[Stage Direction]
First report of the standing committee on banking and commerce.-Mr. Moore.

[Stage Direction]
On the orders of the day:
Mr. A. J. BROOKS (Royal):: Mr. Speaker, on April 29 I asked the Minister of Public Works (Mr. Cardin) for information regarding the contract for the supply of coal to dominion public buildings in the maritime provinces, for the coal year 1935-36. I understood that the minister would table a return containing the information required. As yet I have not received- this return, and I should like to ask the minister when I may expect it.


Hon. P. J. A. CARDIN (Minister of Public Works):: I will undertake to make inquiry to ascertain the cause of the delay, and will have the report tabled as soon as possible.
[Mr. Bennett.)



THE BUDGET


[Stage Direction]
The house resumed from Monday, May 11, consideration of the motion of Hon. Charles A. Dunning (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the proposed amendment -thereto of Mr. Mac-Innis, and the proposed amendment to -the amendment of Mr. Hansell.
Mr. JOSEPH NEEDHAM (The Battle-fords) :: When the house rose last evening
I was asking how the government could justify its action in regard to the budget in not presenting some real monetary reform. At the outset I said I wished to deal with debt, and the interest incurred in connection with it. That is the theme I want to discuss.
Our problem as I see it throughout the dominion is one of interest. The interest on the debt of this country, federal, provincial, municipal, etcetera, is so staggering at the present time that it has become a question of deep concern to almost all our citizens. Faced as we are this year with another deficit of $100,000,000, the prospect does not look very bright. I say that interest is the biggest problem we have to face. Two questions were asked at the beginning of this session. One was: How much is the -national debt at the present time? The answer given was that on January 31, 1936, the national debt stood at $2,895:,124,222. The other question was: How much interest has the dominion paid since confederation? The answer given was $2,823,245,404. So you see the national debt and the amount of interest that has been paid are practically equal. This raises the question which is in many people's minds at the present time: Why should the federal government pay interest? This is a question which I want to consider with hon. members for a little white this afternoon.
I say -there is a feeling in the minds of thousands and tens of thousands of people in -this country that the national government should not pay interest on money, because we see that if we have to pay interest we are bound to go into debt more and more. If the country could be relieved of this one item we would have little or no debt. That is the problem I want to present. Without interest we would have practically no debt, and with interest we cannot help but have debt. Look at it in this way: If a person borrows money, say $1,000, and has to pay

The Budget-Mr. Needham
eight, per cent interest, eighty dollars a year must be provided from somewhere. Where is it to come from? He cannot make it. He can produce goods, but the bank will not take goods. He can produce wealth sufficient to pay his loan and his interest perhaps over and over again, but that wealth cannot be used to retpay the loan; it will not be accepted. You will agree with me that every dollar that leaves the bank leaves it as a loan to someone. How can it be paid back when the borrower cannot make that with which to pay it back? May I use a simple illustration which will perhaps bring out the point clearly. Suppose a community starts up and a bank goes in there with say $20,000, and there are twenty people who borrow that $20,000, $1,000 each, at eight per cent. They go out and work, and when the notes are due in a year suppose ten of them have been very active, have produced and sold their products and have acquired the .amount of the principal and interest due on the loan. They go to the bank and pay their loan and interest, which would aggregate $10,800. How are the other ten going to make out? They are bound to 'be $800 short, assuming there is no other money in that community but the $20,000; they can pay only $9,200. So there you have 81,600 that cannot be paid. They may have produced wealth sufficient to meet it, but they cannot find money, which is the only thing the bank will accept. What are they going to do? The bank has the $20,000 back, just what it loaned them, but there is a shortage of $1,600. The bank can again lend that $20,000, but in order that the ten people may again secure $1,000 each they will first have to borrow to pay the interest. That is the problem that we are up against at the present time. It does not matter ho-w you analyze it; I do not see any other solution.
Take it from another angle which may present a point that has been raised very often during this session. Suppose a bank starts in a community, and twenty people deposit in the bank $1,000 each. The bank therefore has $20,000. All right; eveiyone in the community is working. Someone goes to the bank and says, "Will you lend me $1,000? The bank make inquiry and decide to make the loan. They place $1,000 to the credit of the borrower do they not? The $20,000 is in the bank; that is all right. The banker does not ask the other twenty people whether they will agree to lend the $1,000. But after that $1,000 has been lent those twenty-one people could write cheques for $21,000, yet there is only $20,000 there. Where does it come from? There is the situation. As you
analyze these things they show the situation that exists at the present time.
As I said before, we have no quarrel with the bankers; it is the system that is wrong. Bankers are just as necessary as farmers or any other class of people in order to carry on the business of the country. I want to read an article taken from The Instructor, published at Gardenvale, Quebec, which shows how the thing works out:
In 1919 the dominion government loaned to the Garden City Press the sum of $126,500 under its housing act, same'to be paid back with interest in twenty years as follows: $3,157.50 on the first of every January, and $7,058.45 on the first of every July. These payments have been made regularly and on July 1, 1939, the full amount of the loan with interest at five per cent will have been paid back.
They have had the benefit of those homes. It continues:
When this loan of $126,500 has been all repaid (on July 1, 1939), it will have cost the Garden City Press $377,800.60-($10,215.95 a year for twenty years at five per cent compounded interest). Of this sum $126,500 was expended for the building of homes and the balance, amounting to $211,300.60 will go, not into the treasury of the dominion government, but into the pockets of the few individuals who own and control the banking system of Canada, which has been modeled after the British system.
If the dominion government had made this loan direct, or through a bank owned and controlled by the government, the dominion treasury would have been benefitted to the amount of $211,300.60. This is the amount, which the privately owned banking system of Canada will have made out of this loan, without any outlay or risk on its part. This amount is first paid into the treasury of the dominion government and the treasury hands it over to the privately owned banking system. This privately owned banking system did not even have the trouble and expense of collecting it. The dominion government does that work for the banking system of Canada, free of charge. Why all this generosity? No one seems to be able to give a satisfactory answer to that question, except that it has always been done that way.
That is one phase of it. We will suppose that the mayor of Montreal came to Ottawa and said, "We have a slum district; we would like to pull down five hundred houses and replace them with new ones. I believe we could dispose of the houses and in that way repay the money to the government. It would take a million dollars, and we believe we could pay you back $50,000 a year." The natural question would be, "Have you available the men required to do the work?" To which he would reply, "Yes, we have." The next question would be, "Have you enough carpenters, masons and other men in the build-
The Budget-Mr. Needham

ing trades?" "Yes." "Have you the necessary material-, such as bricks, cement and the like?" "Yes." What would prevent the dominion government from advancing that million dollars, and having it paid back ait 150,000 per year for twenty years, without interest? That is the question thousands of people are asking to-day. Where and how will the Minister of Finance (Mr. Dunning) take care of the $100,000,000 deficit, I suppose he will write a government bond issue in favour of some financial interests, and -they will give back what? They will give either figures or bills. Why could not the .Department of Finance do this on the credit of the country?
It is true the banks have not the wherewithal to lend one hundred million dollars. What have they?-just buildings and equipment, that is all. The minister has to give them the credit of the country, and in return he receives figures. If it cannot be done, I want the Minister of Finance to place on record the reasons why, because there are thousands of people throughout the dominion who want to know. If this action is feasible and if it is right, it is the first move that could be made to alleviate our present financial difficulties. In my estimation it is the action which should be taken.
We have heard this session about the staggering debt of Canada, and the statement has been made that we must furnish $350,000,000 per year to pay the interest on federal, provincial, municipal and school debts. It is a staggering amount-almost a million dollars a day for interest payments. But it is only part of the debt, because according to the Canada Year Book for 1935 I find that private company and indvidual loans on October 31, 1934, amounted to $1,015,472,167. This amount is in addition to the eight billions of government debts. When we remember that all revenue originates in industry, and that the greater the amount of revenue taken for interest on capital debt the less there is left for wages, one begins to wonder how industry survives at all. Of course the answer is that industry does not survive; it commits suicide. Ninety per cent of all industries fail. The average life of all industry is only seven years; only four per cent of our greatest industries have existed thirty years or more. The situation in Canada is serious, and it is not getting better as time goes on.


Mr. VIEN:: Will the hon. member tell us from what source he got his figures?


Joseph Needham: They were from The Instructor, published in Gardenvale, Quebec.
[Mr. Needham.1


Thomas Vien: I am satisfied.


Joseph Needham: Speaking a few days ago the hon. member for Huron-Perth (Mr. Golding) made this statement:
The Liberals have a tremendous majority in this house, but with that goes a tremendous responsibility.
There is no doubt about that. If ever a government was on trial in Canada, surely it is the present one. I take it every hon. member feels he represents all his constituents, and for that reason Liberal members in this chamber represent a great majority of the citizens of Canada. These citizens are looking to you for action and for relief. You are the dominion government; in reality you are the dominion people, between elections. Just so far as you know why you were sent here to represent your constituencies, and just so far as you are aware of the responsibility to which the hon. member has referred, to that extent will the government act as you decide. When I make that statement I refer not to the cabinet but to hon. members of the Liberal party generally. There is the responsibility which rests upon each and every one of you.
On every coin in this dominion there is a picture of the king, and I think the king's picture should be on every currency bill as well. I want to know by what authority any chartered bank got the power to print money and put on it a picture of Sir Herbert Holt or of M. W. Wilson or of some of the other bank presidents. By what authority do they do that? I have been told ever since I came to this dominion that these bills are not legal tender. If they are not legal tender, there is only one conclusion, and that is they must be counterfeit, and if they are counterfeit it is time this government took some action about it. If the banks have no right to do what they have been doing, and we asked them to return the interest which they have been receiving illegally, we could readily deal with the national debt, could we not? I say again that the picture of our sovereign should be on all currency that is issued in this dominion, backed by one hundred per cent of the wealth of the country.
I call upon this government to fulfil its pledge given on the eve of the election by the Prime Minister (Mr. Mackenzie King) in these words:
Usury once in control will wreck any nation. Until the control of currency and credit is restored to government and recognized as its most conspicuous and most sacred responsibility all thought of the sovereignty of parliament and of democracy is idle and futile.

The Budget

Mr. Motherwell
I wonder just what those words mean, "restored to government?" There is the implication that the control should be there now, and that the government has never legally transferred it anywhere else. That is what this country is looking to the Prime Minister to do, but so far we have had no indication of any move in that direction. I believe, Mr. Speaker, that the words of the Prime Minister which I have just quoted are a distinct pledge of the Liberal party, one of their main planks, and I believe that the two gentlemen who are responsible for that plank being included in the Liberal platform are the Hon. Mitchell Hepburn, now Premier of Ontario, and Hon. Ian Mackenzie, one of the members of the present government. I appeal to them to see that that part of their pledge is fulfilled.
I had thought, sir, of dealing with the question of monetary reform being taught in our schools, but that is really a provincial matter. I would, however, call upon the departments of education throughout the dominion to see that our monetary system is taught in our schools so that people will understand the conditions under which the present system is functioning.
One cheering aspect of this whole thing is that public opinion is aroused as never before on this question. The people are on the march; they are investigating, and public opinion, I believe, is the factor that will decide the issue sooner or later. If this government want to kill communism, if they want to check socialism, if they are not in favour of social credit, let them get busy and reform the present system themselves, or the people will put someone else in power that will. The opportunity is yours and the country is behind you; there is no doubt about that, and if you act now you can do something for this country that will make the Liberal party immortal. If you do not, I hesitate to say what may happen.


Hon. W. R. MOTHERWELL (Melville):: Mr. Speaker, it has been my privilege to listen to fifteen budget speeches in this house and to about as many more up in Regina, and I do not think I have ever taken quite so much satisfaction and pleasure in listening to any of them as I have in listening to the one delivered by the Minister of Finance (Mr. Dunning) a week ago last Friday. It was a wonder for candour and comprehensiveness. I think I like it best because there were no phony money stunts in it, and that sort of thing-Doctor Townsend's plan, Upton Sinclair's, that kind of highly infectious economic disease that usually befalls the nation every time we have a period of great depression. I do not want to become too
personal but I must say that this house has not been entirely free from that infection. However, it is just a nursery disease that we get over easily and we hope that will be the case here.
There has been one notable omission in the debate that followed the excellent budget speech of the finance minister, and that is there has been no reference, with one exception, to the virtues of honest toil. Honest labour faithfully performed has ceased to be a commendable attribute in man, in the estimation of some of our people. I was brought up on the wholesome doctrine that early to bed and early to rise makes a man healthy, wealthy and wise. It may be foolish in some respects, but it is mighty sound in others-I hesitate to use the word "sound" for fear it means something unsound in these days. I am sometimes not only amazed but saddened when I hear hon. gentlemen in this house and in the country speak of hard work with disdain, as if it were not a desirable attribute of man at all, but something to be shunned, something that should belong to the age of scarcity. This is an age of plenty, we are told, and therefore we should talk more about leisure, how to put in our time, how to shorten the working day, and enjoy the comforts of modern civilization. So far as applying that doctrine to agriculture is concerned, I do not know any land that has become great as an agricultural land or any farmer who has succeeded by sitting down and counting the hours till sundown, and pleading for a shorter working day and a shorter working week. Agriculture is of necessity a seasonal occupation, and you cannot gauge it by the hours of industry and do justice to both.
The leader of the C.C.F., that abbreviation for Cooperative Commonwealth Federation, which is a disguise, and a thin disguise, for state socialism, suggested that farming could be run on a six-hour day, and that if we could not get our work done in six hours, then have two or three shifts as they do in industry. I do not think I ever heard anything so effective against the C.C.F. and their theories as when I heard that astonishing doctrine enunciated right in this room.
I like the budget, too, because I think it gives more consideration, especially from the tariff standpoint, to agriculture than has any other first budget of a new parliament as far back as I can remember. My recollection is that there were few if any changes in the first budget presented by the government of Sir Wilfrid Laurier and I know there were many but small changes in the first

The Budget-Mr. Motherwell
budget presented by the King government which came into power late in 1921. In fact, they were so small that those of us who were anxious to have larger changes made were a little dissatisfied. However, the changes increased in the aggregate until they culminated in the Dunning budget, which was condemned by the people of Canada but which is now being endorsed so successfully, not only in this house but throughout the country generally.
This is all the more so when we take into account the trade agreement recently entered into between Canada and the United States. When we consider the changes made under that agreement plus the changes made in this budget we find the largest number of worthwhile changes in respect to agriculture ever made by any government in Canada at its first session. There have been two or three challenges as to the soundness of this budget, but that is quite natural. As the farmers approve of the changes in the budget, so do the manufacturers and their friends not approve. In the session of 1930 the previous government shot the tariff upwards, especially with regard to agricultural implements. The duties on some implements were doubled; on others they were tripled and on others they were quadrupled. They were put up to twenty-five per cent. Under the trade agreement recently entered into with the United States, plus the budget reductions, the average duty on agricultural implements has been reduced to 74 per cent.
Can any exception be taken to these reductions? It is only a case of "as you were." If the manufacturers got a break in 1930, surely the farmers are entitled to a break now. Unless we do get a few breaks like this, we will soon be broke ourselves beyond mending. I look forward to the time when our manufacturers will be able to thrive under a low tariff just as they throve under the low tariff of the Liberal government from 1922 to 1930. It may be a little presumptuous of me to make a suggestion to the Minister of Finance, but I am going to do so because I realize he is in urgent need of revenue. I believe he could find additional revenue from one or two other sources. The free list does not produce any revenue, and only very little revenue is produced from a prohibitive tariff. I know it is almost like heresy for a Liberal to suggest anything like making a free article dutiable even temporarily, but this government is not a free trade government. The Liberal party is a low tariff party; we believe in the lowest tariff consistent with revenue requirements. The only ones in the opposition who do not believe this are those 
who do not want to understand. There is a gentleman on the tariff board who used to use his spare time trying to prove that the Liberal party was the high tariff party; I wonder what evidence to that effect he will be able to produce now after this budget is completed? I think this budget shows that there is a real cleavage between the two major parties, notwithstanding the fact that the third party fondly tries to convince itself that there is no difference.
I suggest to the minister that he explore the possibilities of additional revenue by investigating the articles now on the free list. Many of these article could be taken off the free list temporarily in order to meet the present emergency. I want to help the minister in every way possible to get revenue, because we cannot balance our budget without revenue. I would not like to see the sales tax raised any higher, but I think additional revenue could be got in the way I am suggesting. I once had occasion to go over the free list and I saw how extensive it was. A small tariff could be placed against some of these items or an excise duty levied, if we want it that way. This could be taken off automatically in the course of two or three years, or whatever time might be decided upon. I am looking to the time when it will be possible to bring the remaining high tariffs down to a revenue producing basis. If that were done I believe we would obtain a greater amount of revenue and also ease the consumer's burden.
I leave these suggestions with the minister. It is only a layman's advice, but it is not long since the minister himself was a brother layman and I think he will understand.
The budget debate is sometimes used as a means of directing attention to the grievances of one's constituents. There has been a particular grievance in Saskatchewan, and perhaps throughout the west generally, namely that our wheat is being tampered with at the terminals before it is exported. Before 1900 there was no law governing the transportation and warehousing of our wheat, but in that year the Canada Grain Act came into force. Prior to that time the grain dealers had debauched the business so completely that they themselves applied for remedial measures, and they joined with the farmers in asking for the Canada Grain Act in 1900-it was then called the Manitoba Grain Act. But there has always been a tendency to go back to the old ways. Eastern members will notice that quite often a royal commission is being appointed to inquire into the grain trade. We get things fixed up for a time and then all of a sudden trouble breaks out some-

The Budget-Mr. Motherwell
where else. Practices prohibited under previous legislation are evaded in some way or other. I should like to show what I mean by quoting from Hansard of last year. On March 25, 1935, the house was in committee of supply dealing with the estimates of the former minister of trade and commerce, Hon. Mr. Hanson. I should like to quote from the discussion that took place'in connection with an item pertaining to the administration of the Canada Grain Act. The former member for Macleod (Mr. Coote) started the discussion, which continued for about an hour and a half, and I recommend the reading of this discussion to hon. members who are interested in this matter. I quote from page 2066 of Hansard of last year as follows:
Mr. Coote: Mr. Chairman, a few years ago the Canada Grain Act was amended so as to prohibit the mixing of wheat in grades Nos. 1, 2 and 3 northern, and before this vote is carried I hope the minister will tell us what steps are being taken by the grain commission to see that that provision of the Canada Grain Act is being carried out.
While I am on my feet there is another matter I should like to bring to the attention of the committee. Even if those provisions for the prevention of mixing may be carried out, another practice apparently has grown up which lowers the standard of No. 1 and No. 2 northern in particular so far as shipments overseas are concerned. It is quite a common practice, I am told, for cars of No. 1 and No. 2 northern wheat which are sampled at Winnipeg to be tested for protein content by the grain companies. Word is sent ahead to the terminal at Fort William, and if this wheat is of a high protein content in many cases it is binned by itself and certain bins apparently are held for what is called selected No. 1 northern, high protein. The result of this practice, it seems to me, must be to lower the grade of the bulk of the wheat that goes out to our overseas customers.
That is the complaint. While the mixing of grades was prohibited, the selecting of high class protein cars was not prohibited. We are told that there is a principle in law that you cannot do indirectly what the law prohibits your doing directly. In my estimation this is not only a wrong practice, but an illegal one. The best cars are skinned out, as it is termed, and sold on a premium basis in the United States. The depreciated balance is sent to the overseas markets where we have to meet the strongest competition in the world. That is wrong. Mr. Hanson admitted that it was being done, but he said that it was done in such small proportions that it did not materially affect the overseas shipment. He admitted however, in a statement which I will read, that if it assumed larger proportions 12739-174
then of course it would be another matter. Here is his reply:
With respect to the second matter to which my hon. friend alluded, namely, the special binning of wheat at terminal elevators, I am advised that a perusal of the grain act will show that this is a perfectly legal process under the provisions of the act itself. This special binning of select wheats by terminal elevators is legal under the grain act and is controlled by the commissioners, in so far as the special bins leased for this purpose have to be authorized by them. It would not appear that this matter is of any considerable importance. because out of a total of 62,000,000 bushels which came to the head of the lakes during the past season, only 820,000 bushels have been so binned. This is only about one and one-quarter per cent of the total. This facility of special binning is open to all interests, including the Canadian mills. In order to specially bin wheat it is necessary for the purchaser to obtain the owner's consent, thereby assuring an equitable return of the premium paid in this connection. An objectionable practice which was stopped in 1930 was that of permitting the diverting of special wheat without the owner's consent and frequently without any premium compensation being paid to the owner. I am advised by the commission that the only possible objection to this practice is that it more or less reduces the average quality of the outgoing shipments, that is the shipments which go to the export trade.
Think of the guilelessness of that gentleman-no, that is not a good word. He was a new minister and we felt sympathetic towards him, and he could not properly have been expected to understand the wheat trade in the few months he had occupied that position prior to this debate. So that I will not call it guilelessness. But call it what you will when he said "the only possible objection" would be that it more or less resulted in a deterioration in the quality of shipments that went overseas. The evidence is on record and I point to it once more this afternoon in the hope that when the report of the special committee on marketing is submitted and the government refers it, as I assume it will be referred, to a royal commission-that is what is forecast-the scope of the commission's inquiry will be sufficiently wide to enable it to deal not only with marketing but with these evils that have again crept into the handling of wheat at the head of the lakes. Let me read another Hansard extract from my own remarks:
Each year that this item has been under discussion up to the present time I have inquired of the previous minister whether there was any evidence of the restored mixing of wheat grades. The practice was general years ago. The answer which that minister gave was invariably, no. Well, each year I hear further reports of it. I am not making any charge just now but I want to put the

The Budget-Mr. Motherwell

government on their guard. It is easy to start these practices but difficult to stop them. These practices invariably begin under Conservative governments and then it takes the succeeding government nearly all their time in office to stop them. In 1930 an attempt was made by some of us to prohibit the mixing of grades and a compromise was reached, prohibiting mixing in the four top northern grades and permitting it in the rest of the grades. As a matter of practice anything that is not prohibited under the grain act is usually done; that is the substance of the matter. It is not particularly made illegal, but it is not prohibited and therefore it is gone ahead with. I have grave suspicions and pretty reliable information that the law is being broken with respect to the four top grades. I did not hear the first remarks of the hon. member for Macleod (Mr. Coote), but I understood him to be drawing attention to the special binned top grades. These grades are isolated and special binned for their quality and are sent to the United States, where a premium is paid therefor. That is exactly the way it started before, only it was with carloads; carloads were switched and cut out and sent somewhere- usually to our millers. To the extent that that was done, what was exported overseas was correspondingly impoverished in quality.
There can be no doubt about that. If you have a dozen apples on that table and you take out the three best, then the other nine will be of a lower average than the original twelve. Anyone can understand that. Mr. Hanson, replying to Mr. Vallance, stated as reported at pages 2069 and 2070:
As regards the degradation,-
He uses a stronger word even than I used.
-by reason of this special binning, of the quantity that goes into the export trade, I agree with the hon. gentleman. But it is permitted by the act and I do not think that any great harm is done where the quantity is so small. I believe that is the opinion of the commission. Of course, if it assumed larger proportions it would be a different matter.
I have not the exact figures from the bureau of statistics, but I know that the export of milling wheat to the United States has greatly increased this year. Earlier in the season it was estimated to be between 35 million and 50 million bushels. There is nothing however to indicate how much of that has been special binned in the manner I have described1, or how little, but the opportunity is there, and I think it is high time we dealt with that questionable practice.
About a year ago I received from a former superintendent of a terminal elevator at Port Arthur a statement to the effect that the mixing practices that had been prohibited, not only those that I have described but the actual physical mixing of wheat, had been reintroduced by some terminals in every conceivable way, as much as they dared and
IMr. Motherwell.]
could get by with. I have no reason to douibt the accuracy of that statement. I purposely refrained from bringing it with me, for I do not think it is wise to disclose the identity of this gentleman, because prospective witnesses sometimes have a habit of disappearing. I must ask the house to take my statement. I hope it is not stretching a privilege too far when I assure the house that I have in my possession a very lengthy document volunteered by a former superintendent of a terminal elevator indicating that these practices are being largely carried out now.


Mr. BENNETT:: What year was that?


William Richard Motherwell: 1933 and since.
If that is so, I do not think there is an hon. member in this chamber who will not want our Canadian wheat protected from debasement. We speak of defaulting on bonds, defaulting on anything, and we shrink from it. When we do not live up to our wheat certificates, or for that matter our cheese certificates or any other certificate which the government of Canada is behind, we default just as much as we do when we default on bonds, and I hope that this will be the view taken by the committee, and that this investigation with respect to marketing will be sufficiently wide to take in the question of maintenance of quality. I hope to see this done, first, to remove the evil, and secondly, for the reason that the very first prerequisite of marketing is to have a good article to market. There is an old adage that if you buy an article right it is half sold. I do not know whether the chairman of the price spreads committee will agree with that. In order to buy properly you must buy in bulk, and that means mass buying. And this is equally true. In order to sell wheat or any other cereal or commodity properly you must produce right and deliver to the prospective customer right, and then your product is half sold. Anything that works to our disadvantage, anything that removes the edge we have over other wheat, puts us at the mercy of our competitors. We must compete against the depreciated currency of two of our veiy strongest opponents, the Argentine and Australia, but we have two advantages to offset that. I am going to make one admission now in the presence of the right hon. leader of the opposition (Mr. Bennett). After inquiry I believe we have a slight edge by reason of this six cent British preference on wheat. I will not go into that matter at length, but I think I owe the right hon. gentleman that admission.


Some hon. MEMBERS:: Hear, hear.

The Budget-Mr. Motherwell


William Richard Motherwell: It is very slight, though. I mention this because we violated the conditions of the contract which entitled us to that preference when we sold wheat not at the world price but at sometimes ten to twelve cents above it, so that preference was liable to be taken away, which is not the case now. I had no opportunity at that time to make this admission, but if it will do my right hon. friend any good I make it now. Possibly I am doing this more for my own sake than for his, but I feel I should say that because of that preference we have a slight edge under certain circumstances. The other advantage is in the quality of our wheat. If in hard times we put our price too high and above competitive prices, the consumers are going to use just as little of our wheat as possible. Wheat must be sold at competitive prices with comparable wheat of other countries. There is no other way to sell it and still get your share of the sales; there never has been any other way and I do not expect there ever will be any other way. An attempt was made, for four years, 1932 to 1935, to sell our wheat in another way, but it failed.
That is about all I wish to say with regard to this question. Now that we have gone into this business of wheat marketing, we do not know for how long, let us all get behind that wheat board and behind any government which may occupy the treasury benches. Let us see that the quality of our wheat surpasses the quality of any other wheat which goes on the market, and in that way we shall be able to offset the disadvantages that are apparent. We are up against the problem of distance, for one thing; our wheat is grown away in the interior of a great continent, far from the ocean no matter which way you look. Then there is the disadvantage of the depreciated currencies, already referred to, of other countries. I think I will leave it at that; I think hon. members are sympathetic with these views, and I just wish to say to the house that this is a situation which cannot be taken care of if we confine this prospective royal commission strictly to what is called marketing, or marketing methods.
Well, Mr. Speaker, I think I have gone over that without making very much of a break, though I have had to do some plain and fancy skating, and that will be even more the case in connection with the next subject. If I had any hair, this question of debt would make it stand up, sometimes, when I think of it. The vortex, the maelstrom of debt in which we find ourselves, individually and collectively as a people, did not start yesterday or the day before or after the war. It started early in this century, or maybe before that.
Speaking of the west, which I know more particularly, in the early days we did not have any opportunities of getting into debt because until about 1894 no one would trust us. The early settlers went in there in 1882, and for the next twelve or fourteen years you might as well have asked a moneyed man to take a mortgage on a square mile of sunshine or atmosphere as on a square mile of land. There was an abundance of both, but land had no value as security for a loan until it was demonstrated what the land would do. Then we had a period of fair prices and large crops, and moneylenders crowded the money on to us until it nearly amounted to an orgy. As treasurer of a school district I was in a position to know how this thing was going on, and long before it was known publicly I was horrified at the number of men who were putting mortgages on their land. I often wondered how they were ever going to get them off, when the land became older and dirtier, the equipment worn out and the men themselves older and worn out. As a matter of fact many farmers did pay off their mortgages and then contracted new debts during the war, so they found themselves in a more difficult position than ever.
In the beginning of the borrowing era about 1894, mortgages were taken on a bunch of ponies, or any other chattels, for $300 or $400. That was all you could get. Then one or two private banks came in with plenty of capital, which permitted them to take pretty good risks considering the interest that was charged, ranging from 24 to 36 per cent. Then the chartered banks came in, sometimes two or three of them in a town like Indian Head. They would come out on the street and canvass for loans. In the old days of the open bar it used to be, "Come in and have a hooker." The banks said, "Come in and have a thousand, and later on when you sell your wheat you can pay it back." How could frail flesh resist that enticing offer and appeal? Then came the mortgage companies, competing for our business and vying with each other as to which one would give a farmer the largest mortgage. Later many began to find it difficult to pay back the money with interest at eight per cent, nine per cent, or whatever it was.
Then a great agitation arose for the government of Saskatchewan, of which I was a member, to go into the farm loaning business. Four other provinces were induced by pressure of public sentiment to go into the very doubtful business of lending money to their constituents. I do not need to enlarge on what happened to them; I think the Minister of Agriculture (Mr. Gardiner) knows. I believe

The Budget-Mr. Motherwell
Saskatchewan lost less than the others, because that government administered the money pretty carefully and handled the loans in a pretty businesslike way, but they all lost money, including this old province of Ontario. Then, not satisfied with that, public pressure came to the highest government in the land, the federal government, and induced it to go into the loaning business. That was started in 1927, with perfectly good intentions. Just as the legislation of last session and the session before, in regard to the Farmers' Creditors Arrangement Act, and the enlargement of the amount available under the Farm Loan Act, was intended to adjust farm debts and make farm loans, so the original federal Farm Loan Act of 1927 was introduced primarily not so much with the intention of doing a lot of lending but for the purpose of controlling interest rates, and it achieved that purpose. In Saskatchewan we have an act called the municipal hail insurance act that has been on the statute books for nearly a quarter of a century. It does not pretend to do everything in the hail insurance business, ibut it is a great factor in controlling the rates of private companies. It was with much the same idea that the federal farm loan board was created in 1927, not to make many loans but to control interest charges.
Then two years later came the smash, and all commercial companies loaning money to farmers disappeared. I do not know where they went; they scooted out of sight and were not to be found. To-day I do not know of any corporation or individual throughout Canada making a business of lending money on farm mortgages. The result is that we have unconsciously, unwittingly, drifted into the same position with farm loans as we did in regard to the nationalization of our railways. It was not with deliberate intent that the railways which now form the national system were taken over as a government proposition. There was an alternative, as we all know-put them up at auction, get what you could out of them. But that course was not taken. I am not criticizing that, but I am pointing out that inadvertently they came into the hands of the government, and now this government is pledged to give them a fair chance. That is our policy; now that we have them, give them a fair opportunity to make good.
I do not know whether I am in a position to say that about the farm loan board. I have a great many complaints about the farm loan board, about the amount of money borrowers are getting. The mania for borrowing has become so impregnated into the very fibre of our people that a great many seem to think
tMr. Motherwell.]
the best way out of one hole is to get into a deeper one. That has been tried all too often and has nearly always failed. We have exhausted every commercial means of borrowing. Surely the collective wisdom of the cabinet can devise some better rvay to assist agriculture than by the state lending money to its subjects. I submit that for consideration by the cabinet. It is said that fools rush in where angels fear to tread; well, on the other hand it was also said by the red men of yore that you cannot scalp a bald man. Believe me, it is in the interests of the country that we should hesitate at this stage before we go too far, and find out-but I am not suggesting another commission-whether there is not a better, a more abiding, a more effective way of helping distressed agriculture than by the state lending its subjects money. I cannot state what attitude I took in the Saskatchewan legislature except to accept my full share of responsibility back in 1917; I think my obligation as an adviser of the crown forbids my stating that; neither can I make it plain what attitude I took here in 1927. But I am at liberty at least now to warn the house of the danger, not only to the treasury-because half the money will be lost if provincial loaning experience goes for anything-not only is the treasury in danger of being smashed, but every government that administers a lending policy like that is itself in danger of being smashed, and the ultimate result will be of very doubtful benefit to the farmers themselves. Why? Because it is perpetuating the same idea, that the only way to get along is to borrow oneself into prosperity. That is wrong. A little borrowing may be a great blessing, but unlimited borrowing such as we have had is a great curse. I have sometimes used strychnine as an illustration; it is a great heart tonic, but if you double the dose you will soon turn up your toes. It is the same with debt. A moderate mortgage may be made helpful, but if we ever get on our feet out of this morass of debt I hope that whatever authority is in charge will see that there is a maximum limit put upon the mortgaging of farms, something that in reason can be paid back. If we do that we shall reap the blessing, but as it is now, we are reaping the curse. We have sown the wind in the past, and are now reaping the whirlwind. Canada is a young country; it is only a little over a hundred years since this city was founded, since Colonel By dug the Rideau canal. That is only a tick of the clock compared with the age of the old countries of Europe. We can easily correct these mistakes that have been made if we

The Budget-Mr. MacNeil
are so disposed. Some people say: What is the use of looking to the past? But what is the use of living if we are not to learn from the mistakes of the past? If we are going to commit them over and over again without heed to the lessons' to be learned, then we are living in vain.
I may be asked; How would I do it? What suggestions would I make to better farming conditions. After hearing the remarks of 'tihe hon. member for Carleton (Mr. Hyndman) yesterday, some of which I think were wise and some otherwise, I am going to mention one, the wise one. That hon. member takes the ground that dairying should be helped in some way, and I agree. Dairying is the chief cornerstone of eastern agriculture-dairying plus its allied industries, the raising of hogs and poultry. In theory we are all opposed to subsidies, and I think there is a more excellent way for the dairy industry to be helped than by subsidies, although I am saying nothing against that proposal as a last resort. In the budget debate of 1931 I made the suggestion to the then minister of agriculture that if the government were going to spend money on a building program some of the buildings to be put up should be for agricultural purposes; that would assist us to get back to normal. Inasmuch as agriculture is now and must be the major primary industry in Canada-of course mines have come to the front very rapidly, while timber and fishing are also important primary natural industries-I was speaking then more particularly on behalf of agriculture; I then took the ground that if you are going to have a building program the money should be spent for productive buildings, to help Canada to get on her feet again.
Now, how can we do that? I have had the opportunity of seeing the dairy industry of other countries, seeing their facilities for making cheese and butter-great, fine modern buildings, not too extravagant, but suitable for making all the major products into which milk is processed. If the market calls for cheese, make cheese; if for butter, make butter, and so on. There they are, well located, ready to make whatever products the market call for, in these combination factories. Not only that, but the turn-over is great; they manufacture in such large volume that they are able to keep down the cost per pound and thereby give the producer more for his milk. Now, that is no dream. It is contrary, I know, to the doctrine of the Bull Moose of the price spreads committee, that mass production and mass buying are evils. The man who tries to run a cheese factory on the basis of ten or twelve cheese a day will be convinced that it is going to cost a lot more than a larger make. Such a small factory cannot afford to hire the best cheesemaker and then the quality tends to go down. The principle of mass production and mass buying is sound generally. Lest some hon. members may think that is a theory which has not been well demonstrated in dairy practice, I may say-and I can talk all the more freely of this because it was started by a good Tory government- that in 1916, under the Hon. Martin Burrell, right in the middle of the war, the Department of Agriculture, the deputy of which was then Doctor Grisdale, one of the many who disappeared during the exodus of deputies in the last five years, established a large combined factory at Finch in Stormont county. They bought three or four old factories and combined them into one. They produced butter and cheese and other processed commodities of milk so cheaply and with such satisfaction to the patrons that they could not take care of all the milk which was offered.


The DEPUTY SPEAKER:: I am sorry to interrupt, but the hon. member has exceeded his time.


William Richard Motherwell: Well, to be continued in my next.


Mr. C. G. MacNEIL:: (Vancouver North): Mr. Speaker, I consider it my duty to support the amendment, for I cannot accept certain principles laid down by the Minister of Finance (Mr. Dunning) in his capable presentation of the budget. My reasons, which I will state briefly, are mainly concerned with the welfare of the majority of those whom I represent in this house. The financial policy of the government as outlined by the minister is frankly a plan, as he stated, "to end an era of recurring deficits as an essential condition of the restoration of business confidence and the free functioning of private enterprise." In this plan when considered in connection with the general policy of the government as now outlined, I cannot discover any hope for immediate and substantial improvement of the living conditions of the many who must now endure the intolerable burden of insecurity and poverty. I am at a loss to discover the intention fully to utilize the material resources at hand with our productive capacity to elevate the material basis of living in our country. I can find no assurance that we may achieve that form of economic recovery required to rescue the submerged
The Budget-Mr. MacNeil

sections of our population. A plan which contemplates greater freedom for private enterprise as now functioning in Canada simply provides a screen behind which the poor will grow poorer and the rich will acquire greater and greater economic power. The government policy does not disclose any intention to control those forces which are making for the disintegration of the national economy. The trends of business as directed by private enterprise will not permit anyone to say that we may plan that the poor will remain poor but not get any poorer, and the rich will remain rich and not get any richer. On the contrary, greater latitude given private enterprise inevitably spells greater misery for the workers.
*It is most unjust that the workers of Canada should be asked at this time to bear the additional tax burden represented in the increased sales tax of eight per cent. Authorities on taxation generally agree that the sales tax is at best a crude method of taxation. It is a tax on consumption, on expenditure. It was originally introduced as an emergency measure only, during the war years, and it has always been held for sound reasons that it should ibe counterbalanced, if used, by a progressive income tax, more especially on the higher brackets of income. Its chief defect is that it falls heavily on the poorest consumers. The poorer sections of the consuming public spend a larger portion of their incomes on things which are necessary for decent living and save a smaller portion of their incomes than the wealthier sections. A sales tax disregards the number of dependents, the sources and amounts of income. Furthermore, if by reason of the sales tax prices are raised on a commodity with an elastic demand, such business is curtailed. If for the same reason prices are raised on a commodity with an inelastic demand, the consumer curtails his purchases in other directions. The final effect is a general reduction in business. In addition there is always a tendency on the part of mercantile interests to seize upon any increase in the sales tax as a pretext for an unwarranted increase of prices. This becomes evident in the process by which the sales tax after the merchandise leaves the hands of the producers is usually absorbed in the purchase price paid by the various distributive agencies through which it passes. As in the process no distinction is made between commodity and tax, and the usual gross profit is successively added thereto, the increased price the consumer must pay when the merchandise actually reaches his hands is in that degree greater than the

actual increase due alone to the sales tax. These defects, which are apparent always upon the imposition of a sales tax, become all the more pronounced when the sales tax is increased to it present level. Thousands of our workers are at this time on relief; thousands are desperately striving to make ends meet on the most beggarly incomes, and maintain the decencies of life. Any increase in the cost of living without commensurate increase in wages, any depreciation in real wages, means for them not less saving but greater deprivation.
Taxation should be levied with regard to the ability to pay, and should be designed so as to remove the inequalities apparent on every hand. The member for Winnipeg North Centre (Mr. Woodsworth) made a telling case when the other evening he placed on the record an analysis of income fax returns for those in receipt of incomes in excess of $10,000. In the table furnished it is shown that in the $10,000 to $50,000 class the minimum incomes after income tax has been paid ranged from $0,000 to $34,000, involving some 6,133 taxpayers, not including those with incomes over $50,000. It has also been shown on other occasions that 56-2 per cent of Canadian income receivers have incomes of less than $1,000 per annum. 23-7 per cent receive between $1,000 and $1,500. The remaining 20 per cent of the income receivers secure almost one half of the total national income. Those over $10,000 receive an aggregate income equal to that of more than 400,000 of the lowest paid group. If it were the intention of the government to protect rather than imperil the living standards of the toiling masses, surely these statistics indicate the manner in which any additional tax burden should be levied.
The minister anticipates a revenue of $88,-
700,000	from income tax receipts during the current fiscal year. He anticipates an additional $23,000,000 resulting from the increase of the sales tax. In this connection it is worthy of note that if the Australian income tax rates were made applicable here, making due allowance for differences in population, wealth, and distribution of income, these rates would yield Canada about $114,000,000 or an additional $26,000,000. Practically the same comparison may be made with New Zealand. I submit that in the interests of national stability it would be safer to explore these avenues of taxation than to demand another $23,000,000 from the consuming public by means of an increased sales tax.
In view of the enormous concentration of wealth and centralization of control over our

The Budget-Mr. MacNeil
economic enterprises that has arisen in Canada, it is reasonable to suggest that this parliament should now consider the levy of a dominion inheritance tax, over and above the succession duties now levied by the provinces. Similar taxes in the other dominions have yielded substantial revenue and have contributed to a more equitable distribution of wealth and income. Statistics will show that if the Canadian government taxed inheritances on the Australian scale, the national revenue would be increased from $18,000,000 to $24,000,000, after deducting the present provincial taxes of approximately $13,000,000. An inheritance tax comparable with that of New Zealand should provide a net yield of $25,000,000. I could quote eminent authorities to show that this may now be done without any dislocation of the economic machinery or any serious discouragement to enterprise.
Even to a novice in matters financial it is a matter of simple arithmetic to calculate that we cannot hope for many years to come to balance the budget in the orthodox manner and at the same time substantially reduce the debt burden. Our national debt with its interest charges has assumed such proportions that we cannot safely rely on any anticipated increase in the aggregate national wealth or increase of population. To do nothing about it means that we must continue to pay heavy annual tribute to those who own our debt. Already this tribute amounts to 36-2 per cent of our national revenue. To do nothing would mean the virtual adoption of the policy so frequently and vigorously opposed by the finance minister. We will be taking from all of us to pay some of us. Any attempt to reduce the debt from ordinary surplus revenue would require an unpleasant increase in taxation, as well as substantial reduction in government expenditure. Taxation is already high, and any substantial reduction in public expenditure would necessarily spell the forfeiture of necessary and desirable social services. The most expert conversion operations, as contemplated, cannot possibly reduce the debt in any substantial degree in the next decade. For this reason we propose in the amendment, a debt redemption levy with the object of paying off quickly, by a special emergency effort, a large proportion of the debt, thus allowing a permanent lowering of the level of annual taxation and a permanent raising of the level of social expenditure.
Such a debt redemption levy would constitute a special emergency payment by all individuals owning more than a specified amount of real wealth. Payments might be graduated according to individual ability to
pay. The basis of assessment would be individual and not corporate. The greater the wealth of the individual, the greater the proportion he would be required to pay. The levy would be secured in one payment, and not annually like the income tax, though provision would undoubtedly be made for payment in instalments over a period of years. The sum secured through such levy would be earmarked for debt reduction and would be applied so as to ensure, as I have stated, a permanent reduction in taxation and a permanent expansion of social expenditure.
As the minister has stated, the index of prices levels fell from 96 in 1929 to 72-4 in March last. It may therefore be said that the purchasing power of the dollar, and with it the burden of the debt, has risen by about a third. No one may safely predict the future of prices or of currency systems, but a further fall in the price level is at least a serious possibility. This would still further increase the burden of the debt, and would make it difficult to balance any budget without the most ruthless economy and increase of taxation. The yield of taxes in terms of money would shrink, expenditure in terms of money would not shrink as rapidly, and the biggest single item of expenditure-interest on the debt-would not shrink at all. As a writer has stated in reviewing the present economic situation in Canada, "It is surely not unreasonable to ask the wealthier members of society to surrender, at long last, the windfall gift of the depression." It is surely not unreasonable to suggest as well that we protect ourselves as far as possible against that which may occur in the future adding to an already intolerable burden. Another economist has stated:
In two respects however, history does seem likely to repeat itself, if we choose to give it the opportunity. In so far as we rely upon future conversions to reduce the annual interest charge on the debt, we are likely again to achieve very little. And if we make no serious attempt to repay a large part of the debt in the near future, false economies in social expenditure will almost certainly be repeated and wide fields of human hope and promise will continue to lie waste.
The proposal of a debt redemption levy was placed before the Liberal summer conference of 1933 by Professor K. W. Taylor, and is set forth in that well known book entitled The Liberal Way, with which hon. members are no doubt well acquainted. Speaking of the annual interest charges, Professor Taylor says in part:
The serious economic effects are that it increases taxation, that it prevents governments undertaking useful and proper expansion of
The Budget-Mr. MacNeil

social services and other desirable expenditures, and, under the regressive system of taxation in Canada, it results to a considerable extent in the transfer of income from the poor to the well-to-do.
Again he states:
The fairest and most satisfactory of the drastic measures is the capital levy, which is practicable, fair and theoretically sound. Detailed specifications have been worked out in England, both officially and unofficially. No such calculations have been made in Canada but probably at least $2,000,000,000 could be wiped out in this way without any serious disturbing effects on the foundations of our economic life.
So we submit that the proposal of a debt redemption levy is sound, practicable, and should now be considered by the government. We advance it not as a panacea or cure-all for our economic ills, but as presenting a safer and more practicable method of reducing the national debt than any yet proposed, within the ambit of the present economic system.
My chief concern is that the policy of the government will tend to crystallize conditions described in an editorial in the current issue of Maclean's Magazine. This editorial referring to the appointment of the national employment commission, says in part:
Neither the bill which outlines the powers and duties of the commission nor the debate over it in the house indicated that the government is proceeding on the premise that unemployment is a permanent problem and not an emergency which, though protracted, will pass away.
The depression cannot be held responsible for the basic problem of unemployment. A revival of trade may alleviate it, but cure it, no.
The truth is that Canada never has succeeded in absorbing its population.
From 1807 to 1933, 0,450,000 immigrants came into this country. Yet the total population increase at the end of that time was only 7,000,000. In sixty-five years we lost almost the equivalent to our entire natural increase during that period.
Even in our most prosperious years there wasn't work for all who wanted it. In the ten years from 1921 to 1931, 1,245,555 people left Canada. Most of them went to the United States to seek work or better themselves.
Between 1914 and 1918 the war took up the slack. Before that there was unemployment. Its effects were not so obvious because those were the days of free land. Men would work for established farmers part of the year and during the remainder work on their homesteads. That phase passed. The supply of easily accessible land diminished. Farmers could not give year-round employment. Workless men flocked to the cities where there were not enough jobs to go round.
On top of all this, throughout the years the advance of science has further complicated the problem. Improved machinery has steadily
I Mr. MacNeil.]
reduced the amount of labour necessary for the production of any given volume of goods. This trend continues.
In February of this year there were 1,080,831 Canadians receiving direct unemployment relief. That did not include 156,944 farmers receiving aid in the dried-out areas.
How many of the men of fifty and over will ever get work again? Very few. A new generation has come up to take available jobs older men once had. There are 2,000,000 Canadians between sixteen and twenty-one years of age. It seems that the number of employables is increasing faster than the number of jobs. In recent months relief expenditures and employment figures have risen together.
Unemployment must be regarded as a permanent problem.
The main point is that the national unemployment commission is only going to be worth the money spent on it if it is enabled to consider the problem of unemployment in its broader and most far-reaching aspects; if it is encouraged to evolve a definite policy that will, in the course of time, take care of all interlocking social burdens.
It isn't a matter of plugging a leak in a dyke. It is a matter of an entire reconstruction plan.
I am frankly dismayed that there is not greater readiness to engage in the program of reconstruction demanded by this alarming prospect of conditions of permanent unemployment in Canada. The policy of the government contemplates little more than the attempt to stop some of the dykes that have been torn away by unregulated private enterprise. In any event I cannot agree to anything that would in any degree aggravate the distress of those involved. In my opinion the security of our Canadian homes is of infinitely greater importance than the security of special privilege as now maintained by the existing financial structure. In the last analysis there can be but little security or stabilization of the financial system unless it is founded on the security and well-being of the workers. We have reached the point in our affairs where we have discovered that we can produce so abundantly that business cannot prosper unless the masses live abundantly.
If we listen to the voice of private enterprise we learn of an insistence to lower living standards so that relief may not check the downward revision of wages desired. C. H. Carlisle, president of the Dominion Bank, recently declared:
We cannot maintain everyone on relief on a scale of comfort. The vast masses of the people, if kept on a scale of even bare comfort, are not sufficiently inclined to get out and vigorously hunt for work and accept work when it is offered.
This is but one of many statements made recently which quite ignores the realities of the situation, and indicates the ruthlessness

The Budget-Mr. MacNeil
with which private enterprise would abandon any attempt to improve living standards in order to preserve profits and special privilege.
Coupled with such statements we hear the statement often repeated that unemployment might easily be cured if we inaugurated a ''back-to-fche-land" movement. Little attempt has been made to analyze the magnitude of the drift to the cities, or the impetus given that migration under planless private enterprise. According to a recently published statement of Professor Burton Hurd, in the inter-censal decade, 1921-1931, there was a net movement away from rural sections of 440,000 over and above the gains in population through immigration. In the same period occupied farm land increased by 23,000,000 acres, or 16 per cent. Improved land on farms increased by 23,000,000, or 21 per cent. One factor contributing to this movement was the increased use of science and machinery, enabling the farmer to meet the requirements for farm products on the domestic and foreign market with a decreasing proportion of farm population, thus releasing an increasing number for employment elsewhere. It has also been shown that the birth rate is about sixty per cent higher in the country than in the city, and this also supplies an additional reason for the migration to the city. Since 1930 emigration to the south has practically ceased, and this has tended to dam back the accumulating rural surplus, awaiting more favourable employment conditions in the cities. Any back to the land movement of proportions to relieve the unemployment situation would simply add to existing agricultural surpluses, further depress prices, and increase the pressure on excess farm population to seek employment in the cities. It' has been proposed that the unemployed in the cities should be settled on the land in such a manner as to enable them merely to produce their own requirements. This means the setting up of a peasant agriculture side by side with modern commercialized farming. It is unjust to expect the unemployed to endure the primitive living conditions imposed, while neighbouring farmers and the workers in nearby cities enjoy the comforts and conveniences of our society. They would quite naturally move back upon any signs of improvement in employment conditions, and therefore the plan has no semblance of permanence. In any event under present conditions it would only be accompanied by a contrary cityward movement which would defeat the purpose of the scheme.
We have depended on private enterprise for a solution of our housing problem. The speculative or profit making element has
completely frustrated all our efforts to meet an acute housing shortage and achieve the recovery of our construction industry. It is estimated by those making a close study of the situation that we require an additional
200,000	dwellings in Canada. Based on the figures given by the Bank of Nova Scotia, the accumulated demand for backlog for residential construction resulting from the lack of building since 1931 is now $266,000,000. Only 126 loans have been granted under the housing act of 1935, while under the housing measure of 1919, some 6,250 houses were built. A total of 6,376 houses have been built in Canada as a result of state assistance. In order to compare these results with those achieved in other countries where the state definitely assumed some measure of responsibility for the problem, I should like to refer to a summary in Modern Housing, by Catherine Bauer.
In Holland, with a population of 7,527,000, a total of 450,000 dwellings were constructed during the period of 1919-1928. The total number built with state aid was 250,000, the number built by public authorities, 40,000, and the percentage of population living in state-aided dwellings was 15. In Belgium, with a population of 7,466,000, 250,000 dwellings were constructed during the period 19191933. The total number built with official aid was 200,000, the total number built by public utility societies was 70,000, and twelve per cent of the population lived in state-aided dwellings. Denmark, with a population of
772,000,	constructed 45,800 dwellings in the period 1920-1929. Thirty-five thousand dwellings were built with state aid, 9,300 by public authorities, and twenty per cent of the population were living in state-aided dwellings. In 280 towns in Sweden with a population of 2,000,000, 129,800 dwellings were constructed in the period 1917-1929. The number built with official aid was 57,400, the number built by public authorities 12,200, and thirteen per cent of the population were living in state-aided dwellings. In five large towns in Norway with a population of 478,000, the total number of dwellings constructed was 16,600. The total number built with official aid was 14,900, and fourteen per cent of the population were living in state-aided dwellings.
In practically all these countries definite provision has been made for slum clearance and the provision of housing for those receiving extremely low incomes. In Canada we must sooner or later face the fact that a large portion of our population receives an income too small to provide itself with a minimum of decent living quarters. We are now committed to a policy of encouraging
The Budget-Mr. MacNeil

this is admitted by any student of our history -that at any time since confederation when the imports of the country have been greatest unemployment has always been at its lowest level. And the figures I have given very definitely and clearly bear that out.
The right hon. gentleman went on to say:
We had to make a new treaty with New Zealand, and that treaty has brought about increased trade and has added wealth to both countries.
That statement is true and is worthy of note. We did make a new treaty with New Zealand and that treaty has brought about increased trade and added to the wealth of both countries. He says that the same thing may be true of other countries. That is exactly what does take place. Before we went out of power we had a trade with New Zealand of $35,000,000, $19,000,000 of which we exported to that country, importing from them $16,000,000. But after the policy of my hon. friends opposite had been in force for a short time, that trade was cut seven ways; less than one-seventh of it remained between the two countries. It was less than $5,000,000. The right hon. gentleman said that his government negotiated a new treaty with New Zealand, and I think we were all glad to see that happen. He also said, with regard to this so called excise tax of three per cent which is actually an additional tariff of three per cent, that as far as Great Britain was concerned one and a half per cent had been removed one year and the other one and a half per cent the following year. He went on to say that the previous government made a treaty with France, gave the intermediate tariff to Germany and Austria, and made treaties with Brazil and Poland. The result has been reflected in the figures I have just quoted; in 1933 our total trade was only approximately $887,000,000, while in 1935 it increased to about $1,189,000,000. So apparently hon. gentlemen opposite, who were in power for five years, found that their policies had to be reversed or conditions in this country would not improve.
I have before me some facts with regard to the customs duties paid on goods entering Canada from Great Britain. I could put a great many figures on Hansard, but I have not time for that to-day. On raincoats and trousers suitable for farm wear, coming into this country from Great Britain, the duty was over 55 per cent. On ties coming into Canada from Ireland there was a duty of over 45 per cent. On men's hosiery, both woollen and fine, coming from Great Britain, the customs taxes of one kind' or another totalled over 64 per cent. On sweaters and hose used by workmen the actual duty paid was over 69 per cent.

And yet at one time the right hon. leader of the opposition said:
For we must commonly agree that there can be no continued sale without purchase; that if we expect to market our goods in the United Kingdom we must expect to purchase goods from the United Kingdom.
I should like to say that a great deal of relief has been afforded by this United States trade agreement. I see on the floor of this chamber a carpet. I have in my hand a bill to which a customs bill is attached, dealing with a carpet imported into Canada from the United States very recently, but before the trade agreement was concluded. The carpet cost $50.07 in the United States, and I find that the total customs duty amounted to $70.06, the sales tax to $7.26 and1 the excise tax to $3.63, or a grand1 total of $80.95 on an article costing $50.07 in the United States. If we eliminate the sales tax, though it should not be entirely eliminated, this means that the duty on this carpet amounted to $73.69, or a tariff of over 145 per cent. Even to-day, under the intermediate tariff, we are still paying more than 100 per cent on carpets coming in from the United States.
At this point I should like to congratulate the Minister of Finance (Mr. Dunning) upon reducing the duties on textiles coming into Canada. In my judgment one of the features of the budget worthy of special attention is what has been done in the interests of Canadian consumers in that regard. I have not as yet had time to analyze the changes which are proposed; perhaps I am not capable of analyzing them fully, but as I understand it I think this is a great step in the right direction. Let me say, however, that the figures which I have presented to the house to-day show that we have yet a long distance to go before the tariffs are down to where they should be.
In our part of the country, Mr. Speaker, we cannot benefit by tariffs. We sell on a free trade market, and unless in some way we can first get the opportunity to sell and then be permitted to purchase at reasonable prices we cannot continue to exist. Professor Rogers of Queens university, now our very able Minister of Labour, in his leisure moments figured out that the tariff costs the province of Saskatchewan approximately $26000,000 annually. To-day in this house1 we hear men say that certain bonuses, subsidies and all that sort of thing have been given to Saskatchewan recently, and that may be true. I am not one of those who believe in subsidies but I say that under the present setup it may be necessary to continue that practice although the principle is not sound1. We

The Budget-Mr. Young
in Saskatchewan want the right to purchase as freely as possible. Then we shall be aJble to sell our goods, and make a fair exchange.
I should like to touch on one or two other features of this budget. I congratulate the minister upon what he has done with respect to the duties on agricultural implements. It is vital to us that we obtain these implements at the lowest possible prices. When we came to power there was a duty of 25 per cent, plus this three per cent excise tax, on agricultural implements coming into Canada. Under the trade agreement with the United States, which applies the intermediate tariff to goods of that country, the rate was reduced to 12i per cent, but just as soon as we came to office we found that the agricultural implement producers actually increased their prices. No man in this chamber can tell me that those prices were increased because of the reduction of duty, and I congratulate the minister upon accepting the challenge of the implement manufacturers by again reducing that tariff, this time to 7i per cent. But it is not only 7i per cent; there is also the three per cent excise tax, and if these prices continue at their present levels I suggest that at some subsequent time we should take further action.
The question of automobiles has aroused a great deal of controversy. There is manufactured in Detroit a car which sells wholesale for $518. The retail price of that car to the purchaser in Windsor exceeds the retail price to the consumer in Detroit by $177. To my mind, there is something wrong when an article which can be produced and sold wholesale in Detroit for $518 retails to the purchaser in Canada for $177 more than the retail price in the United States.


Mr. ROWE (Dufferin):: Would the hon. member permit a question? How much more do cars cost than they did before the budget was brought down?


Mr. YOUNG:: They have increased in price by approximately the amount of the two per cent increase in the sales tax. What I was going to say is that if that industry cannot sell cars in Canada for a smaller differential than there is at the present time, there is still something wrong with regard to our tariff or the industry is not a legitimate one in this country. If the industry cannot do better than that it may be classed as one which is not of any great advantage to this dominion. I would also say to the automobile manufacturers that I think they had better look very carefully over the price lists which they issue for Canadian consumers, otherwise on some
subsequent .occasion something further may have to be done with regard to the tariff on cars.
I might say the same thing in regard to gasoline. We have this year reduced the tariff on gasoline by one and a half cents a gallon under the Canada-United States trade agreement and the present budget. But I have not noticed that the price of gasoline has gone down accordingly. I trust that the oil companies also will take notice and reduce their prices. I suppose it is not recognized by everyone that where the gasoline manufacturers get their greatest protection is in the differential in the freight rates on crude oil and gasoline brought into this country, a differential of at least five or six cents a gallon. So with this additional one cent a gallon still remaining under the tariff they should take great care to see that the consumers of Canada are not penalized any longer. I might say a great deal more about that, I feel very keenly about some of these matters. I feel that the prices the consumer is paying in this country are too great.
But I want to pass on to the financial picture as I see it. The Minister of Finance clearly pointed out all the details. He did a great service not only to the members of this house but to the whole country in placing before them exactly what has taken place. He showed that last year we had in Canada a deficit of about $162,000,000. That is a very serious matter. If we go back to the year 1914, the total debt of Canada was then $335,000,000. We paid less than three and a half per cent interest, and the total interest on the national debt was less than $13,000,000. That is a striking fact, that the entire debt of Canada from 1867 to 1914 amounted only to $335,000,000, and the interest to less than $13,000,000.	After the war that debt rose
by 1923 to about $2,400,000,000, and we paid a total yearly interest bill of $140,000,000 in round figures. That is a serious matter. During the past five years the public debt increased by about $800,000,000; perhaps I might be more nearly right if I said $1,000,000,000. The total amount of the debt is now $3,265,287,604. Surely that is something to make every one of us pause and think it over. The Minister of Finance told us that to-day we are paying $134,000,000 interest yearly. For soldiers' pensions we are paying between $40,000,000 and $45,000,000 and other grants and allowances to soldiers bring the amount up to probably $50,000,000. If we put this into percentages, the interest on the debt of Canada last year was 36 T9 per cent of the total revenue; European war pensions,
The Budget-Mr. Young

11 * 19 per cent; care of returned soldiers, 2-9 per cent; a total of 50-28 per cent. These figures go to show that a very large portion of the debt of this country and the interest thereon is due to the war.
Mr. Speaker, I ask this question: From whom did we get that two. billion dollars which we borrowed during that war? Am I to be told that in Canada there were men who during the war were actually making money and lending it out at high rates of interest to this country? . If not, where did the money come from? Am I to be told further that we at that time-not this government or the former government-issued bonds which were tax free, so that we were not even able to tax those who made profits out of the war on the income from those bonds? Everyone knows that is true. Today that debt has increased until now it is over three billion dollars. I know, we all know, that there is great difficulty in financing not only the dominion but every province of Canada. We see the premiers or the provincial treasurers coming to Ottawa; they came to former finance ministers and they come to the present Finance minister. If I were premier of Saskatchewan or any other province I am not quite sure that I would like to subscribe to the principle of a loan council. On the other hand if I were the Minister of Finance I am not sure that I would like to have all the provinces coming to me and asking for money unless I had some control over them. But we must recognize that all these governments have sovereign authority, if we do not stretch that term too far, the same as the federal government. Surely it is a serious matter if the federal government find it necessary to impose some form of control with regard to what the provinces may do. Personally I think it is serious. But the Minister of Finance cannot be expected to continue to hand out money the way in which it has been going out unless there is some control. Take our own province of Saskatchewan; in 1929 when the Liberals went out of office the debt of Saskatchewan was about $65,000,000. The Conservatives were in power for five years, and at the end of that time that debt had increased, to about $160,000,000. For twenty-four years while the Liberals were in power building up that section of the country the total debt amounted to $65,000,000, but in five short years it increased by $95,000,000. The other day I heard the leader of the opposition suggest that he was afraid that some of this money which had been provided by Canada had not 
been too wisely spent in some of the provinces. I suspected that be was thinking of our own province. When we see that happening there we also see similar things happening in other provinces that are now in financial difficulties.
It is a very serious matter when we consider that there is approximately $10,000,000,000 owned by the people of Canada in the form of either federal, provincial, municipal or private debts. What are we going to do about this? Is there any hon. member who really believes that we are ever going to pay these debts, under the conditions in which we are now living? This country is up on financial stilts; we must at least get one foot on the ground, and begin sotaawhere. In my humble judgment we must refinance the debt of Canada, federal, provincial, municipal and private. It might surprise the leader of the opposition if he were in the house if I told him that on the platform during the election campaign I gave him the credit, and was proud to give him the credit, for the refinancing which he did, by which he saved some interest to the Canadian people. But I suggested then, and suggest now that what has been done is nothing to what must be done. My suggestion is that we should set up in this country a committee of experts to analyze the situation. There is no man in the house, no man in Canada more proud than I am that we have perhaps one of the ablest Ministers of Finance who have ever occupied that position. I suppose all hon. members are probably a little fed up with what we call royal commissions, but I am going to suggest to the minister that we set up a committee of experts who would analyze the federal, provincial and municipal situations, and would even consider the private debt of the country. AfteT having done that, we must not be afraid to do that thing which in my humble judgment must be done, and will ultimately be done before once again we can get on an even keel.
I do not believe any federal government in Canada should be paying an interest rate higher than two per cent. I do not believe we can continue to do what we are doing. When commercial firms get into difficulties,, what do they do? They'meet their creditors-to make arrangements. In Saskatchewan the Farmers' Creditors Arrangement Act is operating, and we have set up a debt adjustment board. On this occasion I want to pay tribute to the men actually engaged in that work,, but they can work only within circumscribed limits. All they are doing is to touch the

The Budget-Mr. Young
hem of the garment., the fringe of the difficulties through which we are passing.
Let us consider the farmers in Saskatchewan. Men come to see me and write me saying, "Doctor, we are losing our equity here; what are we going to do about it?" Let us, for example, take the case of a farmer who has a farm which is worth, let us say, $1,000. His equity amounts to 60 per cent and the mortgage amounts to 40 per cent. Well, if the farmer is a poor one who gets up late in the morning and goes to bed early at night, allows weeds to grow in his fields, and all that sort of thing, there may be no objection to closing out the mortgage and his getting his $400. But we have the other farmer-we have had them for five years-and what is the picture in connection with him? Again the unit is worth $1,000; the equity of the farmer is $600 and the mortgage is $400, but through no fault of the farmer, due to conditions in Canada and perhaps throughout the world, the value of the farm has been squeezed down from $1,000 to about $400, and in that way the farmer has lost all his equity. What we are now doing results merely an preserving the other 40 per cent for the coupon clipper.
In my humble judgment this matter must be given serious consideration, or we shall reach a state where the real owners of this country will be squeezed out of their equities, and we shall have what? We are going to say that all those who loan mortgage money at a high rate of interest shall have their full 100 per cent. In my opinion that sort of thing cannot be permitted to continue. The other day I was proud to hear the leader of the opposition say that this Bank of Canada of ours has done some real good to this dominion. I am a believer in the Bank of Canada. But we have all these institutions privately owned to-day; all money institutions are privately owned. I am proud to say that there is now before the house a measure which will bring control of the central bank into the hands of the government and of the people of Canada. That is a step in the right direction.
I trust I shall not be one charged with saying that you can put faces and figures on pieces of paper to create wealth, because that cannot be done. But while that cannot be done I recognize that we could use the central bank much more than it has been used hitherto for the destruction of debt. There is a great difference between the creation of wealth and the destruction of debt. I look forward with pleasure to the time when we shall have that institution under our own control. I do not wish to do anything that
is foolish; I am not one who believes in wrecking institutions. I recognize full well that Canadian insurance companies hold a large amount of Dominion of Canada bonds; I recognize full well, too, that we could absolutely wreck the insurance policies held by our people if we were to take foolish action. I am advocating nothing of the kind, but I do suggest once more that we should have a committee of experts to inquire into the whole situation to see in what way we can best revalue, reassess and refinance the whole debt structure of Canada, and at the same time not do violence to any interest therein concerned.
To me this matter is so serious that it must be given consideration. I recognize that the government cannot do everything in one year. I am not asking that everything be done in one year, but I suggest that the time has come when we must give full consideration tc a matter of vital importance not only to the farmer who owns his farm or the business man who owns his business, but to those men who are interested in the other angle, namely those who loaned the money. I do not know how far the government is prepared to go, but I suggest that the matter is of such vital importance that it should be thoroughly investigated, because our farmers and business people cannot continue to do what they have been doing. They must not be permitted to suffer as they have been suffering. If we permit this to go on, the last condition will be worse than the first.
I close with a few words concerning the Canadian National Railways. One point which strikes me as being very interesting- I am arrested by it all the time-is that men within and without the house paint a horrible pioture of the Canadian National Railway situation. A few days ago the leader of the opposition said that the net loss for one year amounted to $115,281,689.79. That figure, as he stated it, is to be found in the annual report of the Canadian National Railways, under the heading of profit and loss. But in the same document there is another statement showing that the cash deficits of the Canadian National Railways last year amounted to $47,000,000. How is the right hon. gentleman's figure arrived at? It is arrived at iby writing off abnormal retirements to the tune of $29,000,000 last year and in addition about $35,000,000 is charged up for interest due the government covering not only last year but an accumulation for many years. Some of tllie charges go back almost to confederation.
Therefore I say that when a statement of that kind is made in a profit and loss account
The Budget-Mr. Young

it does not give a proper picture of the situation. The hon. member for Mount Royal (Mr. Walsh) not long ago said in this house -and I take it he was enunciating the policy of the Conservative party-that they were not in favour of amalgamation, and that they did not like that term. I am not surprised that they do not like the term. But he did say that they were in favour of unification. I asked what unification meant and he said that it was retaining two entities under one management. He did not go to the extent of saying what management, but contented himself by recommending one management. Perhaps I may assume that he intended to say that all the railways of Canada should come under Canadian National Railways. He is not in his seat to-day, but if he were I would ask him if that is what he meant, and this further question: Does he believe that the Canadian Pacific Railway, which is well managed, would be satisfied to turn over all its assets to and be managed by the management of the Canadian National Railways? I am inclined to think there might be some difficulty about that. Let us put it the other way about: Is the suggestion this, that the management for both railways shall be that of the Canadian Pacific Railway? I am inclined to think that something would be said by the people of Canada if we turned over all our assets in the Canadian National Railways to be managed by the Canadian Pacific Railway.
Unification will do what? Under one management, either one or the other, what would we have? Just let that condition exist for five years and, while I have a great respect for cooks, I defy any cook to unscramble scrambled eggs. We would have both railways before us, and certainly an amalgamation, and we could never unscramble it again. I am opposed to amalgamation. I believe it is bad business to have a monopoly of the kind that such a railway monopoly would be. When we hear men inside this house and out of it painting a horrible picture of the Canadian National Railways, let me say that in my humble judgment this is done for one purpose and one only, to try to scare the people of Canada to the extent that they may be willing to submit to a plan which will bring about the greatest monopoly this country has ever had. That monopoly cannot be permitted to come. I am not so hopeless as some are about the Canadian National Railways. I am not so hopeless as some are about the general condition of Canada. We are living in a great country, a country with unbounded resources. All we require to do is to get down to better principles and better practice,

and then with the splendid natural resources and man power we have there is no doubt at all that this dominion is going to come out of the depression through which we are passing, and when that time comes, the Canadian National Railways, which has been maligned from coast to coast by some, may become one of our greatest assets.
Where is that railway located? It is located chiefly in the northern parts of Canada, in that part of the country where in the future will be found the greatest development, and as that development takes place we shall find that the Canadian National Railways will become more and more a valuable asset. Let us not lose faith in Canada; let us not lose hope. We have a country of immense possibilities, with unbounded resources, and as one who has passed a great many years in this dominion I feel that the end of this depression is going to come about and that we shall once more enter upon a reign of prosperity similar to what we had before.
There is one other thing that I should like to say. What are we passing on to the youth of this country?


Mr. SPEAKER:: I am sorry, but the hon. gentleman's time is exhausted.


Mr. D. J. HARTIGAN (Cape Breton South):: Mr. Speaker, in rising to make a few comments on the budget I wish like other hon. members to take this opportunity of congratulating the Minister of Finance (Mr. Dunning) upon his able presentation of the annual statement. The clear and concise manner in which he gave the facts and figures pertaining to the debt of Canada and what he proposed doing about it, and the expenditures which we shall be called upon to make for the ensuing year, I am sure must have been enlightening to us all. The able grasp which the minister showed of his subject leads us to hope that within a year or so we shall be well on our way to recovery.
I should like also to take this opportunity of associating myself with the miners of Nova Scotia who made the heroic rescue of Doctor Robertson and Mr. Soadding at the Moose River mine a few short weeks ago. Like everybody else in the country I felt proud of what those minens did. They wrote what I believe will go down as an epic in the history of mining all over the world. I would point out, however, that accidents of a like nature and even great catastrophes are not uncommon in Nova Scotia or in any other province where mining is carried on as a major operation. It is not unusual for us in Nova Scotia to have numerous deaths in the mines. I myself know of one catastrophe in which through a mine

The Budget-Mr. Hartigan
explosion seventy-six men lost their lives on one level, only one man out of seventy-seven coming out alive. I am not saying that at all in derogation of what the brave miners did in rescuing Doctor Robertson and Mr. Scadding at Moose River, and I should like to congratulate these two gentlemen on their fortitude and their great nerve control under such trying conditions. I should like also to condole with Mrs. Magill. I think we can look upon the action of the miners at Moose River as typical of the actions of all miners throughout Canada. Take them as a pattern of the miners throughout our whole country, protagonists in the reign of right over might. That is how I feel those miners would wish their actions to be construed. If we wish to measure accurately the deed they performed, we must study their background, the conditions under which they lived during this period of time, to use a term which seems to have endeared itself to the leader of the opposition (Mr. Bennett) in this house. Ever since the late government came into power in 1930 the miners of Nova Scotia, yes, and of eastern Canada- I represent about one-third of the total number of bituminous coal miners in the Dominion of Canada-have been working on short time, their wages hardly, if at all sufficient to meet their ordinary expenses and enable them to keep their families in good condition and get sufficient of this world's goods to give them a decent living. It was under such conditions that those men displayed such fortitude, such courage and such persistence, without any thought of pay, because pay was not in their minds at all when they attempted the rescue. They had made up their minds to rescue those entombed men, whether dead or living. That was the motive behind their efforts and their tenacity of purpose. Somebody needed succour, and they were going to go through and rescue those men dead or alive in spite of every obstacle which might be imposed by man or nature.
I do not wish to be considered parochial, and I am not talking, I assure you, Mr. Speaker, for the benefit of the constituents back home, but there has been so much talk in this house on the budget and on various other matters, some academic, some problematical, and some prophetic-you would think some hon. gentlemen were possessed of occult powers the way they can tell us what is going to happen in the future-that to-day I would like to bring to the attention of the government and of Canada the condition in which our coal miners have been existing during the past five years especially. I assure you, Mr. Speaker, that I shall not trespass on the generosity of the house by dwelling too long on the subject of the coal miners.
They are a unit in our national life; they are nationals. The first duty of Canada or of any other country is to protect its nationals. That is why we have embassies and protective systems. The miners of Canada are nationals of Canada, and under the British North America Act they have rights and privileges just the same as any other group. We want no more than what is our due, but we expect no less.
Our total imports of coal amount fio
13,000,000 tons and we mine a total of
6,500,000	tons in our eastern provinces. Under these conditions there is no excuse for any one of the 30,000 miners to have to go hungry or without the necessities of life. There is something wrong in our national make-up when the people of Canada are ready to tolerate such conditions in one of our basic industries. You cannot blame the miner if at times he is driven to wondering whether there is any equity or fairness in the government when such conditions of affairs are allowed to persist. We import a total of 13,000,000 tons of coal, but when these miners come to Ottawa or to any other source of authority in an effort to expand their trade, they are met with the answer that it is economically not feasible. If it is not economically feasible to sell our coal in Canada, is it economically feasible to permit a group of nationals to exist on one day's work per week, as has been the case for the last number of years?
This is what is happening and yet government ships are bunkered with imported coal. The Canadian National Railways, our own railway system, a system which should be working in the interests of the people of Canada, is actually working coal mines in the United States. The coal miners in Nova Scotia or in Canada have no objection to the coal mined in the United States being used on the American lines of our system, but they have a definite objection to the use of American or other imported coal on the Canadian lines. I do not think one can find either equity or justice in the procedure followed. However I do not propose to go into this question to such an extent as to burden the house with a lot of figures. I always say that figures are tiresome. I shall endeavour to deal with conditions as they exist to-day.
The manner in which the Canadian National Railways has been managed for the last number of years is responsible to a very large extent for the situation prevailing today in the coal trade of Nova Scotia. Our markets in Ontario have been extended to

The Budget-Mr. Hartigan



PRIVATE BILL


[Stage Direction]
Hon. H. A. STEWART (Leeds) moved the second reading of Bill No. 59, respecting Thousand Islands Bridge Company.
Mr. CHEVRIER (Stormont):: Will the
hon. gentleman explain the purport of the bill?


Mr. STEWART:: Mr. Speaker, the object of this bill is to make two minor amendments to the act incorporating the Thousand Islands Bridge Company. That act authorized the company to enter into an agreement of amalgamation or cooperation with a company in the United States, but it did not contain a provision authorizing the company to enter into an agreement with a government authority. The state of New York has constituted an organization known as the Thousand Islands Bridge Commission, and it will be necessary to amend the act to authorize the Canadian company to enter into an agreement with this corporation which has been constituted by the state of New York. There is another minor amendment to the bill providing for an extension of time and there are sections added to the bill which are applicable to this corporation that has been formed by the state of New York. These are minor amendments. They have been approved, I am informed, by both the state of New York and the province of Ontario. In the ordinary course the bill would go to the private bills committee for consideration.


Lionel Chevrier: If I am in order I should like to ask the hon. gentleman one or two questions. Has the consent of the governor in council been obtained as far as the Canadian side of the bridge is concerned?

Criminal Code-Mr. Church


Hugh Alexander Stewart: I am informed by the legal gentlemen in charge of this matter that approval of the plans has been granted by the government of Canada.


Lionel Chevrier: Does the
hon. gentleman know the date when that approval was given?


Hugh Alexander Stewart: No.


Mr. HOWE:: I should like to ask one question. Is there any change in the terms under which the deposit is made by the bridge company with the Canadian government?


Hugh Alexander Stewart: No, the deposit is still required.


Clarence Decatur Howe: Is there any change in the terms?


Hugh Alexander Stewart: Yes, there is some change in the terms.
Motion agreed to and bill read the second time.



CRIMINAL CODE


[Stage Direction]
Mr. T. L. CHURCH (Broadview) moved the second reading of Bill No. 57, to amend the criminal code.
He said: Mr. Speaker, I arranged with the Minister of Justice (Mr. Lapointe) last Friday that this bill should be gone on with to-night. To me it is one of the most important bills with which we have to deal. When you think that between now and next Christmas over three thousand more people in the city from which I come, more than ten times as many as would be required to fill up all these seats, will have suffered injury in automobile accidents and about 50 more killed, I am sure you will agree that this is a bill which should be considered. I should have preferred to introduce this subject by means of a separate resolution, as I did last session. At the beginning of this session in the house here I suggested that a committee of both houses of parliament should deal with this problem, but I was unable to get the matter before the house in any way other than this. This matter is far more important than any resolution in the budget, since it concerns the life and death of the people on our highways. In every constituency of Canada people are being slaughtered in this way; men, women and innocent children are being injured and killed, and the House of Commons does nothing about it. They can talk about Mr. Sage; they can waste time deciding who should be

the ten men to constitute the House of Commons Follies for 1936, but they cannot give consideration to this bill which deals with such an important matter.
According to the rules of the house, on the motion for second reading I cannot take up the bill clause by clause, but I can discuss only the principle of the bill and the necessity for it. Is the present law adequate to protect the public at level crossings and on highways? That is the principle of the bill. If the bill reaches committee I will explain every clause contained in it or later seek to add it all to any government bill. The first section refers to level crossings, and I should like to remind the house that only a few weeks ago five people were killed on a level crossing at Delhi, and not so very long ago four people were killed at Whitby while returning from a hockey match. I seek to have the law of Quebec in regard to motor vehicles being compelled to come to a full stop at level crossings made to apply all over Canada.
I wish at this time to deal only with the principle of the bill, because if the house agrees to the principle we may do what should have been done long ago. Canada is lagging far behind the times in connection with this work. We are the only country in which something has not been done to protect the public. Long ago we should have had a committee of both houses of parliament studying this problem. Why, Mr. Speaker, you might be knocked down on the street to-morrow and be unable to preside over the sittings of this house again. There are 245 members of this House of Commons. In 1934 the number of those killed in automobile accidents in Canada would be sufficient to fill all the seats of this chamber four or five times over, and that is the result of the failure of parliament to deal with this question.
This matter was discussed by the house for a whole day last year, and everyone agreed from all sections of the house that something should be done. That debate will be found in Hansard for February 13 of last year, at page 786. This bill is not a criticism of the motorists, ninety-five per cent of whom are usually careful. I own a car, though I do not drive; I should like to live a while longer, and that is why I do not drive. Ninety-five per cent of the people who drive automobiles try to obey the law, but facts are facts and we must face them. These death cars are on every highway, and with the exception of a few newspapers no one does anything about it. In my opinion transportation in Canada should be a means to an end and not, as is becoming fashionable in this country.

Criminal Code-Mr. Church
an end in itself. Everyone has the speed fever in this country. One of Ontario's ablest judges, the late Chief Justice R. M. Meredith, addressing the grand 'jury at the assizes in London more than seven or eight years ago, said:
And as now nearly everyone is a car owner and ear driver, young and old of all sorts and conditions, it is difficult to get justice in even a civil action. Car-driver-jurors have nearly all the speed fever; and self-preservation instincts are so strong that they will not be persuaded to decide against drivers who have been no more unlawful than they themselves often, if not commonly, are.
What then is the remedy? I think it should be: make the laws plain and reasonably severe and enforce them; and cancel licences freely.
Since that time parliament interfered in 1930, and now no one can tell what the law is. I have read three or four presentments of the grand jury of the county of York at the assizes. It is impossible to convict men of manslaughter or criminal negligence owing to the loopholes made in the criminal code by that statute. As Mr. Justice Meredith said, everyone has the speed fever. He might have added, except the House of Commons. We ought to have been through here long ago. If the statute of limitations were amended to provide that parliament could sit for only four months, we might get some relief from large sessions, no one but a millionaire will be able to afford to belong to parliament. The senate is exempt from this statement; they do not suffer from the speed fever, except in the last days of the session.
It would be misleading and mischievous to attribute all blame for the present state of road traffic, with all its ghastly horrors, to those who drive and use motor vehicles. But it is beyond dispute that they have a very large portion to their discredit. This small minority of drivers appear to have exploited for their pleasure or profit the generous tolerance of others in a very irresponsible, callous and appallingly cruel manner. Their fault is grievous and they can have no ground for complaint if they are put under restraint. Ignorance and thoughtlessness are but small palliation. Obedience is the only reparation they can make; it is very long overdue. Last year I brought this matter to the attention of the house and I said it is one of Canada's greatest scandals; so it is, this daily slaughter of men, women and children, and one of the worst features is the absolute public indifference. I find it hard to explain this indifference. The church, the pulpit, the general public and legislative bodies take it all as a matter of course and form and toss
it aside, while public officials and legislators go out and collect a few statistics about it, and the net result of their effort does not lessen the slaughter; it leads to nothing but a shameful and glorious fiasco. The highway department collects statistics but the slaughter still goes on. The press with a few notable exceptions say nothing about it, but devote pages to reports of a selection of ten handsome men here, a House of Commons Follies of 1936 with a star cast, making -out of this House of Commons a house of nonsense.
People of sober thought in this country are becoming fed up with all this. The other day I attended the funeral of a great newspaper man, Harry W. Anderson, one of the greatest men this country has produced, and before attending that funeral I attended the funeral of a man killed in the riding represented by the hon. member for Greenwood (Mr. Massey). The breadwinner was taken from a family of five small children, and I promised the widow that I would bring this matter once more to the attention of the house. The fact that two hon. ladies are in this house does not mean that they represent all the women of this country; they do not. I represent the women of my constituency. They are the people who are suffering, and they are fifty per cent of the voters of the country. They know what it is to lose the breadwinner and be put out on the street with a family of small children, and they are crying out to this house against this reckless slaughter. Let us cease being a house of follies and do something to protect the long-suffering public of this dominion who are being massacred and slaughtered on the highways. The -past few years have shown the decay of parliament, as we see in the way this question is being dealt with. In the death of our people we are reaping the result of this inaction. If the invader were at our gates we would mobilize our whole effort to defeat him, yet in Canada a most shocking and un-Christian slaughter and legalized murder go on day and night, winter and summer, a carnage that is worse than war, that stains -red all the main roads of this, a civilized country, and the world goes on just the same as ever.
The abuse of the motor car is one of the unpardonable sins of the age; it is a real menace to organized society in Canada to-day. If a baffling disease were taking the toll of life exacted on our highways day by day science would know no rest until a remedy was found. Great Britain and the United States are waging war against this slaughter. Mayor LaGuardia of New York has had a committee appointed; they are getting results, but we are not. The privation and sorrow,
Criminal Code-Mr. Church
[Stage Direction]
broken lives and Shattered homes resulting from this holocaust are terrible to contemplate. The abominable and domineering indifference of some drivers of motor cars to the convenience of others is hard to explain. There are three features which appear to be predominant in the conduct of motor traffic, namely, a domineering indifference to the convenience of others, excessive speed and congestion. Ever since man learned to mount and direct a machine more powerful than himself he has asserted his superiority of force over his neighbours. "Make way or take the consequences" has been his instinctive cry, and he has gone on his way largely indifferent to their admiration, tolerance or resentment. Nearly every motor driver, if he be honest with himself, must agree that when he drives he is imlbued with that same primitive instinct to assert his superiority to demand the right of way and freedom to progress as rapidly as 'he thinks necessary. One of independent mind cannot but think that the condition of motor traffic on our highways is just as discreditable to Canada as was the effect of prohibition in the United States, where the law was just laughed at. We must examine the problem with an open, mind to get the truth, no matter how distasteful it may be. Thou shalt do no murder; Thou shalt not kill; that is the law of God. Our duty to our neighbour is also involved, as well as selfishness, one of the worst defects of human nature. Pope says, "Worth makes the man." Human fife should be sacred on the highways; yet many men of real worth, by selfishness and carelessness violate the laws of God and man and send many men, women and children to their graves. The paths of glory lead but to the grave in this daily slaughter.
There is no invention that has contributed more to the education, pleasure and enjoyment of the people than the motor car, but its use is one thing, its abuse another. Like other inventions of science, medicine, the arts and discoveries in physics, pathology, chemistry, biochemistry, preventive medicine and trade and commerce, the right use of inventions has been a boon and a blessing to humanity, but the motor car has also been a curse, like the use of gas in war. It involves awful misery and suffering, sorrow and pain, equal only to that of plague, pestilence and famine, battle, murder and sudden death. The abuse of the motor car is one of the unpardonable sins of this age and is a real menace to organized society in a so-called Christian country. Widows and orphans are crying out to us in the House of Commons in their agony for relief. Are

we going to do our duty? In every constituency represented in this house poor people are being legally murdered. I may say that men, women and children have been killed', and the dependents of many of those men and women have not been provided for. I myself have seen some of them suffering. For this reason I think women should be on the jury; they should comprise a third of it. They have equal rights; they are voters; they can be members of the senate or of the House of Commons. They cannot sit on the bench, but probably if they were permitted to sit on the bench a great many of these reckless drivers would not get off as easily as they do. I can say that at least fifty per cent of women are voters, and they should be permitted to sit on juries so that cases might be properly considered and digested. I admit that pedestrians on the highways are careless and reckless; of course they are. The causes of accidents would run about fifty per cent for drivers and fifty per cent for pedestrians.
This bill contains no criticism of the driver of the motor car, nor of the motor car owner, ninety-five per cent of whom are law-abiding at heart. I limit it to five per cent of those drivers. Some of the jurors are so soft when they consider the cases of drivers that they are almost at the point where they present a gold watch and an illuminated address to the accused. All the world, with the exception of Canada, is considering this matter. President Roosevelt has appointed a committee under secretaries Wallace and Moore to make a study of the matter, and Great Britain has done likewise. It is making a study of the problem, especially the psychological aspect. Psychological principles may be discovered there which will have a worldwide application. Last year on the roads of Great Britain 6,521 men, women and children were killed by violence, and in addition 219,000 were hurt ot maimed for life. This number, in one year, is 500 less than Canada's total casualties in her part in the great war. In Canada in 1934, 1,106 were killed and last year 1$16 were killed. In the Netherlands, a small country, 744 wers killed and 14,900 injured. In the United States 36,000 were killed, hurled to death and
954,000	were injured.
The public puts up with this slaughter, this economic waste of man power, wages and disasters, some of which plunge whole nations into mourning and sorrow. Hon. members will recall the Moose River tragedy. The men who were trapped in the mine suffered horror and tribulation. Look at the amount of space

Criminal Code-Mr. Church
given to that tragedy in the newspapers. On that occasion there were three men whose lives were endangered, but in this instance tens of thousands of people are killed and injured in this and every other country in the world, and in Canada nothing is done about it, except to talk. The attitude of the public is appalling.	'
In my opinion there should be an investigation into the matter, and a committee of the house or both houses should be appointed. If the bill reaches the committee stage I will give reasons for that section of it which deals with the functions of judge and jury and I will cite cases showing what has been done,, notably a case which has been much criticized in the Toronto district. In that instance repairs were being made on a roadway; thirty or forty lights were on the works, stretching out nearly a quarter of a mile. The repairs were being made at night. A motorist drove through at a reckless rate of speed causing great damage, but the case was taken to the jury. Functions of judge and jury are set out in the bill. The measure does not seek to interfere with the primary functions of judge and jury but seeks only to interpret the law and to untangle difficulties in connection therewith. Some grand juries have been asking for this very amendment.
The present state of affairs on roads in Canada built at great expense by the taxpayers is not creditable to the people of our country. The pedestrian has been altogether forgotten. We must remember that, under common and civil law, he has rights on the highways, equal to those of the motor. From time immemorial he was compelled illegally to make way for the mounted man, and he did so for his own safety. Let us contrast that unsportsmanlike conduct with the customs of the sea. Seamen, on account of their continued conflict with the forces of nature, are more broadminded and tolerant than are landlubbers. The seafarers' rule is that the strong shall give way to the weak, and the swift to the slow. The rule of the road on land is just the opposite: Make way, or take the consequences. There is no doubt that all road accidents are avoidable. Why are they not all avoided? Because the pedestrian is unorganized; he is one of an unorganized and helpless body.
The poor pedestrian, however, is in the majority. In Canada it seems to me that we are always thinking of the rights of minorities. True, the history of the world is the history of minorities, and the history of this country is one of compromises. Pedestrians and others who are the majorities have been slaughtered in this way because they are unorganized and helpless and have no rights despite the fact
that they are voters. No one has any interest in them, even their rights in this parliament No one does anything to prevent their injury and slaughter, whereas the rich and well organized motor industry takes care of its own interests in the legislative halls of the country and by press publicity.
While we sit here the slaughter is going on night and day, causing a dreadful loss of life. The number killed in Toronto last year would form a line two deep from here half way to the union station. In 1934 there were more people killed and wounded in England and Wales than in the Boer war. In nearly three years fighting in South Africa 5,744 were killed and 22,829 were wounded. In 1934, 5,855 were killed and 159,257 were injured on the roads of England. In ten years the number killed has doubled and the number injured trebled. In the same period of years only eight people were killed and sixty-three wounded on British railways. Only a few people have been killed or wounded on our railways.
There has been a clamour by certain sections of the press against uneconomic roads, and the stopping of public expenditures for the benefit of the motor, thereby relieving the pressure of deficits on the railways. The beauty of the countryside is being destroyed, and these expenditures are being made. I am not opposed to good roads; as I said the other day, I was the author of a recommendation and development of fifteen miles of good roads outside the city of Toronto. The Toronto good roads program of 1907 was an example for the rest of Canada.
If the country can take such an interest, and quite properly so, in three men trapped in a mine, how is it that every year thousands of people can be placed in a cemetery, and tens of thousands injured, without much being said about it or any public interest whatever. Hardly a word is said in this house or out of it about this terrible loss. The public is utterly indifferent; it is impossible to get anything done. In the present year the score in the city of Toronto to date is this: Dead, twelve; fifteen surgeons called in to treat fifteen people there severely injured on the streets of the city on one day, Sunday; hurt, 943. That means in a little over four months nearly 1,000 people have been killed or wounded by motor cars in our city. The figures go on to show that there were twenty-nine drivers gaoled. The totals for 1935 are these:	Dead, fifty; hurt, 3,087; drivers
gaoled, 151.
The minister has shown a great deal of interest in this matter. Last session while dealing with my motion, the then Prime
[Stage Direction]
Criminal Code-Mr. Church
Minister (Mr. Bennett) gave his support to the appointment of a committee of both houses to go into this problem. He has taken a great deal of interest not only in public health measures, but in matters relating to hospitals and medicine. Last year he told me in the house he would give me a committee, but that was rather late in the session and I did not have an opportunity to attend to it. The matter should be dealt with in the criminal code and should apply to all provinces, because whether a man is killed by a burglar's pistol shot or by a motor car makes very little difference, because he dies anyway.
At common law all the king's subjects, including drivers of any kind of vehicle, had a lawful right to travel upon and use every part of the highway, and a cause of action arose only when one used the highway in an unreasonable or careless way, or in a way causing damage or loss to another. The liability of the owner or driver of a motor vehicle is not new law but is based upon admiralty law and the general common law respecting negligence, and includes all cases of injury by any other sort of traffic on the highway. Mr. Justice Hodgins said in 1926 in the Yellow Cab case-Volume 59, Ontario Law Reports, 1926,-referring to the motor statute:
That statute is really a collection of duties and obligations imposed upon drivers and others, based on the use and operation of motors on highways for which owners of cars are made responsible. It is not intended to be exhaustive as to all other liabilities which arise at common law or otherwise due to the negligence of a servant who is in charge.
The common law right of an action for damages has been replaced in motor accidents by an action under the act for negligence of a definite kind, and the owner or driver is liable for damages because of that negligence. The common law regarding the use of highways goes back to ancient times. The law on motor vehicles commenced in 1903 with 3 Edward VII, chapter 27, as amended in 1905 and almost every year since.
I have dealt with the principle of the bill, Mr. Speaker, and coupling what I have said to-night with the debate which took place in the house last year, you cannot blame me for feeling a little aggrieved. I was chairman of the board of police commissioners in Toronto for several years, and I saw these deaths occur by hundreds, yes, and injured by thousands, but it was almost impossible to get anything done to prevent them. I have great sympathy with anyone who is suffering, and I appeal to the two lady members of this house to support this bill. I have seen men, women and children,

injured in motor car accidents, carried away in ambulances, and it is my duty to bring this matter to the attention of the house as I did last year. I do not blame any member of the house particularly, because this is a new parliament and hon. members may not have had an opportunity of bringing the matter up. I do hope that something will be done to stop this slaughter.
I notice that one of the motor league men in Toronto is opposing this bill. Of course they will oppose this bill, just as when I was on the board of police commissioners in Toronto some people opposed the erection of traffic lights and the making of stop streets in the city. They said it was ridiculous to compel a motorist to stop at an intersection, and all that kind of thing. Everybody knows the accidents that have been caused, for instance, at level crossings, and if every driver were careful there would be no necessity for a law such as this, but it is our duty to guard the people of this country against reckless drivers. Only a few days ago at Mimieo four young fellows were driving at sixty miles an hour and all four of them were killed. In another case in the police courts there in the county a driver was clocked going at ninety miles an hour up Yonge street, and another was doing seventy-five miles an hour on Yonge street. What chance have women and children with drivers like those on the roads? Have pedestrians no rights on the highways for the upkeep of which all the people pay?
Children playing on the street are the most frequent single cause of pedestrian accidents. Then comes accidents from children darting from behind a parked car or crossing the street between intersections. We should recognize that the automobile driver has some rights and see that children and everybody else cross only at intersections, instead of doing all this jay-walking. As I said at the outset, pedestrians themselves are very largely to blame for many of these accidents. When one considers the lot of the pedestrian, he has been from time immemorial looked upon as of an inferior order, and the only safe place when we see some drivers coming down our highways is to climb up on the bank,, keep out of the way and give the reckless driver the right of way.
This bill may not be perfect, but it is the only way in which I can bring the matter before the house at this session. By the law of New York, motor buses are compelled to stop and throw open their doors when they come to level crossings. Everybody knows how the big motor buses are eating into the

Criminal Code-Mr. Lapointe (Quebec East)
earnings of the Canadian National Railways and other railways on this continent. The Grey Line buses and several other lines of buses travel between the large cities of Ontario and some go with their connections as far south as the gulf of Mexico'. There is a law in some states that these buses must come to a full stop and throw open their doors at every level crossing. That is not only the rule of many of the companies but the law of the state. This bill does not apply where there are gates or bells at level crossings, and it applies only to steam railways and to trunk lines, where most damage is done.
Another section of the bill deals with juries. Women have made good in the House of Commons and in the Senate, and I believe they can do still better work on the jury. They might better as jurors see that women and children get compensation for injuries caused in these automobile accidents. They might also insist upon legislation being passed making motor car insurance compulsory so that the injured can get some relief.
I appeal to the minister himself. I do not wish to give him too much trouble, but I believe the time has come when we should have a complete revision of the criminal code. It started away back in the early days of this century, but there have been many discoveries and inventions since then, and I think a committee of both houses should be appointed to bring about law reform and a new criminal code. It may be too late to do it this session but I am here to-night to plead the case of these helpless people on the highways. I am pleading for the pedestrians, the men, women and children whom I have seen killed or injured in these accidents.
The onus is on the government of the day so long as they are the government. The onus is not on me as a private member. I have nothing to do with these matters except as a member of parliament representing the constituency of Broadview. Danforth avenue is the busiest street in Canada for traffic and in that constituency I .must say that I hate to cross at nights part of Danforth avenue because of the chance of being knocked down by the hundreds of cars of outside traffic passing along the road at a rate of speed that I have never seen anything the equal of. I am simply doing my duty to my constituents in bringing this matter up this session as several of them have been killed. I brought it up last session when we had a debate covering forty^six pages of
hansard, and all parties agreed that something should be done. As I said, the onus is on the government of the day to solve this problem. In the British House of Commons the Labour members have insisted on something being done. They have spoken out against the slaughter of their workmen and have	asked for	compensation as	well.	Iadmit, Mr. Speaker, that I am a little impatient when I see what is being done in other countries and, after bringing this matter up last session, getting no results here,	I suggest	that	this bill be	read	asecond time and perhaps then it might go to a committee, or in the recess the minister might consider appointing a committee of both	houses or	some	other form	of committee or commission to go into the problem, as they are doing in Washington, with three members of the cabinet on the committee. Otherwise what is going to happen between now and next Christmas? It simply means that	three thousand	more people	will	be
killed or injured and put into hospital. The motor car is more successful in creating jobs, through killing people, than all we do in this parliament for unemployment. We are side-tracking this issue, but the people back home will ask us what we did here in Ottawa about it.
Hon. ERNEST LAPOINTE (Minister of Justice):: Mr. Speaker, I am grateful to my hon. friend for the information he has given the house in support of his bill. As the Prime Minister (Mr. Mackenzie King) told the house the other day, it is the intention of the government to introduce a bill to amend certain sections of the criminal code. I should not like to anticipate the introduction of that bill by making remarks, even in connection with the private bill introduced by my hon. friend, but I can assure him that the law officers of the department will carefully consider the argument he has offered in support of his request for certain amendments. If it is possible to insert some of his proposals in the government bill, it will be done. If we come to a different conclusion as to some of the provisions in his bill, the hon. member will be at liberty to move them as amendments to the government bill. In the meanwhile, if he will agree to my suggestion, I will move the adjournment of this debate and further discussion can be had on the matter when the government measure is before the house.
On motion of Mr. Lapointe the debate was adjourned.

The Budget-Mr. Hartigan



THE BUDGET


[Stage Direction]
The house resumed consideration of the motion of Hon. Charles A. Dunning (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, and the proposed amendment thereto of Mr. Maclnnis, and the proposed amendment to the amendment of Mr. Ilansell.
David James Hartigan: Mr. Speaker, when the house rose at six o'clock I was dealing with some of the disabilities under which the coal miners of Canada suffer because of the limitation of markets. I had intended to go on with this matter for a while longer, but in view of some of the remarks made by the hon. member for Broadview (Mr. Church), I will summarize my remarks and then proceed to another subject which is very important to the people of Canada. I contend that the Canadian National Railways should use nothing but Canadian fuel. This system is owned by the Canadian people, the Canadian people have to pay any deficits. Canadian money should not be expended for the employment of American labour to supply coal for our railway lines. That is one of the points I wish to postulate.
The other is that the people of Canada are not willing to forego ownership in the Canadian National Railways. Despite accusations that may be made by certain hon. members, the Canadian people are not going to be deprived of this great public ownership undertaking which they have started. This is the greatest public ownership project in existence. I noticed in the Ottawa Journal of last Thursday that it was expected that the Canadian Pacific Railway would soon resume the payment of dividends. This statement must have created amazement in the minds of many Canadians; they must have been surprised to leam that after going through a period of depression identical to that gone through by our own railway system, this privately owned system was about to resume payment of dividends. To my mind this is evidence of only one thing; it implies that there must be some resistance -by the Canadian people to the public ownership of the Canadian National Railways. We have no objection to using the product of American coal mines for the American units of the Canadian National Railways, or even of the Canadian Pacific, but we contend that Canadian fuel should be used on the Canadian lines, especially of our own system.

Since the British empire trade agreements came into effect in 1932 an increasing quantity of Welsh and Scotch fuel has been coming into this country. It has been found that English crickets are being brought in with this coal. This cricket is different from our Canadian insect; it being brownish instead of black. It may be innocuous enough in its own habitat, but there have been instances where insects have thrived, when they found congenial conditions in the country into Which they had -been introduced, to such an extent as to constitute a pest in that country. I merely mention this so that the entomological branch may look into the matter. I am not saying that this is what will happen; I am not prophesying at all, but I do say that in the past there have been instances where insects have been brought in from other countries and have multiplied to such an extent as to constitute a pest.
I now leave this question to go on to deal with a question of great national urgency. On almost every second corner we bear people talking of this social question. I noticed a reference in the Ottawa Journal of May 7 to the introduction of a resolution by the hon. member for Greenwood (Mr. Massey) along similar lines. The hon. member asked: Is there a problem of youth in Canada? Yes, Mr. Speaker, I say there is. There is a serious problem, a problem which is national in scope. I say that it ill-becomes any member of the Conservative party to bring forward a resolution seeking to ameliorate the condition of youth in this country. Why do I say this? If we investigate the records we find that in 192-1, 3,081 ounces of pure codeine w-ere imported into Canada. In 1931 the importations amounted to 15,918 ounces; in 1932 they had increased to 17,010 ounces; in 1933 they had risen to 26,361 ounces. An astounding amount of codeine has been imported into this country. Under the League of Nations the importation of opium and its derivatives is forbidden and I am well aware that codeine is not specifically mentioned in this prohibition. At the same time that did not give the government of the day the authority or the right to narcotize the people of Canada to the extent indicated -by the importations of 1933, which had amounted to the astounding total of 26,361 ounces. It got so bad-this is illuminating-that at a meeting of the opium advisory committee of the League of Nations at Geneva, Canada's attention was directed in 1930 to the fact that the codeine consumption of this country was the highest in the world. That is something to ponder. But that did not daunt the then

The Budget-Mr. Hartigan
Prime Minister or the government so far as the importation of codeine was concerned, not at all. They were not faced with an increasing use of the drug. In 1934 there were imported 28,915 ounces, or an increase of 2,000 ounces. In other words, the League of Nations conventions were flaunted; its advice to Canada to cut down the consumption of codeine was not heeded, and in that regard the then Prime Minister of this countiy may have started the vicious circle by which other dictators in Europe disregarded both the conventions of the League of Nations and other treaties that existed. It would be illuminating to have the papers bearing on this question, the communications passed between this government and Geneva, tabled. I will not call for them. It is sufficient for me to point out the effects of this evil.
The. hon. member for Broadview has been speaking of the recklessness of motorists. What else could he expect? You can go to any country store and for forty-five cents Obtain twelve tablets containing a grain and a half of codeine. There is not an ethical doctor practising in the dominion who would give more than an eighth or at most a quarter of a grain. He' would be satisfied to give an eighth of a grain and repeat that prescription if necessary. But, as I say, you can go to a store in the country and for forty-five *cents get twelve tablets containing a grain and a half of codeine. I am aware that resistance can be built up, but who knows the untold suffering caused by the use of this drug? Only someone who is in close contact with the addict and who knows the conditions prevailing in his home. And then people will tell us that there is a youth problem in the country. Yes; and the previous government aggravated that problem to a great extent during the last five years. If you put a grain and a half of codeine into the hands of someone who does not know how to use it, some deluded woman who thinks it is an ordinary headache tablet which can be given to a child, you know very well what to expect. The hon. member for York South (Mr. Lawson) said the other night that he had the happy faculty of judging when any-* one was serious. I do not know whether it was as a result of that proclivity that someone put a label on the package advising purchasers not to give the drug to children under two years of age. Just fancy! According to that, it is all right to give it to children of three, four, five or six, or to give it to a man or woman or some girl and let them drive an automobile. The hon. member for Broadview told us ably about traffic
conditions in the cities. Well, what do you expect when you allow people to use this drug? How many mothers are there to-night who are not in sorrow for some son who has been paying for some crime, or who probably has already paid with his life the penalty, for some crime committed under the influence of this drug.
If the government wants to do anything to elevate the people and to improve social conditions it should begin with the prohibition of the promiscuous use of the drug, for at present anyone in the country may obtain it. Anybody can get the drug; when he sits behind the wheel of an automobile there is no coordination between his mind and his muscles, and his vision is distorted. Under its influence such people think they can go over houses or mountains. But apart from the effects the use of the drug is having on the population generally, consider the distress it is bringing to our workmen, the men in the mining districts and in industrial centres. Forty-five cents is not much as far as money goes, 'but it is a good deal when it is subtracted from the daily budget. The people who become addicted to the drug think it is a harmless headache tablet and they do not hesitate to spend forty-five cents for it. Take men working in the mining districts, getting one day's work a week; when you take away forty-five cents from such a man's wage to pay for this drug you can imagine how he is going to support his children for the rest of the week on the balance The former government, through its attitudi to the narcotic question in the last five years has driven the workmen of the country into an almost untenable position. And the workman is not to blame. But would-be reformers will get up and offer advice, and it is remarkable that when a Liberal government gets into power advice soon begins to pout in from Conservative sources. The hon. member for Broadview spoke fervently a short while ago; why did he not persuade the government, when his party was in office in the last five years, to do something towards the alleviation of this drug evil? It is said that a conference of youth is needed. What will be done? Will they meet and indulge in platitudes as we have seen in the past?


Walter Edward Foster: The hon. member has spoken forty minutes.


David James Hartigan: I realize that my
time is up, but perhaps you will allow me to say this in conclusion, Mr. Speaker. The Prime Minister might very well attend a

The, Budget-Mr. Iiuhl
youth conference, and the happiest message that the youth of the country could possibly receive would be his assurance that the government would prohibit the promiscuous use of codeine, as has been done in the United States and nearly every other country in the civilized world.


Mr. W. F. KUHL (Jasper-Edson):: Mr. Speaker, most hon. members who have spoken thus far on the budget have commenced their speeches by offering a tribute of praise to the Minister of Finance (Mr. Dunning) for his good work. Just to be different, I am not going to follow the beaten path; I will tell the minister and the government exactly what I think. When I think of the deplorable conditions of poverty throughout this Canada of ours; when I think of the hopeless condition of the young people throughout this country; when I think of the mental agony of both young and old; when I think of the pitiable condition of the blind, the maimed and the halt; when I think of the medical care that people require and cannot obtain; when I think of the possibilities of this age of plenty; when I think of the untold suffering, misery and agony that is being endured; when I think of the veritable hell that people are going through in these days, I cannot have any mercy whatever for the monetary policy which is supported by the minister or for his banker-bondholder budget.
I do not wish the minister to think I am criticising just for the sake of criticism. That is not my nature. The minister can rest assured that if he proposes any real, genuine reform I shall be one of the first to support it with both hands, both feet and every inch of the seventy-seven inches of my physical anatomy. But, Mr. Speaker, in view of the untold suffering that is abroad to-day I think it is time we dealt with the facts as we find them. I think the time is long overdue when we should quit playing and pussy-footing around; I think we should bore right into the heart of the problem, attack this citadel of high finance from every comer and deliver broadsides at it from every angle until it is demolished.
1 do not wish the minister, however, to think that I harbour no kindly feelings whatever towards him on his presentation of the budget. I think his address certainly demonstrated his excellent business acumen and the many qualifications he has for the position of Minister of Finance. However, if intelligence and ability could be measured in that way I maintain that one ounce of intelligence and ability applied on behalf of the people would 
accomplish infinitely more than a hundred pounds of intelligence used only for the benefit of the bankers and the bondholders. This budget is undoubtedly the best the minister can do under the existing monetary policy, but that is the whole point, the existing monetary policy. I am sure no one in this house expects the minister to do much better as long as he permits himself to be bound by the shackles of an obsolete and outworn monetary policy. I am quite sure that if, before making up his budget, the minister had tasted some of the economic food of which some of his colleagues have partaken, I would find in his budget more that would merit favourable comment. As it stands, however, I must say that the whole thing can be summed up in one sentence: The people have asked for bread, and they have received a stone.
Many members of the Liberal party have been proclaiming from the housetops that their presence in this chamber in such overwhelming numbers is a definite and positive indication that the people of Canada approved of their trade policy. I contend that such statements are an entire misrepresentation of the facts. jQf there was in the Liberal platform anything at all of which the people approved it was the monetary reform which they hoped they would get. Anyone who knows what monetary reform means realizes that, as far as any indication of it in the budget is concerned, it is conspicuous by its absence. If the people of Canada voted on a policy at all certainly it was not a policy of trade. The people of Canada were under the impression that the Liberal party was going to restore to government its sovereign right, the industry of manufacturing money, as the hon. member for Vancouver-Burrard (Mr. McGeer) indicated in his speech not long ago. The speeches delivered from time to time by the right hon. Prime Minister (Mr. Mackenzie King) certainly gave the people of Canada the impression that this was going to take place. Let me repeat just one of the Statements frequently made by the right hon. gentleman:
Usury, once in control, will wreck any nation. Until the control of currency and credit is restored to government and recognized as its most conspicuous and most sacred responsibility, any talk of the sovereignty of parliament and of democracy is idle and futile.
We are still looking for indications of the implementation of promises of that kind. In view of that statement I say that if there is going to be no more monetary reform than is indicated in the proposed legislation, the inaction of the Liberal government in this connection will constitute one of the greatest

The Budget-Mr. Kuhl
betrayals of public confidence ever recorded in the history of the parliament of Canada. During the election campaign back in Alberta we heard those of Liberal persuasion, if there is 'such a thing, say again and again, "Why should we vote for you inexperienced social crediters? The Liberals are going to give us monetary reform and they can accomplish far more for us in that direction than you can, for they are experienced parliamentarians." I am quite convinced now, however, from what I have seen of the proposed legislation, that the people who harboured such hopes are doomed to disappointment. Again I say that if the people did vote on a policy in the last election it was one of monetary reform and not one of trade.
As far as trade and tariffs are concerned not one elector out of a thousand can give an intelligent explanation as to the difference between the policies of the Conservatives and the Liberals. That is not because they are not intelligent; it is because there is no fundamental difference between Liberalism and Conservatism, and I think we have had first-hand proof of that right in this house. There have been just as many good arguments presented for high tariffs as have been presented against them. Furthermore we have been voting tariffs up and down ever since 1867, and during that whole period of time the public debt has been steadily increasing. Consider the period from 1913 to 1933, during which time we had changes of government from high tariff to low tariff. What happened? The population increased by thirty-five per cent; the production of wealth increased by ninety-five per cent, and the bonded inddbtedness increased by 324 per cent. As far as trade benefiting the people is concerned there is no indication of it there. This quibbling and squabbling over tariffs is just camouflage for the bankers' money and credit racket. Liberals and Conservatives have always supported bankers controlled money and credit. There is only one difference that I can see between Liberals and Conservatives: The Conservatives swear by the tariff and they never raise it; the Liberals swear at it and they never lower it.
I wish to say a few words with respect to debt but before doing so I wish to accept the challenge offered in this chamber yesterday afternoon by the hon. member for Huron North (Mr. Deachman). At page 2689 of Hansard he is reported as saying:
I challenge my hon. friend and the members of the social credit party in this house to tell us where that 15 billion dollars' worth of production went.
I tell the hon. member that if he has a chip on each shoulder I am going to knock both of them off. Whether the hon. member intended to or not he made statements, as reported on this and the following page, which left the inference that the leader of the social credit group was lacking in intelligence. Let me say that the hon. member should be more careful in future not to judge the intelligence of either the leader or the members of this group according to the standard of his own intelligence. On page 2689, referring to the leader of the social credit group, he spoke as follows:
My hon. friend suggested in his speech of a week ago that in the United States the total value of all production in 1934 was 60 billion dollars, but that the total paid out in that production was only 40 billion dollars. In some strange way 20 billion dollars' worth had disappeared.
Then a little further down:
By a mere twist of the fingers, 15 billion dollars' worth of .production disappears.
Well I maintain that the hon. member has set up a straw man and knocked him down.


An hon. MEMBER:: Where did the hon. member get those figures?


Walter Frederick Kuhl: They will be found on page 2689. I do not know where the leader of the social credit group obtained them, but those are the figures that were quoted. The point the hon. member makes is this: "In some strange way 20 billion dollars' worth had disappeared." I do not believe that any social crediter in this house ever maintained that the difference between the price values of goods and the total income ever disappeared. What we have constantly maintained is that the difference between the 60 billion and the 40 billion never existed as money. That is one point which the orthodox economists apparently are unwilling to accept. To-day a manufacturer makes goods and he makes prices, but he does not make money. When I say "make money" I am speaking in the literal sense and not as we ordinarily speak of making money. The only institutions which make or create money are the banks. Factories made goods and prices but not money. This 15 billion to which the hon. member for Huron North made reference never existed as money. He continues:
There was an explanation for 5 billion dollars' worth of this in the payment of life insurance, but there was no explanation for the disappearance of the 15 billion dollars' worth of purchasing power.
The hon. member is mistaken when he draws the inference that any social crediter ever maintained that that 15 billion repre-
The Budget-Mr. Kuhl

seated purchasing power; it does not; it never existed as money; it existed only as prices. Then he continues:
I have seen magicians stand upon a platform and pull rabbits out of a hat, hand them to a boy and have them disappear the next minute, but I have never seen a rabbit cause a man to disappear from a platform.
Well, I maintain that is exactly what the hon. member is endeavouring to do by supporting the monetary policy which he has supported. He is endeavouring to get this country out of debt by going further into debt. He is trying to make the rabbit make the man disappear from the platform. He can no more get this country out of debt by a debt creating system than he can get out of a hole by digging the hole deeper. He continues:
Here we have a member of the House of Commons who has been able to accomplish the impossible. By a mere twist of the fingers, 15 billion dollars' worth of production disappears.
The leader of the social credit group did not make the inference or the statement, that the production disappeared. The hon. member continues:
I challenge my hon. friend and the members of the social credit party in this house to tell us where that 15 billion dollars' worth of production went.
Well, this is where it went. In the United States, as all hon. members know, consumption was financed, and financed in different ways. All money that was issued' as relief money was financing consumption. We know that many millions of dollars have been paid out by the federal government of the United States to producers of wealth for not producing, for restricting their production. We know that a great deal of wealth has been sabotaged. That is where t'hie 16 billion dollars' worth of production went. But all this money which was issued for consumption was written up as debt, and the debt of the United States has constantly increased because of that. It is much the same thing that social credit members would be instituting with the exception that this consumer purchasing power would not be written up as debt. Then the hon. member continues:
They say that perhaps this production is lying on the shelves of the merchants, but I would never accuse capitalism of producing 15 billion dollars' worth of goods which it could not sell.
There is no' accusation in that. What has that to do with accusation? Then he continues:
IMr. Kuhl.]
Has it disappeared into the pockets of the bankers ?
No it has not, because it never existed in the first place.
I do not think our banking friends are so smooth as to get away with that much without losing their equilibrium. I do not believe that has happened, and I do not know where this amount has gone. My hon. friends say that it has disappeared, and I ask them to search for it and find out where it is.
His hon. friends never did say it disappeared. As social creditors we maintain that the difference between total income and total price values exists only as prices, not as money or purchasing power anywhere in the system.
Then the hon. member continues with an illustration of a book, and1 then he says:
There is only one thing which could possibly arise, and I should be very glad indeed to hear my hon. friends deal with this matter. There is a possibility that in some part of the process some man might have got too much while others got too little. It is following largely the teaching of Major Douglas when I say that perhaps someone got too much, but I doubt very much whether any of it disappeared.
Major Douglas does not teach that principle. Major Douglas maintains that there is never sufficient money in existence to buy all the goods that are produced,
I should like to quote one passage from page 125 of Major Douglas' book Warning Democracy:
Economic advantage to the ordinary man means money advantage, and he has the idea, if he thinks about the matter at all, that there is only just so much money in the world, and if one man has more then the other must have less.... The poor are poor not because the rich are rich, but because there is not enough money, or more correctly, purchasing power, to make the poor rich, or even comfortably well off, even if the whole of the money possessed by the rich were taken from them and equally divided amongst the poor. The result of attempting to enforce the latter policy, and such an attempt is being made in many countries to-day under the stress of public pressure and democratic politics, is merely to accentuate the difficulty and still further to increase the grip of the financiers since the distribution of purchasing power, largely through the agency of wages, depends to a considerable extent on the buying of articles which would not be produced at all if the existing amount of money were equally divided, since no one would have enough to buy articles which may be said to be above the most mediocre standard of living.
The hon. member continues:
The enigma of the social credit system is the disappearance of the value of production which they cannot trace and which they have made no attempt to trace.

The Budget-Mr. Kuhl
I cannot comprehend what the hon. member means by that statement. Apparently he knows the price of everything and the value of nothing. He continues:
That is, my hon. friends in the social credit section of the house, make the claim that production is vastly in excess of consumption.
That is correct; we do maintain that production exceeds consumption, not only actually but potentially. He continues:
... that there is therefore a large surplus, and that this surplus could be distributed. During 1928 and 1929 there probably was a fairly substantial surplus; it went into savings.
I am at a loss to understand what the hon. member is talking about in this instance. Is he talking about money or goods? He says that through 1928 and 1929 there probably was a fairly substantial surplus. There was a. surplus of what? Was there a surplus of money or a surplus of goods? Then he says:
It went into savings, into investment, into expansion of plant. But if you are going to get a dividend out of the surplus you must first take it from the people who have it, tax it into your government and then distribute it again as a dividend.
Mr. Speaker, the hon. member has not made the statement correctly. Social crediters do not maintain that dividends can be obtained from existing income. If all incomes as they exist were distributed there would never be enough to buy the total of the goods offered for sale. He continues:
I hazard this statement-I think it is capable of proof-that during the last few years consumption exceeded production.
What does he mean by that? Does he mean that we consumed goods which were never produced? I am very much tempted to repeat the words we often hear, "Consistency, thou art a jewel." I should like to take more time than I have taken, but the time is passing and I must turn to the last part of t'he hon. member's speech. He continues:
They propose what has been called a cultural inheritance.
Social crediters have never proposed any such thing; the cultural heritage is here. It was obtained for us by our ancestors; we did not propose it. The hon. member continues:
But I submit that we are getting our dividends right now.
I wonder whom he means by "we," when he makes the statement "we are getting our dividends." If he means the bankers, bondholders, and presidents of corporations, then probably he is correct. His remarks continue:
It is paid to us. That is true of all the great inventions which we have. We are enjoying the dividends now.
I would ask the hon. member if he would dare go into the homes of unemployed or people who are living from hand to mouth, or living on subsistence incomes, and tell them that we are enjoying our dividends to-day? He concludes with this statement:
I have touched lightly upon one or two of the problems in relation to social credit.
I think he was correct when he said that he touched lightly. Then he makes this further statement:
It would be interesting if we had in this house a free discussion of the question, because I think there is nothing quite so easy as to puncture some of these bubbles.
I insist that the hon. member who composed this article is the one who is blowing the bubbles. He certainly cannot demolish the social credit theory with arguments of that kind. When he begins to attempt to demolish the social credit theory in that manner he has his head against a stone wall, and it will take a better head than his to move it.


An hon. MEMBER:: Time is up.


Walter Frederick Kuhl: I think I have about ten minutes yet. An hon. member has suggested that time in this chamber costs $2,000 an hour. Well, I would like to suggest that much of the time which has been already spent in this house has been absolutely wasted. I think if the time taken up in the discussion of high or low tariffs had been spent in a discussion of the creation of money it would have been of far greater benefit to hon. members and to the people of the country generally.
I have not half finished my remarks, so I will content myself with dealing with the last portion of my address. I should like to say a few words with respect to the unemployed and work. During the course of the debate on measures respecting unemployment we heard a great deal of discussion concerning unemployment relief, old age pensions, pensions for the blind and for ex-service men. I think it is a shame that in this day and age we should be debating questions of that kind; they should be history. Economic security to-day, in this age of mass production, should be an established fact. We should not be debating as to whether or not the unemployed should have relief, or whether old age pensions, pensions for the blind or for ex-service men should be given. We should be debating the best type of policy which could be instituted to make the lives of these individuals most happy. I repeat that in this day and age economic security should be an established fact.
It has been often said during this session that we are struggling through a depression.
The Budget-Mr. Kuhl

We have not depression; we are in an oppression. The so-called depressions we have had were not depressions. The only depressions we have experienced are those in which providence has failed to bestow its blessings on this earth, and there have been very few years since this country was settled when we have had a depression.


Mr. WILTON:: Do not blame providence.


Walter Frederick Kuhl: We certainly do not blame providence. What we have been suffering from is an oppression by the bankers. What we call a depression is man-made, and it lies within the power of man to help himself out of this so-called depression, which is actually oppression.
We have had a great deal of discussion on motions and resolutions seeking to provide employment for the unemployed. In this day and age I think we Should be more careful with respect to the terms we use. There are several ways by which the term "work" may be explained. I agree with all attempts by the government and others to provide necessary public works. I believe that necessary work is necessary, but I disagree entirely with the idea of deliberately trying to provide work. We have to settle in our minds, first of all, when we talk about work, what is the object of our economic system. Is it to provide work or is it to provide goods and services? I believe that the object of an economic system is to provide goods and services irrespective of whether or not it takes work through human hands. I believe, if we get down to fundamentals and agree on them, we can make some progress, but so long as we maintain that the object of an economic system is to provide work we shall not get anywhere. The unemployment situation is not a sign of decay; it is a sign of progress. We should be using the machine wherever possible. If the object of an economic system is the provision of work, it would be very simple to provide it. Why not put all the unemployed on the highways with teaspoons and table-knives? You could put the un-. employed to work in that way. The purpose of an economic system is to provide goods and services and not work, and when you introduce the necessity of work into an economic system you are introducing something that is purely extraneous.
We must also distinguish between voluntary work and involuntary work. It is necessary for man to do voluntary work if he is going to obtain the most out of life. There are two kinds of involuntary work, or forced labour: that forced by man, and that forced

by nature. That forced by nature is dignified and is necessary; that forced by man is unnecessary and servile. Man has been endeavouring to free himself from both lands of forced labour ever since the history of man began. He has achieved to an outstanding degree freedom from nature's forced labour, but he still has to obf \in freedom from man's forced labour.
The only method by which we can to-day distribute the goods which are produced and are upon the shelves, and for which there is no purchasing power in existence, is by placing purchasing power right in the hands of the consumers. There is absolutely no other way. The facts have been presented again and again to show that it is absolutely impossible with existing incomes to distribute the goods that can be both actually and potentially produced. I had intended to deal in some detail with the question of consumer purchasing power, but the time has gone by and I trust I shall have another opportunity to do so.
In conclusion, I should like to give two quotations to refute the argument that dividends would tend to demoralize people. But first let me say that so far as demoralization through the dividend is concerned, I do not think that is a matter with which the government should concern itself. A government should see that all goods which are produced are distributed. When it comes to demoralization as a result of consumer purchasing power, the government is stepping outside of its realm in dealing with that. That is a matter for the church and the school to deal with. Nevertheless I would like to place on Hansard two quotations to show that a dividend or consumer purchasing power or leisure does not tend to demoralize people.
During the boom period which came soon after the end of the war, the international labour office issued a questionnaire on the subject of the use of leisure by those whose shortened hours had made the question a live one, and in the following year, 1924, they reported on the replies, as follows:
It has been ascertained that excessive drinking has become less frequent in those centres in which the working day has been shortened. Excessive drinking is frequently the result of overwork, since the workman, tired by the continuous effort required by long working hours, is tempted to seek relaxation by going from the workshop to the public house. It is clearly shown by the general tenor of the evidence given and the declarations made by representatives of employers' and workers' organizations, by secretaries of provincial councils, by industrial employers, etcetera, that not only has the new system failed to produce any increase in intemperance, but that, on the

The Budget-Mr. McNiven
contrary, it has been one of a number of other important causes of the marked decrease in drunkenness which is attested by fiscal and judicial statistics. The worker welcomes the opportunity of improving his home and taking exercise in the open air. Workers' gardens and sports clubs have increased in number, and sport has a beneficial effect upon health and character.
Elsewhere we read this:
In all countries the introduction of the eight hour day has resulted in increased attention to sport on the part of the workers. The movement for physical development is rapidly gaining ground amongst them. In many cases the workers' organizations themselves take the initiative in founding sport clubs. This is particularly true in Great Britain and the United States. In Germany also; according to information supplied by the Commission for Physical Training, the number of members of the chief sports clubs increased from 1,586,000 in 1914 to 2,955,000 in 1922. The number of members of workers' associations exclusively devoted to sport and athletics increased from 186,000 in 1914 to 382,000 in 1920.


Walter Edward Foster: The hon. gentleman's
time is exhausted.


Walter Frederick Kuhl: I would like permission, Mr. Speaker, to conclude in one sentence. I verily believe that we are actually on the verge of a promised land, >but I wonder very seriously whether ours will not be the fate of Moses of old, that of merely viewing it from afar without actually participating in its pleasant benefits.


Mr. D. A. McNIVEN (Regina City):: Mr. Speaker, I do not intend to follow the hon. member for Jasper-Edson (Mr. Kuhl) in two respects. In the first place, I intend to support the budget for certain reasons which I shall outline. In the second place, in the most emphatic language and in the most generous terms possible, I hasten to associate myself with others who have preceded me in extending my sincere personal congratulations to the Minister of Finance (Mr. Dunning) upon his clear, logical, lucid, analytical and comprehensive statement of Canadian finances. That statement and its presentation justify the confidence and satisfaction which spread clear across Canada when it became known that the hon. gentleman had accepted the invitation of the Prime Minister (Mr. Mackenzie King) to join his government. Nowhere did that wave of confidence and satisfaction find a more sincere expression than in the city of Regina and the province of Saskatchewan where the hon. gentleman had spent a great part , of his life.
The budget statement itself presents the actualities of Canadian finance. It contains the possibility of development in the future that will redound to the advantage of the Canadian consumer. There are in the bud-12739-176
get four matters, among others, which appeal to me:
(1)	The reduction.in the duty on agricultural implements;
(2)	The reduction in the duty on automobiles;
(3)	The reduction in the duty on textiles;
(4)	The removal of artificial valuations for duty purposes which had existed previously. These are moves in the right direction, and they were introduced as a means of benefiting the Canadian consumer and- the Canadian citizen. They constitute a substantial variation and departure from that economic nationalism, that system of bonuses, high tariffs and subsidies which during the last five years have so successfully dammed the limpid and fertilizing stream of trade.
I am not enthusiastic about the sales tax, but neither is the Minister of Finance. However there is no occasion for pessimism as this tax was increased only as an absolute necessity. When the Liberal party came into power in 1922 it was faced with a large deficit, a large adverse balance of trade, and every field of taxation had been fully canvassed. The government of that day found it necessary to increase the sales tax. This tax finally reached a maximum of six per cent. In 1924 the late Mr. Robb found that he was able to balance the budget, and in succeeding years there were annual reductions in the sales tax until it reached a minimum of one per cent in 1930. When Liberalism has had an opportunity to clear the channels of trade; when it has had a chance to put its principles and policies into effect, then we may expect a balanced budget and a gradual reduction in the sales tax resulting in its ultimate elimination.
I hope it will not be regarded as presumptuous on my part if as a lawyer and a representative of an urban centre I deal for a few moments with the question of agricultural implements. The reduction in the duties on agricultural implements, as contained in. the Canada-United States trade agreement, was welcomed by the agricultural population of Canada. The increase in prices which followed shortly thereafter has since become a matter of grave concern and anxiety to that population. Nothing that has happened in recent months has so aroused the agricultural population of this country as this increase in the price of implements at a time when the farmer found himself in a desperate condition. The reduction in the duties on agricultural implements as contained in the budget is a welcome gesture on the part of the government, and is so received by the farmers of Canada.

The Budget-Mr. McNiven

This is not the first time that the question of the duties on agricultural implements has been discussed in this house. This has been a moot question at many sessions since 1876. I should like to make one or two references to incidents that have occurred in this house and in committee. In 1876, under the government of Sir Alexander Mackenzie, a committee of the house heard evidence given by Mr. Frost of the Frost and Wood Company, who was asked these questions, to which he gave these answers:
Q. How does the cost of material, rent, and labour in the United States compare with the cdst in Canada?
A. The machine we sell at Prescott at $75, twelve months' credit, is sold by the American manufacturers at Ogdensburg, at $100.
Q. Still you sell cheaper than the manufacturers in the United States?
A. Yes, 25 per cent. By competition we succeeded in driving them all out of the country.
Apparently the manufacturer of those days was made of sterner stuff than the manufacturer of to-day. John Watson, of Paris, Ontario, also appeared before the committee in 1876. He said:
I have worked up my business, commencing with two men up to what it is to-day, increasing each year. Just as my capital increased I put it in the business.
He was asked this question:
If we adopted a policy which would require protection to iron manufacturers as well as other trades, the effect of that would be injurious to your trade?
To which he replied:
Yes; I think our business is protected just as much as it is necessary to protect it. The American can do nothing in the way of sending their goods here. We can compete with them in any shape, and we produce an article which they cannot excel.
Mr. Watson was then asked this question:
Do you believe the policy of the present government in not protecting home industries is a good policy, allowing the Americans to flood our markets with goods?
This venerable gentleman answered as follows:
I think it is better to do that than to increase the tariff-because the foundation of this country is agriculture and if you increase the tariff for the benefit of manufacturers, of course it must be disadvantageous to the farmers. I have noticed that in a season when the farmers were prosperous, the better position they were in, the better position I was in.
Industry does not seem to have yet learned that lesson in a practical way. We heard from the hon. member for Greenwood (Mr. Massey) with respect to the Massey-Harris Company. It seems to me that the management of that company has not now the same breadth of vision which it had in 1876.


Mr. MASSEY:: I should like to correct the hon. member. I stated very clearly in my remarks that I have had no connection with the Massey-Harris Company for four years, nor has my family.


Donald Alexander McNiven: I did not allege that my hon. friend had any connection with the Massey-Harris Company at the present time. I might go on to say that it is my regret, that it is probably too bad that my hon. friend's family did not continue their connection with that company. Had they done so it might have been better for that company and for the farmers of Canada. Mr. Massey, the president of the company, said in 1876:
We may also add that the existing tariff is satisfactory to us-
It was then fifteen per cent.
-and is sufficient protection. Perhaps even a little less would also be. A still further advance in the tariff would certainly prove adverse to our interests.
That continued until 1883 when, under the national policy, Sir John A. Macdonald increased the tariff to thirty-five per cent, and remained there until 1894 when industrial and agricultural conditions throughout the length and breadth of the country had reached such a stage-had been driven into the doldrums-through the operation of that industrial policy that the tariff was reduced in 1894 to twenty per cent, where it remained until the year 1907. In 1907 the tariff was reduced to 12J per cent under the British preference, 17| per cent under the intermediate, and 22\ per cent under the general. May I point out that prominent men in t'he Conservative party have not always thought as they do now with regard to the duties on agricultural implements, for in the spring of 1911, when he was representing a rural constituency and sitting in opposition, the Right Hon. Mr. Meighen moved in this house a resolution in these words:
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 end of a protective tariff.
Enlarging upon that motion, Mr. Meighen used this language:
Now, sir, what are the manufacturers of agricultural implements enabled to do? They are able, under this tariff, to exact a higher price than they could exact if the tariff were lower. I do not say that a reduction will, to any very enormous extent, affect the price; I believe it will materially, and I think it will render some relief to, particularly, the farmers of the west, many of whom, notwithstanding any statements that have been made

The Budget-Mr. McNiven
here, are struggling between success and failure every hour. It will accord some relief to them and I believe it is the bounden duty of the government to so afford it.
If ever there was a time in. the history of this country when the farming population both east .and west needed relief, now is the .time. Mr. Meighen continued:
From 10 to 20 per cent is about the addition which these manufacturers are able to obtain from our farmers, by reason of the increased protection afforded them by this government.
But it has remained for this government to push the line far beyond that, and they have not only given the manufacturers a grip on the whole home market, but practically given them a monopoly of it and they have taxed the consumer in order to push the manufacturers and their industries successfully into the markets of the world.
He was speaking of a time prior to 1911 and it seems to me that that paragraph is eloquently descriptive of conditions which have existed during the last five years. He concludes with this statement:
But before I go into that, let me give a few figures to show that the conditions of manufacture at the present time do not warrant a very material duty of any kind ... and I think I will convince the house that there is very little, if any difference in the cost of production of these machines on this side of the border .and in the United States. . . . They (the manufacturers) are able under this tariff to exact a higher price than they could exact if the tariff were lower. It (the reduction of the tariff) will accord some relief to consumers and I believe it is the bounden duty of government to so afford it.
For a generation or more the farmers of Canada have been definitely of the opinion that the tariff did increase the price of agricultural implements, and they were confirmed in that opinion by the statements of such leading men as the Right Hon. Mr. Meighen. In 1914 the duty on agricultural implements was reduced to 124 per cent under the general tariff. In 1920, speaking on this subject, the president of the Massey-Harris Company said:
Speaking on behalf of the company which I represent, I emphatically state that the privileges which are conferred on us by the protective duties have not been of very great advantage to us....
So far as the Massey-Harris Company is concerned, even to-day, examining it from the only standpoint of money making the company would perfectly be willing to face the withdrawal of the protective duty on farm implements, "if at the same time the tax was lifted upon all material which enters into their manufacture."
In 1922 when the Liberal government came into power there was a slight reduction in the duty and in 1924 that duty was reduced to six per cent. Reading the debates of that time I am amazed that our Conservative friends of that day should have regarded that tariff rate as free trade. They painted a 12739-1761
gloomy picture of a destitute industrial life, migration to the United States and the devastation of industry generally. It is all very difficult to follow. The hon. member for Parkdale (Mr. Spence), speaking on May 1, 1924, used this language:
For free trade would drive away our population. Free trade would shut up our industries and the population would leave the urban centres.
He was concerned for the future of the city of Hamilton, for he went on to say:
As a result the population of Hamilton would soon be reduced from 110.000 to 50,000. This may actually occur, because a free trade policy is bound to bring about such a result if it does nothing else. My hon. friend here (Mr. Senn) is a truck farmer and lives within twenty miles of Hamilton. He does not do any growling. On the contrary, he is bringing in his produce and finding a ready market for it in_ Hamilton, for the city has a population sufficient to consume all the fruit and garden truck grown within forty miles of its boundaries. But what is going to happen when we depopulate this urban centre? What are we going to do? Land will drop in value fifty per cent because the price of land fluctuates with the price of farm products.
Addressing the treasury benches he said:
You gentlemen need a little more experience. YTour mind is too narrow; you are continually thinking of yourselves to the exclusion of everybody else.
Is that not a gloomy picture? Well, we are happy to say that that picture was not realized. The city of Hamilton, then with a population of 110,000, by 1931 gloried in a population of 155,000, and we have the hon. gentleman to whom he referred in such lugubrious terms, the member for Haldimand (Mr. Senn), sitting in this house looking hale, hearty and prosperous.
Then too at this time Mr. Thomas Bradshaw, who was then general manager of the Massey-Harris Company, gave evidence. I will not refer in detail to that evidence except to read this:
I will not say all our machines, because that is not the case, but some machines are manufactured more cheaply in the States than they are in Toronto, and vice versa.
I cite that just as an illustration of the fact that the question was gone into with great thoroughness and in great detail. I was also interested in reading the speech delivered by the present hon. member for Broadview (Mr. Church), who at that time declaimed against the reduction in the duty on agricultural implements, because he said it would foment and augment the migration of workers to the United States. He pictured the disappearance of the Massey-Harris Company; he seemed afraid that they would take Massey
The Budget-Mr. McNiven

Hall and the Hart House string quartet with them. He was in a gloomy mood when he spoke on that occasion, and he concluded with this bit of verse:
111 fares the land to hastening ills a prey,
Where free trade flourishes and men decay.
He affirmed his belief in the Bible, but he said, "I have no belief in either Exodus or Lamentations." That was the situation in 1924, but happily what he feared did not come about; his fears did not materialize. But in 1930 he was the supporter of a government that created for him a condition which brought to realization his fondest hopes. It gave him protection to the nth degree, and then from 1930 to 1935 we had an exodus of employees from the factories of this country, an exodus from the payrolls, and throughout the length and breadth of the land there were lamentations. At that time, in 1924, Mr. Massey confirmed what had been done. He said that he was perfectly satisfied with the reductions in the duty and that, as far as the Massey-Harris Company was concerned- and he said no doubt this would apply to other implement companies-there would be passed on to the farmers by way of reduced prices the complete saving effected by the remission of the sales tax and the lessened duties on raw material. The farmers of this country expect the implement industry to do now what was done in 1924.
In the most eloquent terms the hon. member for Greenwood (Mr. Massey) followed the practice of Conservative members during this session and deplored the reduction of any duties because of the effect that would have on industrial workers. He feared for their financial future. He was in favour of a high tariff and a monopoly for, the benefit of the industrial workers. The names Massey and Cockshutt have been associated with the implement industry for generations, and I hope the hon. member will not take offence when I say that in the mind of the agricultural population the names Massey and Cockshutt have been associated with great wealth, accumulated in the farm implement industry. Therefore, when they speak of colossal losses so far as agricultural implements are concerned, it is difficult to understand, particularly where the Massey-Harris Company is involved. At page 63 of the report of the price spreads commission it is stated that in the years 1927, 1928 and 1929 the agricultural implement companies made $16,000,000, while in the years 1930 to 1934 they lost $11,000,000. The report goes on to state that their method of doing business since 1929 was an "inflexibility in price" and "a

flexibility in production." There is just one expression appearing on page 62 of that report to which I should like to refer, because it sums up the situation pretty well:
The result has been that the farmer, the industry's sole customer, whose income has been drastically reduced through the falling prices of primary products, and who has relatively little bargaining power, has been compelled to pay what he regards as high prices to a monopolistic manufacturing group for the essentia] tools of his trade, at a time when lie could least afford it.
At page 66 the price spreads committee also state that there is no competition in price so far as the farm implement industry is concerned. There may be some competition in the matter of service, as to parts and in salesmanship, but the managements have seen to it that the price has been maintained. The viewpoint of the farmer is pretty well summed up at page 298 of the report, and I think this is well worth placing on Hansard because it comes from a man who, by reason of his clear-headed thinking during the progress of that inquiry, made himself a national figure. I refer to Mr. Ed. Young, who said:
The implement manufacturers made a mistake many years ago when they joined the Canadian Manufacturers' Association in support of a fiscal policy calculated to exploit the only customers they had. Now that the exploitation is complete they find themselves without customers. Had they joined the farmers' associations in their fight against tariffs they might have created a saner sentiment in regard to these matters throughout the country and perhaps have saved us from some of the extreme tariff rates we now endure, and which have been the major factor in rendering the farmer unable to buy the implements he needs.
I have said that there was no competition. This report also indicates that the difference between the cash and credit price to the farmer is about fifteen per cent. It is also stated that in 1927, without the importation of agricultural implements to the tune of nearly $20,000,000, the production in Canada would not have been sufficient to take care of the export and domestic trade. Prior to the war the Massey-Harris Company devoted sixty per cent of their production to export trade, and this report indicates that since the war they have exported between sixty and eighty per cent of their production. It does seem to me that the Massey-Harris Company and other similar organizations are suffering to-day from loss of markets, particularly the loss of that export market due to the very conditions-increased tariffs-which they would perpetuate in this country. It appears to me that as a result of high tariffs the consumer pays more to a monopoly. He pays more to enable that monopoly to produce goods of which a large part find their way to the export

The Budget-Mr. McNiven
market. He pays more in another direction, also, because industry in the doldrums finds ways and means of reducing costs, generally at the expense of labour and, as has happened time and again, during the last five years the cost of maintaining that unemployed labour has fallen upon the state at large. The agricultural population of Canada asks for a reduction in the duties on agricultural implements; they ask for reductions in the price of agricultural implements. They ask for such reductions because they desire to place themselves in a position to produce at a price that will enable them to sell their product in the markets of the world in competition with Russia, Roumania, Argentina and other countries.
The hon. member for Greenwood wailed and lamented over the hardships of the industrial worker. May I tell him that if western Canada gets a crop and can market that crop at a fair price he need have no misgivings or worries so far as the industrial worker is concerned. Owing to conditions in western Canada during the last five years there is not a farm that does not need new implements, new hardware, new furniture, paint, glass, repairs of every kind that you can think of. If we get that crop-and it is coming, six inches of snow in western Canada last Friday-that good crop we are always hoping for, I say to the hon. member that he need have no worry about unemployment in the industrial plants; they will be so busy supplying the wants of western Canada that they will not even be able to take time off for lunch.
Yesterday the hon. member for Carleton (Mr. Hyndman) deprecated and deplored the fact that large amounts of money were being voted for western Canada without corresponding votes for Ontario, and he asked the reason. May I briefly tell him. In the years 1928 to 1935 in western Canada farmers have been frozen out, everything except the mortgages, dried out, everything except the mortgages, rusted out, everything except the mortgages, blown out, everything except the mortgages, prices declined for everything except the mortgages, and there is to-day such an accumulation of debt and such a condition has been created because there was no production that they were unable to maintain themselves. Because of the conditions the former government advanced large sums to western Canada-and I commend them for the action they took-and this government has continued and enlarged upon that policy for the benefit of those people who have suffered in what may rightly be called a national
calamity. And may I say to the hon. member that if his county of Carleton should ever be so afflicted, which God forbid, the province of Saskatchewan and western Canada will extend to that county a helping hand. They would marshal the assets of western Canada to come to their rescue, as an expression of our conception of what confederation means, and in direct and definite appreciation of what has been done for us.
There is another point I had intended to deal with; I shall touch on it only in one way, and that is to exipress the disappointment and dissatisfaction of the general public at the fact that the automotive industry has found it necessary to increase the price of cars by the increase in the sales tax which has been imposed. Canada has dealt kindly and generously with the automotive industry. General Motors has 43.000,000 shares issued, and at to-day's price they have a value of $2,870,000,000. No one ever believes that General Motors is able to maintain fifty-three high-priced executives in the United States on a profit of only seventy-five cents on a car. Then look at Ford Motor Company, incorporated in 1904 with an initial investment of $125,000. That company has paid in cash dividends $22,813,000. They have reinvested undistributed profits approximating $27,000,000. That original $125,000 investment is now represented by 1,400,000 no par value shares which have a value on the markets of New York to-day of over $31,000,000. The people of Canada have dealt kindly and generously with the Ford Motor Company. I agree that it is a great institution, but I think the Ford Motor Company might have found ways and means of absorbing that small increase in the sales tax and set an example to Canadian industry, inspiring some degree of confidence in the minds of the afflicted farmer and those who have suffered so much.
Now, if I have a moment I would like to say a word on behalf of the blind. For twelve years the blind people have been coming to this parliament. For twelve successive years they have been showered by this house with platitudes. We have sympathized with them in their affliction; we have spoken to them in the most geneTous language, but we have never done anything for them except a minor vote once in a while. We were taught in our youth that nature and divine providence have a simple way of exacting compensation for our refusal to obey her laws and precepts. If that applies to individuals it applies likewise to nations, I firmly believe. It may be that the troubles and difficulties which we have
2764	COMMONS
The Budget-Mr. McNiven
experienced during the last few years have come to us partly because of our refusal to recognize and act upon our responsibilities to these unfortunate people who are afflicted in a way that it is impossible for any of us who have our sight to appreciate. Let us give further consideration to their request. I never saw the Finance minister in a more disheartened mood than on the evening when he announced that it would not be possible to carry into effect that resolution. He would like to have done so; let us encourage him. The supplementary estimates are still to come down. Let us follow the poet, who said: Because right is right To follow right were wisdom In the scorn of consequence.
I see my time has expired and I will therefore conclude.



WAYS AND MEANS


[Stage Direction]
The house in committee of ways and means, Mr. Sanderson in the chair.
Progress reported.

Mr. MACKENZIE KING:: To-morrow it is
proposed to take up the resolution which appears in the name of the Minister of Justice
Questions

(Mr. Lapointe) with respect to an amendment to the British North America Act, and if time permits such of the special estimates as remain.


Mr. CAHAN:: Might I suggest that it was agreed by the Minister of Justice (Mr. Lapointe) that prior to the discussion of this motion for the adoption of the address, he would bring down what correspondence there was with the provincial governments dealing with its subject matter. We have been waiting for correspondence dealing not only with the proposed loan council but with the other to some extent radical amendment to the British North America Act with regard to indirect taxation. It is almost unprecedented as far as this parliament is concerned, and if there is correspondence it certainly should be brought down in time to be considered before the discussion of the address.


Ernest Lapointe: I do not believe there is much correspondence with regard to this special feature of the address, namely, the right given to the provinces to impose some sort of indirect taxation. I think those matters were discussed orally at meetings of the conference and subconferences. However, I will look into the matter and possibly I may supply my hon. friend with whatever correspondence there is.


[Stage Direction]
At eleven o'clock the house adjourned, without question put, pursuant to standing order.
Wednesday, May 13, 1936