope of securing lasting peace lies in cooperating with the English speaking nations of the world who alone have preserved the political freedom necessary to bring about economic reforms by constitutional methods. We are unalterably opposed to war except in defence of our political freedom.


Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Although the mover of the resolution (Mr. Douglas) is a member of our own group, perhaps I might be permitted to express my appreciation of the comprehensive and dignified manner in which he has dealt with this subject. With regard to the speech to which we have just listened, we are heartily agreed that the only real way to prevent war is to remove the causes that make for war. But we have to face a world in which Canada is not a self-contained country but is inevitably brought into relations with otner countries. We are to-day dealing with other countries. Under almost any circumstances that might be imagined, Canada would be dealing with other countries, and

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under these conditions when hostilities break out we simply have to face the issue. And it is in order that we may the more intelligently face that issue that the resolution is introduced to-day.
Before considering the resolution in detail, I should like to take this opportunity to call attention to a report of a speech 'by the Italian consul, Luigi Petrucci, given before the Italian chamber of commerce yesterday in Montreal. It seems to me that this is a most improper speech and a very dangerous one. After criticizing very severely the League of Nations of which we are a member, and which league has condemned the action of Italy, he goes on to say-I will quote only part of the article which appears in the first column of page 2 of this morning's Montreal Gazette:
I cannot refrain from expressing my sorrow because Canada is applying sanctions against Italy, sanctions which are dangerous because they can bring another world war and which have destroyed the Italo-Canadian trade, which only a few months ago the two countries were trying to improve by means of a new commercial convention.
These sanctions cannot stop the Italian enterprise in East Africa. Other effects of sanctions are that they will create a great wall between nations and will make economic liberalism even more unrealizable and utopian. The covenant will become more and more difficult to apply and economic wars between nations will become the rule.	_	.
Italy refuses to admit the judgment taken by the League of Nations against her as illegal and iniquitous, and will stand with all her strength to oppose the effects of sanctions.
That is a challenge to Canada, and a challenge to the league, uttered by one who enjoys special privileges and special immunities in this country. I submit that it is ample ground for asking for his withdrawal from this country as the consul of Italy. May I further say that this is not the first time that we have had trouble with this particular consul. Members will remember something of this kind about a year ago, if I recall aright. Further, I remember last year a deputation of Italian citizens waiting upon me here in Ottawa, they having come from Montreal to make certain charges against the consul. They chimed that with his connivance there was being built up a secret fascist organization called the nationalist organization for the repression of anti-fascism. They charged that the officials of this organization were paid by the Italian government notwithstanding that they were British subjects 'by naturalization. They charged that the consul exercised a great deal of intimidation over Canadian citizens; that, naturally, Canadian citizens had to go to the consul for a
[Mr. Woodsworth.1
good many things relating to their homeland -certificates of birth and so on; that when they did so the accommodation was refused them unless they joined the fascist organization, and further that threats were made, not merely of bodily harm to Canadian citizens here but also to relatives of Canadian citizens who were still in Italy. There was shown to me a photostat of what purported to be an oath which was being administered by the consul to Canadian citizens. This ran as follows:
In the name of God and Italy I swear to execute the orders of II Duce and to serve with all my strength and if necessary with my blood the cause of the fascist revolution.
I am not prepared, obviously, as a private citizen to make investigation as to how far these charges are justified. I turned over the memorandum, which was submitted to me by a lawyer of Montreal who appeared with the delegation, to the Department of External Affairs. I do not know whether any action has been taken, but I submit that these are serious charges and ought to be carefully investigated. I have not brought this matter to the attention of the house, but when such statements are made, as appeared in the Montreal Gazette to-day, it is high time that some action should be taken by the government.
Coming to the resolution, may I point out that in the past it has been extremely difficult to get a discussion of foreign affairs. I do not know why it is, but it has been the practice to bring in the estimates of the Department of External Affairs very near to the close of the session. I am glad to say that that practice has been modified this year, and we already have had before us some of these estimates. But year after year about the only opportunity the house has had of discussing foreign or external affairs has been on the estimates, and they have come in very late. Last year-I do not say it was done by design-they came in late one evening just at the close of the estimates of another department. One minister was not prepared to go on; a switch was made to the Department of External Affairs, and the estimates went through without even a single comment; in fact there was not even a reference to them-I suppose for that reason-in Hansard. One result of this lack of discussion in parliament had been that our people generally have not been very much accustomed to discussing foreign affairs. Of course it is quite true that with us foreign affairs have more largely to do with our relations with the United States, but notwith-

League of Nations-Mr. Woodsworth
standing that fact I think we all must recognize that in the last great war we were thrown into the struggle, and in all probability we may be thrown into another great struggle.


Miss MACPHAIL:: We jumped in.


James Shaver Woodsworth: That struggle led to the sacrifice of the lives of tens of thousands of our best young men and brought this country to a condition of bankruptcy or near bankruptcy. It is curious that although we participated in one great war and are in danger of being thrown into another, we take no very active part in actually discussing external affairs. I have expressed on several occasions the hope that the reports of the League of Nations delegates should be referred to the committee on industrial and international affairs. Almost anything that would stimulate an interest among Canadians in the matter of our external relationships ought to be welcomed. The Prime Minister the other day, discussing the estimates for his own department, referred in this house to the way in which external affaire were pressing in upon us in recent years. They are bound to do so, and yet any crisis that arises finds our people quite unprepared.
A few years ago Canada was a signatory of the so-called Kellogg pact, in which we definitely abandoned war as an instrument of national policy. Nearly all the leading nations of the world signed that pact, and yet none of us apparently has implemented it by any change in national policy. I urge that not only should we abandon war as an instrument of national policy but we should abandon it as a recognized means for settlement of international disputes. Such a settlement is not permanent. The organization with which I am connected stands opposed to war. In order to make very clear our position I would read a statement with respect to peace, published two years ago at our Winnipeg convention:
We recognize that modern war rises primarily from the clash of interests in a world economy based on competition, therefore the establishment of world peace depends on abolishing competition and on building a cooperative commonwealth.
I trust that hon. members will not accuse me of unduly dragging in party considerations We were thinking of much larger things than any Canadian party when we spoke of it. The statement proceeds:
The Cooperative Commonwealth Federation is ualterably opposed' to war. If the great capitalist powers drift into another war Canadian neutrality must be rigorously maintained whoever the belligerents may be. Canada must refuse to give military assistance to the League
of Nations as at present constituted. We stand for thorough reorganization of the league in order to make it an effective instrument of peace.
The last clause of the resolution before the house is as follows:
That unless and until there is a sincere acceptance and application of the above by the member-nations of the league, Canada will refuse to participate in any foreign war, no matter who the belligerents may be.
Personally I would go farther than that. The longer I live the more convinced I become that war settles nothing, that war is the greatest disaster that could come upon any nation. I am convinced of that. I do not care whether or not somebody dubs me pacifist, with all the rather opprobrious connotations of that word; I think it is the only sane and safe policy in the world to-day. I have a good deal of respect for Mr. George Lansbury who, speaking of his resignation as leader of the Labour party in Great Britain, made this statement:
It is impossible for me to believe anything good can come out of mass murder, whether this is carried out by order of a league of nations or by a single nation. Evil cannot be swept out of our lives by evil; the spirit of war cannot be destroyed by more war.
I want to adopt that statement as my own, so there may be no doubt in the mind of any hon. member as to where I stand.
We come to the policies of our country, and as yet, unfortunately in my judgment, this country, like a good many other countries is still relying more or less upon armaments as a last resort. I suggest that an isolationist position cannot be successfully maintained' in the world to-day. Things may come to such a pass, if we are about to be dragged into a war and there may be no other policy open to us. We may be forced to adopt an isolationist policy and refuse to be dragged in. But it should be remembered that to-day the world is becoming more or less integrated industrially, financially and socially. We cannot stay out by ourselves. As long as we are in the world neighbourhood we have to deal with the people whom we meet in that neighbourhood. So we ought to recognize that the League of Nations, in so far as it is an association of nations seeking to promote peace, ought to be supported.
We are also of course a member of the British empire. Two years ago I had the opportunity to attend, as a delegate, the Canadian Institute of International Affairs, which met at Toronto in association with the Royal Institute of International Affairs, which has headquarters at Chatham House. Viscount
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Cecil led the British delegation, which included Liberals, Conservatives and Labour men. We discussed the question as to what would happen if, perchance, the interests of Great Britain and the League of Nations should not be identical, which should claim our loyalty. Possibly the answer to that question was evaded, because there were certain differences of opinion, but the conclusions finally adopted were to the effect that we could not possibly see that the interests of Great Britain could be divergent from the interests of the league itself. So I do not think we need discuss our special obligations to the British empire; they ought to be identical with those we owe the league.
I frankly confess, Mr. Speaker, that the league as now constituted is a very imperfect instrument for maintaining world peace. For some years I declined to join the League of Nations Society, just for that reason. At that time the league seemed to me essentially a league of victors. For a time the situation improved. Now the United States is still out; Germany came in and went out; and Japan is out. The entry of the U.SjS.R. into the league, meant a distinct advance but still it is essentially only a partial league of nations.
Further than that, national sovereignty is still maintained. I know every nation is jealous of what it claims to be its own final right to decide things, but just as within our national life smaller groups have given up their voices in the presence of the larger groups, so it seems to me we ultimately must come to the place where we will be willing to sacrifice for the common good what we have hitherto claimed to be our national sovereignty. I think we will have to come to that. To-day two people come to the court; they ask the court to make a decision, and then they loyally accept the decision that is made. As nations we refuse to do that. In the first place we all maintain our armaments, and a number of nations persist in carrying on a line of independent action. Just recently, for example, Great Britain held some naval manoeuvres in the Mediterranean, taking independent action at the very time when it would seem that every move should have been taken through the league.
I will admit, too, that to a large extent the league to-day is dominated by the great powers. Several years ago it was largely dominated by France. To-day I think the predominate influence is that of Great Britain. The great empires have their own ends to serve. I think that can be said without particularly casting reflections upon them as empires. They have their own ends to serve;

they are not impartial judges. In my judgment there is a very great danger that the league may be made a kind of smoke screen behind which imperialist aims and ambitions may be carried forward. I am not ashamed of being a Britisher, but I unite with a great many Britishers living in Great Britain in denouncing imperialism as we know it in modern days, and imperialism is none the less to be denounced because it is British imperialism. We denounce German imperialism and French imperialism and Japanese imperialism, and I cannot exclude British imperialism. 1 do not think Great Britain had been worse than most empires, but as we look back through history and see the processes and developments that have taken place we must admit that our British empire has been built up by methods none of us to-day would care to justify.
Now let me say a few words with regard to sanctions. I think we may distinguish between economic sanctions and military sanctions. I know there is a danger that economic sanctions may provoke an enemy in a desperate position to reprisals, perhaps even to the declaration of war. In the case of Italy I cannot but think that a declaration of that kind on our proposal to extend sanctions was a good deal of a bluff. However, there is that possibility. As the hon. member for Weyburn (Mr. Douglas) suggested in moving the resolution, however, there is also the danger that unless we do exercise economic sanctions we may very easily provoke war. There is danger in every direction, but if we were only sincere and thorough-going in our exercise of sanctions it seems to me we would not have to face war. Take this question of oil. I do not know the ins and outs of the handling of oil. I do know Great Britain is said to have a very considerable number of shares in the Anglo-Persian Oil Corporation. I know something of the part that oil has played in the past, and it may be that there has been pressure on the British government from the oil companies. I do not know. A few weeks ago it seemed as if the United States, despite the difficulty of the president taking action along this line, might possibly have joined with other nations in bringing oil sanctions into effect. But if sanctions are to be applied, they must be made effective, and all nations must be willing to do their share. I am glad to think that at last we have come to the point of recognizing the desirability of not allowing war materials to pass into the hands of the aggressor. I think it is two years since I brought in a resolution in regard to nickel, urging that we express our willing-

League of Nations-Mr. Woodsworth
ness to cooperate with the League of Nations in seeing that no nickel found its way into war materials. That resolution was not adopted by this house. Here is an extract from a stock market publication, issued a little less than a year ago; it is given in the League of Nations Society in Canada monthly news sheet:
Current demands for nickel are running at a record making rate, moving ahead with the added force of peace time requirements. In addition, there has been little let up by the purchases by many nations of armaments and this has meant in one way or another the buying of nickel. Neaidy all major powers are increasing substantially their naval and military appropriations. These and other factors seem to promise a rising curve of nickel consumption, production and earnings.
I cannot see that we as a nation can escape responsibility for having continued to send abroad nickel that has been finding its way into the making of war materials. Here is a recent Canadian Press dispatch which appeared on the regular financial page dated at Ottawa, November 20, with regard to nickel:
The Dominion Bureau of Statistics disclosed, Tuesday, that Italy, apparently racing to get under the League of Nations' sanctions wire, imported from 'Canada almost twice as much fine nickel in October as it did during all last year, increasing its total imports from Canada 119 per cent, compared' with October, 1934.
And the dispatch goes on to speak of the greatly increased production and shipment of copper. I am glad that we have stopped the exportation of nickel-at least I hope we have. At Brockville the other day a railway employee pointed across the railway yards to a car which he said was loaded with nickel and which was being stopped in transit. That is at least some indication that perhaps action is being taken. But I submit that we should have taken action two years ago, and very drastic action, even before we formally consented to join in these sanctions.
The purpose of the resolution is to point out that sanctions in themselves are not enough. We say that we should remain loyal to the terms of the covenant. That may be, but may I point out that there are other clauses in the covenant besides 10 and 16. Take the first clause in article 8:
The members of the league recognize that the maintenance of peace requires the reduction of national armaments to the lowest point consistent with national safety and the enforcement by common action of international obligations.
Have the countries of the world actually disarmed? Instead of that they have been arming, and now we are told that Great Rritain is giving up the idea that there will
not be a war within ten years; her leading statesmen are saying that war will almost inevitably come inside of four years, and so a greater armament campaign is being proposed. We asked Germany to disarm, and Germany disarmed under the express condition that the other nations would do the same. The other nations did not carry out their solemn obligations to Germany, with the result that an almost desperate German people developed fascism. We have not carried out our obligations under section 8 of the covenant.
Then there is section 19, which I think is not quite so familiar to some of our people. It is very short:
The assembly may from time to time advise the reconsideration by members of the league of treaties which have become inapplicable and the consideration of international' conditions whose continuance might endanger the peace of the world.
There is no doubt that a great many treaties that exist are not applicable to-day. There is no doubt in my mind that the Versailles treaty is not a just treaty. In many ways it ought to be revised. Under pressure from Germany certain clauses have been slightly revised. We are willing to concede now that Germany was not wholly responsible for the war. The provisions with regard to reparation payments have become in effect dead letters, but we have not made those general revisions that seem to be justified if the peace of the world is to be preserved. I feel very strongly that some responsible body must undertake to get at the causes of war, the causes of friction. That was one of the purposes for which the league was set up. A few weeks ago there was a discussion of the league policy carried on under the auspices of the League of Nations Society in Canada. Comments were sent in from various members of the society, and a number of them were published in the organ of the society. Among others I find this:
Her (the Canadian) representatives have two distinct questions to answer for her people, before they can properly take or support action at Geneva. One is: what can she do through her own government, and in cooperation with other nations, to satisfy the claims and desires of Italy that are just and genuinely in accord with civilized life, and thus prevent war?_______If war is the alternative, the Canadian people should be allowed to choose between a war, and its consequences near and far, and a reorganization of her economic and social life....
Until some powerful effort has been made by Canada or someone else to attack the causes of war, and to remove them by paying a price
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which however great cannot be as great as war itself, Canada should not become involved in any system of sanctions which under those circumstances would not be sanction-that is the force of equitable authority

at all, but would simply be the old-fashioned private war used by a stronger group to assert its will.
Thus we are forced to recognize the danger of sanctions unaccompanied by other action. Sanctions in themselves might simply maintain the status quo, which might prevent a just solution of existing problems. Lord Lothian put this matter very clearly in a speech delivered on September 28 of last year:
We have allowed it (the league) to become an instrument not for settling grievances but for perpetuating a status quo which is every year becoming more difficult to justify.
A few days later Sir Herbert Samuel put it this way:
The League of Nations must become something more than a mere defender of the status quo.
May I quote once more from Lord Lothian in a speech delivered on September 18 of last year:
Italy has a case against us and the league -a much better case than she has against Abyssinia. In the last century there was practically free migration all over the world, and in substance free trade in goods, foodstuffs and capital. To-day the nations are living in watertight compartments, with no migration and no freedom of trade, with the result that many of them have got into such tremendous population and economic difficulties that they have resorted to dictatorship to maintain order at home, and most of them are adding to their armaments in order to try to solve their internal problems by action in a foreign field.
In summing up my position I believe I could do no better than quote the observations of Mr. Eseott Reid in a statement before the National Council of the League of Nations Society in November:
An effective collective system means not only the restraint of the aggresor but also disarmament, international instead of imperial control of colonies, and effective machinery to deal with treaty revision and the problems of markets, migration and raw materials. The crisis which presents itself to-day gives us an opportunity to build the foundations and perhaps some of the framework of such a system. If we seize that opportunity we shall greatly diminish the prospects of war. If we fail to seize it, war will not be far off.
I know it is very difficult for most of us to come to anything like a satisfactory conclusion in connection with the Italo-Ethiopian tangle. I should like to express my personal sympathies for Ethiopia. I cannot see how possibly we could too strongly condemn Italy's action. At the same time I am conscious that other nations have sinned in much the
Mr. Woodsworth.]
same way as has Italy. I have before me a volume published several years ago by the late John S. Ewart, entitled Canada and British Wars. Could anyone read a document such as this without realizing that in nearly all disputes of recent time Great Britain has been at fault as have other empires, in the wars of imperial expansion. Undoubtedly the British empire has been built up by methods not greatly dissimilar from those now being used by Italy and Japan. I think of India, of Egypt from 1882 to 1895, of the Venezuela boundary dispute of 1895-6, of Persia in 1896, of South Africa in 1895 and through to 1902, of the Anglo-Japanese alliance of 1902, of our relationships with France, 1898-1914; of the Moroccan crisis, 1905-6, of the Anglo-Russian relationships, 1906-7; of the triple entente 1907, and of all the difficulties we had in Morocco and Persia and the Balkans; of British action in China, and so on.
Hon. members of my own generation will recall the difficulties which were experienced in connection with these matters. One cannot go back over the history of modem imperialism without realizing that there is much to be deplored. At the same time that does not mean that we can condone what Italy is now doing, but it does mean that we must frankly recognize our responsibility in the matter. I do not often feel like quoting Mr. Amery, but I should like to read a statement he made a few months ago. Hon. members are aware that he was former dominions and colonial secretary. He said:
There is something rather humorous in a gorged and satiated lion reproving a hungry young tiger, saying it sympathizes with him, but his appetite must be satisfied in accordance with the rules of the vegetarian society, of which the lion has been the last joining member.
There is a great deal in that statement. Along similar lines Sir Stafford Cripps made this statement at the Brighton Labour party conference:
It is argued that Mussolini will be crushed. He will not. In all probability he will drive a satisfactory bargain with his fellow members of the international burglars union momentarily termed policemen.


Mr. DEPUTY SPEAKER:: The hon. member has spoken forty minutes.


James Shaver Woodsworth: Very well, I shall have to leave it at that. May I say in closing that if we are to have peace we must be prepared to pay the price of peace-a price which, at the very worst, could be nothing like as heavy as the price we pay when war is declared.

League oj Nations-Miss Macphail
Miss AGNES C. MACPHAIL (Grey-Bruce): Mr. Speaker, I am sure the resolution of the hon. member for Weybum (Mr. Douglas) is of interest to all hon. members. Undoubtedly a very strong opinion in Canada against Canadian participation in European wars was shown during the last campaign, when parties and groups, either through conviction or because of their desire to say things which were pleasant to the ears of the electors, took the same stand on this question. Every party or group whose campaign literature reached me, or whose speeches I read in the press, stood against Canadian participation in European war, until wre had consulted the people through a plebiscite or something of the sort. Then if people decided that they wanted to go to war, then they would go to war. I believe the party in power took the stand that Canada would not participate in any European war until the matter had been submitted to parliament, which in practice would mean submission to the Liberal party.
The feeling on this matter of a great many people is one of confusion and uncertainty. I find myself troubled by the common ground taken by the imperialists and the enthusiasts for the league on the matter of sanctions. It is the first occasion of which I am aware that they have taken the same ground, and they seem to be about equally enthusiastic though I am quite sure, for different reasons.
The whole question of sanctions brought the matter of participation in European war clearly before us, and any thinking person has to come to some conclusion or other in regard to it.
For many years I have been exceedingly enthusiastic about the league and have been hopeful that it was the organization in the world which was going to do the most to remove the causes of war. I have always been more interested in removing causes than in the maintenance of peace by force. Peace maintained by force, whether the force be called sanctions or by some other name, is a precarious peace. In my view the only peace which can be lasting is one which arises as the natural consequence of the removal of the causes of war. My undimmed enthusiasm for the League of Nations lasted until the disarmament conference. My faith in British sincerity in maintaining world peace through the action of the league lasted until the disarmament conference, but I say to this house quite frankly that I have never been as enthusiastic on either point since the failure of the disarmament conference. I feel that at that time Canada did not take as strong a stand as she might have done. She took just a nominal stand, and did not put up the
fight at the conference that I would have wished to see. I was not pleased with the attitude of Great Britain at that time. I did feel then, and I have felt since, and do feel now that we lost a tremendous opportunity at that time, and it is one that may not recur. It may after another blood bath, or it may never.
In reading over the resolution I feel myself in harmony with most of the statements made therein-it is rather too long to read again- but I want to take some little time to say that I feel the greatest need of Canada and all the other countries which are sincerely anxious for world peace is the pressing for the application of article 19 of the covenant. I think that if we are only going to go on invoking sanctions, we are wielding a big stick which will eventually not be successful. It may now be successful, but the time will come when the group of nations which "have not" will become as strong, by combinations, as the group of nations which "have," and when that time comes sanctions will not be effective. So I think if we are going to remain in the league we ought as a country to take the wrork of the league very seriously. We ought first to have a Department of External Affairs that is not headed by the Prime Minister. The Prime Minister (Mr. Mackenzie King), speaking of this matter the other evening said, and the leader of the opposition (Mr. Bennett) agreed with him, that he would have to know what went on in that department anyway, and with that I agree; still if that department were headed by a person who specialized in international matters, his consultation with the Prime Minister would make it a stronger department than it could possibly be when headed by an altogether overworked man, as the Prime Minister of Canada must be. So I think we should have a Department of External Affairs with a minister at its head apart from the Prime Minister.
I believe, too, that we should raise the status of our representative at Geneva. I believe that we ought to take the road to peace definitely. But what we have been doing, and everybody in this house knows it, is trying to take both roads-peace and war-at once. We have not been spending much money on peace or on the Department of External Affairs or on our office in Geneva. We have not even made a place on the agenda of the House of Commons for a report of the delegates when they come back from Geneva. We thought what they did at the league of so little consequence that we did not even provide on the agenda a place for
680	COMMONS
League oj Nations-Miss Macphail
their report when the delegates returned, so that they could make clear to the house what went on there and what the stand of Canada was. And we should send to the league only people who are members of parliament, either of this house or of the upper house. It is simply ridiculous to send people who are not members of either house. It has been a method of rewarding people who have been kind to the party in power or some such thing. It has no meaning so far as the peace work is concerned.
So if Canada is going to stay in the league I would like to see her seriously undertake the work because nominal support is likely to draw us into sanctions and into war, without our ever having used the league as an instrument for the preservation of peace. I think we have come to the place where we must decide what we are going to do, whether we are going to stay in the league and be active members of it, or not stay in at all.
I hear a good many people talking about the happy results that would come from an English speaking alliance. May I say that I think a great deal of danger lies in that direction unless we clearly recognize the differences in interest and the different areas of the earth which constitute the first interest of the great English speaking nations. It is true that Britain and the United States have very much in common. There is no quarrelling about frontiers; there is no wrangling over spheres of influence or over the expansion of their empires. In fact, they are both contracting and are getting out from under the weight of their imperial interests by gradually, and sometimes rapidly, giving self-government to their dependencies. The Philippines would serve as an example in the American sphere, and the growing power of the dominions and of India in the British sphere. As far as we have gone now, Great Britain and America have a similar outlook on world politics. Then they have this other thing, which is greater than all; they have a common tradition, and they have a common language. But we are apt, when we have come to see that all this is true, to jump to the conclusion that their interests are therefore identical. May I take a moment to point out that their interests are not identical; their most immediate and pressing problems are not the same, and if we recognize that fact it will save us future disappointment. Let me quote a paragraph from Walter Lippmann on this point. He says:
American isolation is one of the optical illusions of the present era. American policy is conditioned by its vital interests just as is
[Miss Maephail.l
British policy. Thus America is isolationist as to continental Europe, but it has never been and is not now isolationist in the region of the Caribbean or the Pacific ocean. The British ardour for the league is a reflection of British interest in British security; the lack of British ardour for the collective system in the Far East is a reflection of a greater concern with European security.	_
He goes on to say about his own country:
So it is with us. President Harding, who was elected in 1920 as a result of a rebellion against the league, signed a whole series of treaties in 1922 which applied the league's principles to the Orient. In 1931 Secretary Stimson stood forth as the protagonist of league principles and Sir John Simon did not.
I think that is true, and I think it is an explanation of why Great Britain was not as much interested in invoking certain articles in the league covenant in relation to Japanese aggression in Manchuria as was the United States, and of why Great Britain is much more interested in invoking certain articles of the covenant in relation to Italy's aggression in Ethiopia than the United States is, and, in fact, than we are. Whether we like to admit it or not, and I for one quite frankly admit it, Canadians are North Americans. We have a divided interest. While sentimentally and patriotically we are bound closely to Great Britain, economically and geographically we are bound to the North American continent. So that we find it difficult-at least I find it difficult, and I believe a great many other Canadians do-to be as enthusiastic about" invoking sanctions in Europe at the moment as Britishers are. I find myself irritated by the continued animosity of Europeans; I find myself remote from these continual quarrels, and I believe we all do-which is only another way of saying that we live on the North American continent. I venture to say that if the English channel were as wide as the Atlantic, Great Britain's reaction to European problems would quite likely be exactly ours. I feel therefore that while doing everything we can to foster good will and understanding among English speaking nations, we ought to recognize the differences that exist. If we did we should not be so much disappointed over the lack of British interest in the far east and the lack of American interest in continental Europe. For it simply means that their greatest concern is respectively in that area in which their first interest lies.
When I was in the United States shortly before this house opened I heard some Oxford students discussing these questions-and very able young men they were. In my opinion they were stressing unduly this question of friendship between English speaking

League of Nations-Miss Macphail
peoples; I could not help feeling that they were not recognizing the differences that actually exist. They were more or less chiding the United States for not being as much interested in the European problem as Great Britain was, when it was evident to anyone looking at a map of the world that the United States would not have the same interest. I do not think their visit did any good; I do not think it helped the very thing they came to promote, whereas if they had recognized that each was loyal to the sphere of its first interest they would have accomplished more.
I have always been extremely opposed to war and I am still; but I am not so much interested in whether Canadian boys die in one kind of war as distinguished from another as I am in keeping them from dying in any sort of war. I cannot therefore work up very much enthusiasm about military sanctions. What I want to prevent is war; and in the last two or three years we have found the nations of the world apparently seeking peace in several ways, the three most outstanding being collective security and at the same time, and running parallel, a race in armaments, simultaneously with pacts outside the league, until some writer-I forget who it was -said there was a bad epidemic of pacto-mania. Now these three methods pursued at the same time do not make sense. I can understand reliance on an armament race and on pacts, but I cannot understand collective security with a race in armaments and at the same time pacts outside the league.
In this house over a long period of years I have noticed the same thing-fear of trying new peace methods. The house apparently has been afraid to abandon the old military methods but has run along timidly with a short step in the direction of peace and a long step on the military road. We have almost forgotten the ideas that emerged from the war. One of the sentences of Woodrow Wilson we ought always to remember; it is: that peace must be peace without victory, for only peace between equals can last. Well, it was not peace without victory and certainly it was not peace between equals; and instead of seeking to make it peace between equals, as time went on, there was a disposition on the part of the league to defend the status quo in Europe. And it is the invoking of sanctions in defence of the status quo that I fear more than anything else.
It is true that the League of Nations has worked out-I am happy about this-the technique of cooperation through conference, and by doing so it has been able to make a very considerable contribution to all the nations and to our common life, which is the
community of the world. It is true too that in these conferences many errors have been made from time to time; but it is also true that invariably when errors have been made the nations have been called together again in conference and some at any rate of the errors have been rectified. But though the league has worked out the technique of cooperation through conference, it has never attempted to invoke article 19 of the covenant. This article was read by the hon. member for Winnipeg North Centre (Mr. Woodsworth) but I should like to read it again, because it is that part of the covenant which we shall all have to learn thoroughly in the future:
The assembly may from time to time advise the reconsideration by members of the league of treaties which have become inapplicable and the consideration of international conditions whose continuance might endanger the peace of the world.
I think t'he task of the league now is to invoke article 19; and while I certainly have no sympathy with Italy, I do believe that in the long run the invoking of that article is infinitely more important than the whole question of sanctions. In my opinion the future of the league will depend upon its ability to invoke article 19 and to settle perplexing economic and racial problems through the method of cooperation, because it is more and more becoming realized that all nations should have access to raw materials and to areas and to markets. I feel that Sir Samuel Hoare will be remembered, because he made a strong speech on this subject, long after the Hoare-Laval-misnamed-peace .proposal is forgotten, because in emphasizing the need of nations having access to raw materials and areas and markets he did strike the thing that is vital. It is true that there are other considerations. The carving up of Europe, the taking away of the hinterland of countries that cannot very well get along as they are now constituted, the dividing of people who should be one racially and culturally, are also grievances that are likely to lead to war. Yet I think that the economic cause is the greatest, and that we need as a League of Nations and as a country that is a member of the League of Nations very seriously to take up the question of remedying these grievances rather than to seek to keep things as they are 'by using sanctions in defence of the status quo.
While it is true that the principle of graduated responsibility in relation to sanctions has been recognized, I think it has not been sufficiently realized that those who are most involved need to take the initiative and to assume the greatest responsibility in the in-
682	COMMONS
League oj Nations-Miss Macphail
yoking of sanctions. I do not feel that we can forever 'be rushing to Europe to save Europe from itself-because that is what it almost always comes to. I have, as I said before, lost patience with a continent that cannot evolve some sort of entity, that cannot manage its own trade and language and racial problems. We are a long way from Europe, and. there does not seem to me to be any reason why we should1 forever be thrown into the settling of European disputes. Sometimes I think that if Europe came to realize that the rest of the world were not as interested in her difficulties as she now thinks they are, she might more seriously go to the task of finding a solution of her own difficulties.
I think I have said all I need to say about the need of graduated responsibility and the taking of the initiative and the bearing of the burden by those who are most closely connected with the difficulty. Some one said, speaking on this matter a little while ago, that he thought unless we could settle disputes and difficulties at home there was not so much we could do abroad. I wholly agree with that position. I was reading not long ago a statement by Mr. Halton, writing in the Toronto Daily Star, that one third of the people of Great Britain were not getting enough to eat. May I frankly say that in my opinion the first task that faces Great Britain is the feeding of her own people; and the first task that Canada faces is to take care of those who are not getting sufficient food and shelter and medical attention, who are not given the opportunity of living a full and happy and purposeful existence. That is our first task, as it is the task of every other country. I was reading not long ago an article written by Professor Soddy in which he said that very thing; if we could solve the problem of getting to the people who need it the plenty which we have, war would disappear. Madame Curie, whose middle name I have forgotten, talking in France said the same, that she had lost all patience with the nations of the world because they were willing to spend a great deal of money on armaments and on all the various preparations for conflict rather than upon endeavouring to remove the causes of conflict and to give assistance to their peoples along scientific lines.
It may be that neutrality is not possible. It looked like it during the last war. Personally I would very much rather see us solve our problems collectively, but solve them from a peace point of view, not from a war point of view, because the moment the League of

Nations becomes an international war office it defeats, in my opinion, its whole object. Last time we had a holy war, a war in which we were on the right side, a war which we won, so we cannot improve on that; and we came out of it believing that it was a pretty punk affair. So if we are going into another holy war it is going to be a little more holy, because we get that way; we shall be on the right side. But to me that is not good enough. I should like to see us go first at this thing with the will to seek and find in cooperation with other nations a solution of the problem by removing the causes of war. If we fail in that it may be that the North American continent will make desperate efforts to remain neutral. If we do, it will be at great cost. It will cost a great deal in money, it will cost a great deal in pride, possibly in lack of prestige. It will be very difficult for business. So that the first thing that I should like to see tried is to remove the causes of war through collective action; but may I say quite frankly that the second thing is the maintenance of neutrality at whatever cost.


Charles Hazlitt Cahan: I am convinced that if the hon. member for Weyburn (Mr. Douglas) had been in the house during the last ten or fifteen years and had occasion to study carefully the attitude and disposition of successive Canadian governments with respect to the work of the League of Nations he would not have drafted a resolution in the terms in which this resolution is drafted. I recall clearly the fourth assembly of the League of Nations when the draft Treaty for Mutual Assistance was formulated, in 1922 and 1923, and remitted to Canada as to other members of the league for consideration. That discussion and the final action with regard to that draft treaty are very enlightening indeed. Canada rejected that treaty by the reply of the present Prime Minister (Mr. Mackenzie King) in July, 1924, and I think that the general sentiment of the people of Canada supported him in that rejection. But the succeeding assembly of the League of Nations, which met in September, 1924, devised then the Geneva Protocol for the Pacific Settlement of International Disputes. This protocol was also submitted to and rejected by all the British nations who form the British Commonwealth of Nations, as well as by other nations members of the league. And I think that rejection was in accord with general public sentiment in this country.
Again, if the hon. member for Weyburn had followed carefully the disarmament conference at Geneva, at which the late government was

League of Nations-Mr. Cahan
represented by the right hon. member for Argenteuil (Sir George Perley), I think he would have to concede that that government, in exceptionally difficult circumstances, did everything that could possibly be done in the way of securing the disarmament of the great nations. But the fact remains that, conditions being as they then were and now are, it was impossible to bring about a general disarmament. In fact Great Britain, supported by the governments of the British dominions, was and is the only nation in Europe to make great sacrifices by reducing its armaments, both naval and military, in every possible way.
This resolution, therefore, is not drawn up with a clear conception of what Canada has done and what Canada or the Canadian government may be able to do at present or in the future, and certainly I cannot support the resolution in its present form. I am speaking merely for the purpose of reserving the right to discuss, at some later date during the session, certain perhaps minor issues arising out of the Geneva situation, when one of the Geneva estimates is brought up for consideration. The Prime Minister has promised us that an opportunity for such discussion will be afforded on that occasion.
Of course we are all pacifists in this country; we all must and will endeavour to support in the future all efforts of the league to mediate and conciliate between conflicting national interests in the hope of establishing and maintaining peace. The preservation and maintenance of peace was the primary object which the nations had in view in establishing the League of Nations, but now there is another phase of the question to consider when we are face to face with the problem of imposing economic sanctions upon a nation which refuses to comply with the findings of the council of the league. We now see that the league, originally conceived as an agency for the preservation of peace, by having imposed certain sanctions as I think we were bound to do, may nevertheless become an instrument or means for precipitating a great war.
The hon. member for Grey-Bruce (Miss Macphail) made some sarcastic reference to the fact that Great Britain did not take any active measures to impose sanctions at the time of the Japanese-Chinese controversy. It is not always possible to disclose the real reasons for declining to intervene in a contingency such as that which then arose. I know that when I returned from Geneva, as one of the Canadian delegates to the League of Nations, I was denounced on every platform from the Atlantic to the Pacific by reason of some pacific words which I had expressed at Geneva at the time of the Japanese-Chinese controversy. I say now, however, that from the information I had received I was convinced at that time that conditions on the Pacific were such that the imposition of sanctions against Japan might and probably would have led to a naval conflict in the northern Pacific in which, for a time at least, the British flag might have been driven from the north Pacific ocean. That, at least, was the possibility that Great Britain and the British dominions were face to face with at that time.
So, though we may be in favour of sanctions and the interposition of sanctions at the present time, we must remember that the exercise of the coercive power of sanctions in order to impose the will of league members upon a recalcitrant state or recalcitrant states may and probably will result in warlike preparations for defence and for a defensive offence. In a conflict between great nations, as the late war disclosed, suffering and death by shot, shell and gas are no more deplorable, in the minds of those who suffer from sanctions, than suffering and death resulting from starvation. A first class power, under present world conditions, before hostile embargoes and sanctions can complete their work, may prefer to resort to offensive military and naval action in the hope of ensuring its own political survival.
I am not contending now that the interposition of sanctions against an aggressor is not necessary at the present time, or that such imposition may not be necessary in the future, but I do suggest that our government and our people, when deciding to impose sanctions, should not conceal from the public view, but should frankly disclose the fact that sanctions are not wholly pacific measures, and that governments which resort to sanctions may be compelled to prepare for war. The war which is induced by the imposition of sanctions for the purpose of coercing an aggressor state into subjection to the will of other states may be a just and righteous war. I am disposed to think that if war should ensue from the conditions which now prevail between Ethiopia and Italy, that war on the part of the members of the league would be a just and righteous one. Nevertheless such a war, though just and righteous, will entail suffering, death and widespread destruction of property. But Canada, as a member of the
684	COMMONS
League of Nations-Mr. Mackenzie King
league, bound by the covenant of the league, must face such possibilities. Therefore I trust that the peace loving people and the peace societies of Canada will not be blinded to the stem realities of the present international situation.
Sometimes it has seemed to me, particularly in recent months, that our peace societies which were formed for the preservation of peace have diverted their energies from their original aims and are devoting them at the present time to devising measures for the punishment of an aggressor, even at the cost of war on a great scale. Certainly pacifists in this country should assist in every way for conciliation and mediation before resorting to the extremity of war. But if it should now appear that the imposition of economic sanctions against Italy precludes the success of Italy in the Ethiopian field I think we should envisage the possibility, if not the probability of the executive head of the Italian nation precipitating a death struggle by striking suddenly in the Mediterranean with his aerial and naval forces. The British government have certainly taken cognizance of the actual conditions and are providing for security against that possible action. As that question may be discussed in parliament at greater length on the estimates, I wish to reserve the right to discuss it at that time rather than enter upon any detailed discussion at present.


William Lyon Mackenzie King: Mr. Speaker, I hope that, if there are other hon. members who wish to speak on this resolution, they will avail themselves of the opportunity at once, because I propose at the end of my very few remarks to move the adjournment of this debate. I intend to do so for the reason just given by the hon. member for St. Lawrence-St. George (Mr. Cahan) for not pursuing his discussion further. I mentioned a week ago, I think it was, that the time which I thought would be most appropriate for the house to discuss any phases of the Italo-Ethiopian conflict and other matters related to the League of Nations would be when we have before us in committee of the whole the several items dealing with the League of Nations.' I would prefer not to anticipate what I may wish to say with reference to matters that may then be discussed, by taking up time now in debating further this resolution.
I hope the hon. member for Weyburn (Mr. Douglas) will not mind my saying that I

think his resolution would have been better drafted if he had not attempted to embody within its provisions as much as he has. I agree with hon. members who have spoken, some members of his own group, when they said that the resolution as framed is a bit confusing; it is, I think, in some particulars inconsistent. At any rate, it does not afford us an opportunity to discuss the real issues either as respects the present position of the league or the imposition of sanctions. These may, as I have said, be better discussed when we come to deal in committee of supply with items pertaining to the League of Nations.
However, I do not wish to let this occasion go by without joining with my friend the hon. member for Winnipeg North Centre (Mr. Woodsworth) in deploring the speech which was made at montreal on Saturday evening last by the Italian Consul General. I think that speech was very ill-advised, and in the circumstances quite improper. I would say that a discussion of the policy of Canada by a representative of a foreign government is not in accord with the established rules and conventions of international intercourse. It would constitute an attempt to influence opinion against a policy adopted by the government of Canada. It is true that the rules regarding consuls are not as strict as in the case of diplomatic officers, and the present situation might, I suggest, be considered as being in the nature of a serious error of judgment rather than a violation of international practice. In the light of existing conditions in other parts of the world we might well take that view of the matter at the moment. But if an incident of the kind should occur again the government would certainly have no option but to make immediate representations to the government of the country concerned with respect to what was said by its representative in Canada.


James Shaver Woodsworth: In that connection might I ask the Prime Minister if the interests of naturalized Canadian citizens could be protected, that there should be no intimidation of Italians resident in this country?


William Lyon Mackenzie King: Certainly the
government would not permit intimidation of any residents of this country if it is at all within its power to prevent such, and I imagine it has ample powers to that end.
On motion of Mr. Mackenzie King the debate was adjourned.

Farm Implements-Mr. Johnston (Lake Centre)



FARM IMPLEMENTS


Mr. J. FRED JOHNSTON (Lake Centre) moved:: That, in the opinion of this house, an immediate inquiry should he made under the provisions of the Research Council Act, chapter 177, R.S.C., 1927, or by other means into the causes underlying the high price of farm implements, with particular reference to the advance in prices for the year 1936.
He said: In moving this resolution I do so in the interests of what I think all hon. members of the house admit to be the great basic industry of agriculture. Anything that affects the welfare of that industry affects the well-being of all the people of this country. The resolution speaks for itself. There has been a sharp increase in the price of those implements that farmers have to use. We all know that nearly fifty per cent of the people of Canada live in the rural sections. Until very recently more than fifty per cent of our people resided in the rural districts; the census returns of 1921 indicated that fact. Ten years later at the time of the census of 1931 a change had taken place and over three quarters of a million more people resided in urban centres than in the
rural districts. Even to-day in this country we hear some talk about bringing more people into Canada, and inducing people now resident in urban centres to return to the land. The figures I have given indicate that in recent years the trend has been not back to but away from the land.
Our friends in this country who manufacture farm implements and machinery claim that they are not making money, and if we look at their annual statements we may be convinced that in recent years they have not been making money. Why have they not? To my mind there is just one reason, a very simple one, and that is that the farmers have not been purchasing the products of these factories. And the reason they have not is the very good one that the farmer has not the wherewithal to buy them. I have in my hand a bulletin issued by the bureau of statistics in 1934 dealing with this matter. In table No. 1 on page 2 of the bulletin we find statistics of farm implement and machinery industries in Canada. The figures are given for the years 1920 to 1934, both inclusive. Time will not permit me to give the list in detail, so I shall content myself by giving the figures for the years 1929, the peak year, and 1934. The following table will serve to show a comparison between these two years:
Year
1934
Average
No. of Capital number of Salaries plants employed employees and wages 62	103,356,773	11.408	$14,775,88935	55,742,696	3,706	3,776,918
Cost of materials at works $19,016,981 3,632,821
Selling value of products at works $40,659,479 8,817,756
Value added by manufacturing $21,642,498 5,184,935
In taking the year 1934 I have not taken the one with the smallest output. The years 1932 and 1933 will show a greater shrinkage than does 1934, because in that year there was an increase over the two preceding years.
The figures in another table before me are illuminating, because they give the apparent consumption of farm implements and machinery in Canada. Again taking the years 1929 and 1934, the figures are:
Production of the farm implement and
machinery industry	Exports	Apparent
Year	(selling value at works) Imports and re-exports consumption
1929	
$40,659,479	$31,845,326	$20,118,978	$52,385,8271934	
8,817,756	3,204,029	3,351,220	8,670,565
These figures are sufficient indication as to why we have unemployment in this country, why machinery companies are not making money and farmers are hard up. I believe these figures give the whole story in connection with the manufacturing of farm implements. Why have not the farmers been purchasing? To answer this question we turn to certain information appearing in a bulletin
on agricultural statistics for March, 1932, issued by the bureau of statistics. We find that the estimated gross annual agricultural revenue of Canada for 1925 was $1,709,815,000; in 1926 it was $1,714,477,000; in 1927, the peak year so far as agricultural production is concerned, it was $1,825,950,000. In 1929 there was a drop to $1,631,081,000; in 1930 there was a further shrinkage to $1,235,319,000; in
686	COMMONS
Farm Implements-Mr. Johnston (Lake Centre)
1931 the amount had shrunk to 8839,881,000, and in 1932 to 8766,794,000, or a little less than one-half of the peak year. In 1933 it had risen to 8802,946,000, and in 1934 there was a further increase to 8931,347,000.
These figures indicate clearly why farmers have not been buying and why machinery manufacturing concerns have not been selling their products. The question as to the price of farm implements is an old one. I find that in January, 1911, the then hon. member for Portage la Prairie, Mr. Meighen, moved the following resolution as it appears at page 1915 of Hansard for that year:
That, in the opinion of this house, a substantial reduction in the import duties on agricultural implements is now due the agriculturists of Canada, and is in just accord with the true ends of a protective tariff.
My reasons for referring to this resolution are that the then hon. member for Portage la Prairie at a time twenty-five years ago felt it incumbent upon him, as the representative of a rural constituency, to bring this matter to the attention of the house. At that time the price of agricultural implements in Canada was just about one-half of what it is to-day, while prices of commodities the farmer has to sell were higher than they are at present. Is there any reason why these implement companies are not able to sell the products of their factories? How can farmers buy when, although what they have to sell has not increased in price, prices of the machinery he must buy to cultivate his farm and harvest his crops have almost doubled. Speaking to his resolution the then hon. member for Portage la Prairie said this:
I call the attention of the house to the present conditions with regard to agricultural implements. I have chosen this field not because there is nothing else that could be the subject for attack, but because observation has shown me that a very strong argument can be made in that field and because also, it seems to me, a better purpose can be served by a clear cut and definite discussion of one class of business rather than by a rambling one over the whole field of our tariff list.
That was the hon. member's idea at that time. To-day if we are going to solve the problem we shall have to take account of some of the other matters referred to in that statement. The high price of farm implements is not going to be met by considering high prices alone. Other matters will have to be looked into. In those days, Mr. Speaker, as I have stated, the price of farm implements in Canada was just about one-half of to-day's price, and still we have this increase. When I decided to place my resolution on the order paper I wrote to the different machine companies asking for their price lists and I have them before me. I intend to give the house

the Changes that have taken place in prices during the last few years. In some cases the prices that have been given me are only for the years 1935 and 1936.
First I will give the prices of the Cockshutt Plow Company. As most hon. members know, the Cockshutt Plow Company builds a complete line of farm machinery, and I have under my hand their prices on four machines that are used on every farm in Canada. The prices that I am now going to quote are given me as being applicable to the Winnipeg district.
The price of a Cockshutt Plow Company eight-foot binder with pole truck and four-horse trees-that means fully complete, with everything ready to hitch on to-was in 1930, $275. In 1934 there was a drop in price. It is very significant, and I hope hon. members will note it. While the price in 1930 was 8275, the price in 1934 was $261; in 1935, the same price, $261, while this year, 1936, the price has advanced to $278, or an increase over last year of $17 for that machine.
I take next their 24-run double disc drill. The price in 1930 was $308; in 1934, $291; in 1935, $2(fl; and for this year, 1936, 8305, or an increase of $14.
Their eight-foot tractor disc harrow was sold in 1930 for $126; in 1934 the price was $115; in 1935, $115; in 1936, $118, or a slight increase amounting to three dollars.
Their 28-inch Jewel gang plough sold in 1930 for $152; in 1934 the price was 8137; in 1935, $137; in 1936, $140, or an increase of three dollars.
Now I will give the prices of the Massey-Harris Company, and I might say that they have given me prices only for the years 1935 and 1936. The same eight-foot binder for which I have given the price of the Cockshutt Plow Company was sold by the Massey-Harris Company in 1935 for $278.50, and in 1936 for $291, or an advance of $12.50.


Mr. BENNETT:: Is that for the Winnipeg district?


John Frederick Johnston: The
Regina district. The Massey-Harris Company's 24-run double disc drill sold in 1S?35 for $301, and in 1936 for $315, an increase of $14.
Their tandem disc harrow, (14-disc out-throw and 16-disc in-throw) sold in 1935 for $129, and in 1936 for $131, an increase of $2.
There is no change in the price of their 14-inch two-furrow gang plough, the price being $145.50 for 1935 and 1936.
Now I will give the prices of the International Harvester Company of Canada, Limited, and I think these prices are for the Winnipeg

Farm Implements-Mr. Johnston (Lake Centre)
district as well. Their eight-foot binder sold in 1935 for $263, and in 1936 for $281, or an increase of $18.
Their 24 double disc drill sold in 1935 for $284, and in 1936 for $298, or an increase of $14.
Their horse tandem disc harrow sold in 1935 for S137 and in 1936 for $142, or an increase of $5.
There was no change in the price of their 14-inch gang plough, the price being $133.50 in both years.
Then there is the question of parts for a tractor that is admitted free, but that has been dealt with, and the other evening the Minister of National Revenue (Mr. Ilsley) gave a ruling which partly meets the case.
While the price changes that I have quoted may not strike hon. members as being tremendous, when one takes into consideration the high prices at which these machines were sold even before the increase this year, and what these high prices must mean to those farmers in Canada who have not been able to purchase implements at all during the1 last number of years, I think hon. gentlemen will agree that the increase is material.
Again, Mr. Speaker, if the machine companies expect to do more business, sell more machines, how are they going to do this with an advance in price? It strikes me that the only way by which a machine company can expect to make more money is by reducing their prices and increasing their volume. If a farmer could not buy a binder last year at the price then quoted, how is he going to buy one this year when the price has been increased? It is a well known fact that western Canada, in particular Saskatchewan, is almost bankrupt of farm implements. For the last number of years we have not been able to secure crops and our farmers have been patching up their old machines trying to get along as best they can. I wonder if that is the reason why the machine companies are advancing their .prices. I would not want to think it was.


Mr. SENN:: May I ask the hon. member when these recent price increases became effective?


John Frederick Johnston: I have given the house the figures sent to me by the machine companies themselves from their head offices at Brantford, Toronto and Hamilton, and I do not think they give the particular dates these prices became effective, but they take effect this year. I have taken
the matter up with some of the local agents and they have advised me that these are the prices for this year.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


John Frederick Johnston: 
Mr. R. J. DEACHMAN (Huron North):: If we take the price level of 1926 as equalling 100, the price level of farm products in 1913 stood at 64, and the price level of manufactured products at 64-8. In 1935 the price level of farm products stood at 63-4, or just slightly below the level of 1913, and the price level of manufactured products at 73-3. Manufactured products were therefore 15-6 per cent above the level of farm products in 1935. If we turn to agricultural implements-and I quote now from figures presented by the agricultural implement companies before the price spreads committee- we find that the average price level of nine implements produced by the Massey-Harris Company stood at $86.39 in 1913 and in 1930 it stood at $130, or an increase in that period of fifty per cent. While the price level of implements is fifty per cent above what it was in 1913, that of farm products remain? almost exactly the same.


Mark Cecil Senn: Would the hon. gentleman
also give the amounts of profit made by the companies?


Robert John Deachman: My hon. friend will
have to wait for that. I cannot give it all in one sentence.


Mark Cecil Senn: I have it before me.


Robert John Deachman: We will come to that later. This means that the farmer who in 1913 laid down $100 worth of goods for farm implements must now lay down $150 of his products for the same farm implements; and as the price level is the same it

690	COMMONS
Farm Implements-Mr. Deachman
means that whereas in 1913 he laid down one hundred units of goods for a machine, he must now lay down one hundred and fifty units of goods for the same machine.
It is very interesting to take the figures showing how this amount of $130 is made up. There was $42.08 of raw material and $6.33 worth of direct factory labour. Those two, amounting to a total of $48.41, were transposed into an agricultural implement which sold for $130 to the farmer in Regina. I wish to call the attention of the Minister of Finance (Mr. Dunning) to that particular item. We have had during the past few years a tariff of twenty-five per cent on agricultural implements. Raw materials and labour combined in this particular example cost $48.41. Twenty-five per cent on an implement costing $130 would be $32.50, so that the tariff imposed by the previous government amounted to almost seventy per cent of the value of the raw material and direct factory labour going into the implement, and now the tariff would amount to nearly thirty-five per cent of the raw material and labour cost. In addition there was $20.92 for agent's commission, $16.58 for freight, $26.42 for other factory expenses, and gross profit before selling expenses, $17.67.
I should like to direct attention to the increase in these items which took place between 1913 and 1934. The agent's commission increased by $10.98, which was 101 per cent above the agent's commission in 1913. Freight cost thirty-four per cent more; materials cost sixty-four per cent more; labour cost twenty-seven per cent more and other factory expenses, largely overhead, increased by 246 per cent over 1913. If you will note these figures you will see that labour was not getting an excessive amount out of the cost. The increase in the cost of labour, the direct factory wages, amounted to only twenty-seven per cent, while nearly all the other items entering into the cost were almost doubled, so that as far as factory wages were concerned it does not seem that the tariff of twenty-five per cent was of any particular benefit, though it may have helped to keep up the price of the implements.
Now I come to the question which has been raised by my hon. friend. Of this increased cost $43.61 is added to the price of the implement and the balance, $821, is taken out of the gross profit of the manufacturer. Management, pensions, selling costs, collection expenses, bad debts, depreciation, experiments and other general expenses on this list of implements would amount to approximately $50, which sum has to be paid out of the $17.67 gross profit of the manufacturers. Clearly

they are not making money; I quite agree with that, but there is a reason why they are not making money and to that I now wish to direct attention. The ability of the farmer to buy has been destroyed, and as a result the farmer is no longer able to buy agricultural implements. It follows, naturally, that we are driving capital and labour out of the production of agricultural implements and into the production of other commodities which have a broader field and a wider market, and the inevitable tendency of this policy, if continued, must be to make things cost more and more as far as the farmer is concerned. With that, possibly, there is a tendency also to bring down the prices of other products which are bought by the wealthier classes of the community. I submit, Mr. Speaker, that when the farmer has reached the position where he must pay fifty per cent more for the articles he buys than he paid in 1913, we have before us a problem which requires the most careful study, thought and attention. We cannot build an industry in this country upon a decadent agriculture; the history of the agricultural implement business in Canada is ample proof of that statement.
I now come to the question of what constitutes the remedy. I admit that this is perhaps a more difficult problem in connection with agriculture than in connection with any other single item confronting the house to-day, for the simple reason that this process has gone on for a long time. We have built up this situation by what might be considered fifty years of mistaken economic policy. I know it was intensified in 1930. I do not want to make a political issue out of this matter, but it was intensified in 1930 because the government of that day held that it was essential, in order to preserve the integrity of the nation, that we should raise the tariff on all the products the farmer had to buy. But, Mr. Speaker, if the integrity of the nation had to be preserved by that process I ask this house what is to happen to the integrity of agriculture and what is to follow if, in the years to come, we continue on the basis upon which we are building now, day by day destroying farm purchasing power in every possible way and still expecting that we should live on the natural resources of the country? I tell you it cannot be done.
What must we do? Well, I think the government have made a small step in the right direction; I think they are moving, but they are moving very slowly. I believe, as everyone in the house must, that there is a tremendous amount of ground to cover if we are going to restore agriculture to the parity which existed in 1929 and 1930 or in 1913.

Farm Implements-Mr. Macdonald
We have come a long way from that, and we cannot get back by simply cutting little bits off the tariff here and there. We must restore equilibrium between the prices of manufactured goods and the prices of farm products. This cannot be done by any slow, measured process, because the farmer is perishing while we fail to act. Somewhere in a park in France there is a sun-dial on which is carved these words, "It is always later than you think." I place that problem before the government to-day, before those who are on the opposite side physically but with me spiritually. They are in the beginning of their effort; they have made a start. We who think as they do are grateful for that start, but we must go forward steadily and swiftly in the direction in which we have started, or at the end of the next few years we shall find that the farmer's problem still remains unsettled. And if it is not settled by that time we shall have to find some other way of settling it, which way may not be as satisfactory as we would wish.
I believe it is possible to do many of these things. I believe the other nations of the world want trade just as we want it. Trade is a natural human instinct. It starts with a boy when he begins to swap jack-knives at school; it will never end so long as there is business instinct left in man. There is no reason why, with the situation as it is, we may not hope for a steadily expanding market. We have not succeeded in the past, not because there was no market but because we were unwilling to make the necessary move to obtain the market. If we are willing to exchange our products for those of other people I have no doubt that we shall find other nations equally willing to do the same, and in that way we may re-establish the agriculture of the dominion on some such basis as that on which it rested in the old days.


Mr. W. R. MACDONALD (Brantford):: Before entering into the debate on this motion, allow me, Mr. Speaker, on this my first opportunity, to congratulate you on the high honour which has been bestowed upon you. If the Prime Minister (Mr. Mackenzie King) were in his seat I would take this opportunity of felicitating him on the high honour conferred upon him by being elected to the eminent position of Prime Minister of this dominion. I trust some of his colleagues will deliver this message to him. I further congratulate him on the body of men with whom he has surrounded himself and who now form the cabinet of this country. It was said of the late Sir Wilfrid Laurier that he surrounded himself with a cabinet of talents. I hope the present cabinet will prove
12739-44$
to be at least equal to and probably greater than that of the late Sir Wilfrid Laurier.
As I rise to speak to this motion I do so not for the purpose of defending or condemning the agricultural implement manufacturing companies. I rise because I am honoured to represent that great industrial centre, the city of Brantford, in which are situated two of the largest farm implement manufacturing companies in the dominion. During the days of prosperity under the former Liberal administration there were employed in those factories approximately three thousand men. Unfortunately, during the last few years the number employed has decreased at times to less than eight hundred. Therefore I feel that I would be recreant to my duty if I did not at this time say a word on behalf of that great band of loyal workers who have struggled honestly for years to turn out the implements which reap the crops of this country. We have heard a great deal of the hardships of the farmer, and far be it from me to belittle them. I know the trials and difficulties of the farmers. But I would remind the house that others also 'have suffered trials and difficulties. We have heard that a large percentage of the farmers are in virtual bankruptcy. I would remind hon. members that in Brantford approximately one-quarter of the population was not only in virtual bankruptcy but would have been in actual need had it not been for government assistance. In January, 1935, out of a population of about 30,000 there were on actual relief 7,237 people, or approximately twenty-five per cent. This year I am happy to say that that number has decreased to 5,719, but it is still about twenty per cent.
It has been said that in 1929 there was produced in this country about $40,000,000 worth of farm implements. In 1932 that production decreased to about $5,000,000. In 1926 farm implements amounted to 1 -18 per oent of the total manufactures of this country, while in 1932 farm implements amounted to only 0-32 per cent of the total. I mention these figures so that hon. members will have some idea of the effect that has had on Brantford. It means that the working men of that city have been out of employment; they have had to struggle to maintain their standing in the community. I bring this matter to the attention of the house in order that we may all realize that Canada must be looked upon as one great country. I do not believe in sectionalism; I do not believe in provincialism. We cannot set the east against the west; we cannot set Ontario and Quebec against the maritime and the western provinces. The farmers must not be set against
692	COMMONS
Farm Implements-Mr. Macdonald.
the manufacturers, or manufacturers against working men or working men against farmers. We must regard these problems as our common problems, and as a united people, not as one class only in the nation, try to solve them.
I should like at this time to clear up some misconceptions. Naturally the farmers buy a considerable number of farm implements. I have in my hand a chart which appeared in the Nor'west Farmer, a journal of very high standing published in western Canada. According to this chart, of the total income the farmer receives he spends only three per cent on farm implements and repairs. Not a very large percentage of his income, hon. members will agree. I also notice that he pays eight per cent of his total gross income for interest, and eight per cent for automobiles. The amount he spends on farm implements and repairs is less, I am safe in saying, than he spends on any other class of goods. So it must be agreed that farm implements are not his major expense.
Then, as has been stated by two former speakers, the implement companies have not made money. I am glad that statement has been made, because there is a feeling abroad- I have met with it from time to time in conversing with members of this house and other people throughout the country-that the implement companies have been making a great deal of money. They have not. During the last five years one company not only has not made any profits but has gone behind $20,000,000. The other company in my constituency has lost all the surplus it had and is in debt to a very large amount. With regard to the investors in those companies, very little has been paid to them. One company did pay dividends to its shareholders in 1928, but at the time it commenced to pay those dividends it was sixty per cent in arrears on its preferred stock, which showed that it had not been making much up to that time. That company paid dividends for two years and for two quarters of 1930, but since then no dividends have been paid. I have heard it said that the deficits of those companies are due to a large extent to bad debts. True, there have been many bad debts, and the debtors of course are the farmers of this country. One company informed me that during the last three years their collections were as follows:	In 1933 they collected
twelve per cent of their outstanding accounts; in 1934, eighteen per cent and in 1935, sixteen per cent; and it cost them each year to collect those debts fifteen per cent of what
JMr. W. R. Macdonald.]
they collected. So there cannot be much money in that.
I should like to remind hon. members of certain laws in effect in Canada. For instance, when an implement is sold the company may take a lien on it. The farmer does not pay cash.. In the event of non-payment, however, the manufacturer cannot go in and seize the implement, simply because he happens to hold a lien. The law has been changed so that the farm implement manufacturer must go to the commission to obtain its permission to seize the implement. The chances are that the commissioner will say, "Well, let the farmer keep it a little while longer. Let him keep it another year, anyway, and we will see what will happen then."
I would diraw hon. members' attention to the fact that if through no fault of his own a farmer does not pay his debts, or cannot pay them, he has some recourse. He may go to a board which has been set up under the Farmers' Creditors Arrangement Act, and in the event of his owing one of the farm implement companies an amount of, say $800, the chances are that the official on the board will say, "Do not worry about the farm implement company; pay them $200, and call it square." The farm implement company has no recourse. I mention this point to show that the farmer has been receiving some consideration. I do not want to set the farmer against the workingman, but I must remind hon. members that if one of the workers in the factories of Brantford cannot pay his debts he is not protected by a creditors arrangement board. His creditors enter a claim in the courts, and in the event of their obtaining judgment against him they seize all he owns. There is no recourse for the workingman; he has to pay. I sometimes hear it said that the manufacturer wants to beat the farmer, but I do not believe that is right. The manufacturer knows that the farmer is his sole customer.
One of my purposes in rising to-night is to try to instil a better spirit of good will not only between workers and farmers, but among workers, manufacturers and farmers. The statement has been made that prices have increased, and we have been given comparisons between prices of 1911 and those of 1930. I do not intend to meet the argument at length. As a matter of fact I have not a clear recollection of conditions in 1911, but I do know there has been a great change between conditions of those days and those of 1930. Unfortunately the farmer has not benefited to the extent he Should have. I know, however, that the city dweller has to pay more for

Farm Implements-Mr. Macdonald
everything he buys, and that the manufacturer of all lines of articles cannot manufacture as cheaply to-day as he could in 1911.
The hon. member for Lake Centre (Mr. Johnston) stated, quite correctly, that since the war prices of automobiles have decreased. The statement is made that to-day we can buy a better automobile for less money, and on the face of it that would seem to be a good answer to the question: Why should not farm implements be in the same class? I would like to remind hon. members, however, that the farm implement business has been in existence for generations, whereas the automobile business started during our generation. Mass production has just developed in the automobile industry, but in the implement industry mass production was at its height before the automobile was invented. For these reasons I would say that the two industries are not comparable. However, if hon. members do wish to make a comparison I would suggest the comparison between the tractor and the automobile. I believe such a comparison will show that to-day the tractor costs just about half, or at any rate considerably less than it did in 1918. Prices of tractors have declined, because in 1918 they were not being turned out in such large quantities as they are to-day.
Certain figures were quoted to which, if I have time, I shall direct my attention in a few minutes. It must be remembered, too, that there have been improvements in farm implements, and that to-day there are certain implements a farmer can buy at the decreased or former price, if he is content to take an obsolete implement, or one that is not quite up to date. Prices of the older types of implements remain where they were, but improvements have been made, and if a farmer wishes to obtain the improved article he must pay more for it. I am informed on reliable authority that to-day the farmer wants the best implements he can buy, and that the manufacturers cannot sell the old style machines because the farmer wants up to date machinery. We cannot blame him for that, because we all feel the same way.
It is true that prices have been increased.
I do not deny that between 1911 and 1935 prices were increased, but again I am informed that the implement of to-day is worth considerably more than that of 1911, and if you take into account the repairs which had to be made to the implement of 1911 and compare repair expenditures with what the farmer has to pay to-day, I am advised that the implement sold to-day is a better buy, dollar for dollar, than that of 1911. I would draw the attention of hon. members to the
fact that although prices of implements, generally, have gone up a small amount, prices of spare parts have not increased. Prices of spare parts remain as they were.
I shall not go into all the prices quoted by the hon. member for Lake Centre, but if hon. members followed them they would know that in no instance is the price for 1936 greater than it was in 1930. True, there is a slight increase over 1935, but the 1930 price in practically every case was higher than that of 1936. If you take the 1936 price and compare it with that of 1935 you find that the increase by percentage has not been very great. As a matter of fact if one were to take the trouble to figure it out he would find that it comes to only approximately three per cent, while in some instances there has been no increase. I think hon. members will agree that three per cent is not very great.
I suggest that we are not tackling this problem in the proper manner. Again I wish to express my sympathy for the farmer. There are farmers in my constituency, and I should like to see them buy their implements as cheaply as possible. On the other hand there are thousands of working men in that constituency, and I want to see them employed at fair rates of wages. I do not think the time of hon. members should be spent in costly investigation. Last year the farm implement industry was investigated very thoroughly and carefully by the experts of the price spreads commission. They went into every phase of the industry. Is it the desire of the house that in order to investigate this industry we should again spend thousands of dollars of the public money and also have the implement companies spend thousands of dollars of their money? I do not think we should go about the matter in that way. As the increases have been only three per cent,
I think we should devise ways and means of obtaining for the farmer a better price for his products so that he will have money with which to buy the necessary implements.
It is my intention to support the treaty between the United States and Canada because I feel that it will put more money into the hands of the purchasing public. In conclusion, let me say again that I trust the house will not decide to spend thousands of dollars to investigate this industry, but will devote its attention to getting more money for the products produced by the farmers so that the working men in Brantford may obtain a fair wage for the work they do and implements may be sold to the farmers at a reasonable price.

Farm Implements-Mr. Perley


Mr. POOLE:: Does the hon. member know what wages were paid in 1911 in the production of a binder, and the wages paid in 1936 for the same work?


William Ross Macdonald: I am
sorry that I cannot give my hon. friend the correct figures. However I can say on very good authority that the working man is getting more money to-day than he did in 1911. Of course, I am not satisfied with the amount he is getting and I hope he will get even more when conditions return to normal.


Mr. E. E. PERLEY (Qu'AppeUe):: Mr. Speaker, judging from the remarks of the hon. member for Brantford (Mr. Macdonald)
I should imagine that a number of hon. members from western Canada will have something to say in respect to this resolution and in reply to the hon. member. I do not propose to take more than a very few minutes in making my remarks. I am behind this resolution one hundred per cent. I think an investigation should be -held with respect to the prices of agricultural implements, especially in view of what has happened during the last two months. If -there is a nigger in the wood-pile we should endeavour to find out where he is and how he got there.


Mr. EULER:: And who he is.


Ernest Edward Perley: A study of
the tariff is somewhat confusing. During the last four or five years many views have been advanced in the house in connection with the tariff. In the last parliament there were some free-traders and there were some high protectionists. The effects of changes in the tariff upon trade and the price of commodities are very confusing. The hon. member for Lake Centre (Mr. Johnston) was very fair in most of what he said. He quoted prices of implements in 1930, 1934, 1935 and 1936. He referred to the Right Hon. Arthur Meighen and to a resolution which he proposed in the house when he was member for Portage la Prairie in 1911. I think he should have developed further the policy of that right hon. gentleman and told the house what had happened when the latter was Prime Minister from 1919 to 1921. During that time a change occurred in the tariff on agricultural implements. I think it is within the memory of some hon. members that at that time tractors, tractor parts and certain other agricultural implements were put on the free list. In those days there were some twenty concerns producing tractors or tractor parts in Canada. We all know

what happened. Prices went up and the industry was destroyed. To-day there is not in this country one concern manufacturing complete tractors or tractor parts.
The hon. member for Lake Centre quoted prices that he had received from the Cock-shutt Plow Company, the International Harvester Company and the Massey-Harris Company on binders, drills, disc harrows and gang ploughs. These prices showed that a decrease had occurred in the period from 1930 to 1934 while there had been increases from 1935 to 1936. I also received prices from the Massey-Harris Company and the Cockshutt Plow Company. These prices show increases, but I do not think the reasons given by the companies for these increases are justifiable. We should have an investigation. I expect that a number of hon. members opposite who came from western Canada will support the resolution of the hon. member for Lake Centre. I should imagine that the members from Manitoba particularly will have something to say. I have in my hand an article which appeared in the western press dated Winnipeg, February 27. This reads:
Urges Protest on Machinery Price Boosts
The Manitoba government was charged Wednesday to consult with the dominion administration with a view to bringing the price of agricultural machinery down "to what they were under the Bennett regime."
Quoting from price lists to show that the cost of farm implements was substantially increased this month, A. R. Welch (Conservative, Turtle Mountain) said in the provincial legislature it was the duty of Premier Bracken to press upon Ottawa the need of a twenty per cent reduction in prices.
Douglas Campbell, Progressive member for Lakeside, also complained of higher prices for farm machinery. He stated that the -Canadian-American trade agreement had resulted in lower prices for live stock and higher prices for farm machinery.
It is very interesting to know that the Manitoba government is being asked to have prices brought down to what they were under the regime of the present leader of the opposition (Mr. Bennett). I think western members would be wise to support this resolution. I agree with hon. members who have spoken already when they say that the farmers should have an equal opportunity. The hon. member for Lake Centre has said that he should not have to pay tribute because of the tariff or anything else.
I should like to refer to some of the figures quoted by the hon. member for North Huron (Mr. Deachman). I think the hon. member was a little unfair when he took the 1926 figures as his index and then made a comparison between 1913 and 1934. I have before me a list of prices prepared by the Dominion

Farm Implements-Mr. Ross (Moose Jaw)
Bureau of Statistics ranging from 1913 to 1934. These show that it is not fair to use the 1926 figures as an index and then compare 1913 prices with those of 1934. In 1913 we had practically the lowest prices on agricultural implements that we have had in the last twenty-five or thirty years. I think it would have been fairer if the hon. member had made a comparison between 1913 and 1924, which was the peak year. During that period, particularly from 1919 to 1924, we had the lowest rate of tariff. As the hon. member for Lake Centre (Mr. Johnston) pointed out, the tariff had been reduced from twenty per cent to six and ten per cent, and it was during the period from 1919 to 1924, when we had the lowest rates, that we had the peak in prices, in 1924.
Coming to the period from 1930 to 1934, we had a reduction in prices. Those who were in the house in 1930 will remember that in that year there was a change in the tariff; increased protection was given to Canadian industries; the Prime Minister of that day made an agreement with the manufacturers that there should be no increase in price, and there was not; as the hon. member said, there was a reduction. Then we have the price in 1936 as compared with the price in 1935, a considerable increase; it ranges from $2 to S40 on some implements. I cannot see any justification for it, and it must surely be a great shock to the hon. member for North Huron, for he was out in the west in January telling the people what a wonderful deal had been made in the Canada-United States trade agreement in so far as farm implements were concerned, and what the farmers might expect. It must have been a rude shock to all western members to see the price list issued on the first of February showing a considerable increase in the prices that then went into effect.
I do not think it is necessary to take up much more time. I am very much interested in this resolution. I hope it will carry and that the government will appoint a commission or a committee to investigate the matter thoroughly. I trust that western Canada will be well represented by legal talent on such a commission or, if it be a committee of the house, by members from the west, and that every opportunity will be given to inquire into the whole subject with a view to ascertaining the cause of the increase.
The farmers of western Canada are certainly very much upset, for they expected a reduction in price this year. As the hon. member pointed out, much of the farm machinery in the west is worn out. Conditions
during the last five years have been such as to compel the farmer to use his old machines and have repairs made to keep them going. But that old machinery is practically worn out and in the next year or two a good deal of new machinery will have to be purchased if the farmers are to carry on their operations with any degree of success. I do hope that this resolution will receive due consideration and that there will be a full investigation.


Mr. J. G. ROSS (Moose Jaw):: In supporting the hon. member for Lake Centre (Mr. Johnston) on his resolution, I speak as a farmer of some twenty-five or twenty-six years' experience; farming has been my business all my life. I can assure the house that there was never a time in the history of the west when farm implements were of more importance to the farmer there than they are to-day. Year by year the growing of grain is becoming more mechanized in western Canada. There are many people who advocate the splitting up of lands in the west into smaller farms. In the wheat growing section the trend has been towards larger instead of smaller farms and towards larger instead of smaller machinery. There are certain parts, marginal lands, rolling, hilly or stony lands, where pasture is usually good and where increasingly we shall go into the live stock industry. But on the great plains known as the bald-headed prairie, wheat will be grown for many years to come, and it will be grown by the farmers on a large scale.
The people of western Canada are very much interested in farm implements and anything that tends to increase prices to them is of vital interest to members of the house from western Canada. Before leaving for Ottawa I heard of the rise in prices of farm implements, and at that time I made a statement to the press in my home city. I have always been in the habit of making and I have always been willing to make in the House of Commons any statement I have made either to the press or in public, and the statement I then made was that if in the faee of the reduction in the duty on farm implements from twenty-five to twelve and a half per cent under the trade treaty the manufacturers of farm implements in Canada could raise their prices, then that proved that they did not need a tariff. They have practically told this government that they are a combine, and we know that from the price spreads report, because it was shown in that report that there were only three large implement companies practically controlling the Canadian market in the production of farm implements, these companies being the Massey-Harris Company, the Cockshutt Plow Company and the International Harvester
696	COMMONS
Farm Implements-Mr. Ross (Moose Jaw)
Company. The Cockshutt Plow Company, according to the price spreads report, own and control the fourth company in Canada, the Frost and Wood Company. There were some smaller ones mentioned, but in effect these three companies control the manufacture of farm implements in Canada; and from the prices quoted by my hon. friend from Lake Centre we can see that that fairly well follows through in the prices of implements as given. There is very little difference in the price of any one kind of implement as between one company and another in any one place in this country.
Another reason why the farm implement companies do not need a tariff in Canada is that they have always been large exporters of farm implements to other parts of the world. I see my hon. friend the member for Haldi-mand (Mr. Senn) shaking his head. According to the price spreads report, from sixty to eighty per cent of the total sales of the Massey-Harris Company in the last seven years has been export business.


Mark Cecil Senn: But the other two are not exporting in the same way.


John Gordon Ross: I cannot say how much the International exported from Canada, if anything. I know that they import a great many farm implements. But imports and exports of farm implements into Canada and out of Canada in the last few years have been about equal at all times; we have imported about the same amount as we have exported. If any manufacturer in Canada can export into the world market over the top of tariff walls in other countries, give me one sound reason why we should pay a price here-


William Ross Macdonald: Were the tariff walls there when they were exporting? Were the tariff walls on the foreign countries when they were exporting?


John Gordon Ross: Well, they are exporting to the United States.


Mark Cecil Senn: No.


John Gordon Ross: They were exporting to Europe.


Richard Bedford Bennett: They have factories in Germany and they have factories in the United States.


John Gordon Ross: They are exporting to the United States now, and always have been.


Richard Bedford Bennett: What are they exporting to the United States? Well, go on. Excuse me, Mr. Speaker.


John Gordon Ross: Threshing machines or separators for the threshing of grain go into the United States in large quantity. My right hon. friend had a tariff of twenty-five per cent on their coming into Canada. If a man can manufacture goods in Canada and sell them in other countries, surely he should be able to sell them in this country without protection. After all, what are we doing when we are protecting the manufacturer of farm implements in Canada? We are paying part of the shot in the manufacture of an implement to be sold at a lower price to our competitors in other countries. That is what we are doing.


William Ross Macdonald: Do you know that for a fact?


John Gordon Ross: All my hon. friend has to do is to use common sense. He does not need any facts. This is an agricultural country. Surely if our manufacturers are able to ship agricultural implements out of Canada into other countries which have a tariff, or no tariff, where world competition has to be met, they should be able to meet world competition in Canada. Surely that is a reasonable argument.


An hon. MEMBER:: Take the tariff off.


John Gordon Ross: And in connection with this tariff-and we have just fought an election largely on it-as a matter of fact back in 1930 my right hon. friend went from one end of this country to the other and told the people at that time that he would put up a tariff to fight for them, to fight their way into the markets of the world.


Some hon. MEMBERS:: Blast.


John Gordon Ross: Well, "blast" was the word used. At any rate he said he would do that. But that was not the main issue in that election. The issue that the people voted upon was that my right hon. friend was going to end unemployment forthwith. But when 1935 came along my right hon. friend had put into effect a very high tariff policy in this country, and the people from one end of Canada to the other had seen the complete failure of that policy. The people engaged in the basic industries from one end of the dominion to the other voted at this election for lower tariffs on all the implements of production and those commodities which have to be purchased by the basic industries of this country. If we are ever to have prosperity again in Canada we must frame our policies in such a way that those basic industries

Farm Implements-Mr. Ross (Moose Jaw)
may become prosperous, and when that occurs the secondary industries will also become prosperous.
What does the policy of protection do in this country? The hon. member for Brantford (Mr. Macdonald) says tha-t he does not want to set one section of the country against another or one section of the people against another. Neither do I. But let me say this, that the policy of protection as put into effect by the leader of the opposition came closer to dividing this country than anything that has been done in it since confederation. After all, what are we doing? We have been protecting our secondary industries at the expense of our primary or basic industries. We have been drawing into one small section of Canada the lifeblood of every other section of the country. There is not any doubt about it.
My hon. friend tells us that two of the large implement industries are in one city or town in this part of the country. And every farmer in this province and in every other part of Canada must pay an additional price on that account. The same thing holds true of practically every other industry we have in the country. Follow this out and you will find that the very lifeblood of every part of Canada in all the basic or primary industries is being drained into one small centre where the secondary industries are.
That policy did not bring prosperity to Canada. The only thing that can bring prosperity to Canada is to build up the primary industries. My hon, friend says that the machines of 1911 were not as good as are those of 1935. I will grant him that on many of them there have been soma improvements. But I have been farming all that time, and I can say that there is very little difference between the eight-foot binder of 1911 and the eight-foot binder of 1936. As a matter of fact if you set the two down together I think you might find that the 1936 binder was a little easier running but that the 1911 binder had a heavier construction and probably would stand up better than one that is built to-day. Let us consider the prices at that time. Somebody gave the price for 1936. I remember a binder I bought in 1911 for S165; the price must be now around $300. At that time the farmer's produce-wheat, at least-was selling for about the same price as it is to-day. It was sometimes a little higher and sometimes a little lower than the set price we now have.
I might say a word on this set price, too. As a grain grower from western Canada I am sorry that we ever had to come to a
point at which it was necessary to set the price of wheat in Canada. I have never believed in that kind of business. The farmers of this country do not want to be subsidized; All they want is to be able to but what they have to buy at world prices and to sell at world prices. The policies that have been put into effect by successive governments in this dominion have been such that finally the farmer has drifted to the level at which the government has had to come to his assistance and set a price for his crops. That I think can be done away with rapidly if this government will follow out the policies on which they were elected. We were elected on. lower tariff policies. I commend the government for the move that they have made in the trade treaty with the United States but, like the hon. member for North Huron (Mr. Deach-man) I say that that is a first step and we must go much further than that.
Since the farm implement people have very plainly stated that they do not need any tariff on farm implements in order to carry on; since they are a combine and will set their prices no matter what the Minister of Finance (Mr. Dunning) does with a tariff or treaty, I would suggest that he start out by cutting off the entire tariff on farm implements. In connection with our industries in this country we have been told for many years by our opponents that if a high protection policy were put into effect people would be put to work. Well, no one needs to argue against that any more; we had that proved between 1930 and 1935, when for the first time the people of Canada were given a real taste of a high protection Tory policy. What was their answer? In the three maritime provinces they did not want that kind of policy at all; they wanted lower tariffs. One Conservative out of twenty-six members was returned to this house. In Quebec the Conservatives did not do much better. In Ontario they were up against the greatest losses they have ever had. In Manitoba they got back with one lone man.


Mr. MacNICOL:: Will the hon. gentleman permit an interruption?


John Gordon Ross: Surely.


John Ritchie MacNicol: The hon. gentleman just remarked that in Ontario they-and I presume he meant the Conservative party-were up against the greatest losses they ever had. I can tell the hon. gentleman-


Some hon. MEMBERS:: Order.


Some hon. MEMBERS:: What is the
question?

Farm Implements-Mr. Winkler


John Ritchie MacNicol: I just want to correct
a statement made by the hon. gentleman. I will ask him to apply his statement to Toronto, Hamilton and London, three cities that benefited very greatly as a result of the tariffs of the Bennett government. They all returned Tories, except two out of the eleven Toronto seats.


John Gordon Ross: That is just the little part of Canada about which I have been talking, that has been sucking the life blood out of the rest of Canada.


John Ritchie MacNicol: And a very important
part, too.


John Gordon Ross: Too important
for the rest of Canada.


John Ritchie MacNicol: It puts up a lot of the
taxes of Canada.


John Gordon Ross: After it gathers
them from other people. As I said before, this policy of protection as put into effect by my right hon. friend for the first time lost out all along the line. They returned one member from Manitoba and one lone member from Saskatchewan, who I am glad to see is supporting this resolution, and I hope he will support the trade treaty with the United States. Then we come to Alberta. If it had not been for the friendship shown by the Premier of Alberta to the then Prime Minister of Canada not one lone Conservative would have come back from the massacre of the plains of Aberhart.


Hugh Alexander Stewart: Would the hon. gentleman let me ask him a question? Was the tariff an issue in Alberta, and, if so, what happened the Liberal party there?


John Gordon Ross: My hon. friend
asks me what happened to the Liberal party there. I will admit that the Liberal party returned only one member from Alberta, but certainly the Conservative party got through with only the then Prime Minister of this country.


John Ritchie MacNicol: And he was elected by a clear majority.


John Gordon Ross: The effect of
third parties in western Canada was more against the then government than against any other party. My hon. friends in the far comer, who say that the people of western Canada are not interested in trade, are lucky that they do not have to go back to the country very soon.


Eric Joseph Poole: Do not boast; we will beat the two of you.


John Gordon Ross: Oh, I had a social credit candidate running against me, and he lost his deposit.
Well, Mr. Speaker, I heartily endorse the resolution moved by the hon. member for Lake Centre (Mr. Johnston), and I would go further. I hope that without too much investigation, because I do not think it is necessary, and without too much delay the government will take action in connection with this matter. When a combine, a practical monopoly, defies the government of the people of Canada it is high time for the government to teach it a lesson.


Mr. H. W. WINKLER (Lisgar):: Mr. Speaker, I should like to address a few brief remarks to the resolution before the house, particularly with regard to its effect upon a certain section of rural Canada which lies along the international boundary. I refer particularly to the great drought area of western Canada, where for the past six years there has been a prolonged drought such as has never been witnessed before. This condition has had a disastrous effect upon the population of the west. In the riding which I have the honour to represent there are sections where for six years in succession they have had drought conditions, and you can imagine the plight of those people today. Their houses and farm buildings have depreciated very badly and their live stock is greatly depleted, in spite of the fact that this is a mixed farming area. The situation has become so serious that in the main taxes have been consolidated, which means that the taxes have been put on an instalment basis over a period of years.
In addition to all this, the question of farm implements has become very acute. During the last six or seven years very few farm implements have been purchased by these farmers; very little repairing has been done, due to a lack of finances, and as a result we find most barnyards completely filled with junk. Under the circumstances it will be understood that in connection with the replacement of this machinery these farmers are faced with one of the greatest problems of their lives. So the resolution before the house this evening concerns them very materially. The farmers of this district have a right to know why prices of agricultural machinery have risen, and this resolution seeks to disclose exactly what they want to know.


Mr. JOSEPH NEEDHAM (The Battle-fords) :: 
Mr. W. A. TUCKER (Rosthern):: Mr. Speaker, we know the condition in which agriculture finds itself in western Canada to-day after many years not only of drought but of low prices. Now we are met with a rise in the cost of farm implements, and I feel that I would not be doing my duty to those who sent me here if I did not say a few words in support of this resolution.

Farm Implements-Mr. Tucker
The situation may be put very briefly. We find that in 1928 the income of the farming industry of Canada was $1,501,000,000, or, roughly, one and a half billion dollars. Six years later, in 1934, that income had shrunk to $525,000,000, a reduction of about two-thirds or sixty-six per cent. That is the situation as to the money the farmers were getting for their products. What about the commodities they had to buy. Taking the index figure of one hundred as representing the retail price of articles they had to buy in 1926 we find that in 1929 there had been practically no change, and that the index figure remained at 99-9. By 1934 it had gone down only to 79. In other words, in those five years there had been a reduction in the index figure of retail prices amounting to roughly twenty per cent. Mark you, Mr. Speaker, that during that time, where the farmer had formerly received three dollars of income, he was now getting only one, but in the retail price of articles he had to purchase he had to pay eighty where he formerly paid one hundred.
We find that instead of decreasing, the burden of taxation has increased. Not only has the burden of his private debt not remained the same, but owing to the fall in the value of what he has to sell that burden has increased greatly. Under conditions where he received only one dollar where formerly he received three dollars, the burden of a debt of $100 became three times as heavy. In other words, the burden of debt on the farmers of Canada in those six years has increased by three hundred per cent. That is the situation. There has been an increase in the burden of taxation, a very small reduction in the index prices of their retail purchases, and an increase in the burden of their private indebtedness. That is the situation in a nutshell. Is it any wonder that as one watches the situation, especially, in agricultural western Canada, one sees that slowly but surely those good people are gradually being forced down, down, down to the level of a peasant population? It is the duty of every hon. member-and I do not say this for the purpose of setting the east against the west-to ask himself if he intends to be a party to a slow change that is going to reduce his fellow Canadians to the level of peasants, and a lowly class of peasants at that, when we understand that they have to live in such a state that they cannot educate their children, cannot provide them with proper medical attention and cannot do for their children

any of those things which every hon. member would want his fellow Canadians to be able to do.
Since I have come to this House of Commons, statements which have surprised me have been made by hon. members from Ontario. The suggestion is made that Ontario and Quebec are paying the bulk of the taxes. Why is it that Ontario and Quebec are paying the bulk of the taxes in Canada? Is not this the answer: They have the money.


An hon. MEMBER:: Where did it come from?


Walter Adam Tucker: My hon. friend asks where it came from. The whole tariff policy, and especially that of the Conservative party, has been designed to benefit the central part of Canada at the expense of the west and the maritimes. The financial policy of this country has been so designed that it causes interest to flow into the head olfices of the big financial concerns situated in Ontario and Quebec. If I were a representative from Ontario I would not draw the attention of the people of Canada to the fact that my province was so well off, or that they could pay so much in the way of taxes at a time when the rest of the people cannot get even enough to live on.
That is the situation. As fellow Canadians we say to them that if we were in their position and were able to look after ourselves as well as pay taxes we would be glad to pay the taxes they are paying. I am not forgetting what the rest of Canada has done for Saskatchewan, and especially that section affected by drought. We have appreciated the attitude of sympathy and help extended to us, and that feeling of good will has done a great deal to tighten the bonds which bind confederation. But I ask them to give us not charity but justice. Let us have not, a situation in which they are wealthy and we are poor, shall I say, orphans, but rather one in which we have equal shares in our common patrimony.	Does any person suggest that under our present organization there are equal privileges for all and special for none? I draw to your attention, Mr. Speaker

and I am sorry I have not the figures in front of me-the state of affairs disclosed in a brief submitted by the present Minister of Labour (Mr. Rogers) to the government of Nova Scotia, wherein it was shown that owing to tariff regulations in one year Saskatchewan alone paid about $28,000,000 more for what it had to buy, $4,000,000 of which went into the pockets of producers in Saskatchewan and $24,000,000 into the pockets of producers in

Farm Implements-Mr. Tucker
Quebec and Ontario. That happened in one year. The sum of $24,000,000 in increased prices went into the hands largely of private interests and corporations from Saskatchewan alone. And then we have hon. members from Ontario suggesting to us that they should have some special consideration because out of that money which we are pouring into their corporations they pay the bulk of the taxes. That is a situation which I deplore.
In connection with the question of wages, to which a previous speaker referred, may I observe that from 1913 to 1930 the average price of nine Canadian farm implements has increased by roughly $51.82. The surprising fact about the analysis is that of that increase only $1.36 went into wages. I commend that fact to the consideration of the hon. member for Brantford city (Mr. Macdonald). Of the $51.82 increase in price during those twenty years only $1.36 went into wages, and those are actual figures from the price spreads report. The amount going into factory wages in 1913 was $4.97, whereas in 1933 it was $6.38, or an increase of around thirty per cent. What about factory expenses? We find that factory expenses increased from $7.63 to $26.42, or an increase of almost four hundred per cent. That is where a great part of the increased price occurred.
I do not wish to condemn anybody. According to the factories manufacturing farm implements they are making no money, but I must bring this fact to the attention of hon. members:	Here is the great basic
industry of agriculture getting one dollar where formerly it got three dollars. We find that the burden of debt is weighing too heavily upon the farmer and that, after all year after year, the cream of his crop is taken away. Every hon. member knows that when a man gives one-third of what he produces towards the payment of interest on his private indebtedness, as a great proportion of the farmers of the west have to do to-day, in many cases there is not enough left to look after himself and his family. What hope is there for the thousands of people on the western plains living under those circumstances?
When I speak, Mr. Speaker, I am thinking of the part of this dominion from which I come. According to the census there were
728.000	farmers in Canada who, with their wives and children, made up a total of
5.473.000 of our population. If you are going to say to almost 6,000,000 people in Canada: We are going to put you on a basis where your purchasing power is down by
two-thirds, but where you are going to carry the same private debt and where you are going to pay public debts at one hundred cents on the dollar; which means 200 or 300 cents on the dollar; when you consider the appreciation in the value of money; when you consider that the attitude of the preceding government was that we were to follow a policy of sound money and that we were going to drive our people until they paid every cent; when you consider that that is being done at the expense of our own Canadian people, our own flesh and blood on those western plains; and when you consider that it has not been considered wrong for the greatest of nations in the family of nations, namely Great Britain, to do otherwise, then we have cause for reflection.
What did Great Britain do with regard to her war debt? The Right Hon. Stanley Baldwin, Prime Minister of England, came over to the United States in 1922, I think it was, and promised formally to pay the large debt which Great Britain owed to that country. What do we find to-day? I think it is three years since Great Britain has paid anything and it is well understood that nothing will be paid on that debt. Of all the nations owing money to the United States, Finland is the only one that has paid as she agreed. The reason given by England for not paying is that she cannot pay. It has been said that England can pay only if the United States will take goods in payment. Do hon. members think Mr. Stanley Baldwin did not know that when he promised that England would pay her debt? I submit that he did know, or that it must be presumed that he knew. If it is all right for Great Britain to say that she cannot pay without ruining her people, it should be all right for the people of Canada to say that there should be an adjustment of private and public debt in order that they shall not be ruined.
There is a sheer necessity for some logical approach to the solving of this great problem of public and private debt which is such a burden upon the people. I submit that it is not enough to say that we will ride out the gale; that somehow we will pull through. The situation in western Canada is very serious. The Minister of Finance (Mr. Dunning) has just entered the chamber, and I do not believe there is an hon. member who knows better than he conditions in western Canada. He homesteaded there and he knows the privations and hardships that face the western farmer. He knows how unfair it is to deprive any of these men of the fruits of his hard labour of twenty or thirty years. I

Farm Implements-Mr. Tucker
know that I do not need to appeal to the minister as I believe he has given this question his earnest consideration. I think he is aware that something must be done with regard to the burden of taxation as well as of public and private debt which rests upon the people. Is it fair or equitable that the dollar should be inflated in value to a point where it now takes three times the quantity of basic products to pay a debt contracted five years ago.


Mr. DUNNING:: In view of the fact that the hon. member has referred to me, may I say that upon looking at the resolution I find that it has to do with the advance in the prices of farm implements. Might I suggest that we discuss the subject matter of the resolution?


Mr. SPEAKER:: The hon. member should confine his remarks to the resolution.


Walter Adam Tucker: If we are going to deprive the farmer of practically all his money, if it takes all his earnings to pay interest, he can ill afford to pay a higher price for his farm implements. I thought the Minister of Finance would like to be reminded of those days when he pioneered in Saskatchewan, but as he does not want the time of the house taken up with these references I shall come back to the resolution.
The people .of Canada elected those whom they thought were the men likely to represent them best in this House of Commons. They hope tihat their representatives will do the best they can to figure out and solve their problems. During the next year they expect that something definite will be done to lighten their burdens and enable them once more to live the life which we expect ordinary Canadian citizens to live. The hon. member for Moose Jaw (Mr. Ross) has referred to the fact that these farm implement companies are raising their prices in the face of a reduction in the tariff. The right answer to that kind of action is: If you are in a position to raise your prices despite a lowered tariff, then we will take the tariff off altogether. It has been suspected that an international combine or cartel exists in connection with the marketing of oil and gasoline and perhaps one exists in connection with the manufacturing of farm implements. If it is found that the large manufacturers of the world are getting together to control prices regardless of tariffs, then I submit that the Liberal party has a policy well designed to deal with such a problem. A part of this policy is contained in the Combines Investigation Act.
Present conditions constitute a challenge to the intelligence and wisdom of parliament.

Over half our people have lost two-thirds of their purchasing power while the price of the articles they require has been rising. This is not my problem alone; it is the problem of every member of parliament. I commend most highly the hon. member who introduced this resolution (Mr. Johnston, Lake Centre). This problem should be submitted to some group of men who will examine into it and try to do something for the basic producers on the western plains who are endeavouring to do ail they can to get along under present conditions. I feel sure that hon. members from eastern Canada will give us their cooperation. They know that unless the great primary industries, such as the farming industry of Canada, are prosperous, the manufacturers of Ontario and Quebec will be in a depression and faced with unemployment. No matter whether a member represents an agricultural constituency in western Canada or a manufacturing constituency in Ontario, it is equally his duty and his privilege to study this problem so that half the population of Canada may be brought back from practically a poverty stricken level to that upon which we want Canadians to be. Once the farmers of western Canada are able to buy the articles they need the manufacturing centres of the east will be prosperous and the spectre of unemployment will no longer stalk through our land.


James Garfield Gardiner: Mr. Speaker, as Minister of Agriculture, I do not think it would be proper for me to permit a resolution of this kind to be discussed in the house without expressing an opinion upon it. At the outset I should like to say that although I come from western Canada and represent an agricultural constituency in that part of the country, I am still mindful of the fact that more than half the agricultural people of Canada live east of the great lakes. In this house are hon. members representing agricultural constituencies in the eastern part of Canada as well as in that part of Canada which lies to the west of the great lakes. Most of the discussion in the interests of agriculture, in so far as this resolution is concerned, has been carried on by hon. members from the central west or the prairie sections of the dominion.
A few days ago a member from one of the rural constituencies in the east placed in my hands a price list in connection with this very question. This list was sent to him apparently by one of his constituents, a man who is interested in prices of implements in eastern Canada, and I find that it compares almost exactly, so far as increases are concerned, with

Farm Implements-Mr. Gardiner
price lists from western Canada which have been read in the house. This is a price list secured from an implement dealer in St. Thomas, and according to this list a six-foot binder sold in St. Thomas in 1935 for 8225.50; but in the list which has been recently put forward for 1936 the cash price is $242.20, which is practically $17 higher than the 1935 price. If my memory serves me rightly, that is almost identical with the increase which has recently taken place in binders in the west. A six-foot mower sold in 1935, cash price, at $84, and in 1936 it sold at $92, or an increase of $8. A side-delivery rake sold in 1935 at $118 and in 1936 at $128, or an increase of $10. A hay loader sold in 1935, cash price, at $114, and it is listed for this year, cash price, at $124, again a $10 increase. A 13-disc fertilizer drill sold in 1935 at $169, and is listed for 1936 at S179, or an increase of $10. A manure spreader sold in 1935 at $164, and this year it is listed at $174, again a 810 increase. A 13-tooth land cultivator sold in 1935 at $73, and in 1936 the price is $76, or an increase of $3. A 14-blade disc harrow sold in 1935 at $47, and in 1936 the price is $48, or an increase of $1; and an eight-foot tractor disc harrow sold in 1935 at $103 and in 1936 it is listed at $106, or an increase of $3. This list represents implements used on every farm in the eastern part of Canada, and the increases in the east are similar to those that have been made in the west.
The discussion of the resolution before us has indicated to me that there is some reason for an inquiry into these increases in prices, particularly because of their having been made at this time. I was somewhat interested in the remark made by the hon. member for Qu'Appelle (Mr. Perley) when he called attention to the fact that certain people were contesting an election in a constituency in Saskatchewan at the beginning of this year and that at that time those of us who were in the constituency fighting in the interests of the government were taking some credit to the government for the trade treaty that had been recently made between Canada and the United States; and he said it must have come as rather a shock to us to find that at the beginning of the next month there was an increase rather than a decrease in prices of farm implements as a result of that treaty having been brought into effect. Well, that fact was perhaps not as great a shock to those of us who took part in the campaign, knowing as we did what has taken place in the dominion following previous reductions in the tariff, as it was to men from one end of the dominion to the other when the price list came out and stared them in the face as representing an increased cost of production to the agriculturist in Canada in the coming summer.
It is for that reason that we believe some sort of inquiry should be made into the causes of the increase in prices of farm implements under conditions that prevail in Canada at the present time. As regards conditions existing in Canada, I do not need to confine my remarks to conditions as we know them to-day in western Canada. Conditions in the west to-day are such as naturally exist in a country that is comparatively new, when the whole world is going through the trying times that are being experienced at present. There are in this house men who can recall similar experiences on the part of people living in the rural areas of Ontario, of Quebec and of the maritimes, in the latter part of the last century, by reason of the prevalence of similar conditions in the world at large.
One of the reasons for the prevalence of the conditions that have been described by the hon. member for Rosthem (Mr. Tucker) and by other hon. members from the western provinces is the fact that we are passing through the first generation of settlers in western Canada; and while we have large debts to meet, while we have to pay for some of the development that has taken place in the past, we are confronted with the fact that it was the opening up of that part of Canada, through the efforts of people in the east, that put this country on the map as a really important nation among the nations of the world. We as a people living in the west owe thanks to the people in eastern Canada for the capital which has been put into western Canada and for the effort which has been made by the people of the east in the direction of developing the western section of the dominion; and we have reason to believe, from the actions of men throughout the eastern part of Canada during the last five or six years, while we have been passing through our trying experiences, that the men in the east who have been responsible for assisting in our development in the past are still not only able but anxious to participate in the future development of western Canada.
One of the reasons we are suffering in the west to-day is that, whereas in the three best years we have ever had in the west, 1926, 1927 and 1928, agriculture produced, in Saskatchewan alone, $1,180,000,000 worth of new wealth which went into business from one end of the country to the other, creating prosperity throughout the country; In three of our most difficult years, 1931, 1932 and 1933, we produced from these same farm lands only

Farm Implements-Mr. Gardiner
$354,000,000 worth of new wealth, or less than one-third of what we produced in the first three year period. And it is because of that reduction in the output of wealth in the west as well as of a similar reduction in the value of the wealth produced throughout Canada that we have been suffering from the difficulties which we have experienced. But in western Canada we have had the additional burden that in the southern part of the three prairie provinces we have been visited by a drought more severe than droughts of the past, and that drought has been accompanied by the lowest range of prices that any part of Canada has ever experienced for farm products. With those two conditions operating together we are of course having hard times and low purchasing power.
But I am one of those who believe that purchasing power can be reestablished only by the cooperation of the farming populations of the west, the farming populations of the east, the industrial populations of the east and west alike, and the financial people in the eastern and western parts of Canada, and that if we are to succeed in bringing back that prosperity for which we are all praying and of which, at the moment, we all dream, we shall succeed only through the one hundred per cent cooperation of the peoples living in all parts of Canada and those engaged in all activities within this country.
I believe the facts produced in this particular debate have emphasized two points. There are those who believe it is most important that we should maintain labour in industry in the different parts of Canada; and I am one of those who believe that in every industry in this country, whether it be for the manufacture of goods or for the production of primary products, first consideration should be given to labour; that when men are not given proper returns for the labour which they put forth in order to produce wealth, whether in industry or in agriculture, or whatever it may be, then we are going to suffer difficulties in every part of Canada. For that reason every effort should be put forward in this house, by inquiry, by legislative endeavour, and in other ways, to see to it that whatever happens, those who give of their labour to produce new wealth in this country from any source should be taken care of before one dollar from that industry goes anywhere else. Believing that, I think it is necessary to have some further inquiry into the reason for this increase in prices, coming at this, one of the most difficult periods that agriculture in Canada has experienced. I want just for a moment to read the resolution and to consider

certain proposals which are made in it. The resolution reads:
That, in the opinion of this house, an immediate inquiry should be made under the provision of the Research Council Act, chapter 177, R.S.C., 1927, or by other means, into the causes underlying the high price of farm implements, with particular reference to the advance in prices for the year 1936.
The discussions indicate, as I said a moment ago, that some are concerned about labour; others are concerned because of the feeling that the actions of companies in connection with prices relative to increases and decreases in tariffs indicate that there is a combine of some kind or another among the companies that are producing farm implements in this country. I think some inquiry should be made before this particular matter is handed on to any particular council or commission for further investigation; that some inquiry should be made by a committee of this house into representations that have been made by members in connection with this resolution. I therefore move, Mr. Speaker:
That the resolution be amended by striking out the words "under the provisions of the Research Council Act, chapter 177, R.S.C., 1927, or by other means," where they appear, and substituting therefor the following words, "by the standing committee on agriculture and colonization."
The resolution will then read:
That, in the opinion of this house, an immediate inquiry should be made by the standing committee on agriculture and colonization into the causes underlying the high price of farm implements, with particular reference to the advance in prices for the year 1936.
That inquiry, Mr. Speaker, should determine whether or not this is a proper question for submission to, say the tariff board or to the research council referred to, or a proper question for submission to an investigation under the Combines Investigation Act, or whether some other procedure should be taken in relation to it. I move this amendment to the resolution, and with this amendment will support it.


Eric Joseph Poole: I should like to ask the Minister of Agriculture-


Some hon. MEMBERS:: Order.


Eric Joseph Poole: -whether, when he was quoting the difference in value over a period of six years, he meant price values or reduced production.


James Garfield Gardiner: I cannot hear the
question.


Some hon. MEMBERS:: Order.


[Stage Direction]
Amendment agreed to.
Motion, as amended, agreed to.


Mr. T. A. THOMPSON (Lanark) moved:: That, in the opinion of this house, all rural telephone companies should be exempt from federal income tax.
Hon. CHARLES A. DUNNING (Minister of Finance): Mr. Speaker, I would ask your ruling as to whether this resolution is in order.


Walter Edward Foster: I had anticipated that there might be some objection in connection with this matter. If any hon. members wish to speak on the point of order raised, I am ready to listen to them, and I will then render a decision.


Thomas Alfred Thompson: I have no intention whatever-


Walter Edward Foster: Does the hon. member want to speak on the point of order raised by the Minister of Finance in connection with the resolution? If anybody wishes to speak on the point of order I am ready to listen.


Charles Avery Dunning: The point of order is that, if this resolution carries, it constitutes a definite instruction to the government to exempt a certain class of companies from a certain tax. As such it is a matter which cannot 'be introduced into this bouse except preceded by a message from His Excellency the Governor General.


Walter Edward Foster: On the point of order raised by the bon. Minister of Finance, I have looked into this matter, and I find that this resolution is not in order. The hon. member's motion is out of order because it is not framed in such abstract or general terms that it can be entertained by the house. The proposal made therein is for a special reduction in the public revenue. The item to be struck out is mentioned, namely, the income tax levied on rural telephone companies. Such a proposal can be entertained only in committee of ways and mean, and, as May says, at page 544:
These proposals must be grafted upon the financial scheme submitted by the government and it must not affect the balance of ways and means voted for the service of the year.
True, the motion says that the exemption of the tax "should" and not "shall" be made, but even at that I think the proposal ought to be considered in the committee and not by the house, for it is essentially a ways and means resolution.


Thomas Alfred Thompson: I abide by your decision.
Wheat, Oats and Barley-Mr. Quelch



WHEAT, OATS AND BARLEY PROPOSAL THAT GOVERNMENT SUBMIT LEGISLATION GUARANTEEING MINIMUM PRICES

Mr. VICTOR QUELCH (Acadia) moved:: That, in the opinion of this house, the government should submit for consideration of this house such legislation as may be necessary in order to guarantee a minimum price, based upon cost of production, plus a fair remuneration to the producer, on wheat, oats and barley, as a permanent measure.
He said: Mr. Speaker, I realize that this resolution deals with a difficult problem, and no doubt it will be asked how can we guarantee a price based upon cost of production when we have a variety of grades and costs of production vary throughout the country. Of course I realize that it would be impossible to set a minimum price that would cover the cost of production and be equitable to all farmers, but on the other hand we must remember that by harvest time the bureau of statistics is in a position to make a fairly accurate estimate of the yields of various grains throughout the country and to arrive at an approximate cost of production based upon averages. If this minimum price were to apply in the first place, say to No. 1 grade, and if the spreads on other grades were shortened to the extent considered advisable, I believe that would be as satisfactory a method as any.
Eastern interests and some hon. members from time to time have criticized legislation introduced to give financial assistance to agriculture and to relieve the distress in agriculture, especially in western Canada. But we must realize that the success of agriculture Ss not of interest to farmers alone, but of vital interest to the whole of Canada. In order to stress this point I should like to quote a few figures mentioned by the Alberta wheat pool in a broadcast on November 27, 1935. In the course of that broadcast it was stated that Canadian agriculture is a five billion dollar industry which supports nearly five million of our population directly and many more indirectly. Canadian agriculture supplies practically half the domestic market for factory products. Nine thousand factories are engaged in the processing of agricultural products. They report a total capital value of close to $700,000,000; they employ 125,000 people; they pay out annually in wages $125,000,000, and they produce products annually to the value of $750,000,000. In themselves I think those figures are sufficient to indicate the tremendous importance of agriculture in Canada, and to justify the statement that until

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agriculture is put upon a sound business basis there can be no permanent prosperity in this country.
I do not believe anyone would be so foolhardy as to claim that to-day agriculture is on a sound business basis. How can any industry be said to be on a sound basis when it is forced to produce below cost of production, and that has been the case in the past in connection with agriculture? To substantiate that statement I should like to quote a few figures taken from the Canada Year Book, 1934-35. We find the total value of field crops, live stock and dairy products in 1926 represented by the figure of S2,078,760,079. Six years later, in 1932, we find that the value of these agricultural products fell to $986,600,033, or a decrease of over a billion dollars. We might well say that if we could restore that billion dollars of lost purchasing power to the farmers we would be well on the road out of the depression. At page 862 we read that between August, 1929, and February, 1933, Canadian farm products fell 60-7 per cent, while fully and chiefly manufactured goods fell only 29-3 per cent. Again, at page 866, taking the 1926 index figure as 100, the index figure for grains in 1932 was 41-1, while the index figure for manufactured goods of mineral origin, such as farm machinery, stood at 84-8. In other words, while the index figure for grains fell by 58'9 per cent the index figure for manufactures of mineral origin fell only by 15-2 per cent. This means that a farmer in 1933, paying a debt incurred in 1929, would find his purchasing power reduced from $1 to 39-3 cents, while the price of manufactured goods had increased by 31-4 per cent and the price of machinery to the farmer had increased by 43-7 per cent.
In dealing with the question of the cost of production, according to bulletin No. 159 of the Department of Agriculture, published in 1932, a survey was made of a number of farms in order to arrive at the cost of producing wheat. It was found that the average cost of producing w'heat on summer fallow was seventy-eight cents per bushel and on stubble $1.12 per bushel. The lowest recorded cost was fifty-three cents; the highest recorded cost was $1.46. According to reports from the experimental farm, taken over a period of ten years, the average cost of producing wheat was sixty-nine cents a bushel, yet from 1930 to 1933 the average price of wheat in Canada, according to the Canada Year Book, 1934, page 257, was forty-three cents a bushel. In 1932, during threshing operations, No. 1 wheat fell to the low figure of twenty cents in the Calgary district. Therefore it is obvious that from 1930 to 1933 farm products were being

produced very considerably below cost of production. At the same time taxation increased. Costs, as represented by wages, of course fell, but on the other hand it must be remembered that according to the 1931 census only 38-6 per cent of the farmers employ help, so in view of this fact the saving in labour costs was very slight.
It is useless, therefore, to talk of permanent prosperity in agriculture until steps have . been taken to guarantee prices for farm products commensurate with prices of other commodities. We are only too familiar with the statements of many prominent business men to the effect that we cannot guarantee prices for agricultural commodities above world market levels. On the other hand, however, when you take into consideration the fact that all real wealth comes out of the soil I think it is absurd to make the statement that you can guarantee minimum wages in industry; you can guarantee the wages of civil servants and you can guarantee the wages of politicians but you cannot guarantee the prices of the very commodities that have made all these services possible.
By guaranteed prices of course I do not mean prices sufficiently high to include large profits, as that would be a direct incentive to the increased production of agricultural products.
I refer to a just price, a price sufficient to return to the producer the cost of production and at the same time be commensurate with prices of other- commodities. In addition to low prices farmers have had to fight drought, grasshoppers, hail, frost and soil drifting, -with the inevitable results that agriculture to-day is in a precarious position. Farmers who by 1929 had built up a fair reserve have seen it vanish; they have not been in a position to replace their machinery; farm buildings have become dilapidated and the inside of the homes in many cases is in dire need of refurnishing. And what of the families? Living in a climate of extremes of heat and cold, the children often have to travel three or four miles to school, undernourished and insufficiently clothed. Yet in spite of that we hear such statements as that of the senator from Rougemont, Hon. Rodolphe Lemieux: "Surely the farmers throughout Canada are not so wholly ruined as to have the right to claim that they should not pay."
We find at the present time a determined effort being made to do away with the existing debt legislation throughout the provinces. In that regard we should remember the statement of Major Douglas, "Show me any concern that does not recover cost out of prices, and I will show a concern headed right for

Wheat, Oats and Barley-Mr. Queleh
bankruptcy." That is why to-day the farming industry is fast becoming bankrupt, because it has not been in a position .to recover costs out of prices. And so before we can hope to put agriculture on its feet by such measures as debt legislation it will first of all be necessary to remove the cause of these debts. When one considers the actions of the majority of the great nations in spending many millions of dollars in maintaining high internal prices for agricultural products, then I think we can fairly say that Canada has not been overconsiderate or over-generous in her treatment of agriculture. The action of the government last year in establishing a wheat board and a minimum price for wheat to a very large extent restored the confidence of the grain farmer. It is to be earnestly hoped that the board will be kept in operation as a permanent institution.
I referred to the fact that the nations of the world have spent many millions of dollars in maintaining high prices for agricultural products in their own countries. In support of this statement I should like to quote from a speech made by John I. McFarland at a luncheon at the Palliser hotel, Calgary, on February 14 of this year. Dealing with this subject, he said:
I have shown you there is no world price, professional and non-professional speculation has been down close to zero in almost every line where there is a risk which must be carried. It is no longer considered sound business ethics for our business men to assume speculative risks. Governments in other countries have been expending and' diverting enormous sums of money to producers Australia paid over 60 millions of dollars in direct payments and indirectly 25 per cent in depreciated currency. The United States have paid about 200 million dollars in stabilization of wheat alone, and hundreds of millions in processing taxes have been levied on consumers to provide benefit payments to wheat farmers. Argentine contributed indirectly 25 per cent through depreciated currency, while controlled' foreign exchange has added to consumers' burdens of that country for the benefit of their producers. England, a country which produces only about 60 million bushels per year, has collected from consumers for the benefit of their wheat farmers about $100,000,000, while other importing countries of Europe and elsewhere have imposed high tariffs against wheat, which have maintained fantastically high prices in various importing countries, thus exacting from consumers enormous sums of money for the benefit of home production.
Now I think we are agreed that the producers should recover cost of production out of prices. But on the other hand I am very much opposed to many of the measures referred to by Mr. McFarland, because they ignore the very root of our present economic evils, namely, that owing to certain practices
under the present system industry fails to distribute sufficient purchasing power to buy back its own production. The last time I spoke in this chamber I dealt with this subject somewhat fully; therefore I shall not take the time of the house to deal with it again, but in view of this fact it is obvious that if you tax the consumer in order to raise the price level of any commodity you are placing a very heavy burden upon the consumer and are merely transferring the burden from one part of the community to another. Therefore I take the stand that in the event of world market prices of grains falling below the cost of production the dominion government should create the necessary financial credit in order to stabilize the price of these commodities at a level that would at least cover the cost of production to the Canadian producer. The futility of attempting to accomplish this by borrowing money from the banks is well emphasized by a statement from one of the greatest commercial organizations in the world, namely, the London Chamber of Commerce. The article was in reference to financing a government expenditure and read in part as follows:
It is quite evident that this cannot be done by the old method of asking the banks to create new money by the not very arduous activity of writing figures in a ledger, the state then borrowing the result from them at interest. In order to repay the capital and' interest more money must be recovered from the community by taxation than has been issued to it. since the banks did not lend the interest, so that the last state of that community is far worse than the first. The entry of figures in a ledger, by means of' which the banks create new money "out of the blue" under the present system, cannot be held to justify the claim to repayment, with interest by the community. The sacrifice on the part of the banks to create this new money involves but a few seconds of a clerk's time.
The justification for this argument of course rests upon the fact that the banks create this credit not out of anything they possess, but against the real credit of the borrower. This action by the government would become necessary only in the event of grain prices becoming deflated below cost of production, and therefore this action instead of causing inflation would cause reflation, a process that would be very necessary if Canada is to be saved from the disastrous results of the low prices of 1930 to 1934. This issue of financed credit would be cancelled automatically by the farmers meeting cost of production plus living expenses, and in the event of any part of this credit becoming redundant it could be recalled by an income tax.
We still hear a good deal of talk about over-production, but in the majority of cases it is in reality a matter of under-consumption

Wheat, Oats and Barley-Mr. Fair
rather than over-production. If the purchasing power of the people were increased up to the full capacity of industry to produce and deliver goods the bogey of over-production would to a large extent disappear. At the present time we hear a good deal about increased immigration, and placing more people on the land. The hon. member for Champlain (Mr. Brunelle) advocated the conscription of the unemployed and placing them on farms. But would not this cause greater production of agricultural products and so tend to bring about lower prices unless the government is prepared to guarantee a minimum price?
In the drought area we have many farmers w'ho are very anxious to move to better districts. In many instances these men moved into the areas with a little capital, good health and plenty ambition. To-day they have lost their capital; in many cases their health has suffered and they are fast losing their ambition. Surely before helping to settle foreigners on the land in Canada we should help these Canadian farmers to become reestablished. To-day it is costing thousands of dollars to ship in feed and seed to these families and to keep them on relief. In the long run would it not be cheaper to finance them to a new start in a good district? Then, provided prices of grain were maintained at a just level they would soon become self-supporting.
The main principle behind the resolution is that farmers should be guaranteed a fair price for wheat, oats and barley, or a price sufficient at least to cover cost of production and a fair profit. Even if this means a slight increase in the price level of commodities to the people of Canada I would ask this question:	Have Canadians any right to expect
that a large body of the Canadian people should produce below cost of production in order that they may be in a position to buy more cheaply the goods they require. Personally I would say that that should not be the case.
If the resolution were agreed to it would possibly involve an amendment of the act establishing the wheat board, so that paragraph (a) of section 8 would read as follows:
To fix a price, based upon cost of production plus a fair remuneration to the producer, to be paid to the producer for wheat delivered to the board as by this act provided, subject to the approval of the governor in council.
Then the act would be made to apply to oats and barley in the same way that it applies to wheat. It applies only to grain produced in Saskatchewan, Manitoba, Alberta and British Columbia because grains produced in other parts of Canada to a great extent are used for feed.

In offering the resolution I wish to stress the principle that the price of an article should be based upon cost of production, a condition which does not obtain at the present time. To-day the price of an article is governed by what it will bring, and then, after deducting certain fixed charges and commissions, the primary producer gets what is left. In some cases that means he receives nothing, and in many others it means an amount altogether inadequate to meet costs incurred in the production of the article. In closing may I observe that I hope hon. members, instead of being too critical of the resolution, will be prepared to admit the justness of the principle expressed therein.


Mr. ROBERT FAIR (Battle River):: Mr. Speaker, in rising to second the resolution I wish heartily to endorse the views placed before hon. members by the hon. member for Acadia (Mr. Quelch). It is not my intention to speak at length because I believe enough has been said this evening to show the necessity for what is indicated in the resolution. It is my belief that if civilization is to continue this chamber has a great task to perform. For the disposal of our chief grains I believe a just price, as suggested by the previous speaker, offers about the only way we can succeed. For a number of years we have been producing grain below cost. I may be challenged with respect to the 1936 crop, but I believe I can substantiate by figures my statement about crops marketed in the past year. During the past season there has been a great deal of rust and hail and, in some cases, frost. In the constituency from which I come we were about three weeks late getting on the land in the spring and, in addition, we had early frosts which cut down the grade from the top, No. 1 northern, to No. 6 and feed. In addition, the yield has been cut by at least fifty per cent.
The price of feed wheat on a twenty-four cent freight rate was thirty cents per bushel and the average yield would not be above fifteen bushels. Hon. members can readily understand what profits are being made on that basis. As hon. members are aware, in the past the farmer has been in the habit of taking his grain to the elevator. He would ask the agent what grade it was, what dockage there would be, and how much per bushel he might receive. If he did not like the answers he got he had to lump it. This has been the condition particularly since 1930, in which year we had to lump it practically all the time. In that year there was a heavy crop of straw and grain in several districts, but in my particular district the grade was from No. 4 tough, down. Those of us who sold through

Wheat, Oats and Barley-Mr. Fair
the pool that year, on a twenty-four cent freight rate basis, got twelve and one-half cents per bushel although it cost us ten cents per bushel to thresh the crop. Perhaps hon. members will see why we are asking for a set price on the grains mentioned.
When the implement manufacturer has his implements ready for market he does not go to the farmer and ask him how much he will pay. The manufacturer sets his price, one which is not by any means below cost of production, and if the farmer does not like the price he must do without the implement. He cannot go to another implement company and obtain a machine to do the same work for less money. I believe that has been proven many times. One can picture an automobile manufacturer taking his product to a customer and asking what he will pay for it, and in most cases taking what is offered. That, however, is what the farmer has to do. When we have grain to sell we take it to the elevator and learn from the agent what he will pay. In nine cases out of ten we take what we are offered and say nothing.
I believe farmers have done everything in their power to cut production costs. When a machine which cuts cost of production is put on the market we find farmers rushing to purchase it, and paying good high prices for it. Abut thirty years ago farmers began making improvements for themselves. As they were denied improvements by the grain companies-I believe some of those pioneers are still opposite in this chamber-step by step conditions were improved until in 1923 we reached the point at which we organized the wheat pools. Since that year the pools of the west have continued to build up and to develop the greatest grain handling organization in the world. To-day on account of conditions over which we have no control we are not able to derive the benefits to which we are entitled. It has become necessary therefore to have a wheat board.
The wheat board is not a true representative of the producers. We have nothing whatever to do with what our grain will bring or for what it will be sold. It has simply been taken to the market place and whatever is offered is accepted. This seems rather foolish, but it is the condition that exists. If farmers cannot get the costs of production I think all hon. members realize what will happen. Factories will have to close down as the farmers will not be able to pay the price for the products turned out. When factories are closed down this means unemployment, and I think we have had enough of taking care of the unemployed. Unemployment is one of the greatest and most demoralizing questions
facing us to-day. The other day the hon. member for Brant (Mr. Wood) said that if he wanted to take a bath, he had to take it in a wash basin.. It seems too bad to think that the people who produce the wealth of this country have to take a 'bath in a wash basin or go without. This is what is taking place when other people handling our products can live under the most luxurious conditions.
The farmer should be able to buy a bathtub and the other up to date conveniences found in the city. If he could, things would be helped all round. The plumbers and the manufacturers of bathtubs and other appliances would toe busy. I think it would be in the interests of the agriculturists and Canada as a whole to pass this resolution and give the farmers of the east and the west, and the other interests in this country a chance to get on the road to recovery. We are told that prosperity is just around the corner, but that corner seems to be one that we cannot get around.


James Garfield Gardiner: Mr. Speaker, in rising to
address the house on this resolution I must say that I am sorry the hour is so late. To discuss this resolution properly would require more time than is now available. The resolution appears on the order paper in the following words:
That, in the opinion of this house, the government should' submit for consideration of this house such legislation as may be necessary in order to guarantee a minimum price, based upon cost of production, plus a fair remuneration to the producer, on wheat, oats and barley, as a permanent measure.
There has been a great deal of discussion during recent years as to the advisability of having minimum prices permanently established for certain farm products. In western Canada this discussion has centred largely round prices of grain while in other parts of Canada it has centred largely round prices of other products of the farm. I am sure hon. members realize that there would be considerable difficulty in setting and maintaining permanent prices upon the basis set forth in the resolution. In the first place, there would be some difficulty in determining costs of production in the different parts of Canada. I can conceive of a price being set based upon production costs on the Regina plains, while in other parts of the country, particularly in the southeastern part of Saskatchewan and the central and eastern parts of Alberta, costs of production might be considerably different. A different basis would be found if we were going to take costs of production in the northern and eastern parts
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of Saskatchewan and Manitoba. The reasons for these differences would be many in number. First, there would be the difference in climatic conditions; second, there would be the difference in the fertility of the soil and, third, there would be the difference in methods of agriculture followed.
For example, in the northeastern part of the province it is possible to carry on mixed farming. Saskatchewan is divided into nine wheat districts. During the past eighteen years in district No. 1 the average farm has produced annually wheat to a value of about $1,200. In grain district No. 2, which takes in the Regina plains, the average farm has produced wheat to the value of over $2,000. In grain district No. 3 the value of the average annual production of wheat has been about the same as in district No. 1. In looking at the production yields we find that in the eighteen years the average yield in district No. 1 has been about 12-9 bushels per acre. In district No. 2 it has been about 13-8 bushels; in district No. 3, about 12-4 bushels, and in district No. 4, about 12-8 bushels per acre. In other words, during an eighteen year period the difference in yields per acre in the different areas has not been so great while the difference in yields per farm has been considerable.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Tuesday, March 3, 1936