[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, I notice in this morning's press that Great Britain and France have informed the League of Nations that they will not consider binding their obligations under the general act for pacific settlement of international disputes in the event that either country should be at war. I should like to know whether Canada, as an independent signatory to that agreement, also repudiates the idea of arbitration instead of war.


Right Hon. W. L. MACKENZIE KING (Prime Minister):: I do not know that I would care to answer the question in just the form in which my hon. friend has stated it, but I would say to him that Canada has not altered her position.



TRADE AGREEMENTS


[Stage Direction]
The house resumed from Tuesday, February 14, consideration of the motion of Mr. Mackenzie King that the house go into committee on the following proposed resolution:
That it is expedient that parliament do approve of the trade agreement entered into
at Washington on the 17th day of November, 1938. between Canada and the United States of America, and that this house do approve of the same, subject to the legislation required in order to give effect to the provisions thereof.
Hon. R. J. MANION (Leader of the Opposition) :: Mr. Speaker, to-day in a sense I am replying to the speech made by my right hon. friend (Mr. Mackenzie King) three days ago. I must say that at least half of his speech did not deal with the trade treaty at all but was good political propaganda, from his standpoint. My hon. friend from Mount Royal, whose observations are very wise and very apt, remarked to me that if the text of the trade treaty had smallpox certainly the sermon the right hon. gentleman delivered would escape contagion because it was so far from the text. I thought that was rather well put. I do not intend to follow my right hon. friend into the political realm-I was going to say "quagmire" but will not use that word-except for two or three remarks.
My right hon. friend spoke of the byelections and boasted a little-perhaps with some justification-in regard to the number of seats his party had won. I happen to have the correct figures, which show that in the fourteen contested by-elections since 1935 the Liberal vote was 111,000, while the antiLiberal vote was 131,000, so there is not very much to boast about there.


William Lyon Mackenzie King: But those were not all Conservative votes.


Robert James Manion: That is true, but they were in opposition to the Liberals. In the 1935 general election, only 46 per cent of the votes went Liberal while 54 per cent went antiLiberal. In spite of that fact, however, my hon. friends obtained 180 seats as against 65 seats won by the 54 per cent voting against the Liberals. Another interesting set of figures -and then I shall have done with the ordinary political discussion-shows that according to the votes cast in the last election it took 12,000 odd votes to elect a Liberal. I do not use the word "odd" in any derogatory sense. It took 33,000 odd votes to elect a Conservative, and it took 389.000 votes to elect the hon. gentleman from Kootenay East. I do not know what any of these figures prove, however; they merely indicate some of the rather strange pictures we get if we begin to describe what we call democracy. The only point I make is that, according to these figures, I do not think my right hon. friend has such a great deal to boast about.
The right hon. gentleman mentioned differences in our party respecting the tariff. Well, perhaps there are such differences, but there

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are differences in all parties. So far as the tariff is concerned the Liberal party goes from the extreme of free trade, as represented by my hon. friend from Huron North (Mr. Deach-man) and many members from the west, to moderately high protection, at least, as represented by the Minister of Trade and Commerce (Mr. Euler). So not only in regard to the tariff but in regard to almost everything, you can go up and down in the Liberal party from imperialism to Hepburnism, and you will find differences of opinion. But after all, sir, the trade agreement is the subject before the house, and I intend to deal with it as briefly as possible having regard to the fact that a great deal of ground must be covered.
To me. I think to all of us, the subject is a very important one which merits free discussion. I do not think any party or any government can bring into effect a trade treaty of any kind without its deserving in this House of Commons free and wide discussion. For example, the debate on the empire trade agreements of 1932 took twenty-six parliamentary days. In fact, we began the sixth week; there were nineteen days on the resolution, and seven days in committee. At the end my right hon. friend (Mr. Mackenzie King) and his party, who were in opposition at the time, voted against the empire trade agreements-with the exception of the present Minister of National Revenue (Mr. Ilsley) who on the second reading voted for it, but I think abstained from voting at the other stages of the measure. In 1911, when the reciprocity agreement was being discussed, the debate took, I believe, something over four months.
In view of those two points it is clear that this subject is too important to gloss over, and requires a certain amount of elucidation. I have pointed out, and I wish to make it clear, that it is not in any way the intention of this party to hold up the discussion. We have no interest in delaying the business of the house or unnecessarily prolonging the debate. In fact I have no doubt the debate will be a good deal shorter-that is my guess at this time-than was the debate on the empire trade agreements. We realize that after all the government has a huge majority, and can pass the legislation anyway.
But I repeat that a fair discussion is proper, both as we sit at the moment and in committee; for it is only right that the details should be discussed. After all, this is public business of the utmost importance to Canada- just as, to my mind, the Bren gun was public business. And I do not mind saying to-day that I am getting just a little tired of people

outside of the house, who know nothing whatever about the affairs of parliament, or how they are carried on, continually lecturing this house and urging it to get on with the business of the people. I do not care who they are; I think they are lecturing without sufficient knowledge. After all, the government of Canada is the executive of parliament, and parliament, therefore-theoretically at least, and indeed in practice-has the last word. That is democracy. Whatever the faults of democracy may be, at any rate it is superior to anything we know of in the way of dictatorship.


Some hon. MEMBERS:: Hear, hear.


Robert James Manion: I think I am expressing the point of view of every hon. member in the house when I say that those who criticize members of the House of Commons, as a body, simply because we choose to discuss matters here, merely show that they do not quite understand what the democratic liberty of free speech means.


Some hon. MEMBERS:: Hear, hear.


Robert James Manion: As a matter of fact-and I do not say this with the intention of playing politics-my conviction is that the reason we did not go on a few days ago when we could have was that the government was not ready.


Mr. LAPOINTE (Quebec East):: No. no.


Robert James Manion: And to show I am not trying to play politics, I say that because I well remember that on some occasions hon. gentlemen on this side were in office we were not ready to proceed. For some reason, governments are often not quite ready with the business of the house. I remember occasions when we had to do what my right hon. friend had to do on a few occasions this year-when we had to adjourn the house at six o'clock. Frankly, I do not know why persons who are not members of the house insist that we should work here until eleven o'clock every night. In fact I will admit that one of the very fine things the right hon. gentleman had much to do with, was that of changing the foolish habit we used to have of sitting here late every night-a most barbarous procedure. After all, we have some rights in the way of liberty and freedom, in regard to our hours, as well as in regard to our speech.
My right hon. friend in his political remarks the other day, suggested that this party consists of economic nationalists, that we do not want to trade with other countries. Of course, that, to put it mildly is ridiculous,-only a blind man in a country like Canada would

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take any such course as that. There are two chief reasons why Canada must trade with other countries. In the first place we have a huge area, a small population and rich resources, out of which we produce large quantities of raw materials which must be exported. We do not consume all of them ourselves. That, in the first place, compels us to trade with other countries. Secondly, we are a debtor nation. The other day I looked up the exact figures and I found that each year we pay out in interest on dominion, provincial, municipal and large corporation loans from other countries, in round figures, S250.000.000 per year. Indeed, we pay out $325,000,000, but we receive in return, in the form of interest and dividends, something like $78,000,000, leaving a balance, in round figures, of about $250,000.000 per year, which we have to pay out to other countries. Most of it goes to the United States-$231,000,000-as against $88,000,000 to the United Kingdom.
So that for that reason again we must export. I must point out however that in our export statistics to-day we include gold, and I believe that does not give quite the proper picture. Gold should be kept separate from ordinary commodities, because gold is not a commodity in the ordinary sense. It is something which is accepted by all countries of the world-they are glad to take it-and for that reason it is something which should not be treated as an ordinary commodity in trade statistics.
In addition to all that, there is a third reason why we must trade. There are certain kinds of products which we cannot produce- tea, coffee, rubber, cotton and even, apparently, wool, though we should, to my mind, be able to produce sufficient wool; I have said that in the house many times. We do not produce oranges and other citrus fruits, and so on. So we are compelled to trade.
Then again, trade figures are mixed up with invisible items such as the tourist trade, shipping, insurance, and the interest wrhich I have just mentioned. So I say that the right hon. gentleman's statement that we do not want to trade, and that we do not want trade treaties, is not correct, and he knows it is not correct. Anyone who knows something about government business or national affairs realizes that we must trade with other countries. But what we do favour is this: We favour trading with other countries on a fair basis. We advocate giving favour for favour. In other words, we do not advocate the making of a trade treaty at any price. I am a pacifist in the best sense of the word; I do not believe in war. But I am not a
pacifist at any price; neither am I a trade treaty man, at any price. If we are to take the attitude that we will make a trade treaty at any price-that is, give two favours for one, if necessary, to get a trade treaty-then the logical conclusion for my right hon. friend and his part}' to come to is to become out and out free traders. Then they would be getting all the imports that our exports could pay for, and there would be no tariff barriers against them.
The only countries of the world to-day in which economic nationalism prevails are a few of the European countries which became economically nationalist because of the great war, and the fear of another one. They would wish if another war came upon them to be self-supporting, self-sufficient and able to take care of themselves. Perhaps of all the countries in the world the United States is the closest to being self-supporting or self-sufficient; yet even the United States requires rubber, tea, coffee, and some other products it cannot produce within its own borders.
Now, in regard to the empire trade agreements,' which are mixed up with the one before us, we must not forget that the United Kingdom is the greatest market of the world. That is obvious to anyone who looks at the figures. It is the greatest purchasing market of the world.
I have a quotation in my hand-and I have heard only a part of it cited before-from the words of Sir Wilfrid Laurier. This is the report of a speech he made m Toronto, in the Toronto Globe of April 2. 1907, at a banquet given to Right Hon. James Bryce, then British ambassador at Washington. This is what Sir Wilfrid said at that time:
I have seen and you have all seen in an American newspaper published in New York just a few days ago, that we are yearning for reciprocity with the United States. Now I tell you that the editor of that neryspaper is about twenty-five years behind the times. At that time, we would have given our right arm for such a thing, but it is now a thing of the past. We are turning our hopes towards the old motherland. We have introduced the doctrine and the policy of a preference to Great Britain and towards all the British empire, and this is the policy by which we stand at the present time. We shall have no more pilgrimages to Washington, and this is simply the message I have to convey to your guest at the present moment. I know he will be a friend of Canada, and if it be a fact that a new leaf be turned in our relations w'ith our neighbours it will be a matter for great congratulation.
The right hon. gentleman who now leads the government of Canada frequently quotes what Sir Wilfrid Laurier had done, and he might give some consideration to the "no more pilgrimages to Washington" idea. I intend to
104S
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deal with the fact that we also looked for a trade treaty, but we looked for one on a different basis from the one negotiated by the right hon. gentleman. To go back a little further, it was the government of Sir Wilfrid Laurier which in 1897 introduced the British preference. I could not find the exact quotation-hon. members opposite will correct me, I am sure, if I am wrong-but I think I am right when I say that for some years Sir Wilfrid took the attitude that we should get something in return, something by way of preference from Great Britain.


William Lyon Mackenzie King: Sir Wilfrid's position was that if at any time England became a protectionist country, we should then expect to be given' a preference in the British market.


Robert James Manion: I attempted to look it up but I could not find it. I accept what the right hon. gentleman has said; and that is exactly what we advocated and what we accomplished in the end. While Great Britain was a free trading country she could hardly give any preference or advantage to the different portions of the empire, but once she became protectionist-I pointed out the other day, Great Britain collects three times as much customs duties per capita as we do- it was then possible for her to return favour for favour, to return something for the favours which she had been receiving since 1897. I submit that the empire trade agreements negotiated in 1932 by the Bennett government were a great triumph.
Great Britain is not only the greatest market in the world, but she is a sheltered market; and that was particularly valuable once we got a preference: the preference gave us shelter. There is another point that should be considered, and that is the fact that Great Britain is a static market; in other words, her population remains practically stationary, and she does not increase her purchases from the world. She goes on buying the same amount of commodities, aside from armaments, year in and year out. It is worth remembering that it is our loss when the United States, competing with us in that market in products such as wheat, fruits and lumber, get some of our export business. If by this treaty we lose in exports to Great Britain, granting world conditions remain the same, ours will not. We would be increasing our unemployment and our distress through allowing the United States to take some of the market which previously we had enjoyed.
As I admitted a moment ago, we also wanted a trade treaty. But in seeking it we asked for it on a fair basis. We did not

attempt to get that trade treaty, or trade agreement-I am using the terms interchangeably-except on a basis of favour for favour. After all, there are many reasons why we should get fair treatment from the United States. I have before me the letters exchanged between the Canadian and United States governments in 1934. The right hon. Prime Minister quoted them the other day. I have no intention of reading all the letters, which were issued as a white paper in 1935. I suggest to any hon. members who have not read this white paper that they do so; they will find it very interesting. The letter from which I intend to quote is dated at Washington, November 14, 1934, and is signed by Hon. W. D. Herridge, who was then our representative at Washington. It is addressed to Mr. Cordell Hull, and reads as follows:
The government of Canada for many months have been giving careful consideration to the means whereby the exchange of commodities between Canada and the United States might be increased, and I have been instructed to present a statement of their views for the information of the government of the United States. The government of Canada believe that the time has come for definite action and that the declared desire of both governments to improve conditions of trade between the two countries should now be carried into effect by the negotiation of a comprehensive trade agreement.
You will recall that when the Prime Minister of Canada visited Washington in April, 1933, at the invitation of the President of the United States, the development of trade between the two countries was sympathetically discussed.
I think the right hon. Prime Minister quoted that the other day. Then lower down in his letter, Mr. Herridge says:
Since Mr. Bennett's visit, informal discussions have been carried on, and several methods of improving trade relations between the two countries have been suggested and examined.
I should like to quote further from the letter, a part which applies particularly to this discussion. It reads:
It is hardly necessary to stress the importance to both the United States and Canada of their mutual trade. For many years each country has provided the other with either its largest or its second largest foreign market.
Here is an interesting part a little further down:
During the decade ending in 1933 Canada provided a market for the products of the United States larger by one-fourth than the whole of Asia, about twice as large as Germany or all South America, nearly three times as large as France or Japan, nearly seven times as large as China, and more than ten times as large as the Soviet Union. In spite of the considerable decline in trade from the high level of 1929, Canada still provided a market in the first nine months of 1934 only slightly smaller than all Asia, nearly twice as large

Canada-U. S. Trade Agreement
as all South America or Japan, between two and three times as large as Germany or France, four times as large as China, and twenty-two times as large as the Soviet Union.
Then he continues on the next page:
In no year since 1882 have Canadian exports to the United States exceeded in value Canadian imports from the United States.
Since that was written in 1934 there have been a couple of years when Canadian exports to the United States were slightly larger than Canadian imports from the United States, but apparently those are the facts up to that time. The letter continues:
During the thirty years ending in 1933, Canada purchased in the United States almost 70 per cent of all her imports and sold in the United States only 37 per cent of all her exports. In the last decade, Canadians have spent over $1.60 in buying products of the United States for every dollar spent on Canadian products by purchasers in' the United States.
That is not a per capita comparison.


Mr. EULER:: It is a better comparison.


Robert James Manion: That is a matter of opinion. I am not quite in agreement with the hon. gentleman, but he will have a chance to deal with the matter later on. I am not going to argue about it at the moment. The letter goes on:
Canada has therefore been obliged to meet the debit balance thus arising by other means of payment. In the decade 1921 to 1930, according to the Department of Commerce of the United States, the balance payable by Canada to the United States on exchange of commodities averaged $287 millions a year.
That is a huge balance in favour of the United States. Then on page 8 he said:
Since the beginning of the depression, amongst countries heavily indebted to the United States, Canada stands almost alone in having promptly discharged in full its obligations payable in the United States.
I am pointing this out because I remarked at the beginning of my speech that the United States had every reason to treat us very well in connection with trade agreements. I shall quote briefly from the final part of the letter as follows:
I am- authorized to put forward the following outline as a suitable basis for the negotiation of a trade agreement:
(a)	A mutual undertaking to maintain during the lifetime of the agreement the unrestricted free entry of commodities now on the free list of either country.
(b)	The mutual concession of tariff treatment as favourable as that accorded to any other foreign country;
That is the gist of that paragraph.
(c)	The reduction by 50 per cent of the existing United States rates of duty, as authorized by the Tariff Act of 1934, on a specified
number of natural products, including inter alia, lumber, fish, potatoes, milk and cream, and live cattle; a number of other agricultural products, and several minerals both metallic and non-metallic.
That, in brief, is the gist of the letter; and if you will note, Mr. Speaker, at no page or paragraph of that letter did we offer to give up our preferences in the United Kingdom. That, to my mind, is one of the chief points of difference between our proposal to the United States government and the attitude taken by the present government.


William Lyon Mackenzie King: May I point out to my hon. friend that neither did we, with regard to our first treaty.


Robert James Manion: In 1935?


William Lyon Mackenzie King: Yes.


Robert James Manion: I quite agree, but you did with regard to this treaty, and this is the one I am discussing.
To prove again that the Conservative party is favourable to trade I am going to read the plank of the Conservative party adopted at its national convention last July. It has a direct bearing on the present discussion, because, of course, it was known at that time that the trade treaty was being negotiated, and I suppose the negotiations had some bearing on the drafting of this resolution. It is a little lengthy, but I will read the whole of it because I think it should be on record both for us and for our friends opposite. It is the trade and commerce resolution passed in July at the National Liberal-no, not Liberal; I was going to say Liberal-Conservative, but they changed the name of the party to National Conservative, and I have not quite got used to it yet. This is the plank:
This National Conservative convention declares its continued adherence to its traditional policy of fostering and sustaining by fiscal protection Canadian labour and Canadian industries, and especially the primary industries of agriculture, fisheries, forestry and mining, all of which are essential to the maintenance of a well-balanced national economy, while, at the same time, guarding against undue advantage being taken of the protection so afforded.
It also affirms its adherence to the underlying principles of that policy, which have served to stimulate the development of the natural resources of Canada, to preserve and to enlarge the domestic markets for Canadian products, to promote interprovincial trade, and, generally, to provide a diversified economic life which will serve to retain Canada's sons and daughters within our own boundaries.
This convention affirms the policy of having tariff schedules under scientific investigation by a permanent tariff commission and that, in case it is ascertained that unfair advantage is being taken of any customs duties imposed by such schedules, the tariff commission shall

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m-ke recommendations, to which effect shall be given by the government, for reducing such r?fes of duty or for removing them from the tariff schedules.
That is very important, and I have so stated on many occasions on public platforms. In other words, it is the plank against exploitation behind tariff walls. We established the tariff board on that very basis, as my hon. friend from Leeds (Mr. Stewart) reminds me.
I continue with the resolution:
This convention affirms its firm adherence to the policy of preferential trade within the British commonwealth of nations, by which Canada obtained the boon of tariff preferences in the markets of the United Kingdom and of other dominions, and which have served to mitigate the severity of the trade depression during recent years, and which were approved by parliament, despite the bitter, determined and prolonged opposition of the Liberal party.
This convention is convinced that the permanent. interests of Canada are best conserved by enlarging our markets in the United Kingdom and in other British dominions, whose products are more complementary than competitive with those of this country, and with which our trade agreements are more likely to be durable and beneficial.
Then this last paragraph:
This convention believes that the external trade of Canada may also be increased advantageously by the negotiation, on a fair and equitable basis, of trade agreements with countries which are outside of the British Empire, but that in negotiations with foreign countries, the terms agreed upon should not be such as to impair the benefits derived by Canada under existing agreements between Canada and the United Kingdom and between Canada and other British dominions.
It seems to me, sir, that that resolution is proof sufficient that the Conservative party is not a party of economic nationalism, and that all of us believe in trade.
The Prime Minister claimed, and the Liberal party have been claiming, that this treaty helps to foster world peace and the unity of the democracies of the world.


Some hon. MEMBERS:: Hear, hear.


Robert James Manion: Some of my hon. friends opposite, I think about half a dozen, applaud.


Some hon. MEMBERS:: Hear, hear.


Robert James Manion: They did better the second time, stimulated by my comment.


William Lyon Mackenzie King: I was speaking of this treaty in conjunction with the United Kingdom-United States agreement.


Robert James Manion: The right hon. gentleman talked as if this was not a trade treaty but a peace treaty. As I listened to him, I thought he spoke, as if we had just been engaged in a spectacular war with some great nation and had won a glorious victory; and
[Mr. Maniou.J
as I waited for his peroration I watched, as an hon. gentleman watched me on another occasion, to see the victims come marching up through the aisles of parliament. He spoke as if we had won some great victory, and yet, as I pointed out the other night, not since 1812, a period of over a hundred years, have we had any differences of a serious nature with the United States, and certainly since the beginning of the century there have been no differences between Great Britain and the United States. It is true, I admit, that prior to the beginning of this century, there were those in the United States who occasionally twisted the lion's tail, as the phrase was at that time, but since the end of the last century so far as I know there has been no attempt, except perhaps by an occasional individual, to do anything of that kind. Yet it looked to m.e as if the Prime Minister were trying to point out in his address to the house the other day, and indeed he implied this in his interruption a moment ago, that this treaty meant a great advance towards peace throughout the world. On occasion the right hon. gentleman can attain heights of oratory on matters of that sort, even if, as now, he is imagining most of what he says. I well remember, and I thought of it as the right hon. gentleman spoke the other day, an expression used by an old friend of his, and incidentally of mine, the late Right Hon. W. S. Fielding, but not with reference to the Prime Minister. He said that a certain gentleman on the other side of the house could make a hogshead of lather out of an ounce of soap. I could not help but think of the expression when the right hon. gentleman got so much worked up the other day on this question. I envy him at times when he does that sort of thing. I am not able to do it. I am just a plain, blunt man who sticks to the facts. I do not use language-


Mr. DUNNING:: My hon. friend does not need any soap at all to make a lather.


Robert James Manion: My hon. friends opposite are pretty slippery with the soap they do use. I use language to express my thoughts, not to hide them. And so I suggest that all of us, including even the Prime Minister and the Minister of Finance, should keep our feet on the ground and not get our heads up among the clouds. After all, we are but eleven millions of people and we are not so powerful a factor in the peace of the world as some of us seem to think. Let us be realists, not weavers of words or dreamers of dreams.
I want to emphasize the fact that all of us in this great dominion are friendly to the United States. The majority of the people

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in our two countries speak the same language, and have the same traditions, the same customs, the same laws. We understand each other. For the people of the United States we entertain most friendly feelings. I admit frankly that in common with other afterdinner speakers I have often boasted of Canada and the United States living peacefully side by side for over a hundred years, without serious quarrels or disputes, as an example to the world of which we may well be proud. In that connection I want to take exception to one thing which the right hon. gentleman said about me in his speech, in the debate on the address. He referred to me as if I had spoken of the president of the United States. But I would point out that I did not mention the president of the United States at all. What I said was that after the Munich agreement all I heard coming from the United States-these were my words, and perhaps they were not quite as definite as they should have been-was criticism of Chamberlain. I was referring to writers, and to such magazines as Time, a very fine magazine which I read regularly and like very much, but which makes me see as red as its cover by its articles against Chamberlain and the settlement which the Bi'itish and the French made at Munich. Indeed, since I spoke on the address, a professor from one of the United States universities made a speech in Montreal quite critical of Mr. Chamberlain, and along the same lines. The reason I mention it-


William Lyon Mackenzie King: I do not think that my hon. friend caught the significance of my remark. I did not think he had reflected on the president; rather I thought he had forgotten altogether the president's contribution.


Robert James Manion: I was not speaking of the president; I was speaking of the populace generally. The right hon. gentleman is more careful to-day than he was the other day. I have the quotation here, and I think I had better read it so that there can be no misinterpretation:
I was rather surprised this afternoon to hear what my hon. friend had to say about the actions of the President of the United States at the time of the crisis last year.
That is on page 58 of Hansard. On page 59 he said:
I say to my hon. friend that if he had given that quotation to the house-
He had quoted Mr. Chamberlain.
-instead of saying what he did, he would have been more patriotic in his attitude. I can conceive of nothing less patriotic in these times than an effort on the part of any Canadian public man or citizen to try to create prejudices between this country and the United States.


William Lyon Mackenzie King: May I say to my hon. friend that the actions of the president which I there referred to were the all important communications that he sent to Germany and to other countries. My hon. friend's remark was to the effect that nothing had come out of the United States except criticism.


Robert James Manion: I admit that I was a little indefinite and probably did not make my point clear, but the right hon. gentleman had no right to apply to me statements about the president of the United States which I had not made, and he had much less right-I mention this very seriously to-day-to question my patriotism. I do not question the patriotism of anybody in this house: I say this very seriously. I take it for granted that we are all good, loyal, patriotic Canadians. I am not going to question anybody's patriotism, but I object very strongly to anybody questioning mine. Probably that will be sufficient to say regarding that matter. The reason I mention it at all is that it was misinterpreted in England. I had a letter from a friend who said he had read a report of my speech in the London Daily Telegraph, and he added, "Until I read your speech in Hansard-with every word of which I agree- 1 was under the impression, gained from the report of the Prime Minister's remarks, that you had said things which were not very wise."
In closing the incident I just suggest this, that we should all bear in mind in discussing foreign relations of any kind that these international relations are too important and too delicate to be made a football of politics, and that we should avoid anything in the way of taking, even though we have the opportunity, political advantage from them.
Let me say further about the President of the United States that nobody more than our group welcomed the words of the president at Ivy Lea, when he said in effect that the United States would come to the relief of Canada if Canada were attacked.


William Lyon Mackenzie King: It was at
Queens university, Kingston.


Robert James Manion: I beg pardon: it was the same day the bridge was opened at Ivy Lea. We should remember, however, that the president's statement had no reference to trade. To my mind it was a statement of the position of the United States with regard to its own self-defence. It is to prevent a flank attack upon the United States that the United States so frankly takes this attitude. Ever since the Monroe doctrine was declared, over one hundred years ago, the United States has taken the same attitude The Monroe

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doctrine forbids any European country which was not then already settled, in a sense, on this continent from becoming settled here; and I have no doubt that if Mr. Roosevelt were asked he would say that he would go just as quickly to the defence of Mexico, were Mexico attacked by some foreign country, as he would to the defence of Canada. As I say, that would be done for the purpose of self-defence, because the Americans do not want Japan, Germany, Italy or any other country to get a foothold in Canada or Mexico and thereby to gain a side-door entrance to the United States. The president's statement had nothing whatever to do with trade. I say also that the friendship of the democracies has nothing to do with trade. Great Britain and France, Canada and the other British dominions, and the United States are and should remain friendly, and I think will remain friendly, because they have the same ideals of individual freedom, much the same parliamentary institutions, and largely the same economic system. These democracies all desire peace. The peoples who are endangering the peace of the world at the present time are not the democracies but the dictatorships. I venture to say that if future wars were dependent upon the actions of the democracies the world would never again be cursed with war.
To support my attitude may I make one or two quotations? I took this out of the Ottawa Journal yesterday afternoon: it is dated February 15, from Washington:
The House of Representatives heard sales of United States airplanes abroad defended to-day on the ground that "Americans are safe only so long as England and France stand."
That is what one congressman said. A little further down:
Representative Pace, democrat, Georgia, member of the house military committee, told the house that he thought it was sound to aid Great Britain and France build up their defences because if those democracies fell before the dictatorships a major bulwark of the United States would be removed.
"Is it not better," he said, "to sell England and France planes for their defence than to go to war with a big power to prevent an encroachment on this hemisphere?"
Asserting that the United States "for selfish reasons" would be forced, defensively, to go to the aid of Canada or Great Britain in an emergency, Pace added, "I feel sure that the President did not say 'Our frontier is on the Rhine'. In my judgment he could well have said, 'Our first line defence is England and France'. When we see England and France go down, we are threatened."
That is an American view of the whole situation. I think it is a perfectly proper and correct view. And that is the reason; not trade treaties, not trade, not dollars and

cents; but the freedom of democracy, the belief in democracy, is the reason that the United States is ready if necessary to help, in various ways, countries like the United Kingdom, France and Canada, in case of difficulty.
With regard to international appeasement, we all want it. We want it just as much as we want peace. But appeasement, like charity, begins at home. We have not appeasement, at least we have not peace, in our own country to-day because of economic conditions, unemployment, lack of opportunity, insecurity, all of which are so common throughout Canada at the present time. To my mind-and I shall try to prove it before I conclude-this agreement increases those detrimental economic conditions and therefore lessens the possibility of our having peace and appeasement in our own country.
A few moments ago I quoted an American. I am now going to quote a prominent British public man, in regard to this treaty, to show that the British are not putting up any verbal fog to try to confuse the people. They are talking of the two trade agreements, merely as business arrangements. Mr. Oliver Stanley, president of the board of trade, who occupies the same position in Great Britain as the Minister of Trade and Commerce does in Canada, speaking at a luncheon of the Canadian chamber of commerce in London a few days after these agreements were signed, made this statement;
"You may ask what about the political effects of the agreements," said Mr. Stanley. "The fact is I have never looked upon this as a political treaty. I have looked upon it entirely as an economic bargain."
That is his attitude. It is the attitude I am taking, and it is the attitude I think we should all take. It is not a matter of politics so far as the agreements are concerned; it is a matter of business.
Here is another quotation from the same speech of his, and I think it is worth putting on Hansard although it has not any connection with the immediate statement that I have made:
It was natural in trade matters, he said, that "we should consider our own interests first and the empire next."
In other words, he was looking at it from the straight point of view of business-the proper attitude. No criticism is implied in my quoting that. A week later, on November 28, he made another speech. Joseph Kennedy, the United States ambassador to the court of St. James, was present. Here are two more quotations from Mr. Stanley's speech in reference to the new

Canada-U. S. Trade Agreement
Anglo-American trade agreement. True, he was not referring to the Canada-United States treaty, but his conclusion applies.
Mr. Stanley, praising it as "wide and fair," said Great Britain concluded the pact without political aims.
That is clear. I want my right hon. friend particularly, and some of his followers, to mark the next clause:
"It takes in more than 600 items," he said, "but one item we did not include was 'eyewash.' We think it is eminently fair to both sides and to the world."
I suggest that the eyewash might be left out in Canada as well as in England. Let me quote another British opinion. The Right Hon. L. S. Amery, speaking at the annual meeting of the Empire Industries Association on November 29, 1938, ten days after .the treaty was signed, made a statement which was quoted in the London Times of November 30, 1938. I quote:
Mr. Amery begged leave to be a little skeptical about the claim that this treaty was a contribution towards international trade and goodwill. He suggested that it would not have the slightest effect on the policy of totalitarianism or on economic nationalism in other countries, and he frankly believed that as a contribution to the opening of the trade doors of the world it was more imaginary than real. The Ottawa agreements-
-that is, the empire trade agreements of 1932- were intended to be the first steps in a forward policy for the development of interempire trade. It seemed to Mr. Amery that any further steps in that direction were forbidden in almost every, direction by the Anglo-American treaty.
That is as far as I shall go in discussing that aspect of the question. I submit that the talk about this treaty as having anything whatever to do with world peace is simply what Mr. Oliver Stanley called it, "eyewash."
There is another point I should like to touch upon at this juncture. In his speech the Prime Minister apparently objected to my describing the Canadian newspaper release as ballyhoo and propaganda. Well, there were forty-three pages in the press release, and if it was not ballyhoo and propaganda, some of it at any rate was deceptive. I find that the people's money is being used for the spreading of political propaganda about this treaty. I have here a page of the Toronto Star of February 7, 1939, ten days ago, over half of which is taken up with a paid advertisement signed by the Minister of Trade and Commerce (Mr. Euler) and by the deputy minister-an advertisement paid for by the taxpayers of Canada. To my mind it is largely Liberal propaganda. For example, in large print there appears this statement:
New trade agreements are further encouragements to Canadian exporters.
That may be correct; I will not argue at the moment about the possible facts. I do not understand, however, why the people of Canada should be asked to pay for such advertisements, and I use the word " advertisements" advisedly, because I do not doubt the hon. gentleman had it printed in other newspapers. I do not suppose^ he limited it to the Toronto Star. I do not see why the Canadian people should pay for putting out Liberal propaganda.


Mr. DEACHMAN:: Any more than they should pay for Tory propaganda published by the former Minister of Trade and Commerce.


Robert James Manion: The hon. gentleman can take that up when he speaks. That should not have been paid for either if it was paid for by the government. I do not know about it. There was some criticism, my colleague the hon. member for Leeds (Mr. Stewart) says, but I do not remember the incident. I say frankly that it should not have been paid for.
The Prime Minister pointed out that the trade agreements favoured the democracies; but they also favour the autocracies, because through the most favoured nation clauses, countries like Japan, Germany, Italy and even Russia are favoured by the agreement. At any rate they are favoured indirectly, and that without giving any return to Canada. For example, Russia and the Argentine are favoured, because when you take off the six cent preference on wheat which was favourable to Canada you give Russia and the Argentine the same advantages in the British market as you give to the United States. Since the war, in one or two periods at least, Russia has been a large exporter and yet, under the treaty, we give to that country the same advantage without gaining any return.
Trade treaties are not necessarily peace guarantors. Austria had a trade treaty with Germany just before Hitler walked in and took possession. As a matter of fact, there are in all trade treaties the seeds of disharmony. I do not intend to quote many passages from the agreement, but from pages one to ten I find a number of indefinite terms, terms so indefinite indeed that they might well lead to misunderstanding. For example:
In those cases in which the other country is a relatively large supplier of any such article . . .
And again:
. . . the commerce of the other country shall receive fair and equitable treatment.
Whose judgment is to be final in deciding this question? With regard to sawn lumber and timber this phrase is used: " In substantial
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quantities." But what are substantial quantities? Who is to determine that question? As I say, it might lead to disputes. Again:
If a wide variation should occur in the rate of exchange . . .
What is a wide variation? Does a wide variation exist to-day? To what extent must the rates vary to constitute a wide variation? These are examples of many expressions that are to be found in the treaty, which are open to dispute and which might lead to serious differences of opinion. I admit that it is not a very grave matter, but it might develop into something serious. A trade treaty might well lead to differences instead of bringing about understanding and harmony.
I suggest that the Liberals are trying to float this treaty through on a flood of propaganda. After all, I repeat, the United States is our chief competitor in wheat, fruits, meat and lumber. The Minister of Trade and Commerce, speaking on the address, made the statement that the United States now recognizes British preferences.


William Daum Euler: Hear, hear.


Robert James Manion: The minister says, "Hear, hear." Have we reached the stage where the United States has to recognize British preferences? Is that to be regarded as another step beyond that taken by the Prime Minister in 1929, I believe, when he said that in trade matters we must do nothing to provoke the United States? Is it another manifestation of the same attitude taken by the right hon. gentleman at that time? Certainly it does seem strange to me.
Let me give briefly some of the chief objections to the treaty as I view it, because I cannot help the feeling that we have given up the British substance for the American shadow. Briefly, these are my principal objections to the treaty:
1.	It makes for greater competition with our industries which are very much the same as those of the United States.
2.	It affords concessions to thirty-one favoured nations which give nothing in return.
3.	It brings unfair competition from favoured nations such as Japan, Germany, Italy, as a result of low standards of living and low wages, and the loss of all liberties to labour in those countries, without returning anything to Canada.
4.	It is the beginning of the destruction of the whole British preferential system for which we have been struggling since 1897 and which we accomplished in the British trade agreements of 1932.
5.	It cuts into the British markets, our best markets in wheat, fruits, lumber, and so on.
[Mr. Monion. 1
6.	It injures our Canadian traffic and damages the transportation system, railways, steamships and so forth, sending traffic north and south instead of east and west.
7.	It gives too much in return for too little; in other words, it is not an equalization of favours.
8.	It will probably lessen revenues through the elimination of the three per cent special excise tax and the lowering of other tariffs.
9.	It will probably increase unemployment through greater competition with industries such as coal, mining, manufacturing and so on.
Why is it that we get the worst of it in this agreement? There are a number of reasons. In the first place, the United States tariffs were and are much higher than ours. They have always been; they have been much more highly protected in the United States than we have been, their tariffs starting higher up than ours and not having to come down as low. The United States duty against wheat, for example, was 42 cents a bushel; our duty against their wheat is 12 cents. The Prime Minister himself pointed out that if the wheat duty into the United States were cut in two, from 42 cents to 21 cents, it would not be of very much use to the Canadian wheat grower for the reason that 21 cents would still be too high a tariff oyer which to ship Canadian wheat. That is all the president of the United States could do-cut the tariff in half. That is the second reason why we got the worst of it; the maximum cut the president could make, according to the act of 1934, was fifty per cent of the tariff, whereas we could and in some cases did take away altogether the tariff against United States products.
Third, they are shrewder traders than we are. I had the word "sharper" in my notes, but I do not like to use it because it might be taken as offensive, and I do not mean it in that way. The down-east Yankee spirit is strong in the United States, and incidentally I like the down-east Yankees, so I am not using that phrase offensively. The hon. gentleman to my right says they out-smart us, and I think they do.
Fourth, the United States has only nineteen favoured nations which automatically get the favours that they give Canada, while we have thirty-one favoured nations.
Fifth, their producers had the opportunity of appearing before the committee for reciprocity information, which is in the nature of a tariff board, to register opposition to the negotiation of a treaty that would affect them. That opportunity was not afforded Canadian producers in this country. I hold in my hand a Department of State press release of January,, 28, 1938, a little over a year ago, when

Canada-U. S. Trade Agreement
this treaty was under negotiation. It is marked, "Confidential release for publication in the morning newspapers of Saturday, January 29," and contains these words:
The Secretary of State issued to-day formal notice of intention to negotiate a new trade agreement with the government of Canada.
Here are the two paragraphs that illustrate the fact that the producers in the United States had an opportunity to appear before some authority, while ours did not:
Pursuant to section 4 of an act of congress approved June 12, 1934, entitled "An act to amend the Tariff Act of 1930," as extended by public resolution No. 10, approved March 1, 1937, and to executive order No. 6750, of June 27, 1934, I hereby give notice of intention to negotiate a trade agreement with the government of Canada.
This is the next paragraph:
All presentations of information and views in writing, and applications for supplemental oral presentation of views with respect to the negotiation of such agreement should be submitted to the committee for reciprocity information in accordance with the announcement of this date issued by that committee concerning the manner and dates for the submission of briefs and applications, and the time set for public hearing.
That is signed by Mr. Cordell Hull. I think this should be on record. What has happened as a result of this opportunity being afforded in the United States, together with the fact that they are shrewder traders than we are? With regard to very many products the duties in the United States are much higher since the negotiation of this treaty than the same duties in the reverse direction, that is, in Canada. It is true that there are a few items where the opposite is true, but there are not very many; I hunted for them. Take the case of bacon, hams, shoulders and other pork products. The duty in Canada is If cents per pound; the duty in the United States is 2 cents per pound. The duty on potatoes entering Canada is 374 cents per hundred pounds for six weeks, from June 15 to July 31, and for the remainder of the year they enter free. The duty in the United States is 374 cents from March to November and 60 cents from December to February. On carrots, radishes and cauliflower there is a ten per cent duty on importations from the United States and a 25 per cent duty on United States importations from Canada. On asparagus and spinach there is a 10 per cent duty this way and a 50 per cent duty the other way. On tomatoes our duty is 14 cents and the United States duty is 3 cents.


Mr. ILSLEY:: That does not take into account our valuations, which form a very important part of our tariff system.


Robert James Manion: I do not suppose that takes into account their valuations either.


James Lorimer Ilsley: They do not have them.


Robert James Manion: These are the rates now in force, and I do not suppose there is any reason to suspect that our valuations are higher than theirs, in proportion.


James Lorimer Ilsley: It is a different system altogether.


Robert James Manion: On mackerel, for example, to take one of the many fish items, the duty is 4 cent per pound into Canada and from 1 to 14 cents into the United States, depending on whether the fish are fresh or frozen. Wheat, as I have already said, carries a duty of 12 cents entering Canada and 42 cents entering the United States. I have various clothing items here also. On clothing of which silk is the main component the duty is 30 per cent in Canada and 65 per cent in the United States. On clothing of which artificial silk is the main component the duty is 324 per cent entering Canada and 45 cents per pound and 65 per cent going into the United States. In view of all this boasting with regard to the effects of this treaty I ask why Canada's duties on the vast majority of these items should be lower than the duties on the same commodities entering the United States.
During the debate on the address I presented an argument which I should like to repeat now, that the United States is and always has been an uncertain market for Canada. I think the Prime Minister mentioned the reciprocity treaty of 1854, which was cancelled very abruptly in 1866, and earlier in my speech I quoted Sir Wilfrid Laurier's words about "no more pilgrimages to W ashingtOn." I presume he was referring to that very treaty. I have also put on record the fact that in 1922 the United States imposed the Fordney-McCumber tariff and in 1930 the Hawley-Smoot tariff against our products. It may be said that those tariffs applied to all the world, but we were a big exporter to the United States, and this was done at a time when we were importing almost twice as much as they were buying from us. My hon. friend the Minister of Trade and Commerce said my comparison of $11 per capita as against $1 per capita was not fair. I am not going to argue the point; I do not think it matters very much, because I did not mean to be unfair, but surely it would be reasonable to compare one nation with the other. Surely the United States with 130,000,000 people should buy as much from us as we, with 11,000,000 people, buy from them.
Canada-U. S. Trade Agreement

Yet, sir, in the decade from 1921 to 1930 our trade with the United States showed a balance against us of 8287,000,000 per year.
It seems to me the United States have always been rather harsh towards us, in view of the fact that we are their best customers. Writing in the Foreign Affairs Journal of October, 1929, Professor Taussig of Harvard used these words:
For many years we have treated Canada much as a big bully treats the smaller boy.
In my opinion that was demonstrated by the Lumber Marking Act of 1938. At that time we had a trade treaty which had been negotiated by the right hon. gentleman and his colleagues, which included lumber; yet the United States put through this marking act which, our lumbermen complained, prevented by a roundabout method our lumber from entering the United States.


Mr. REID:: Has that not been removed?


Robert James Manion: Yes, it has; but for some months it was in force, and all the lumbermen who spoke to me about it at the time, long before this treaty was negotiated, pointed out that the very fact that each piece of lumber had marked on it "Produced in Canada" prevented a great deal of our lumber from entering the United States.


Mr. MACKENZIE (Vancouver):: It came into force on September 1 of last year.


Robert James Manion: Yes, and was cancelled some months later.


Ian Alistair Mackenzie: It was
cancelled when the new treaty was signed.


Robert James Manion: It was in effect only for two or three months, but in my opinion that was an unfair method of dealing with our lumbermen, and that is all I am pointing out.
Then there is the cattle quota. In the press release of my right hon. friend and his government it was stated that we had a cattle quota of something like 225,000 head -I think that is the correct figure-to be shipped into the United States. And we thought we had. Now, it is discovered that that is what the United States calls a global quota-that is, it refers to the whole world, and does not refer to Canada alone. As a matter of fact, in the first quarter of this year we learned that instead of our having the right to ship into the United States 60,000 head of cattle, Mexico shipped in 45 per cent of that 60,000, and that is cut off from our cattle quota. Why?
My right hon. friend objected to my using the word "propaganda". He objected to my

using the word "ballyhoo". I say now that if the fact which was mentioned in the release, namely that we have a quota of 60,000 head, is not ballyhoo or propaganda, then it is deception-and I think it is deception. I should have used the word "deception" to the people of Canada.
Until the other day-I discovered it I believe-we did not know that part of the quota was given to Mexico.


Mr. MacNICOL:: Do they know?


Robert James Manion: I had a letter from
western Canada, but I shall deal with it later on. There is another point I should like to make about the unfair results of the treaty. Il is this rather extraordinary thing which was shown in the press release. Our new reductions to the United States number 283 items, whereas their new reductions to us number 129-considerably less than half.


William Daum Euler: Items do not mean anything; it depends upon the amount involved.


Robert James Manion: Apparently nothing means anything to my hon. friend. I am speaking of the items and, as I say, so far as I can see, the United' States is getting two to one, from this government. I am asking myself: Why should they?
The government claims that the six cent preference on wheat we were given in the empire trade agreements was of no use. They have said that this preference was of no particular value to us. Well, perhaps it does not matter to a farmer in the west to-day because he has obtained a guarantee of eighty cent wheat, so he is not worried. But I say that every bushel of United States wheat which goes over there to replace our wheat is just that much more competition against us. And it is a most dangerous type of competition because it replaces our wheat and shows the British consumer that United States wheat is as good as ours-or almost as good. There is not much No. 1 hard; it is mostly No. 1 northern; and the northern United States produce good wheat. In addition to that, as I pointed out, Russia and the Argentine, without giving anything in return, get the same advantage. If Russia achieves an exporting position for wheat, she has the same advantage.


Thomas Reid: Is it not a fact that the United States government was subsidizing wheat up to seventeen cents a bushel, and that since this new agreement has passed they have agreed not to subsidize the wheat growers in the United States, on the British market?

Canada-U. S. Trade Agreement


Robert James Manion: I do not know whether they have agreed to that. I did see the item in the press to that effect. I shall deal with that in a few moments.
It seems to me that if the United States is subsidizing United States wheat, that is all the more reason why we should retain our preference. If it is not another advantage to the United States to have the preference of six cents a bushel removed, then why is the United States so jubilant over it? In their official publications they have been jubilant. I shall quote two items of their press release regarding wheat. These are their views in regard to the six cent preference.


Charles Avery Dunning: And the opposition down there calls that document ballyhoo.


Robert James Manion: I assume there is a certain amount of ballyhoo about it, too. I admit we are not the only people who play politics. But at the same time this is the statement in their press release. It was not distributed by the government of Canada. I happened to get this from the United States office. Here is what they have to say about grain, at page 6:
One of the most important concessions is the removal of the duty on wheat, which has been equivalent to about six cents per bushel. This has tended to divert trade to Canada and Australia. The United States formerly sold great quantities of wheat to the United Kingdom and with normal crops in the future and the restoration of free entry it should again be able to sell large quantities. Also, as a result of the removal of the preference, it should be possible for American port and transportation interests to regain their lost business in the transhipment of Canadian wheat to the United Kingdom.
I agree with that. I used that argument before I saw that statement; I believe I used it in my speech on the address in reply.
Then, at page 19 of the same release they say the following-and this is the proof of the pudding, so to speak:
Grain and grain products.
Wheat: The granting of duty-free treatment for wheat by the United Kingdom should prove of marked value to American wheat growers and the American wheat export trade. The import duty on non-empire wheat has been at the rate of 2 shillings per 480 pounds since November 17, 1932.
That is, the six cents a bushel.
A duty of this size (about six cents per bushel) applicable to wheat from some countries and not others often is sufficient to divert the trade.
Then they go on:
The concession of free entry for American wheat should benefit also the American transportation and port business. In order to obtain the benefits of the United Kingdom 71492-67
preference, Canadian wheat, which formerly moved in large quantities through American ports has under the preference been shipped principally to the United Kingdom direct from Canadian ports. In view of this concession, American port and transportation interests will be in a position to reenter the transshipment business.
The United Kingdom is the leading wheat-import market of the world. Formerly about a fourth of the total American wheat exports were regularly shipped to the United Kingdom. Under the influence of the world economic depression and the establishment of an import duty in 1932-*
Get this.
Under the influence of the world economic depression and the establishment of an import duty in 1932-
That is what we got.	*
"-(with empire wheat remaining duty free), imports of American wheat into the United Kingdom dropped from 39,267,000 bushels in 1930 (20-1 per cent of total wheat imports) to only 9,000 bushels in 1933-


Charles Avery Dunning: They did not have any wheat to sell.


Robert James Manion: It is strange they did not point that out.


Charles Avery Dunning: They were buying wheat from Canada.


Robert James Manion: We did not have much wheat at that time, as a matter of fact; that was a drought year.
-while imports from empire sources for the corresponding years rose from 79,234,000 bushels (40-5 per cent of total wheat imports) to 140,459,000 bushels (07-0 per cent of the total).
That was the difference between 1930 and 1933. Well now, the very figures of the imports given by them as a proof of the injury done to the United States wheat grower by the six cent preference on Canadian wheat shows the correctness of the argument that the United States was injured and that we were benefited by that preference.
Then, I have here an item from Boston, appearing in the Telegraph-Journal of St. John on January 20, 1939:
First Canadian wheat to move through the port of Boston to British markets in more than two years, a shipment of 24,000 bushels will be placed in the steamship Newfoundland on Saturday for delivery at Liverpool.
Earlier this month a shipment of 280,000 bushels of Canadian wheat moved through this port to Rotterdam. Shipment of Canadian grain through Boston follows the removal in the United Kingdom-United States trade treaty of the six cents a bushel preference on grain shipped to Great Britain through Canadian ports.
That is clear. I do not think the matter is debatable. Then there is another item from the Dow Jones agency of New York showing

105S
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that they expected the same occurence to take place, namely that the ports of Canada would be hurt and the United States ports helped.
I have here another item-from the Christian Science Monitor of November 18- of which I shall read only one paragraph:
"As a result of the removal of the preference," a state department announcement said, "it should be possible for American port and transportation interests to regain their lost business in the transshipment of Canadian wheat to the United Kingdom."
Those facts seem to me unanswerable. It is not a case of an opinion; the facts are there. I have in my hand an article sent to me by a practical grain man of the city of Montreal. This is a statement which appeared on February 3, 1938, a year ago. I take it it was prepared by the shipping interests in Canada. They point out something which is quite true, that while there was nothing in the empire trade agreements that forced Canadian wheat through Canadian ports in order to get the preference, the fact was that the British customs regulations actually forced our wheat to go through our ports. I shall read just a brief summary from this document.


Charles Avery Dunning: Who put it out?


Robert James Manion: I imagine it was the transportation interests which were affected.


Charles Avery Dunning: Did any one sign it?


Robert James Manion: It is not signed. I shall
pass it over to the hon. gentleman when I have finished. It reads:
If the preference is lifted or varied which it can be done by the United Kingdom customs the Canadian interests affected are:
1.	Canadian lower lake elevator interests, as storage and transfer will naturally flow again through U.S. lake and Atlantic ports.
2.	Canadian lake carriers, as with shipments via Buffalo-Atlantic ports, American ships can carry to Buffalo and will do so, as next season's outlook is for restricted traffic of American products for the American lake carrier.
3.	Canadian railroads, as they would lose the bay-Montreal haul during navigation season, and Montreal-Saint John, Halifax during winter seasons.
4.	Canadian labour on Canadian ships, railways and in elevators, et cetera.
It may be said that this is exaggerated, but I do not think so. Naturally those who are interested do not want to be injured by this treaty, and they published this pamphlet. As I said, I do not know just who published it, but it was sent to me by a prominent grain man in Montreal as their argument. Here are some interesting figures. In 1931 the empire countries shipped 42-6 of the wheat sent into the United Kingdom. That was

before the empire trade agreements. In 1938, empire countries shipped in 63-2 per cent. In 1931 foreign countries shipped in 57-4 per cent, and in 1938, 36-8 per cent. Those figures illustrate what happened as a result of the empire trade agreements.


Mr. MOORE:: Those are percentages of
what?


Robert James Manion: I am sorry if I did not
make myself clear. They are percentages of wheat imports into the British market. I have here a statement published by the economic branch of the Royal Bank of Canada. This has nothing particular to do with the trade treaty, but it sets out a few facts which I take for granted are correct. They point out that woidd wheat production for the current season is placed at the record total of 4,459 million bushels. They give the supplies available for export as 1,135 million bushels. They point out that importers' requirements are only 550 million bushels and therefore, there will be a carry-over of something like 1,000 million bushels. This illustrates the need for markets for our Canadian wheat, and that is why I mention it. They go on to say:
International demand for wheat declined from a peak of 947 million bushels in 1928-29 to 523 million in 1935-36. Since that time little improvement has been evident, total shipments amounting to 609 million bushels in 1936-37 and 512 million in 1937-38.
Then they go on to point out that the only stable market that remains-"static" is the word I used a while ago-is the British market. They continue:
In Argentina, however, conditions were much more favourable during the latter part of the season and a bumper crop was harvested. The first official estimate places the outturn at 316 million bushels, the largest on record with the exception of that harvested in 1928-29, and compares with 185 million bushels harvested in 1937-38.
They point out that the Argentine harvest is double what it was a year previously. Despite that fact, w'e are taking this treaty method of losing some of our markets. We are losing our six cent preference, and yet there is more wheat to be shipped by countries like the Argentine, whose crop is double this year what it was last year. All this is going to make matters more difficult for the Canadian producer. I submit that our preferences are being destroyed. I have many quotations here, and I shall read briefly from a few. An apple producer writes to say:
United States requires the export market only for her surplus production; Canada requires it for almost , half her production.

Canada-U.S. Trade Agreement
I quote from the Seattle Post-Intelligencer of November 18, 1938, as follows:
This is a start in bringing back our export business to the United Kingdom. The previous tax of 45 cents per box for apples was prohibitive. The reduction, approximating 15 cents per box is still inadequate, but it will help.
The Business Week of New York of November 26, 1938. states:
The British pact is more important diplomatically, but the biggest trade concessions are made in the Canadian pact.
The two new pacts, while they do not wipe out the system of empire preferences which was set up at Ottawa in 1932, mark the first important move to break down that system.
The hon. member for New Westminster (Mr. Reid) was inquiring about subsidies paid by the United States, and in this connection I quote from the Ottawa Citizen of December 5, 1938:
British millers who bought 20,000,000 bushels of wheat from the United States made this a condition of their purchase of the grain
U. S. to prevent further exports of subsidized flour to Great Britain
British millers have purchased approximately 20,000.000 bushels of United States wheat through ordinary commercial channels. The cost was $13,750,000.
Shipments will begin in January when the wheat duty is lifted and continue over six months.
Just because of the destruction of the preference. Then I quote from the New York Times of November 18, 1938, a Washington dispatch dated November' 17:
The reciprocal trade agreement between the United States and Great Britain, which was signed here to-day, may well have sounded the death knell of the empire preference theory of trade among the members of the British empire. This system, which was advocated by Lord Beaverbrook and others in London, was put into actual effect by the Ottawa agreements, signed late in 1932 and renewed in modified form last year.
And again:
In the agreement signed to-day, several imperial preferences have been extended to include the United States. That is to say, produce of the United States may enter Great Britain at the same rate as competitive produce from some of the dominions, whereas previously the American goods had to pay a higher import duty than similar goods from an empire source.
If the six cents preference on wheat going into the British market was of no use to us, why are all these different sources in the United States so jubilant over its removal? 71492-67J
Here is another dispatch from Washington-dated November 17, appearing in the same issue of the New York Times:
Now, because both Canadian and American, wheat are, by virtue of the British trade agreement, on the same duty-free basis, Canadian wheat may pass through American ports if its shippers desire.
Officials said this would prove a great boon to American railroads, transfer workers and shipping.
I shall quote from one British source. Thf London Economist of November 26 has this
to say:
It is more questionable whether there will be a corresponding increase in British imports. Very few of the concessions made to the United States will result in any category of American goods being placed in a more favourable competitive position vis-a-vis the domestic producer. Most of the agricultural products affected are not grown in this country, or where they are, the domestic producer is already safeguarded.
Listen to these words.
In these eases the effect of the agreement will largely be to divert a certain quantity of trade from dominion (largely Canadian) to American hands, without increasing the total volume of imports.
I ask again what I asked a few moments ago. Where is the advantage if we lose some of our trade and the United States gets it? World trade remains the same, but ours does not. What is the advantage to the world? I cannot see it myself. I simply say, Mr. Speaker, that the United States cares for its own people when it is making a trade treaty of this kind. This government is too anxious for a trade agreement. It wants trade agreements at any price. I say now, from all the mail I am getting from all over this country, that very many of our people, producers of one kind and another-and I have had letters from dozens of different types of producers, agricultural and manufacturing-are very much opposed to this treaty. They protest against it as damaging to them. But they are afraid to protest openly because they know that the budget is going to be brought down in this house probably within a month, and if they protest openly they are just a little afraid of what might happen to them. So the industrialists, the producers, and the workers in the plants or industries affected are afraid to express their viewpoint.
Let me deal briefly with fruits and vegetables, and this will illustrate what has been done to some of our agriculturists. Before 1936 the duty on fruits coming into Canada was 20 per cent, and on vegetables 30 per cent. The duty on both is now down to 10 per cent, as a result -of this treaty and the treaty of 1935. Our season for the production
Canada-U. S. Trade Agreement

*of fruit and vegetables is much later than the season in the United States, and so it is [DOT]difficult for our farmers to produce fruits and vegetables in competition with United States production. I take this attitude, that so far as possible our growers should have the first opportunity in our market.
Then, as I pointed out about apples, the United States sells only its surplus abroad. It has a huge market within its borders, and now it can dump whatever surplus it has much more cheaply into the British market because of the removal of part of the preference, whereas our Canadian producers, with our small population, have to sell about half their apple production in other countries, mostly in Great Britain.
. I have also had strong protests from our tomato growers, some of whom say it is going to ruin their industry. They point 'out that under the treaty there is a duty of H cents a pound on United States tomatoes entering Canada and a duty of 3 cents a pound on Canadian tomatoes entering the United States.
There is another industry, the British Columbia door industry, that is going to be affected adversely by this treaty. There called at my office a few days ago a gentleman who lias for many years been associated indirectly with that industry. I do not wish to give his aiame, but he is an outstanding student as well as a business man. He came into my office and gave me this information. I have confirmed it with British Columbia people.
He says that the door industry in British Columbia began in 1933, after we obtained the preference on doors in the British market. I will read the data he gave me just as I jotted it down. Until 1933 Canada had no wooden door export business at all. In 1933, the year when the British empire trade agreements were negotiated, we exported 50,000 doors, and that number increased to about
1.000.	000 doors in 1938. In looking over the figures I found that our exports went to 1,681,000 doors in 1936, when business was a little better, or nearly 2,000,000 doors in that year, and then with the drop in business generally the figure came down to about
1.000.	000 doors in 1938. The development of the door industry, particularly in British Columbia, has been almost spectacular since 1933. Many United States firms have been forced to open up factories in Canada, and subsidiary industries such as the plywood industry, have been established. Under the British empire trade agreements we enjoyed a preference of two shillings and sixpence on doors, whereas under this treaty the duty is one shilling and sixpence, and this gentleman told me-and what he said has been confirmed

by others-that as a result of the cutting down of our preference of two shillings and sixpence to one shilling and sixpence, the door industry in British Columbia is going to be completely wiped out. They say that this difference is just sufficient to drive the business to the western states; to Tacoma, the hon. member for Kootenay East suggests. This gentleman told me that in two more years there will be no more door industry in British Columbia.
Take coal. The dominion bureau of statistics reports that our Canadian production of coal last year amounted to 14.000,000 tons, and 15,800,000 tons in 1937. Our imports amounted to 13,500,000 tons, or just about the same as our Canadian production. These figures should be read in the light of the declaration that was made in the Nova Scotia brief presented to the dominion government last week, wherein it was asserted that the present Canadian duty on coal is wholly inadequate, and the fact that it has been further reduced by the elimination of the excise tax makes a difference, if I remember the calculation rightly, of seventeen cents a ton .in the duty. My hon. friend the Minister of National Revenue (Mr. Usley) shakes his head.


James Lorimer Ilsley: That, is not so with respect to the duty on soft coal.


Robert James Manion: That would be the duty on anthracite coal. Now, whatever increase there may be in importations of coal from the United States in competition with Canadian coal hits the miner, the railways and the shipping interests of this country.
I should like to deal briefly with one or two quotas, and I am very glad to say that I am getting near the end of my remarks. My right hon. friend the Prime Minister said that I used unfairly the words " propaganda or ballyhoo " in a discussion of the quotas under this treaty. I said, Mr. Speaker, that in the press release which was issued respecting the treaty, these quotas were made to appear enormous, whereas many of them are absolutely laughable, and some of the statements are deceitful.
Let me deal briefly with the milk quota. I do not pretend to be an authority on agriculture, but I am giving these facts, and I have no doubt they are absolutely accurate.


Charles Avery Dunning: But you do understand milk.


Robert James Manion: Yes, and I like it. By this treaty we are given a milk quota to the United States of 3,000,000 gallons. I am told by authorities on the dairy industry that

Canada-U. S. Trade Agreement
one-half of the dairy cows in any dairy county in Ontario or western Quebec could supply that complete milk quota.


Mr. PERLEY:: One-quarter of the dairy cows in Qu'Appelle.


Robert James Manion: My hon. friend says one-quarter of the dairy cows in his constituency.


Charles Avery Dunning: He is a little ambitious.


Robert James Manion: While our milk quota by this treaty is 3,000,000 gallons, Canadian production last year amounted to 1,700,000,000 gallons.
Mr. DUNNING We drink a great deal of our production.


Robert James Manion: Of course, but a quota of only 3,000,000 gallons out of a production of
1,700,000,000 gallons shows the picayune size of the quota on milk. It is just a joke.
I saw an item in the press the other day-and I have it here-showing that the milk sold in Ottawa last year amounted to over 4,000,000 gallons, and yet our quota, of which this government boasts so loudly, is only 3,000,000 gallons. My secretary, who has a mathematical turn of mind, figured it out this way, that if you take those 3,000,000 gallons and divide them among the people of the United States it means that each citizen of the United States would get one-fifth of a pint once a year. That is the quota of which hon. gentlemen opposite are boasting, and this, with the free market for vegetable oils, is severely injuring the dairy industry.


Charles Avery Dunning: The vegetable oils are not touched by the treaty.


Robert James Manion: Quite correct. I just
mentioned that it is hurting the dairy industry very much. I was not speaking of vegetable oils as being in the treaty. But milk is in the treaty. The quota on milk is a speck; it is not important, just a microscopic amount.
As regards potatoes, Canada's total production of potatoes in 1938 was 60,000,000 bushels, and that of the United States, 369,000,000 bushels, or a total of 429,000,000 bushels. Our quota into the United States is two and a half million bushels, and I am informed- and my statement has been confirmed by many who come from that section-that one county in New Brunswick could more than supply that quota. My hon. friend the Minister of Finance has raised a good deal of wheat, but I did not think that he raised potatoes. He may eat them, like a good Irishman does.


Charles Avery Dunning: Just now I represent potato growers, and they are very well pleased with the quota.


Robert James Manion: Well, apparently they are easily pleased, if one county in New Brunswick can satisfy the quota. His statement is not in accordance with letters I have been receiving from potato growers. As I have said, our potatoes go into the United States under much greater restrictions, in addition to the limited quota, than those on United States potatoes coming into Canada. I ask myself, why the difference?
I wish now to deal with the cattle quota. This is a more important matter, because I maintain that the statement about the cattle quota as given to this house and to the people of this country in the press release was a deception-intentionally or accidentally, I am curious to know- I should like to know whether the government knew, when they got the quota of 225,000 cattle and advertised that in their press release, that it included! Mexico.


Mr. ROSS (Moose Jaw):: We in the west knew it.


Robert James Manion: Why did they not mention it in the press release?


John Gordon Ross: They thought that inside three years the hon. gentleman would know that that provision was in the other treaty.


Robert James Manion: I think that inside three years the hon. gentleman and his party ought to have learned enough to tell the truth when they issue a press release. I am going to quote it. A copy of the press release issued by hon. gentlemen opposite is here, and this is what it says on pages 14 and 15 about the cattle quota:
For the prairie provinces the most important concession-
They are boasting of what they are doing for the country.
-in the trade agreement is the maximum reduction in the United States duty on heavy cattle and the enlargement of the tariff quota on this type of cattle considerably beyond that granted in the 1935 trade agreement.


Charles Avery Dunning: That is true.


Robert James Manion: I do not know whether it is when you take away the Mexican side of it. On page 15:
The most important of the agricultural concessions are those relating to live cattle. Western Canada is particularly interested in the United States duty on heavy cattle weighing 700 pounds or more each. On this type of cattle Canada is to receive the maximum reduction in duty or a rate of U cents per pound
Canada-V. S. Trade Agreement

as compared with 2 cents per pound under the 1935 trade agreement and 3 cents per pound under the Tariff Act of 1930. Whereas the number of cattle to be imported at the reduced rate of duty was limited under the 1935 trade agreement to a total of 155,799 head in any one calendar year, the new trade agreement provides that the maximum reduction in duty shall apply to 225,000 head imported in any one calendar year, of which not more than 60,000 head shall be imported during any one quarter of the calendar year. In other words, provision is made not only for a further reduc-tion_ in duty by the maximum, but also for an increase in the annual quota to which the reduced duty applies of nearly 70,000 head over the quota provided for in the 1935 trade agreement.
There is no qualification there. There is no reference to Mexico.


James Lorimer Ilsley: All that the hon. gentleman has read is true, every word of it.


Robert James Manion: Yes, but it is only half true.


Charles Avery Dunning: It is wholly true.


Robert James Manion: It is not the whole truth. My hon. colleague says it is Liberal truth, and I rather think it is. They go to work and give to the people of Canada, and particularly to the -western cattle raisers, through the press the impression that there is a Canadian quota of 225,000 cattle into the United States.


John Gordon Ross: No.


Robert James Manion: Well, they do not mention Mexico; I do not find any mention of Mexico.


John Gordon Ross: The western cattle men knew, from the time it was in the other treaty.


Robert James Manion: Who knew?


John Gordon Ross: Western cattle men.


Robert James Manion: Apparently they did not know at the time. The hon. gentleman is familiar with the rather tricky manner in which his party puts out propaganda, so probably he knew; but so far as I am concerned, I may say very frankly that I did not know, and I do not think anybody else knew. In fact, we had to find it out here in the House of Commons, through a question the other day, that it is a global quota and Mexico has sent in forty-five per cent of the first allotment. I will read that. I intend to put it on Hansard.


Charles Avery Dunning: The Minister of Agriculture (Mr. Gardiner) spoke of it the other day. fMr. Manion.]


Robert James Manion: I know, but only in reply to a question of my hon. friend the member for Haldimand (Mr. Senn).


Charles Avery Dunning: I merely indicate that it was spoken of.


Robert James Manion: He spoke of it when it was dragged out of him. Questions were asked on February 10, as shown in Hansard, pages 821 and 822, by the hon. member for Haldimand:
Is the quota of 60,000 head of cattle per quarter allowed to enter the United States under the terms of the new trade agreement exhausted for the first three months of 1939? I should also like to ask if the shipments from Mexico help to make up this quota allowance.
The Minister of Agriculture replied:
The answer to the first question is, yes. The quota ran out towards the end of the month.
That is the first month of the three months. And he goes on:
I believe the statement is somewhat as follows-
Incidentally he had this information at hand, so apparently he expected some mention of it, and knew somebody would be a little curious. This is the statement he puts on the record:
United States cattle imports, 700 pounds and over, for the month of January, 1939:
Number Percentage
Canada	
30,246	55	per	centMexico	
24,769	45	per	centTotal	
55,015
Then he explains why they shut it off at the 55,000. In other words, of this supposed quota for the Canadian cattle raiser, the Mexican gets 45 per cent. That may please the hon. member for Moose Jaw (Mr. Ross); he seems to be quite tickled to death with it.


John Gordon Ross: No.


Robert James Manion: But I do not think it
satisfies the western cattle raiser who was told he could ship in 60,000 cattle in that time.


John Gordon Ross: No, he was not.


Robert James Manion: He was told it in the press release. Why deny it?


John Gordon Ross: No, he was not.


Robert James Manion: There was no word said of Mexico.


John Gordon Ross: It was in the last treaty, and this quota was increased by 70,000.


Robert James Manion: I do not suppose the cattle raiser read the terms of this treaty any more than he read the last one. This, I am told.

Canada-U. S. Trade Agreement
is the first time it was ever mentioned in the parliament of Canada. A little further down the Minister of Agriculture said:
The quota will divide somewhat in the proportions of fifty-five per cent and forty-five per cent.
A little further down the hon. member for Haldimand asked:
Was it the intention that Canada should enjoy the whole 60,000 per quarter, or otherwise?
Mr Gardiner: No. Under the old agreement, the one which existed before, provision was made, whereby the quota would be for all the cattle imported into the United States. In practice it worked out that the cattle came from Mexico and Canada, and exactly the same terms are in the present agreement.
I ask, why was that not stated in the press release? My hon. friends implied that I was not quite fair in using the word "ballyhoo" or "propaganda". Certainly they might have said that this -was a global quota in which Mexico could share. Canada cannot now ship any more into the United States until the end of March; the quota was exhausted in January, with the result pointed out to me in a letter from a cattle raiser from the west, who says:
Our cattle will rule $1 to $1.50 per hundred lower for the next six weeks than they were selling at one week ago, and I can assure you that the feeders of live stock across this country are really mad.


Charles Avery Dunning: That shows the value of the treaty to the cattle raiser, does it not?


Robert James Manion: It shows what he can get as long as he can ship cattle under the quota, but it does not show how long he can get them in.


Charles Avery Dunning: As a matter of fact, many cattle were saved up for the coming info operation of the treaty.


Robert James Manion: Where was that?


Charles Avery Dunning: In Mexico, and here too, for that matter.


Robert James Manion: That may be; but I find
that last year, when Mexico was not saving up, they supplied 31-3 per cent of the cattle shipped into the United States. That was pretty nearly as high as this.


Charles Avery Dunning: Not of the class covered by this item.


Robert James Manion: Yes, exactly of the class. I have the figures here in a publication put out by the Minister of Trade and Commerce
(Mr. Euler), and I have a page torn from that publication, the Canadian Intelligence Journal.
Total exports of cattle weighing 700 pounds or more amounted during the calendar year to 124,903 head, or 80-2 per cent of the total quota. Of this total, 48,496 head or 31*3 per cent of the quota were shipped from Mexico.
Again I ask, why, in fairness to our people, was not Mexico mentioned? That is the only attitude I take in this connection, and it is a perfectly fair attitude.


James Lorimer Ilsley: It is a weak case for deception.


Robert James Manion: My hon. friend may think so. His idea of deception and mine may be different. I do not know.


John Gordon Ross: Apparently the
Minister of Trade and Commerce did not try to deceive them.


Robert James Manion: The hon. member is implying that the Minister of Finance did, because he denied it until I put up the Minister of Trade and Commerce against him.


John Gordon Ross: He put it out
last year.


Robert James Manion: That is all about that.
I do not wish to get into any wrangles; I am simply pointing out the facts. Let me read what they say in the United States press release with regard to cattle. It shows that they were not blind. At page 47 they say:
In making concessions to Canada on farm products, care has been taken to avoid the possibility of material hardship to any important group of producers in the United States. . . . The most important concessions to Canada in the live stock field are safeguarded by tariff quotas.
They knew what they were doing. This is just another illustration of the way in which they put it over. Now let me read a few more items from this press release, having no particular bearing on cattle but of interest for other reasons. For example, on page 1:
A major new concession to the United States results from the provision that hereafter the Canadian special import tax of 3 per cent will be removed from all items, dutiable or free, listed specifically in schedule 1 which names concessions by Canada.
Then on the next page:
On the other hand, the bulk of Canadian imports from the United States consists of dutiable commodities; consequently the commodities on which Canada has reduced its duties, make up a substantially larger value of trade than dp the commodities on which the United States lowered its duties.
Canada-U. S. Trade Agreement

Then on page 5:
Every section of the United States will benefit from the wide-reaching concessions made by Canada in the new trade agreement.
On page 9:
Under the trade agreements act the United States may not reduce any duty through a trade agreement by more than 50 per cent; but the Canadian government is under no such limitation, and, in some cases, the rates in schedule 1 are more than 50 per cent lower than those in effect in 1935, and some former duties have been removed altogether.
There are a good many more statements to the same effect, all showing clearly that we got the worst of it. They are so bad that I do not like to read them. On page 10 there is this statement:
By far the most important of the "bindings" of the rates of duty already in effect in 1935 relate to coal and coke, the imports of which from the United States to Canada in 1937 were valued at over $30,000,000. . . . The listing of these items in schedule 1 carries with it the removal of the 3 per cent excise tax, which in the case of many of the items on which the duties proper are low, constitutes a material fraction of the charges payable on importation into Canada. In the case of anthracite coal, the duty on which, bound by the agreement against increase, is 50 cents per ton (about 10 per cent in ad valorem equivalent), the tax is equal to about 17 cents per ton.
On the same page:
The new agreement provides that, in the case of all articles, dutiable or free, listed in schedule 1, the Canadian special excise tax of 3 per cent will be removed on imports from the_ United States as soon as the necessary legislation can be enacted. Since schedule 1 covers 57 per cent of the total of 1937 imports from this country, this provision means a large reduction in the charges heretofore collected.
On page 13:
Of the nine tariff quotas fixed in the new agreement, on dutiable and free items together, six are at figures which represent a very small percentage of our consumption. The limits on filleted fish, shingles, and nepheline syenite are relatively higher but are not high enough to permit serious injury to domestic producers should the tariff quotas be filled.
These quotations show how well they took care of their own people, and I commend them for having done so. They were right in safeguarding the interests of their own people and we should have done likewise. In regard to fruits and vegetables they say, on page 19:
The 1937 imports of United States fresh fruits and vegetables into Canada were valued at nearly $17,000,000. The new agreement provides for reductions in Canadian duties and other import charges on $14,500,000 worth of that trade, or 80 per cent of the total value of all agricultural items on which reduced duties result from the new agreement . . . These concessions represent benefits to fruit and vegetable growers and shippers in all parts of the United States.

In regard to apples:
This reduction on apples results from the fact that Canada has agreed to a substantial reduction in the margin of duty preference enjoyed by Canadian apples in the British market, an action of outstanding value to American apple growers and shippers.
Then on page 20: [DOT]
Duty reductions:-The new agreement establishes a basic duty of 10 per cent for nearly all of the fresh fruits and vegetables now subject to an ad valorem duty. Under the 1936 agreement the same items paid 15 per cent. Prior to 1936, the fruit items now dutiable at 10 per cent paid 20 per cent, while the vegetables were charged 30 per cent.
Here is another, on page 25, with reference to pulp, paper and printed matter:
A major concession of the 1936 agreement, continued in the new agreement, related to magazines and periodical publications. . . . Imports under periodicals of all kinds, including newspapers from the United States increased from $2,600,000 in 1935 to $5,900,000 in 1937, the gain being chiefly in the class from which the duties had been removed. The wider circulation of American magazines in Canada creates and stimulates demand for new and improved products and thereby benefits both Canadian and American manufacturers of such products.
Incidentally, it stimulates in Canada the purchase of many pulp magazines, some of which we would be far better without. On page 43 there is the following:
An important concession is made on boots and shoes. The 40 per cent rate of 1935 became 35 per cent in 1936 through the mostfavoured-nation provision. Imports increased from $343,000 in 1935 to $515,000 in 1937. The rate is now made 30 per cent by schedule 1, which is the same rate as applied in 1929 when imports from the United States were valued at over $2,000,000. *
On page 47:
The trade agreement with the United Kingdom. made at the same time as that with Canada, contains many concessions of benefit to American agriculture. Several of the concessions thus obtained involve the relinquishment, in whole or in part, of tariff preferences which Canada had previously held in the British market . . .
In making concessions to Canada on farm products, care has been taken to avoid the possibility of material hardship to any important group of producers in the United States.
On page 49:
Canada has now agreed to permit free entry of potatoes except during the 6-week period June 15 to July 31. at which time the duty will be half the former rate.


William Daum Euler: What is the hon. member reading from?


Robert James Manion: From the United States press release.


William Daum Euler: Propaganda like ours?

Canada-U.S. Trade Agreement


Robert James Manion: The hon. gentleman admits that theirs is propaganda. He contradicts his leader. I do not blame his leader for looking crossly at him at the moment.


William Daum Euler: I merely used the hon. gentleman's extravagant language. That is all.


Robert James Manion: The minister need not use any extravagant language of mine; he can be extravagant himself. This release was put out by the Department of State in Washington under the title, "The New Trade Agreement with Canada, signed November 17, 1938." It is an official document.


Mr. CRERAR:: Does the hon. member consider that ballyhoo?


Robert James Manion: I do not know whether it is ballyhoo, but I do know that a good deal of what my hon. friends put out was ballyhoo. In regard to the most favoured nation clause, I find that despite the fact that we get no concession from any of the favoured nations including Japan, Italy and Germany, we give them the same concessions as we give the United States. Here is Japan with a lower standard of living, very much lower than ours, with low wages, in some cases one-tenj.h of ours, in some cases one-fifth, with sweatshop conditions, no liberty to labour-and that applies to Germany and Italy-no labour unions, no right to bargain; and yet they are given the same rights as the United States under the favoured nation clause. How can Canada compete with such conditions? On another occasion I placed on record the wages paid in the textile industry of Japan, which are just one-tenth the wages paid textile employees in Canada. This provision will curtail the work and wages available in Canada, where the wages are equal to any in the world. Our duty on cotton goods, for example, is 161 per cent, while the British duty on similar goods is 22$ per cent. At the same time our wages are 60 per cent higher than the British wages. I am informed that our cotton industry is about 19 per cent below what it was in 1937.
The right hon. gentleman said what has been stated over and over again, and I suppose will be stated many times in future, that Great Britain asked for special concessions on the part of Canada in regard to the preferences, which would give an advantage to the United States. I asked that those letters be tabled, but the right hon. gentleman said they were too confidential. I want to protest again against this "too confidential" statement that is being made continually by hon. gentlemen opposite. If the right hon. gentleman has a right to quote from that correspondence, 714S2-68
this whole house has a right to read it. It is claimed that this agreement brings some advantage to the man on the street. That is questionable; instead of an advantage to the man on the street, what we get is more competition, less production and higher costs. That often happens when you lower tariffs; you have fewer jobs and less money with which to purchase the goods produced.
Then, with regard to the 3 per cent special excise tax, I assume this change will result in a great decrease in revenue. Last year I believe that tax brought in between fifteen and eighteen million dollars. I submit that the removal of the 3 per cent special excise tax on the items specified in the agreement was either bad faith or bad management on the part of the government. No announcement was made in connection with the matter until some days later, after protests began to reach the Minister of Finance because so many inequalities would result. Then the minister said that these would be corrected, but they have not been corrected yet. Here is the situation to-day, on account of the fact that the 3 per cent special excise tax has been removed only from the items mentioned in the schedule. Mushrooms and cut flowers are freed from the 3 per cent tax, but it remains on most of the necessities of life. The tax has been removed from such items as sweet potatoes, artichokes, asparagus, strawberries, quinces and nectarines, perfumery and alligator pears, but it remains on many raw materials and on clothing.


William Daum Euler: The excise tax is not off yet.


Charles Avery Dunning: It has not been removed from any item yet.


Robert James Manion: I admit that; but the
government agreed to take it off, and I am sure my hon. friend would not contradict the statement that the government does intend to take it off. The situation to-day is that the go'-ernment has promised to remove the tax from the luxuries I have mentioned, these absolute unnecessaries, if I may coin a word, while they have said nothing about removing it from many raw materials and many kinds of clothing. To show the incongruity of this agreement, the excise tax is to be removed from raw cotton but it is to remain on raw wool and raw silk. It is to be removed from coal but will remain on certain types of coke.


Charles Avery Dunning: Who says it will remain?


Robert James Manion: I say, according to the
agreement it will remain.


Charles Avery Dunning: Nothing of the kind.

Canada-U. S. Trade Agreement


Robert James Manion: The agreement distinctly
states that the 3 per cent excise tax is to be taken off the items covered by the agreement.


Charles Avery Dunning: Yes, but it does not say it will remain on anything else.


Robert James Manion: No, and that is exactly
what I was going to say. Before the government has finished it will have to remove the tax from all items. The other day when the hon. member for Kootenay East pointed that out, the Minister of Finance shook his head, but I repeat that before we have finished we shall have to remove the special excise tax entirely. It must be done in order to remove the inequalities, absurdities and discriminations in the application of our duties.


Charles Avery Dunning: Not because we have to; whatever we do will be in the interests of the Canadian people.


Robert James Manion: The hon. gentleman would not suggest that they would remove that tax from many of these unnecessaries, as I termed them a few moments ago, and leave it on the raw materials and necessities of life.


Charles Avery Dunning: I take it that we would have my hon. friend's support in removing it?


Robert James Manion: As long as the agreement is as it is, certainly you would have to have my support, because I would not want the country to get in the muddle it would be in if the situation remained as it would be without further removal of the 3 per cent tax. But the hon. gentleman and his government did not mention that in their press release. They simply stated that these were the reductions. It was only a few days later that this situation was pointed out to the Minister of Finance by many people who were vitally affected by it, people who would suffer from injustice if some remedy were not found. Then, a few days later, the hon. gentleman said:
The government will make certain when the necessary legislation is introduced that it will be of such a character as to eliminate any unfairness that might otherwise be expected to result from the exemption from the tax of the particular articles enumerated in the agreement.
With that I heartily agree. Otherwise the country would be left in a hopeless muddle. The situation could not possibly remain as it would be left under this agreement. There is no doubt, I further suggest, that this extension of the removal of the excise tax was not contemplated at the time the agreement was negotiated, so these are really new concessions to the United States.


Charles Avery Dunning: Oh, no.


Robert James Manion: Then why was it not mentioned among all the ballyhoo in the press release? Was it again deception?


Charles Avery Dunning: If my hon. friend will permit me, I will tell him.


Robert James Manion: The hon. gentleman can make his own speech when he wishes to do so.


Charles Avery Dunning: Very well.


Robert James Manion: However, I do not mind interruptions. Tell me; why was it?


Charles Avery Dunning: The answer is this. We were making an agreement with the United States with respect to a specified list of commodities. Anything we do with respect to taxation outside the list of commodities under discussion is purely a matter of domestic policy for this parliament and not a matter for the United States.


Robert James Manion: I quite agree with that.


Charles Avery Dunning: That is why it was not mentioned.


Robert James Manion: But since the minister was going to make a statement a few days later, why did not the government, in the press release, say that within a short time there would have to be other modifications in order to put the agreement on a fair basis?


William Daum Euler: They were only announcing accomplished things.


Robert James Manion: No; they were announcing a good many things which were not accomplished at all. To my mind this is simply another case of ministerial blundering.
In conclusion, let me repeat that at present it is impossible to state what will be the result of this treaty. Time alone will tell, but my belief is that the ill effects will be very much greater than the good effects. In 1935 this government made an agreement with the United States. In 1934, the year previous, our trade with the United States showed a balance in our favour of $1,000,000.' Last year our trade with the United States showed an unfavourable balance of $82,000,000; in other words, they sold us $82,000,000 worth of goods more than we sold them. Then it is interesting to note the increase of trade under the items covered by the 1935 agreement. Our exports under the items affected by the 1935 treaty increased by only $16,000,000; of that amount newsprint accounted for $15,000,000, and newsprint has been on the free list since 1913. Hon. gentlemen opposite talk about their press release being so honest. Let me quote

Canada-U. S. Trade Agreement
what is said at page 26 of that press release, because this is the sort of half truth with which this release is filled:
In the 1935 trade agreement provision was made for the binding of the free entry of those kinds of wood pulp of which Canada was the chief supplier of imports into the United States. In the new trade agreement the binding of free entry is broadened to cover all kinds of mechanical and chemical wood pulps shipped from Canada to the United States. The free entry of standard newsprint paper is rebound in the new trade agreement and this covers the largest single item of trade between the two countries.
What is the implication there? It is that they got some great favour for Canada, when as a matter of fact all these things fiave entered the United States free, at least since 1913. If that is not propaganda; if that is not a half truth, I do not know one when I see it.
This agreement will help here and hurt there. The future will tell the result so far as Canada as a whole is concerned. My belief is, of course, that there is some good in this treaty. It would be a queer treaty if there were not some good items in it, though frankly I have not heard about them, and I am hearing more and more every day about the ill effects on the various industries of Canada. My conviction is also that the balance is largely against us.
After all, we have to aid Canada as a whole. This country is a nation, not nine nations, and we must treat it as a nation. I pointed out that the empire trade agreements bound the empire together economically; this trade agreement pulls the empire apart. When the Republicans again go into office in the United States, the chances are that this agreement will be cancelled. Then we shall have a changing of our trade routes and we shall have lost our preference. The Minister of Trade and Commerce, who follows me in the debate, made the statement in the house the other day that we would get back our preference. The preference will have been wiped out. It will not come back. If the Republicans take office in 1940, then probably this treaty would be wiped out, because they are a high protectionist party. If they do, and if it is wiped out, does anybody suggest that we shall get back our preference?


William Daum Euler: Yes.


Robert James Manion: I do not agree with the hon. member. He says we do.


William Daum Euler: It is in the agreement.


Robert James Manion: Yes, but it will be a fait accompli; we shall not get it back. There is certainly room for discussion, and we intend 71492-68J
to tell the people what has not been told by the government. We intend to tell the facts and the truth-what we should have in all government business.


William Daum Euler: Mr. Speaker, may I say at the outset that I realize my inability adequately to deal with some of the statements made by the leader of the opposition (Mr. Manion). He has quite properly taken some two hours to deliver his address and to make his criticisms. I appreciate the fact that I am confined to forty minutes, and I believe it is quite impossible for me fully to deal with some of the statements he has made.


Charles Avery Dunning: You cannot use a scrapbook in forty minutes.


Robert James Manion: But you put out forty-two pages of propaganda, to begin with. You do not need as much time.


William Daum Euler: But I should like to use as much of my forty minutes as possible.


Robert James Manion: Then, tell the Minister of Finance to keep quiet.


Charles Avery Dunning: I was talking to my colleague.


William Daum Euler: Probably my remarks will be rather discursive, in my attempt to some extent to meet some of the criticisms which have been made by my hon friend, some of which have been made a second time and some of which I believe I attempted tq answer when I spoke in the debate on the address in reply to the speech from the throne.
At the outset I had an inclination to compliment my hon. friend upon his speech-as I think I shall still do-and to compliment him upon his evident intention to deal with the trade agreement on its merits. I admit I had a fear that perhaps he would be consistent with what was read out of his book the other day, where I believe he rather advanced the theory that the duty of an opposition was to criticize, regardless of the merits of a case.


Robert James Manion: What I said was not quite as strong as that.


William Daum Euler: Perhaps not quite so strong as that, but I believe that is the implication which was evident from what he had written in his book. He said to-day that he desired to deal with the question on its merits, and I have no particular fault to find with what he has said. I am rather inclined to suspect that he has received a sufficiently convincing number of ballots from the Globe and Mail
Canada-U. S. Trade Agreement

which call upon, all of us to forget party advantage and to cooperate for the common good.


Robert James Manion: Are you going to obey?


Mr. CAHAN:: How many have you received?


William Daum Euler: I have received a considerable number. And I will say to the hon. member for St. Lawrence-St. George (Mr. Cahan) that on a considerable number of those ballots additions were made which indicated that they had considerable confidence in their member.
Although my hon. friend said in a previous speech, and repeated in his speech to-day, that no one can judge whether or not this is a good or bad agreement until it has had time to operate, yet he spent most of his time this afternoon in a criticism of it. I agree with him that it is not entirely possible for anyone to say whether or not this agreement *is going to give us all the advantages for which we may hope, or that it may result in *some disadvantages-which we hope will not occur. But while time will tell-and while the hon. member has made the statement that time will tell-I might say to him and to the House of Commons that time has already begun to tell.


Mr. STIRLING:: It certainly has.


William Daum Euler: I have just had brought to my attention a statement giving a comparison of figures with respect to exports to the United States.' Our exports to that country in the month of January, 1939, were valued at $36,276,766.


Charles Hazlitt Cahan: Does that include gold?


William Daum Euler: I expected that question. Yes, some of it includes gold. But even if we subtract gold our January exports to the United States are increased by at least $5,000,000 over those of last year. While I am not an economist, and while I have every respect for the opinion of my hon. friend [DOT]opposite, I cannot see why, when gold is produced in Canada by the labour of our men, when it adds to the wealth of Canada and when it is exported as a commodity, it cannot fairly be included in the sum of our exports.


Charles Hazlitt Cahan: Should we grant trade concessions to induce other people to take our gold bars?


William Daum Euler: If I may proceed, our exports in January, 1939, were the highest for the month of January in any year since 1930, and I suggest a comparison with 1933, when they were valued at $16,000 000. Domestic exports
fMr. Euler.]
to the United States in January, 1938, were valued at only $20,732,240. I repeat that in January of this year they were valued at $36,276,766.
Imports from the United States in January, 1939, were valued at $28,790,257, compared with $32,329,792 last year. So it appears that imports from the United States, instead of being increased, as my hon. friend seems to fear, for some reason or another have decreased in those respective months of January by something over $3,000,000.
I do not attach too great importance to the month-to-month figures. They vary from time to time, and conceivably it may occur that in other months the balance might be the other way. The favourable balance of trade with the United States in January of this year stands at $8,077,335, compared with an unfavourable balance in January last year of $10,629,000. Exports to the United States in January, 1939, were $15,544,526 greater in value than those in the same month of 1938; [DOT]but of this increase-and I say this for the information of the hon. member for St. Lawrence-St.	George-shipments	of gold
accounted for $10,258,000. So that the increase in merchandise exports amounted to $5,286,000. I shall now set out figures for the month of January in 1938 and 1939 showing the increase in the value of exports of some commodities. At least some of this increase is attributable to the new trade agreement.
	January,	J anuary,
Commodity	1938	1939Seed potatoes	$ 1,043	$ 141,525Cattle, all kinds	270,027	1,901.143Fresh fish	1,081,091	1,118.485Cheese	22,298	62,265Leather, unmanufactured.	47,454	173,075Planks and boards.. ..	703,599	1.113,557Red cedar shingles.. ..	438.142	774.608Newsprint	6,124,124	7.055.458Wood pulp	1,489.875	2,062.071Aluminum in bars.. ..	200.354Nickel	1.004.929	2.092.593Fertilizers	408.075	566,002Soda compounds	104,601	147,921


Robert James Manion: There is no change in the rates on many of those commodities.


William Daum Euler: There is in some of them, but there may be an increase on account of the natural development of trade.


Robert James Manion: The pick-up in business generally.


William Daum Euler: I am quite willing to have my hon. friend place any construction he wishes on these figures. I am simply giving some items where an increase in exports occurred in January of this year. In perhaps half of them the increase in exports may be attributed to the new agreement. I give this

Canada-U. S. Trade Agreement
just as an indication to my learned friends that perhaps they need not fear what was so apparent in my hon. friend's speech, that this country was going to be ruined as a result of this trade agreement.


Robert James Manion: I did not suggest it would be ruined.


William Daum Euler: I am going to be rather discursive in my remarks, in touching upon some of the points mentioned by my hon. friend to-day. He spoke of the fact, and it is a fact, that on some commodities the Canadian duties are much lower than the duties on the same commodities going into the United States. I have not had an opportunity to look into this to any extent, but I might quote a few instances where the shoe is on the other foot.


Robert James Manion: I admit there are some.


William Daum Euler: There are some commodities that go into the United States at lower rates than into Canada. Patent leather goes into the United States in fairly large volume and the duty imposed against it is 7i per cent. The Canadian duty on patent leather from the United States is 20 per cent. They have a duty against rubber tires of 10 per cent, whereas our duty against them is 25 per cent.


Robert James Manion: As a matter of information, do any Canadian rubber tires go into the United States?


William Daum Euler: I do not think so, but the rate is there. They have a rate of 10 per cent against automobiles from Canada, whereas our rate is 174 per cent. Agricultural implements are admitted into the United States free, and some do go in, whereas we have a rate of 7i per cent. The rate on cereal breakfast foods entering the United States is 10 per cent, whereas the Canadian rates are from 15 to 25 per cent. The rate on whisky entering the United States is $2, whereas the Canadian rate is $6.
My hon. friend said something about press releases, indicating that the Canadian press release was pretty much propaganda for the government. Perhaps he made a point in connection with the cattle quota, but I think it might have been as well if it had been stated that, as in the previous agreement of 1934, the cattle quota is a world quota. The hon. member cited some figures to show that this quota was divided pretty well in the present quarter between Canada and Mexico. That is quite true because they are the only countries exporting cattle to the United States. He went on to show that the quota had been exhausted during the first quarter, and that
Mexico had received a large proportion of the quota. That is also perfectly true. I believe hon. members across the floor will appreciate my statement when I say that this situation has received the attention of the government. Without disclosing anything' that should not be disclosed, I think I can say that the cattle exporters of this country will be well satisfied when they know what action is to be taken with regard to the quota, on cattle going into the Lhiited States.
In regard to my hon. friend's reference to the Canadian press release as propaganda, I leave it to him to say whether it is not just as reasonable for me to assume that the press release which was sent out by this government was just as fair, just as accurate and just as representative of the real situation as was the press release in the United States, from which he quoted so freely.


Robert James Manion: They certainly could not
both be right.


William Daum Euler: They might both be right.
My hon. friend has read a good deal from his scrap-book, for which I do not blame him. Before I conclude my remarks, which will be brief, I may be obliged .to do the same thing in order to combat some of the statements which he has made. My hon. friend minimizes and deprecates the argument put forth by the Prime Minister (Mr. Mackenzie King) that trade agreements between countries like Canada and the United States, and the United States and Great Britain, have an influence on the goodwill that ought to exist between countries. I do not believe my hon. friend is quite serious in what he says. The buying and selling of goods by individuals often result in personal friendships. I remember once being a delegate to the League of Nations, and I thought then, as I do now, that the greatest value of the league was in the delegates from the various countries coming together to sit round a table, getting to know each other and realizing they were all pretty much .the same in their outlook. If that is -true of individuals, is it not true of nations? We have absolute proof of that right here. In spite of the disapproval of the hon. member for St. Law-rence-St. George-and I shall take back my statement if he objects-never in the history of nations has the feeling between Great Britain and the United States and Canada been as friendly as it is to-day.
I should like to turn, during the .time I have at my disposal, to the more material side of the agreement rather than deal with what might be regarded as the sentimental side, of which I spoke just now. I would say that the first principle which we as a
Canada-U.S. Trade Agreement

government desired to observe in making an agreement with the United States-and 1 think they were actuated by the same principle-was that we should try to make an agreement which would be mutually advantageous. That is the only basis upon which a permanent agreement can be framed. I was surprised at the statement of my hon. friend that the United States always gets the best of us. I believe he said that he would be afraid to negotiate with them for fear they would always get the best of us.


Robert James Manion: I did not say that.


William Daum Euler: That sort of thing comes
strangely from the mouth of that red-blooded Canadian we used to have in this house.


Robert James Manion: I did not say that.


William Daum Euler: If I have misquoted my hon. iriend, I shall retract it.


Robert James Manion: The hon. gentleman has.


William Daum Euler: My hon. friend certainly
made some statement to the effect that if this government negotiated with the government of the United States, he feared we would be taken advantage of.


Robert James Manion: I admit that I said I
thought this government had got the worst of it.


William Daum Euler: 
Charles Hazlitt Cahan: Nonsense.


William Daum Euler: I will give figures to show that it means that and nothing else. In the fiscal year 1938, our imports of shoes from the United States were 307,000 pairs, and the total consumption in Canada was 22,723,000 pairs. If you figure that out, our imports of shoes from the United States, if we disregard those brought over occasionally under the S100 exemption, amounted to less than one and a half per cent of our consumption. I contend, Mr. Speaker, that under those conditions we cannot regard the competition as particularly strong.


Charles Hazlitt Cahan: We must have had a fairly good protective tariff.


William Daum Euler: It still is a good protective tariff, and that is one of the points I desire to make. But the argument of my hon. friend would mean that, in spite of the fact that imports of United States boots and shoes amount to only one and a half per cent of our total consumption in Canada, we ought to impose a duty that would shut out those imports altogether, and that he must be in favour of a prohibitive tariff.


Robert James Manion: I am not.


William Daum Euler: It must be true in this particular instance. It would indicate that, at all events, and if you have a prohibitive tariff you might as well say good-bye to your trade agreement.


Robert James Manion: I am absolutely opposed to a prohibitive tariff.


William Daum Euler: 
Charles Hazlitt Cahan: That is the hon. gentleman's deduction, which is different entirely from the deduction made by the United States.


William Daum Euler: I would remind my hon. friend that when I made that statement the other day, I think he said: " Oh, yes, we would get all these back." I made the statement that in case the agreement between Great Britain and the United States was discontinued by, let us say, the coming into power of a new government in the United States, in that event our preferences in the British market are restored, and I repeat that with all possible emphasis-our preferences are restored. The hon. member for St. Lawrence-St. George said that they are only restored-


Charles Hazlitt Cahan: I did not discuss that.


William Daum Euler: In the debate on the address in reply to the speech from the throne the hon. member for St. Lawrence-St. George, speaking in the house on January 31, 1939, as reported on page 479 of Hansard, contended that the exclusion' of preferences from the scope of most favoured nation treatment in no sense affirms the right of Canada to grant such preferences and leaves the United States free to condemn such preferences on diplomatic grounds.	*


Charles Hazlitt Cahan: That is true, but that is not what the hon. gentleman was saying.


William Daum Euler: Article 17 of the trade agreement reads:
Nothing in the agreement-
I am saying that this in effect reaffirms that we have preferences in the United Kingdom market which will be restored to us:
Nothing in the agreement shall entitle the United States of America to claim the benefit of any treatment, preference or privilege which may now or hereafter be accorded by Canada exclusively to territories under the sovereignty

Canada-U. S. Trade Agreement
of His Majesty the King of Great Britain, Ireland and the British dominions beyond the seas, Emperor of India, or under his majesty's protection or suzerainty.


Robert James Manion: As a matter of information, has that not been the rule right along for years? I understand that it has been.


William Daum Euler: It was not included in the agreement.


Charles Hazlitt Cahan: It never was necessary
because the agreement in other terms made it clear.


William Daum Euler: 
Grote Stirling: Is that arrangement
countervailing?


William Daum Euler: I do not think there is any countervailing arrangement.
In conclusion I should like to speak of some concessions which Canada obtained, but I can speak of them only in very general terms. The new agreement renews or betters all the concessions secured for Canadian exports under the 1935 agreement, and contains a large number of entirely new concessions. Whereas the 1935 agreement provided for reductions in United States duties affecting sixty-three items and sub-items of the United States tariff-and now I am using some of the arguments of my hon. friend; I am speaking of ''items," although I admit quite freely that the number of items has no real bearing on the matter; it is the amount of money involved ; you might have half a dozen small items which w'ould not counterbalance one large item-the new agreement includes 129 reductions in rates of duty covering trade valued in 1937 at 872,981,492. In addition, there are forty-one bindings of existing United States rates of duty, including thirty-two rates reduced in the 1935 agreement. The total trade affected by these bindings was valued in 1937 at $51,843,682. Furthermore, the 1935 agreement contained a number of quotas limiting the imports allowed at reduced1 rates of duty. In each case in which it was found that these quotas actually restricted Canadian exports, the new agreement provides for a complete removal of, or a substantial increase in, the quota.
Finally, existing free entry was bound on thirty-two items and subitems in the new agreement, compared with twenty in the 1935 agreement.
The following are some of the principal concessions to Canada in the new trade agreement:
Agricultural products: Maximum reduction in duty on an enlarged quota in the case of

Canada-U.S. Trade Agreement
heavy cattle; enlarged tariff quota for calves; maximum reductions in the duties on cream and milk; further reduction in duty on cheese -this is very important-further reduction in the duty on horses; reductions in the duties on oats, barley, rye, buckwheat and products made therefrom; reductions in the duties on various kinds of feeds, fresh and frozen blueberries, clover and grass seeds, certified seed and table potatoes, hay, maple sugar and maple syrup, and silver or black fox furs or skins.
Fishery products: Reductions in duty covering almost the entire range of production of fish.
Forest products: Removal of the requirement that imported lumber should be marked with country of origin; removal of tariff quota applicable to imports, at reduced rates of duty, of Douglas fir and western hemlock lumber; more favourable arrangement regarding imports of red cedar shingles; reduced duties on a variety of woodenware articles; and on uncoated printing paper, hanging paper, tissue papers and crepe paper.
Minerals and metals: Reduced duties on a large number of them. I will not enumerate them.
Chemicals: The same.
Manufactured goods: Binding of free entry for agricultural implements, and reduced duties on patent leather; horsehide and cowhide gloves; skating boots; pipe organs; yachts; hose; wire cloth; axles; iron castings; moulders' patterns; iron and steel chains; electric stoves and ranges; electric washing machines; and waste.
In addition to the benefits which will be derived by Canadian exporters from the reductions in United States duties provided for in the new Canada-United States trade agreement, there are a great many concessions in the trade agreement between the United Kingdom and the United States which will facilitate Canadian trade. I have already made mention of this. Some of these are: Books; abrasives; sole leather; side upper leather; collar, bag and case leathers; grained leather; boots and shoes; numerous textile items; dressed furs; kippered herring; biscuits; jellies, jams and marmalades; ginger ale, and so on.
I will conclude, since my hon. friend has read from so many authorities, with some of the opinions of the Canadian public, or Canadian journals, as to the probable effect of the trade agreement. These are not in general taken from the columns of papers which are friendly to this government.
I have here a telegram received from the president of the British Columbia Lumber and Shingle Association:
At a meeting of our directors to-day I was instructed to wire you expressing our appreciation and thanks for the efforts that you and your department put forward in the recent trade negotiations to protect the lumber interests of our country and to advise that we fully appreciate that you had a difficult task to handle, particularly affecting lumber. We fully realized from the start some sacrifice would have to be made in empire markets in the interest of broader trading and sounder national relations but we are hopeful that when the United States removes the present excise tax that we will be able to more than regain our losses. I should also like to express my personal sincere congratulations and thanks.


Grote Stirling: 'Would the minister give the dates of these?


William Daum Euler: This is November 23 of last year.
The Windsor Star of November 19 said that cash will flow, and that the treaty is important to Windsor because of the car industry, which can look foward to better times.
The Ottawa Journal says that praise for the new Canada-United States agreement was general with representatives of the majority of industries.
The Hamilton Spectator says that the spirit behind the agreement stamps it as a healthy symptom in world economy.
The Montreal Gazette states that while there may be some difference of opinion as to the merits of the agreement, it can be said that it is bound to have a stimulating effect on world trade.
The Toronto Star writes that the treaty should commend itself to Canadians of all parties.
The London Free Press remarks that on general principles the people will approve the new treaties on political as well as economic grounds.
The Farmers Advocate believes that wider markets are opened through the trade agreement with the United States.
The Winnipeg Free Press quotes J. A. McLeod, president of the Bank of Nova Scotia, that the new three-cornered agreement is a great achievement in reducing trade barriers.
Saturday Night predicts an increase in trade, which will add to Canadian national wealth, and better times.
The Winnipeg Free Press quotes Hon. Howard Ferguson as strongly approving the agreement.
Canada-U. S. Trade Agreement

The Montreal Herald says that the signing of the treaty is one of the most hopeful signs which has appeared on the world horizon for a long time.
The Monetary Times states that the new treaty will affect the volume of international trade.
The Canadian Textile Journal believes that the new trade agreement will lessen restrictions on international trading that should have a fav-reaehing effect.
The Canada Lumberman, the Montreal Gazette and again La Presse are all favourable. I might say for the benefit of my good friend the hon. member for Waterloo South (Mr. Homuth) that far from the textile mills in Hespeler having been injured, they are busy in that town, and in Preston they have gone back from a three-day to a five-day week. In regard to live stock Mr. Wright of Saskatchewan states:
Lowered tariff of half-cent on live cattle increases the value of all Canadian cattle approximately $5 per head.


Grote Stirling: Is that Mr. Wright of
the Globe and Mail?


William Daum Euler: No. This is a gentleman
from Saskatchewan who, I believe, was a member of the board of the Bank of Canada.
Now let me give a few comments from United States sources.
The Mining Congress Journal of the United. States states that the zinc mining industry has been sacrificed in the agreement and complains bitterly.
The Milwaukee Sentinel states that the dairymen attack the treaty, complaining of the reduction in American tariffs on cream, milk, cheese and other dairy products.
The Duluth Herald objects to provisions that lower the duties on dairy products from Canada.
The New York Journal American states that there is severe criticism of the agreement on the part of members of congress who come from industrial states.
Senator H. Shipstead of Minnesota asks, "if this is Yankee trading, or are we trading the Yankee?" He says that the treaty is based more on international politics than on economics.
The New York Times protests against the agreement.
The Boston Post says that the pact hurts New England, and is loud in protest on behalf of the fishing and textile industries of New England which it says are injured.

The New York Herald-Tribune regards the new trade pact as a blow to the United States fisheries.
The lumbermen, the sheep and cattle men complain. The cattle men declare that they are sold down the river.
The New York Journal American states that United States farmers are sold out.
I have cited these opinions to show that there are views on both sides, and I say to the leader of the opposition that we shall have to wait and see exactly what the results will be.
This agreement was conceived in the spirit of goodwill and mutual advantage. No one contends that it is perfect, and only time and experience will disclose definitely its advantages and disadvantages. We believe that it is action in the right direction and that its enactment will be to the advantage of both countries.
At six o clock the house took recess.
After Recess
The house resumed at eight o'clock. RAILWAY ACT



LANGUAGE REQUIREMENT IN QUEBEC PROVINCE


[Stage Direction]
Mr. WILFRID LACROIX (Quebec-Mont-morency) moved the second reading of Bill No. 3, to amend the Railway Act.
He said: Mr. Speaker, the object of the bill which I have the honour to introduce is to ensure that employees of certain public services in the province of Quebec have the necessary qualifications for their work. Inasmuch as the chief qualification required in any public service is the ability to speak the language of the people with whom one has to deal, the proposed amendment seeks to authorize the board of railway commissioners to make orders and regulations providing that all new employees of railways, telegraph and telephone companies in the province of Quebec be sufficiently conversant with the French language to be able properly to perform their duties and to be understood by and understand a majority of the people with whom they are called upon to do business.
The situation in that regard in the province of Quebec is deplorable. In spite of all the complaints lodged by the travelling public

Railway Act-Language Qualification
and others using these services, and their requests for an improvement in the situation, there has been no improvement. Why? Because there has been no change in the custom of appointing to positions in these public utility companies men who are totally ignorant of the French language. Let me take as an example that part of the Canadian National system situated in the province of Quebec and administered from Moncton. Nearly one-third of this division is located within the province of Quebec, and a considerable part of the remainder is in a French-speaking section of New Brunswick. On that division the following new appointments were made during 1937: brakemen, fifteen, of whom only two can speak French; firemen (apprentices), thirty, of whom only three can speak French; shop apprentices, thirty-nine, all but three unable to speak French; headquarters and supervisory staff, six, none of whom can speak French; legal department, seven, all unable to speak French; assistant superintendent of pensions, two. both unable to speak French: staff of the general superintendent of transportation, nine, all unable to speak French; traffic department, twelve, only two of whom can speak French; electric power and signal department, seven, not one oS.. whom can speak French; purchasing department. four, all unable to speak French; engineering department, six, all unable to speak French; auditing department, ten, none of whom can speak French; telephone and telegraph department, three, all unable to speak French; divisional superintendent's office, twelve, not one of whom can speak French; Canadian National express, seven, all unable to speak French; freight claims department, three, only one of whom can speak French; treasurer's department, four, all unable to speak French; local freight agent's office, three, all unable to speak French; general baggage agent's office, three, all unable to speak French; and so on.
In the town of Shediac, New Brunswick, for instance, where the population is ninety per cent French-speaking, there are three officials of the Canadian National Railways: a station agent, his assistant and a porter, not one of whom can speak French. It is high time that we changed this state of affairs; the French-Canadians are sick and tired of it. Even in our good old city of Quebec the express agent bears the name Corrigan MacManus; the telegraph agent is a Mr. McWilliams; the superintendent of the St. Malo shops is a Mr. Boone; the superintendent of the Saguenay division is a Mr. Edgley; the head of the bridge department L a Mr. Riddock; the head of the sleeping car department is a Mr. McDougall; the head of the mechanical department is a Mr. Broad-hurst ; the superintendent of the transportation department is a Mr. Sunderland; the official in charge of steamships is a Mr. Trueman, and so it goes in a dozen other cases.
In this connection I cannot do better than quote the testimony of a former railway employee who is now a member of this house, the hon. member for Matapedia-Matane (Mr. Lapointe), who on June 22, 1938, said:
It is clear that there exists within the Canadian National Railways an organization which is seeking to eliminate French-Canadians from the posts to which they are entitled. I therefore consider it necessary to investigate this situation, which should not be allowed to continue. Our English speaking friends may be tired of hearing our often repeated complaints, but I wish to tell them that, if we were used a little more fairly, if we were not always kept in the background, we would not so often deem it our painful duty to discuss with such frequency a problem very disagreeable to us.
In order to show them the actual situation, I invite them to visit w'ith me the province of Quebec where we will effect a little investigation. Let us first go to Montreal, and visit the shops or the large offices of the Canadian National Railways on McGill street.
If my hon. friends pay a visit to the different branches-traffic, finance, accounting, purchasing, industry, natural resources, etc.,- they will not find more than two French-Canadians out of every twenty employees. They will also find that French Canadians have been almost ostracized from important positions and that high salaries never go to them. They will look in vain for bilingual signs, either on the walls or on the office doors. If they ask the elevator operator for information in French, they probably will receive the same answer as I got, a few weeks ago: "I do not understand. All that is going on in the greatest French centre of America.
I will then ask my hon. friends to travel to the eastern part of the province of Quebec. But, before we leave Bonaventure station, we will pay a short visit to the offices of the sleeping car department. My hon. friends will no doubt be received as I was a few days ago when I spoke French to one of the employees: "Do you speak English?" said he. "If so. all right, because nobody here understands French."
We will then board the Ocean Limited, the night express, where further surprises await my hon. friends. In the sleeping cars, they will try in vain to make themselves understood in the French language. After a night's rest, we will go to the dining car. In any of the places between Rimouski and Matapedia, the stretch covered from 6 to 9 a.m., when the train passes through one of -the most beautiful districts of the province of Quebec, which is also one of the most exclusively French, I defy them to find among the eight members of the staff of that car a single one who can speak French. Our journey will end at Camp-bellton, New Brunswick. Although more than 50 per cent of the mileage administered from this divisional point is in the province of
1076	COMMONS
Railway Act-Language Qualification
Quebec, only four officials out of fourteen are French Canadians. The staff of the divisional office numbers twenty-one employees, of which only four are French Canadian. Out of forty-five men employed in the roundhouse only seven are French Canadian.
Mr. Hungerford, to whom I wrote some time ago to complain about there being no French speaking employees on the Gaspe line, answered me in part as follows, in a letter dated December 15, 1938:
We will take the matter up with the representatives of the brotherhood in accordance with the requirements of a labour agreement existing between the company and its employees. We hope to be able to come to an agreement with the brotherhood that will permit us to appoint a bilingual employee to the post in question.
I do not see why a regulation could not be made that would force the brotherhoods to make their choice among bilingual candidates, without violating their labour agreements. Seniority rules were also put forward as an objection. I think the members of the transport commission are intelligent enough to draw up rules which will safeguard seniority rights; for it must not be forgotten that my bill applies only to new employees.
Should parliament pass this bill, we shall have in a certain number of years, through the normal working of the promotion system, our rightful proportion of French speaking employees on the railways operating in the province of Quebec. This would assuredly be the best wa3' of maintaining the confederation agreement, because it would remove all the causes of injustice of which my compatriots rightly complain.
I rely on the sense of justice of my fellow members in the house to help me in getting this bill through the various stages of procedure.
Hon. C. D. HOWE (Minister of Transport) :: 
[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on railways, canals and telegraph lines.


[Stage Direction]
Mr. J. S. WOODSWORTH (Winnipeg North Centre) moved the second reading of Bill No. 5, to amend the criminal code.
He said: A bill similar to this was introduced in 1936 as Bill No. 62. I was not even given a chance to explain the bill; the house had passed a resolution to deal only with unopposed bills, and this bill was promptly opposed by the Minister of Justice (Mr. Lapointe), possibly not because of opposition to the principle of the bill but rather because of the season.
Mr. ROGERS:: That was made very clear.


James Shaver Woodsworth: Yes. It was reintroduced last year as Bill No. 4. It was again opposed by the government, but entirely on constitutional grounds. The labourers' right to organize was apparently conceded by everyone-at least no one objected. But the British North America Act was invoked once more and we heard a good deal about property and civil rights.
The minister will recognize that I am a mere layman, but in my own way I tried to present certain constitutional arguments. I should like very briefly to run over the ground I took last year. I had been looking over the criminal code, and I brought to the
attention of the house certain sections of that code. I found, for example, that breach of trust by a public officer is a crime punishable by five years imprisonment. I found that obstructing an officiating clergyman is a crime for which one is liable to be sentenced to two years in prison. This does not mean that religion comes under federal jurisdiction, but when someone attempts to obstruct an officiating clergyman the act becomes a crime. I found, further, that the head of a family is required to provide the necessities of life for any child under sixteen and for his wife, and if he fails he is guilty of a crime and liable to a penalty of $500 or one year's imprisonment or both. Again I would say that this is not because family matters are matters that come under the jurisdiction of this parliament, but when someone evades certain responsibilities it becomes a crime. I find that the issuing of a false prospectus, statement or account by directors or officers of a company is a crime. Here again is a matter that is concerned with contracts, which come directly under provincial jurisdiction; yet if there is a false prospectus issued oi anything of that kind-though, and indeed because-affecting property and civil rights that becomes a crime. I found that ever cheating in playing at any game or in holding the stakes or in betting on any event is a crime rendering one liable to three years' imprisonment. I found that sending a false telegram is a crime, the punishment being two years imprisonment. I should like to read section 501 of the criminal code:
Everyone is guilty of an offence punishable, at the option of the accused, on indictment or on summary conviction before two justices and liable on conviction to a fine not exceeding $100, or to three months' imprisonment with or without hard labour, who wrongfully and without lawful authority, with a view to compel any other person to abstain from doing anything which he has a lawful right to do, or to do anything from which he has a lawful right to abstain . . .
I submit that clause is closely in line with the bill which I present to-night.
Let us take another section, section 502:
Everyone is guilty of an indictable offence and liable to two years' imprisonment who, in pursuance of any unlawful combination or conspiracy to raise the rate of -wages . . . uses any violence or threat of violence to any person, with intent to hinder him from working or being employed at such trade, business or manufacture.
Here is a matter that on the face of it might be considered a purely provincial matter, having to do with contracts, wages, et cetera; but when anyone undertakes to prevent an employee from doing work under
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these circumstances, his action is a crime and comes under the jurisdiction of this parliament. As I pointed out last year, certain things which employees may do become crimes. And I suggest that if we have a provision against such actions we should also have in the criminal code a provision preventing employers from interfering with employees in their efforts to organize or carry on union activities. It seems to me that is a reasonable provision.
I am not a lawyer. But I remember nearly forty years ago having to coach a few law students in logic. I must say that after the experience of those weeks I have never been overwhelmed by what the lawyers instinctively know about reasoning or accept unreservedly their conclusions.


Mr. MARTIN:: They were just young men.
Mr. W00D8W0RTH: Yes, quite so.
An lion. MEMBER: Like yourself.


James Shaver Woodsworth: But I submit there is no inherent quality in a lawyer as such which makes his deductions necessarily logical.
With regard to the -constitutional aspects of the case I should like to quote from the submission made by the Trades and Labour Congress of Canada to the royal commission on dominion-provincial relations in January of last year. Referring to the jurisdictional question the submission states:
We base this statement on two important principles laid down by the privy council itself in dealing with our constitution. The first of these principles was given in a decision of 1896 (the Distillers' and Brewers' case), when their lordships stated that they did not doubt "that some matters, in their origin local and provincial, might attain such dimensions as to affect the body politic of the dominion and to justify the Canadian parliament in passing laws for their regulation or abolition in the interests of the dominion." Obviously this means that a matter of civil rights or of a local or private nature in its origin should cease to be reserved exclusively to the provinces when it becomes of such prominence as to attain national significance.
The second principle, contained in the decision on the Radio case (1932) may be taken either as an extension of the first, or as parallel to it. Lord Dunedin in giving judgment had established that the point at issue was given by the act neither to the dominion nor to the provinces. As a residual power, and as a matter essentially national, jurisdiction was declared to rest with the federal authority.
One other paragraph of this document.
Thus, it seemed to the trades and labour congress that the intention in the mind of the original promoters of the British North America Act and the needs of to-day in regard to the constitution are in agreement, namely, that the central government should be able to exercise those functions one "would expect to find a

central government possessing, that is to say, jurisdiction in questions of common import throughout the nation in matters where uniformity is highly desirable, in matters where the size of the problem exceeds provincial competence, as well as in matters more readily recognized as interprovineial in scope.
Later in the debate last year I was very glad to have the hearty support of the then leader of the opposition, Mr. Bennett. As we all recognize him as a lawyer of standing, I take the liberty of quoting a few paragraphs which I think fairly well summarize his argument. This is to be found on pages 3994, 3995 and 3996 of Hansard for 1938:
I think the right hon. Minister of Justice will agree with me that in two paragraphs of this bill we are not dealing with property and civil rights at all, that what we are dealing with is intimidation and conspiracy.
I hope the right hon. Minister of Justice (Mr. Lapointe) will take this point very carefully into consideration, "what we are dealing with is intimidation and conspiracy." The quotation continues:
In the paragraph to which I refer, paragraph (b), we are dealing with the offence against the body politic on the part of those who may be in a position to enforce their views by threats, intimidation or otherwise, preventing that which arises out of property and civil rights, namely a contract being made effective. No one would question the right of the provinces to control matters of property and civil rights. No one has questioned the right of the provinces to deal with matters of contract. But it does not follow that because that is so, this parliament in the exercise of its jurisdiction over criminal law may not express itself in the strongest possible terms as to those who interfere with freedom of contract and the making of it. . . .
Again:
But where a man says, " 'Thou shalt not' use your property or exercise your civil rights," and he uses towards you intimidation or force or threats to see that you do not exercise your rights, that is an offence; that is within the criminal law, and solely within the jurisdiction of this parliament. It is that offence at which this bill strikes.
And again, with respect to penalties:
But it is not a penalty for a breach of contract, because that is covered by a provincial statute; that penalty sounds in damages, as many acts provide. This bill goes further. It does not, as I read it, contemplate the question of contract or property and civil rights in that sense at all. It merely says that if a man refuses to employ another, or dismisses him from his employment because he has exercised his freedom of choice by associating himself with a particular trade union, that is such a deprivation of a civil right, the great right of freedom or association, as to incur the penalties of the criminal law, and not a pecuniary result sounding in damages. That, I think, is the distinction between the provincial statutes and this bill.

Criminal Code-Trade Unions
The then leader of the opposition offered a practical suggestion:
On the other hand, if we have what I conceive to be the strongest reason in the world for believing a statute to be valid, we should place it on the statute books and ask that it be referred to the court so that its validity may be determined. That is the method prescribed by law for that purpose.
He considered that under these circumstances the bill need not be proclaimed. He closed his presentation with this statement:
I believe the bill to be valid. I believe it to be within the legislative jurisdiction of this parliament. I believe it makes it an adequate and proper offence for a person to interfere with any man exercising his freedom of choice and his right of association, provided always that it is exercised-in the language of the bill itself-"in a lawful manner."
The United States, I might point out, has had somewhat similar constitutional difficulties. The National Labour Relations Act of 1938, though challenged in the courts, was upheld by the supreme court. The core of the National Labour Relations Act lies in sections 7 and 8. Section 7 provides:
Employees shall have the right to selforganization, to form, join, or assist labour organization, to bargain collectively through representatives of their own choosing, and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection.
Section 8 supplements and enforces the right of employees to organize and bargain collectively by enumerating and prohibiting certain practices by employers, which are designated as "unfair labour practices." And I would call these particular sections to the attention of the Minister of Labour (Mr. Rogers):
1.	It is declared to be an unfair labour practice for an employer to "interfere with, restrain or coerce employees in the exercise of the rights guaranteed in section 7."
2.	It is an unfair labour practice " to dominate or interfere with the formation or administration of a labour organization or contribute financial or other support to it."
3.	It is an unfair labour practice for an employer "by discrimination in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labour organization."
4.	An employer indulges in an unfair labour practice if he discharges or discriminates against an employee because he has filed charges against an employer under the act.
5.	An employer indulges in an unfair labour practice when he refuses to bargain collectively with the representatives of his employees.
Let me reiterate that this measure, whose constitutionality was challenged, was sustained in the United States by the supreme court.
We are urging this bill at this time because in practice it has been found that the provincial legislation is wholly inadequate. Had I time I might review the provincial acts in the various provinces, but I do not think that is necessary here to-night. I should like to confine myself to the objection raised last year, the constitutional objection.


Ernest Lapointe: I should like it very much if my hon. friend would indicate in what way the provincial legislation, where it exists, is wholly inadequate.


James Shaver Woodsworth: Essentially because of the very thing that I have included in this bill; that is, intimidation, either overt or in the form of the economic power which an employer possesses and may exercise. This is the situation practically, as I see it. The various measures that we have in the provinces take it for granted that there are two parties equal in bargaining power and that these two parties have perfect freedom in coming to an agreement, but in practice that is not the case. It is true that behind the employee may stand a local union that may have considerable strength. We had an example before us to-night in the very strong railway brotherhoods where, because of certain seniority provisions, there would be difficulty in carrying out the provisions of the bill presented just prior to mine. But very often there are not strong labour organizations.
On the other hand, behind the employer there is a board of directors, a company, possibly a great corporation with millions of dollars. Opposing the corporation is a little man who is threatened with the loss of his job. What chance has he, under these circumstances, to bargain freely? No chance whatever. We can go on and on and on in a theoretical sort of way assuming that everybody has economic freedom and liberty, and we shall get nowhere.
I was very much struck with a paragraph I read the other day in a book by Max Lerner, entitled " It Is Later Than You Think." Although Mr. Lerner was speaking of liberals with a small " 1 " and was thinking in terms of the United States, I am afraid that what he says applies all too closely to at least some members of the Liberal party in Canada.


Ernest Lapointe: With a small " 1 " or a big one?
Criminal C ode- Trade Unions


James Shaver Woodsworth: In some instances, I am afraid, with a large "L." It applies to those who have been brought up in the old school, possibly before the problems which have arisen on account of the concentration of capital which exists to-day became acute. In any event I should like to read this paragraph; I think it is worth the attention of every member in the house:
The result is that the classical liberals play directly into the hands of the reactionaries. They have become the most reliable allies that reaction has. Their doctrine of individualism and laissez-faire leads, in the absence of effective government control, to the further concentration of economic power in the hands of the giant corporations. Their doctrine of the rule of law leads to the oligarchial power of the supreme court. Their doctrine of liberty of contract leads, in the hands of the supreme court, to the defeat of basic humanitarian legislation. Their doctrine of states' rights leads to the creation of a No-Man's land in which the federal government is prevented from acting and the states refuse to act. Their belief in social control through litigation leads to the attempt to regulate a social system through the interminable delays of the courts. Their lip-service to the shibboleths of freedom ties the hands of the government and leaves the field to the tyranny of corporations. It is not that liberals want to stand still but that they fear to go forward.


Mr. POULIOT:: May I ask my hon. friend, in what country do they have such a strong bench in the supreme court?


James Shaver Woodsworth: I was quoting from Mr. Max Lemer, who I think was speaking particularly of conditions that prevail in the United States.


Jean-François Pouliot: It is not in Canada.


Mr. COLDWELL:: It is worse.


James Shaver Woodsworth: I do not think the situation here is any better. There is a reference in my quotation to a No-Man's land. Undoubtedly there are some very real difficulties that any government has to face. It seems to me that this government has sometimes been very generous in its treatment of the claims of the provinces. I am not now going into the question of the padlock law.


Ernest Lapointe: That is
not what I am being told in my own province of Quebec.


James Shaver Woodsworth: Perhaps not.


Ernest Lapointe: I am a
federalist over there.


James Shaver Woodsworth: I wish merely to
point out that there are undoubted difficulties. I appeal to the common sense of the

house and the sense of justice of the Minister of Justice and the Liberal government, in this matter. I ask them not to look at the situation too closely from the purely technical standpoint-although I believe that constitutionally I am on sound ground. But when a grievance exists in this country, and when it has been found in [DOT] practice impossible to remedy that grievance under provincial jurisdiction, it seems to me that we have a right to come to this house and expect that action will be taken.
On other occasions I have referred, to some of the abominable conditions which exist in our so-called company towns. I understand that one of my colleagues will take the opportunity to deal in some detail with that problem. But anyone who has gone into certain industrial communities in northern Ontario, northern Manitoba, northern British Columbia-and I have no doubt that such communities exist in parts of the east, with which I am not so familiar-will recognize that conditions exist there which are incompatible with all ideals of British liberty. Some years ago I was threatened with not being permitted to speak in one of those towns; although I came there at the time of a federal election and I was then supporting a farmer member of this house. It was before we had our own organization as it exists to-day. Before the meeting I was waited upon in the office of the hotel by an American manager of an American company who laid down the law that if I touched on labour matters I would not be permitted to speak. That was in a good sized town in northern Manitoba. Here am I, a Canadian citizen of several generations, who in this country have cherished the ideals of British liberty, and I go to that town to carry on the work of trying to select a federal representative, and an American who has not even taken the trouble to become naturalized in Canada can block me in carrying on that work.
If that can be done to an individual who has some standing in the country, what can not be done to the poor employee who has no one behind him and whose very livelihood is affected by the decision at which the manager may arrive. That is the kind of thing we face all over this country.
Unfortunately in some instances these companies even have certain concessions from the government. It is an outrage, merely because many of these places are isolated and the people concerned are economically unable to assert themselves, that these conditions should continue from year to year. I appeal to the Minister of Justice, who I believe is

Criminal Code-Trade Unions
a fair-minded man, that he should take this matter up. As I said, I am not a constitutional lawyer, and I may not argue this matter as it might be argued in a court.


Paul Joseph James Martin: You have done very well.


James Shaver Woodsworth: I have confined
myself almost exclusively to the constitutional aspect, but I believe that if the minister would give a little more careful attention than he has in the past to the actual conditions which have developed here in Canada, he would find a way-if not in the exact wording of my bill, then in some other manner-* whereby this need could be met. I urge upon him that course. I do not want to prolong this presentation, although I could go almost indefinitely into cases of hardship. On behalf of the considerable number of people whom I represent-and I know I have behind me the organized labour bodies who have urged this action upon the government-I would urge that the government give this matter careful consideration at this session.


Mr. DANIEL McIVOR (Fort William):: I should like to put myself on record as supporting this bill, because it is real reciprocity and trade treaty, or tradesmen's treaty. The purpose of the bill is to prevent employers from refusing to employ or from dismissing employees, or conspiring with others therefor, for the reason that such employees are members of a trade union. I do not think there is any wrong or any crime in the act of a man who unites himself with other fellow workers for their own good. I know that employers generally give their workmen a square deal. I am speaking now from experience, and I will give the house the most recent example of which I know, of employers of labour who have assisted their men to form a union. I refer to the Canada Car and Foundry Company, of Fort William. The men wished to organize, and they were assisted by the management in their organization. This bill would not do anything but help those men and that management. It may be that there are some employers known to the hon. member who sponsored this bill who are not fair and are not willing to play fair with those whom they employ, but I am convinced that the rank and file of employers of labour want to give their men a square deal, either because they are afraid of public opinion, or because their consciences are properly trained according to the Master Workman.
I have no hesitation in supporting a bill of this kind because it embodies true Liberal policy, and I am glad to see the leader of the Cooperative Commonwealth Federation (Mr. Woodsworth) coming so close to Liberal
ideas. I am going to support the bill wholeheartedly.


Mr. C. G. MacNEIL (Vancouver North):: Since this matter was last discussed in the House of Commons I have had some experience in industrial strife which has led me to the firm conviction that only a measure of this kind will guarantee to the workers of Canada their fundamental rights-freedom of association and equality before the law. I propose to tell a plain, unvarnished tale of events which occurred in British Columbia last summer and which demonstrated how men may be deprived of these fundamental civil rights by powerful, vested interests. In this instance something like thirty-one men were convicted before our courts as a result of their struggle to assert their rights. I refer to the strike that took place at Blubber Bay, Texada island.
Quariying operations on Texada island are conducted by the Pacific Lime Company. Texada is an isolated spot and the company controls virtually the only payroll on the island. They enjoy practically a monopoly of the source of first-class lime on the Pacific coast, both on the Canadian and on the United States side, and usually they employ about 150 men. I have no hesitation in saying on my responsibility as a member, and after careful investigation of the conditions there, that this particular company has a most unsavoury record at the coast so far as working conditions are concerned. It is a notorious fact that they have failed to enforce the usual safety regulations in the mill, in the quarry and in connection with ventilation in the sacking room. On one occasion, a man, because a shaft was unguarded, was caught, and before the accident was discovered about twenty minutes later, he was mincemeat. Mr. Justice McIntosh, who presided on the arbitration board, found it necessary to recommend that rubble round the lip of the pit should be cleared away. When men are working in a quarry 189 feet deep, from which the only egress is a straight, narrow ladder, it is obvious that a stone, falling from that height, might easily crush a man's skull. Other industrialists on the coast have felt quite uneasy for many years about the conditions that obtained at Blubber Bay. The wage arrangements were also unsatisfactory. The men attempted to organize, and in consequence of that attempt their leaders were definitely blacklisted by the company. During the summer of 1937, and again in the summer of 1938, they insisted on their rights of collective bargaining and of organization. They took all the legal processes available to them under the laws of British Columbia. Conciliators were sent in on three
Criminal Code-Trade Unions

occasions and, conciliation having failed, the men took action under which is known as the Industrial Conciliation and Arbitration Act of British Columbia. Mr. Justice McIntosh presided over the board of arbitration, and the board brought down a unanimous finding on the main points submitted to them. The provincial act provides:
It shall be lawful for employees to bargain collectively with their employers, and to conduct such bargaining through representatives of employees duly elected by a majority vote of employees affected, and any employer or_ employees refusing so to bargain shall be liable to a fine not exceeding $500 for each offence.
The board found in favour of the men on all the principal points under dispute, and the award was unanimous. The company accepted the award. True, there were some technical difficulties at the time, but Mr. Justice McIntosh, accompanied by several members of the board, went back to Blubber Bay and ironed out these difficulties. Again, the award was accepted by all parties to the dispute. Mr. Justice McIntosh recommended that the twenty-three men previously blacklisted should be reinstated. His position was made quite clear in that respect. He said that the company should dismiss the men who had been temporarily employed during the course of the dispute and that those who had been dismissed should be reinstated if available. Nevertheless this company, almost wholly owned and controlled entirely by a United States concern, the Niagara Alkali Company, New York, although accepting the award, refused to work out conditions of reinstatement for the men concerned. The men waited between two and three weeks patiently expecting the company to devise a plan of reinstatement, but still the company refused to reemploy them. The men went on strike and from then on we had one of the most tragic series of incidents in British Columbia, constituting a dark blot on the industrial history of that province; for not only was it shown that the provincial legislation was inadequate, that it was impossible for the provincial government to enforce the award, but the company figuratively thumbed its nose at the law; and what made it still worse, the detachment of provincial police sent to Blubber Bay was employed to suppress the strikers.
The company, through the cooperation of the police, enforced their owm padlock law on Texada island. Families residing on private property and desiring to cross on the only thoroughfare available in order to get to the only store, the only telephone and telegraph office, the government dock and the public highway, were compelled to secure passes from

the company's office, and on one occasion, in order to reach the public highway from private property, I was required, though a member of this house on lawful business, to travel under police escort. It was a terrible situation and one w'hich has led to extreme bitterness in British Columbia. That strike is still pending. The result was to make a travesty of law and justice in that province, and after what has occurred at Blubber Bay, and in view of the circumstances that surrounded that strike, it is no wonder that many people have little confidence in the administration of law and order in our country. It is nine o'clock now and I desire to move the adjournment of the debate.	.
Motion agreed to and debate adjourned. TRADE AGREEMENTS



CANADA-UNITED STATES-CONTINUATION OF DEBATE ON MOTION FOR APPROVAL SUBJECT TO REQUIRED LEGISLATION

[Stage Direction]
The house resumed consideration of the motion of Mr. Mackenzie King for approval of the trade agreement between Canada and the United States, entered into at Washington on November 17, 1938, subject to required legislation.
Mr. J. H. BLACKMORE (Lethbridge):: In
rising to speak on the trade treaty I find myself in a most difficult position. I could praise this treaty with justice perhaps, as the Minister of Trade and Commerce (Mr. Euler) and the Prime Minister (Mr. Mackenzie King) have done, and in so doing unquestionably win the applause and approval of the Liberals in the house and their supporters outside. On the other hand I could disparage the treaty with equal show of reason, as the leader of the opposition (Mr. Manion) has abundantly demonstrated, and in so doing I should win the approbation of the Conservatives in the house and their supporters outside.
But I am here to preach a new doctrine, a doctrine of understanding. It is my task to point a new way. If I understand; if I have a new way, I shall stand alone; for it is well known that he who understands, stands alone. I believe there is a way out of the difficulties by which we are beset, and as long as I have that faith I shall endeavour to find that way and to assist my fellow Canadians in finding it, even if in so doing I must, to a great extent, stand alone. Consequently I will not approve this treaty, nor will I condemn it. In my opinion the good points offset the bad ones, and there are in the treaty a sufficiently large number of both.
It would appear as though in the last analysis it might favour the west in considerable

Canada-U. S. Trade Agreement
measure. It would seem that it might assist my province and my constituency, at least *directly; whether or not it will assist indirectly it is too early to say. Consequently I will watch the treaty and the way it works out, with much interest.
Before going further, I am going to lay down this general principle, which I was pleased to hear the leader of the opposition lay down. Before any change is brought about in the tariff structure of Canada, by any administration whatever, all producers whose interests may be affected directly or indirectly by any such change ought to be given full right and opportunity to come before the people concerned in making the change and to present their case, in whatever detail they consider necessary, in order to make everyone fully understand their point *of view.
There is a tendency on the part of the leader of the government, the right hon. Prime Minister, to try to misrepresent just a little the stand of the people who oppose him in this country. If one says the least word against trade, or even damns it with faint praise, immediately the leader of the government rises in his place and seeks to take advantage and make political capital of the situation by trying to make it appear that such person opposes trade. That is distinctly unfair, and I trust that as the right hon. gentleman grows older he will outgrow that tendency.
Let me say a word or two regarding the stand I take on trade, in order to make my position clear once and for all. I do not oppose trade; neither do I ardently worship it. As long as the circumstances persist which at present obtain, we Canadians simply must trade; first, to rid ourselves of our surpluses; second, to obtain those commodities which we need and which we cannot produce, such as citrus fiuits and the like; third, to enable us to have seasonal exchanges, so that in the winter time, for example, we may enjoy carrots, green vegetables and the like, which can be produced readily in warmer climates. At the same time we have interest to pay on debts. That interest can be paid only in goods and the goods can be exported only by trade. Again, we have life insurance policies in companies located in the United States and elsewhere. Upon those policies we must pay regular premiums which must be paid in goods, and goods can be exported only through trade. Then we have a great deal of raw material to distribute.
At the present time we are endeavouring to distribute the world's raw material by trade, and in so doing we are attempting an utter impossibility. Let no man forget that. We
are attempting also to place adequate purchasing power in the hands of our people by means of trade. In so doing we are again attempting an utter impossibility. These last two objects cannot be attained, and until those who are leading this country and the people generally throughout Canada clearly comprehend these latter two facts which I have laid down, we shall go on blundering, trusting to trade to do those things which trade cannot do.
Much has been made by the Prime Minister of the contention that this treaty is tending towards peace. During the time at my disposal I propose to discuss that aspect of the treaty, neither opposing the trade treaty nor defending it- as an economic measure, but treating it purely as a political measure in a world where war abounds. Our people in Canada want peace. A democratic government should give them peace. If this government cannot give them peace, at least it ought to follow those policies which are designed to lead to peace. I contend that this government in signing this treaty is taking a step which is not tending towards peace. Can the treaty help to prevent war? Absolutely not. When the Prime Minister maintains that it will do so, he is deceiving himself and all those who trust him.
In a Canadian Press dispatch reporting a speech delivered by Sir Samuel Hoare on February 10, 1939, I find a most interesting statement, in these words:
How often have I thought . . . when I was foreign secretary, that we tended in the years after the great w-ar to ignore the root of the causes of future wars.
Does Sir Samuel Hoare know? During those years Great Britain was striving for trade treaties. Does he think for one moment that in so doing she was removing the root causes of war? Manifestly he does not. He goes on to say:
Our first duty is to be ready to remove the causes of war.	[DOT]
To those words I say amen.
What are the causes of war? There are two main causes to-day. The first is the deficiency of purchasing power in the hands of the people within any given country of the world. The more we know about realities, the less we shall treat that statement with disdain. It was that condition which brought into power Hitler and Mussolini, and it is that condition which will bring into being a Hitler or a Mussolini in Canada unless it is changed. The second main cause of war is that in this world there are plenty of resources, but they are in the- hands of relatively few nations. The other nations are unable to get those
Canada-U. S. Trade Agreement

resources, or the products of those resources, by any means known to man, except by fighting. If we are going to remove the causes of war we must remove those two causes. For example, sir, in Alberta we have vast resources of coal. Italy needs coal, which she must import every year in order to keep her people from freezing. Up to the present time and under the present system we know of no way to enable Italy to get enough of the products of Alberta's coal fields except by . conquering and possessing Alberta. We want to remove the cause of war; seek it in this inability and remove it. I maintain that this treaty, or a thousand treaties like it, cannot remove that cause.
What is the cause of war? Is it lack of goods in this world? Let us see. I have in my possession a statement by F. E. Lathe of the national research council of Canada. On June 27, 1938, in Ottawa, speaking before the American Association for the Advancement of Science, that authority declared that mankind to-day can produce four times as much food as all the people alive can use. In the same speech he said there is a sufficiency of every other necessity in the world to give everyone an adequate standard of living. There is no lack of plenty in this world. The trouble is that we have not yet learned how to distribute it.
During the same convention another eminent authority spoke; this time Doctor Harold C. Urey, Columbia's Nobelist in chemistry. Before the convention he used these words:
There is little doubt but that much of the unrest of the civilized world for the past twenty-five years resulting in revolutions, new systems of government and world wide depression are all-
Note these words-
-rather closely related to this productive capacity, largely brought about by science.
Mr. Speaker, through you may I call the attention of hon. members to the fact that this is a revolutionary statement. It is a
statement of what seems palpably impossible -that we are fighting, having depressions, having upheavals, because of our large production. Yet those are the words used. And he goes on to say that profound modifications of our social and economic institutions must result from the clearly increasing productive capacity for material things that chemistry and other sciences make possible. There can be no doubt of the meaning of that man. I maintain that statement bears out my contention. We must leam to distribute. Lack of distribution within the country and among the different nations is the fundamental cause of war and troubles.
What is the cause of war? It is the unequal distribution of resources. I shall have to turn over to Hansard a chart which I wish all hon. members to see. This is a striking chart used by F. E. Lathe in his speech. I shall have to tell-


Mr. DEPUTY SPEAKER:: Order. I
regret to interrupt the hon. member for Lethbridge, but I would ask him to confine his remarks to the trade treaty between Canada and the United States.


Mr. POOLE:: That is the trade treaty.


John Horne Blackmore: I do not see how in
the world a person can more closely confine his remarks to the treaty than by discussing the question whether or not it will tend to create peace, especially when the Prime Minister made that as one of his greatest arguments in favour of the treaty. The question of peace is the matter I am discussing. With your permission, Mr. Speaker, I have laid down the statement that there is an inequality in the distribution of resources throughout the world, and that this is one of the causes of war. This is the chart used by Mr. Lathe in connection with his speech:
In this table the number "1" is taken to represent substantially complete self-sufficiency, "2" partial or temporary self-sufficiency, and "3" definite lack of self-sufficiency.
	Table VI-National Sufficiency in		Major Minerals				
Br.	U.S.	France	Ger-	- Emp.	U.S.A.	S.R.	and Dep. many	Italy	Japan
1*	I	1	1	1	2	2
1	1	1	1	2	3	3Copper	
1 	
1	1 1	2 3	3 3	3 1	3 2	2 3
1	1	2	2	2	3	2Nickel	
1	3	3	2	3	3	3Tin	
2	3	3	3	3	3	3Asbestos	
1	3	1	3	3	3	3Petroleum.. ..	
3?	1	1	3	3	3	3
Numerical order represents decreasing abundance in relation to national requirements.

Canada-U. S. Trade Agreement
Is it not clear why Germany, Italy and Japan must struggle with the nations which have those commodities in abundance, in order that they may be able to get their share? There is an inequality of distribution of this world's resources. This generation must discover a means whereby we can enable those three nations to get their full share of the production of those resources, without owning them, or they will arise every twenty or twenty-five years, when they are strong enough, and endeavour to seize them by force.
The Minister of Trade and Commerce has declared twice in the house that in the present treaty Italy, Germany and Japan hardly profit at all-and we are supposed to be signing this treaty to get peace! Yet those three nations with whom we want to have peace are entirely ignored, so far as the benefits to be derived from the treaty are concerned.
How can this treaty help towards peace? I will grant it helps the United States, Canada and Great Britain. But Great Britain and the United States are not the sources of our potential danger, as the leader of the opposition has so well pointed out on two occasions before the house.
What is the cause of war? What does Herr Hitler say? Perhaps I may be excused for quoting a few salient passages from a recent speech he made. He may not be representing himself truthfully, but this is what he says:
In Germany 135 persons live on one square kilometre-


Frederick George Sanderson: Order. Would the hon. member state the newspaper from which he is reading?


John Horne Blackmore: It is an Associated
Press dispatch from Berlin under date of January 30, appearing in the Ottawa Citizen. May I just quote again:
Where lies the cause of all our economic difficulties? (says Hitler). In over-population of our living space.
In Germany 135 persons live on one square kilometre (-358 square mile) without outside assistance and without the resources of former times.
"No people have been born to be "have-nots," and no people to be "haves." The conditions of possession on this earth have resulted from historical development."
And again:
Every people has the right to make its existence secure on this earth.
And again:
It has exactly the same right to participate in the exploitation of this world as any other people.
And again:
As things are, we must replace what we lack in material means by extreme industry and the greatest possible concentration of our labour power.
And again:
He for whom nature lets bananas grow into the mouth-
And, sir, if he was not thinking of the United States, and Canada and other parts of the British empire I ask you what was he thinking about; for if there is any people in the world born with bananas growing into their mouths-


Mr. BOUCHARD:: "Yes, we have no
bananas."


John Horne Blackmore: We are those people.
-by themselves naturally has an easier fight for existence than the German farmer %vho must work hard all the year to keep his soil in condition.
The whole speech is replete with statements like that, which are pathetic. If we are ever going to get ourselves to the point where there is an understanding between us and the other great races of this world, we must commence now, and not delude ourselves into thinking that the signing of such treaties as this is the beginning of that understanding.
Do such treaties make the "have" nations help the "have-nots"? is the question to ask. This is a treaty among three "have" nations, the three greatest "have" nations in the world. By what conceivable means can it help the "have-nots," when the Minister of Trade and Commerce this afternoon specifically stated that the "have-nots" were not to derive benefit from these treaties, except only incidentally?
May I now read statements of some men whose word ought to bear some weight with hon. members, regarding treaties somewhat similar to this one? I choose first the words of Sir Archibald Sinclair, Liberal leader in England. He is speaking about the Ottawa agreements. But before reading this, may I say that when the Ottawa agreements were signed I hailed them as a great achievement. That was because at that time I did not understand. To-day, without any reflection whatever on the good men who negotiated those agreements, men who in my judgment believed they were doing what was in the best interests of this country, I would certainly not praise those agreements. I agree with this man. Here are his words:
It was not until then-[DOT]
That is when the Ottawa agreements were signed.
-that the German people abandoned themselves to the frenzy of despair which we call

Canada-U. S. Trade Agreement
Hitlerism, and the tariffs and quotas of Ottawa, the economic armaments of the British empire, began to breed in other countries tanks, aeroplanes and warships, the military armaments of nation* which were determined not to go oil paying tribute to Britain but to acquire territories and raw materials for themselves in Abyssinia, in Spain, in China, in Austria, in Czechoslovakia, and perhaps ultimately in the British empire itself.


Mr. HEAPS:: What is the date of that?


John Horne Blackmore: According to the record I have, this was delivered on May 11, 1938. At any rate it was near that time.
That is what one great authority says-I assume he is an authority; I hope he is not just talking political ballyhoo. He ought to be an authority. Those words are worthy of our respect. The Ottawa agreements were somewhat similar to the agreement that we are now discussing. They were a set of agreements designed to enable members of the select few who have been blessed by Almighty God with the good things of this world to keep these things unto themselves and away from the others.
I have another quotation of the same tenor. This is from Peaceful Change published by the Foreign Policy Association:
Through the Ottawa agreements of 1932, the members of the British empire, including India, the dominions and a number of British colonies, established a system of trade preferences, favouring each other, and discriminating against outside countries. Since the trade of the British empire amounted to 29 T per cent of the world total in 1934, such a policy is of serious concern to the rest of the world. Outside countries like Germany and Japan are thus placed at a disadvantage in all these imperial markets.
The trade treaty under discussion is an expression of a sort of Anglo-Saxon economic imperialism. Canada and the United States could manage to live largely without engaging in hot, successful commercial rivalry. That statement, without amplification, must seem strange, I know, but I could support it at great length. Canada and the United States, being blessed by providence with an abundance of all sorts of resources of every kind, are in a position largely to live without obtruding their goods upon the world markets and competing with the other nations who have to trade their goods on world markets in order to live. We do not need to extrude our goods in order to live; we are doing it merely as a means to distribute purchasing power among our people, simply because we have not yet learned a better way of doing it. Is it not hot, successful com-
mercial rivalry which tends to war? May I read some words of President Wilson, that great ambassador of peace:
Is there a man or woman, nay, is there a child in this audience, who does not know that the seeds of war are sown in hot, successful, commercial rivalry?
This treaty as far as Germany, Italy and Japan are concerned is tending towards hot, successful, commercial rivalry against them. Thus it does not tend to remove the causes of war; it tends rather to provoke war. I am not condemning the treaty; I am not saying that at the present stage of our progress it is not necessary for us to have such a treaty. But I am saying that any informed person who deludes himself into thinking that a treaty like this tends towards international peace is either culpably ignorant or culpably lacking in understanding. I intend to support the treaty, not because I am deluded into thinking it tends towards peace. It is a bargain economically profitable or unprofitable. But let no man trust to it for peace. If he does, he is leaning upon an aged and very much decayed reed which will break and let him fall.


Mr. J. A. BRADETTE (Cochrane):: Mr. Speaker, I always listen with a great deal of interest to the leader of the social credit group in this house (Mr. Blackmore). I also read very attentively the statements he occasionally makes between sessions, and it is hard for me to reconcile the statement he made last fall immediately after the trade agreements had been signed between Canada, the United States and Great Britain, the treaties we are now discussing, with his attitude to-night, because in an interview he then gave to the press he stated that he was highly elated at the signing of the treaties. But this evening, listening to him, the only conclusion I could draw was that he was strenuously opposed to this trade agreement between Canada and the United States.


John Horne Blackmore: Will the hon. member permit a question? Does he not recall that I said in the course of my remarks upon this treaty to-night that as far as I could see it was in the interests of Alberta and in the interests of my constituency directly? I think he will grant that I said that.


Joseph-Arthur Bradette: The hon. member may have said that, but any one reading his speech in Hansard would be left with the impression that he was absolutely opposed to
the treaty.

Canada-U. S. Trade Agreement


John Horne Blackmore: Will he not grant that I stated repeatedly to-night that I favoured the treaty for economic reasons?


Joseph-Arthur Bradette: Anyone who will analyze his speech would say that it was seventy per cent against the treaty, perhaps five per cent for it, and nobody knows what the other twenty-five per cent was about, but I want to believe what he has just said. He mentioned that the people, the consumers, should be considered. But, Mr. Speaker, we are all consumers, and as consumers we have a right to expect that tariff changes will operate to our benefit. There is one thing that the Canadian people have come to realize perfectly during the last'four years of the present administration, and that is that tariff changes which have been made have been continually downward, not upward, and that for the consumers of Canada the cost of living has, by such action, been steadily decreasing, and will continue to do so as long as we adhere to that policy.
The hon. member also mentioned the attitude of the Prime Minister (Mr. Mackenzie King) in the House of Commons. I believe, that every member of the house and everyone who has seen how the Prime Minister has, for a great number of years, carried out his functions, realizes how patient he is with every section of the house, and with every member, in all matters pertaining to the parliament of Canada. I say that without fear of contradiction.
The leader of the Social Credit group spoke repeatedly to-night of the unlimited resources we have in this country, but I think we should be very careful about making statements of that kind. He mentioned that Italy, which lacks coal, could easily get coal from Alberta. Would he tell the house how feasible he thinks it would be for Italy to buy Alberta coal? A few years ago there was a bonus paid on coal by the federal government. In our section of the country, in northern Ontario, we have long and severe winters and we use a great deal of coal. We tried as earnestly as we could to use Alberta coal, but we could not use it economically for either domestic or industrial purposes. The distances were too great for economical transportation.


Eric Joseph Poole: It is the hardest coal in this country.


Joseph-Arthur Bradette: But it is not at all easy of access. The hon. member will not state that it is easy to bring Alberta coal to northern Ontario.


Eric Joseph Poole: I said that we have the
hardest coal in this country in Alberta, forty-two miles south of Calgary.


Joseph-Arthur Bradette: Yes, you have coal,
wheat and cattle, et cetera


Eric Joseph Poole: The hardest coal in Canada, less than one-half of one per cent moisture.


Joseph-Arthur Bradette: -but you lack many other commodities. It is no use saying that we have unlimited resources. We have limited resources, and they are hard to develop. I have mentioned northern Ontario. At the present time lumbering operations in my section of the country are conducted in a temperature ranging from fifteen to forty below zero for months at a time, and there is now nearly five feet of snow in the bush. Will the hon. member say that our natural resources are easy to develop? They certainly are not. Our mining is all done in hard, solid rock. Tins is a hard country; we have to fight every inch of the way, and if we have done so well among the trading nations of the world, this has been on account of the fine character of our population, its industry, enterprise and determination, which is the greatest asset any nation can have. Apparently the hon. member believes much more in the utterances of totalitarian leaders in Germany or Italy or some other countries of Europe than he does in his own government.


Eric Joseph Poole: How does the hon. gentleman arrive at that conclusion?


Joseph-Arthur Bradette: When he spoke of the
nations that have not, he apparently did not realize that our markets are opened to Germany and Italy. Personally I have received a number of letters criticizing the action of the government because Germany and Japan receive most favoured nation treatment with respect to the commodities dealt with in this treaty.


Eric Joseph Poole: He quoted a press dispatch.


Joseph-Arthur Bradette: There is no necessity
for Germany to fight for any raw materials she wants. She can get them if she wants them, like all other nations. Will the hon. member maintain that it costs Great Britain less than Germany or Italy to get the raw materials to keep her industries going? Germany and Italy have access to world markets the same as any other nation.


Eric Joseph Poole: But they have not the
credit.


Joseph-Arthur Bradette: It is their intensive
nationalism that prevents them from taking
Canada-U. S. Trade Agreement

advantage of that access. They do not want to trade with other nations of the world, and we have accordingly seen revolutions take place in the last few years. Mr. Cordell Hull, of the United States, only a few years ago, in 1934, stated that while the United States had made big mistakes on the tariff question and they have been changing drastically their policy in that regard in the last few years:
Extreme nationalism, if persisted in, is destined soon to wreck our entire structure of western civilization. In entering upon the negotiation of trade agreements, we are willing frankly to admit that we have erred in the past, that w'e have now repented.
Just as we set the vicious example of erecting the trade barriers of high tariffs which induced others to follow us, so now W'e are asking other nations to join us in an attempt to undo the damage our collective action has worked.
Surely the members of the social credit group realize that situation. It was not for reasons of trade alone that Germany annexed Austria. It was not for trade alone that she annexed the Sudeten from Czechoslovakia. Hon. gentlemen opposite should be fair and not "make statements which cannot stand the light of day, and in discussing a matter of this kind they should not attribute to the government motives which the government do not have. We believe trade treaties between the haves and the have-nots, treaties between all the nations of the world, -would foster the bringing about of universal peace, and it is the only way in which we can have universal peace.


An hon. MEMBER:: Why not include the other nations too?


Joseph-Arthur Bradette: They are included, at
the present time, many of them, and all of them that wish to come in. All that a country has to do is to show its willingness to trade with Canada, the United States and Great Britain. Only a few days ago a British statesman, speaking in the House of Commons at Westminster, I believe, said that it would not be necessary for Germany to get back her colonies to get raw materials because the raw materials of the British empire were always easy of access to Germany and Italy at the same prices as to other nations.
I am absolutely in favour of more and more trade agreements of this kind. When one looks at Canadian history over the past seventy-five years, with its succession of reciprocity defeats and revivals, it would almost seem that some force stronger than politics, perhaps some national selfishness,

kept alive the idea that Canada and the United States should not engage with each other in profitable trade, but we are gradually coming to a better understanding on that question. The echoes of previous general elections in this country come back to my ears. In 1911, for instance, we had that fine motto from the Conservative party, "No truck or trade with the Yankees," and only last fall they were talking of Canada's annexation to the United States as a result of the present trade agreements. A man who is presently a member of the upper house, and a minister in the previous government, made the statement that the signing of these trade agreements was one of the surest steps towards the annexation of Canada to the United States. He was trying to revive the old cry of annexation to the United States.
I was pleased to hear the leader of the opposition (Mr. Manion) say this afternoon that we should be ready to trade with other nations on a fair basis. How far away this is from the policy of 1930, when the then leader of the Conservative party was going to blast his way into the world's markets. His powder must have been very wet, because he was not able to do any blasting that I know of. The present leader of the Conservative party mentioned, I think, that the Hon. Oliver Stanley said that some of the features of the present trade agreement were "eyewash." Well, I remember what was said about the Ottawa agreements by one of the ministers of the British government; he said it was humbug, speaking of some of the actions of the then Prime Minister of this country in 1932.
The hon. member also said that the tariff protects labour and industry. I still have to be shown when a tariff has really protected Canadian labour. As to protecting Canadian industry, I am absolutely open-minded on that score. There may have been stages in the life of some of our industries at which they needed some tariff protection, but no one will deny the statement that in very many instances protection has been used to fleece the Canadian people who have been compelled to pay high prices by industries which have hidden behind the tariff wall.
The leader of the opposition appears to have lost some of his red-blooded Cana-dianism when he says that we cannot do very much, we 11,000,000 people, for the peace of the world. Surely a nation which is fifth in the world as far as trade is concerned should have its voice heard and respected in the concert of nations, where it should be heard on behalf of peace and harmony. This

Canada-U. S. Trade Agreement
agreement is one great step forward, showing not only that democracies can unite for the good of all, but that commercially speaking it is possible for nations to ally themselves for peaceful purposes. We have done a great deal for peace, and Canada should not take a back seat whether in the League of Nations or in the matter of trade agreements; for we are worldng nationally and internationally for the peace of the world, and appeasement between nations.
I believe the leader of the opposition was hardly fair to himself when he said this afternoon that we must have peace in our midst before we talk of universal peace. Surely he never meant that statement to be taken literally, because we have peace in this country, although there is some unemployment and some poverty to be dealt with, sometimes acerb discussions; but we are not suffering more than any other nation, and our condition in that respect is not any reason why we should avoid trying to the utmost by trade agreements and all kinds of activities to keep in the forefront ideas of international appeasement and the preservation of peace.
The leader of the opposition also expressed the opinion that Americans are much better traders than we are. Well, I have been quite a student of Great Britain, and I believe it would be difficult to drive a hard bargain against Britain. Old John Bull and Jack Canuck have the reputation of being good traders. We must always visualize this as practically a triangular trade agreement; it was made possible to some extent by the good offices and the willingness exerted not only by Canada but also by the United States and the United Kingdom.
As far as my own section of the country is concerned, we should be free traders in the full sense of the word, for the very good reason that we are primary producers. For every pound of our production we must of necessity find an outside market, and I maintain that the best markets we have are those of the United States and Great Britain. Some hon. memjpers seem to deplore the fact that we are so close to the United States. Cannot they realize what Australia, for instance, would give to be in as close proximity to the United States as we are? After all, in a good many instances we are running on parallel lines in our culture, civilization and way of thinking; our production is almost identical so far as our industries are concerned; our financial and industrial activities operate on much the same footing; and we are in the happy situation not only of having an 71492-69
American outlook but of working within the-orbit of Great Britain, within the commonwealth of nations, and acting as a liaison officer between Great Britain and the United' States, as well as enjoying those two fine markets which we so greatly need.
I desire to say a few words about the seasonal tariff on fruits and vegetables. I want the Ontario and Quebec producers of these products to have a full measure of protection so long as it does not interfere with the cost of living of the pioneers in districts like northern Ontario and northern Quebec. I know of many instances where the change in the seasonal tariffs has been the cue to certain dealers to over-charge the. people in-, our section of the country. I am not a free trader, and I believe that central Canada should enjoy a reasonable amount of tariff protection. Do hon. members know that in our section at the present time there is what we call a zone system? They may be surprised to know that when I am living in my home town I pay thirty-five cents a gallon for high test gas. In Ottawa you pay nineteen cents a gallon for the Same kind of gas. While those who live here are paying on their overdrafts on current accounts six per cent, we in northern Ontario have to pay eight per cent. That sort of thing applies all along the line. A premium has been applied against us as far as our section is concerned. If we criticize high tariffs it is because we believe we are paying exorbitant prices and helping other sections of the country to our detriment. All we want is fair treatment.
I was astonished to hear from the leader of the opposition and from the hon. member for St. Lawrence-St. George (Mr. Cahan), that in dealing with items of trade between Canada and the United States we should not include our exports of gold; that gold is not a commodity. Did the hon. members by that mean that, like King Midas of old, who had the power to turn into gold everything he touched, and who, in spite of all that wealth, starved to death, we must start and accumulate gold? As far as northern Ontario and Canada are concerned, when we have a surplus of that commodity we must dispose of it in outside markets. We have been fortunate in that respect because a few years ago the President of the United States found it possible to increase the price of gold to S35 an ounce. That decision has meant the lengthening of the average life of the old gold mines of northern Ontario and the opening up of new. ones, giving useful occupation to tens of thousands, yes, hundreds of thousands, of Canadian workers.

Canada-U.S. Trade Agreement


Eric Joseph Poole: Why does the United States keep its gold instead of exporting it?


Frederick George Sanderson: Order.


Joseph-Arthur Bradette: I believe the hon. member who just interrupted me expects Canada to keep all that gold. Is that what he suggests?


Eric Joseph Poole: Well, we have not too much money.


Joseph-Arthur Bradette: On that reasoning, we should keep all our wheat, all our meat, all our timber, all our manufactured production.


Frederick George Sanderson: The hon. member who interrupted is out of order. He can put a question to the hon. member who has the floor, with his permission, but when he does so he should rise in his place.


Joseph-Arthur Bradette: Speaking of this matter the hon. member for St. Lawrence-St. George answered thus, when the Minister of Finance (Mr. Dunning) put this question to him, at page 477 of Hansard: "Is gold not a merchantable commodity?"
Mr. Cahan: No, gold is not a merchantable commodity in the sense that iron or steel or wheat is.
Well, I repeat that this shows how shortsighted some members of the opposition have been in their opposition to and their arguments against this trade agreement. Further, the hon. member for St. Lawrence-St. George said that we have exported to the United States 8258,367,247 in gold bullion, and that this should not be included in our export trade. Does he not realize that our producers of gold, and now the government, are always trying to get the best market possible? Do hon. members who speak on this problem realize that in 1933 the Conservative government stopped the selling of gold to anyone but the Canadian government? Do they think for one moment that any Canadian government, whether past or present, has not always done its utmost to find the best markets in the world for Canadian gold? I repeat that with the surplus of production of this commodity we cannot.keep it in this country any more than we can keep our excess supply of pulpwood or of sulphite or of grain. Will the hon. member for St. Lawrence-St. George say that we should send that gold to Germany, for instance? What price would Germany or Russia or the Scandinavian countries give for that gold? These are questions that must be very carefully considered when we are dealing with one of the largest wealth-

producing industries in Canada, which has greatly helped the nation during these times of stress. The hon. gentleman said:
But no trade agreement is necessary to induce foreign countries to accept bar gold. Gold is not an ordinary commercial commodity which is subject to customs duties, and gold has no place in trade statistics which are quoted to show the advantages of a reciprocal trade agreement between this country and the United States or between this country and any other country.
The same applies to all other production. We all know that in the past the United States government have used the tariff as an instrument for the protection of United States industrialists, and it did not always work for the prosperity of that nation. In my section of the country we must of necessity find outside markets; and the best market we have is in the United States. But the United States market is very sensitive. It is easy for that market to lose its equilibrium. I remember vividly two years ago before the increase in the cost of newsprint from $45 to $50 a ton, in my own constituency, in the whole of northern Ontario and northern Quebec, the newsprint and sulphite mills were working over-time shipping in some instances a whole trainload of newsprint in a day. But then the Americans began to buy more freely from the Scandinavian countries, and at the present time we have the sad spectacle of some of these mills running at only fifty per cent capacity, with the result that the prosperity which existed last year in that section is now gone. That makes a big difference to this country. We have no market in Great Britain for that commodity, nor have we in Germany or the other nations. Canada depends upon a freer interchange of commerce between this country and other nations of the world, because it must not be forgotten that we are on an export basis, and that freer interchange will prove beneficial to us in the long run. At the beginning of this session the leader of the opposition, speaking on the address in reply to the speech from the throne, made an allusion to the present trade agreement. He had this to say:
There have been perhaps more or. less sub rosa, many complaints against this treaty, but the industries of the country may have been too frightened to express their opinions about it. Some of them appear to think it would be more or less unpatriotic to express an opinion against the treaty.
I never doubted the patriotism of our industrialists, our manufacturers, but I do know that when their interests are affected they are certainly outspoken and it does not take them very long to express themselves.

Canada-U. S. Trade Agreement
If any one will take the trouble to read the various opinions which have been expressed by the industrialists of Canada with respect to the trade agreement, he will realize that that agreement has been wonderfully received by every business organization, by every industrialist in the country. Some of them refer to it as the 1939 model trade agreement, one that will be beneficial to Canada as a whole. Apparently the industrialists of Canada realize, just as those in the United States do, that at times it is necessary for them to make sacrifices. It is not necessary in this instance, and where it may seem that temporarily the trade agreement will not be satisfactory, a little reflection will suggest that in the long run it will prove beneficial to every section of our population. Many opinions have been quoted, from newspapers and various other sources, to show that the agreement should be acceptable to the dominion as a whole.
The opposition that was expressed in this house earlier in the session was more pronounced than it is at the present time. Nearly fourteen months ago, when the announcement was made by the government of a three-way agreement, the Conservative opposition thought they had something to work upon such as they had in 1911, and Mr. Bennett, when speaking in Halifax, tried to stir up the people. He told them that they must fight that agreement from the drop of the hat; that the trade agreements which the government contemplated meant that we were selling Canada's birthright. My hon. friends, however, sensing public opinion, realized that the people were in favour of the agreement; and in his speech this afternoon the leader of the opposition showed that he was fully conversant with the views of industrialists, farmers, primary producers and the Canadian people as a whole. He knows they are practically all in favour of this trade agreement between Canada and the United States, and that to oppose it would not be a popular move on his part.
Some people sometimes seem to believe that the government has no right to appeal to sentiment in support of agreements of this kind. Sometimes they are baffled by the attitude of the government. They always remain in the realm of hard facts, never considering what might be the outcome of any action taken. But I believe that this government should be sincerely commended for the work it has accomplished in the last four years, and particularly in this instance, in bringing together the two great Englishspeaking democracies. Canada has played a great role in that achievement. The leader
71492-69J
of the opposition said this afternoon that in' some parts of Great Britain the people were opposed to the trade agreement on the ground, that it called for too great a sacrifice. The economists of London and Great Britain, however, had this to say, that even the briefest study of the terms of the agreement, is enough to show how little could have been done without the readiness of Canada to offer her generous cooperation, and that Canadian and British business men generally should be gratified at the part the dominion has played in effecting the treaty.
So far as I am concerned, I do not wish to see any harm result from the treaty. I do not want to see any of our minor or major industries adversely affected. But- I believe that every Canadian industrialist after making a close scrutiny of the three-way agreement will realize that in the near future, if not immediately, the result will be beneficial to Canada. In our section of the country we are ready and willing to make any sacrifices that are necessary to the well-being of the country, and if in regard to vegetables and fruits we are paying fifty per cent more than the people in the older sections are called upon to pay, we are willing to make that sacrifice, but we do not want that to be used to the detriment of our people and for the purpose of providing profits.
It has been suggested that the textile industry will suffer from the present agreement. I have studied the situation carefully from that angle and have looked into the retail trade in my own locality. I have spoken with some industrialists and they do not believe that particular industry as a whole will suffer.
I do not believe that the present discussion will be as long or as strenuous as we at first ejected, for the simple reason that the Canadian people are an infallible political barometer. They have looked into the situation from all angles and have thoroughly analyzed it, and they realize that although the agreement may not be perfect in some respects, although in some instances it may have to be amended from time to time, the government through the agreement has been working for the welfare of the Canadian people.
It has done more, however. It has continued the policy of appeasement in the international situation. We see that it is possible for nations with diversified interests to come together in matters that are so important. Sometimes trade is the cause of war between nations. Trade may cause friction. But, unlike the leader of the opposition, I do not decry the fact that there has been over a century of peace between Canada and the United States.
I see no reason why we should not be proud

Canada-U. S. Trade Agreement
to mention that fact, and to reiterate it, because it is an evidence that the nations have found it to be to their mutual advantage to live peaceably side by side. It is a much happier sight to see the border between Canada and the United States practically unprotected; it is much better than if we had on the one side something like the Maginot line and on the other the Siegfried line. Our two nations live side by side, each benefiting and respecting the other, and I would never fear what one of the senators from the province of Quebec mentioned the other day, for example; that is, our annexation to the United States. It is possible for us to develop more fully within our own borders, and as we achieve a greater understanding of the mentality of the people with whom we are so closely affiliated we shall slowly but surely create a civilization of our own, on which our proximity to the United States will leave its imprint.
In my own name and that of the people whom I represent I want to express appreciation of the fine work that was accomplished by the Prime Minister of this country when, immediately after his return to power in 1935, he announced the negotiation of a trade agreement between Canada and the United States. Again last fall nearly all the citizens in my section were equally happy because! of the action taken by the government in again negotiating a trade agreement with that republic. As far as those people in my section are concerned, it will be absolutely impossible for any opposition effectively to criticize those agreements, which in my view represent great amity and understanding between the three nations involved, and present an example to all the world.


Grote Stirling: Mr. Speaker, in 1936, during the debate on the 1935 agreement, * I expressed the belief that there would be very few people in Canada who, of their own knowledge, could give a comprehensive opinion with regard to that agreement, because its implications were so wide that time alone would tell. If that was the case then, it is more than ever the case now. Not only have we the terms of this agreement, to use the Prime Minister's words of the day before yesterday, added to those of the 1935 agreement, we have also the other agreement, with which we are not primarily connected, between the United Kingdom and the United States. Then we have the further fact that the concessions we give under this agreement automatically go to thirty or forty other nations whose agreements contain the most favoured nation clause, and from whom we receive nothing in return.

In addition, there is also the provision for the [DOT] removal of the 3 per cent excise tax, the implications of which cannot be followed because of the complexity of the matter in its present position. Again time will tell.
This afternoon the Minister of Trade and Commerce (Mr. Euler) used that exact phrase, that time would tell, and he believes that it is telling. As his reason for so believing he gave the January figures having to do with trade. I do not take that as a proper basis on which to measure the agreement, because last fall we heard from all quarters that various transactions were being held up waiting for January 1, when this agreement would come into force. So it will be interesting to see whether the imports and exports in February, March and subsequent months bear out the contention of the Minister of Trade and Commerce. In my opinion, however, the trade figures as between Canada and the United States over the last three years have told at least part of the story. A week or two ago the hon. member for St. Lawrence-St. George (Mr. Cahan) directed attention to the export and import figures between Canada and the United States. At that time the hon. member was dealing with what he considered a mistake which is now made, in including the export figures of gold. At the moment I am not interested in that feature, but it is quite evident that if you are going to compare export figures over the years that have passed you must compare comparable things, and if until 1935 the gold export figures were not included, certainly they must be deducted now.
I want to direct the attention of hon. members to the fact that for the calendar year 1935 Canada's exports to the United States amounted to $261,655,372. With the improvement in world trade in 1936 those figures rose to $333,916,949. Again in 1937 those figures showed a slight increase, to $360,012,143. Then, because Canada was feeling the reflection of the set-back in the United States, they fell off so that for the calendar year 1938 our exports amounted to $270,461,189. Now I want to look at the import figures. In the calendar year 1935, before the 1935 agreement had any effect, we bought from the United States $312,416,604 worth of goods. Those figures improved in 1936 to $369,141,513, and again they showed a notable improvement in 1937, to $490,504,978. Then, I assume for the same reason that our export figures fell, in 1938 they dropped to $424,754,993. In other words, in 1938 our export figures dropped back almost to those of 1935, but our imports remained $110,000,000 higher than those of 1935. So to that extent

Canada-U. S. Trade Agreement
it appears to me that the benefits which were derived from the 1935 agreement were benefits to the United States rather than to Canada; and to the extent that this SI 10.000,000 represented commodities which Canada could and did produce, to that extent we made employment in Canada so much more difficult.
There is another consideration to which I wish to allude because it is another thing that makes it so difficult to measure the implications of this agreement. I refer to the spirit in which commercial interests in the United States will carry out the terms of this agreement. I do not wish to be misunderstood ; I am casting no slur on the commercial integrity of another countiy, but I am drawing attention to the difficulty that our business men have encountered in the past in carrying out business transactions with that country. We know of so many cases of shipments, covering everything from silk dresses to tank loads of heavy chemicals, which have been sold and moved towards the border with the expectation that they would enter that country under a certain tariff item. They have been held up at the border; and when finally admitted, after incurring demurrage charges, after the business deal had been queered, the question was submitted to the tariff board of the United States and a ruling less favourable to Canada was delivered.
Two or three years ago a shipload of lumber left Vancouver for one of the Pacific coast ports. On arrival at that port the lumber cargo was refused. Eventually it was accepted under protest. Then that matter was carried through the courts in that country for two or three years, before the matter was finally adjusted. We had the famous instance only last fall of the regulation which was imposed, entailing the marking of every piece of lumber. Our lumber had been selling in the markets of the United States. It had come into competition with United States lumber. That competition was, to an extent, resented, and all sorts of methods were resorted to in order to make it more difficult for trade to be carried on in exporting from Canada under the terms of the 1935 agreement-to such an extent that eventually a regulation was passed making it necessary to mark every stick of lumber.
I know that regulation has now been removed under the terms of this agreement, through an arrangement whereby the agreement was arrived at. But the point I am making is, even if that particular method can no longer be adopted, can we really go ahead in the belief that the spirit of this agreement will be carried out in accordance with
our understanding of the spirit of commercial dealings? It is these things that make it almost impossible for anyone to give a general opinion as to the effects of this agreement.
On	all	occasions when trade	agreementscome	up	for discussion we	are	faced withthe charge that we do not wish to make trade agreements. On the other hand the view we hold, a view which was corroborated by the Prime Minister (Mr. Mackenzie King) the other day, is that the Liberal likes to make	an	agreement. And	we	are of theopinion that he likes making an agreement so much that he is ready to let it go through for a price which in our opinion Canada is not able to pay. We are perfectly ready and anxious to make agreements, but they must	be	agreements which	by	their termscommend themselves to us. The Liberal charges us with believing in economic nationalism. Well, if we believe in economic nationalism we have taken the most extraordinary way of showing it.	I say that
because in the case of the Ottawa agreements we succeeded in extending Canada's commerce, her buying and selling, far beyond the coasts of Canada, and we did increase trade with the countries of the commonwealth. The very making of those agreements resulted in the making of scores of trade agreements between the nations of the commonwealth and foreign countries. And there is no doubt whatsoever that the making of those agreements was a factor in inducing the United States to make trade agreements.
She of course had surrounded herself by a perfectly frightful tariff, a tariff passed by her congress, and one which could be altered only by congress. So long as that tariff stood, the United States could not make trade agreements. She never expected the Ottawa agreements to be the success they were, and she awoke with a shock to the fact that she' was no longer able to enter the United Kingdom market and make use of it for the removal of her surplus. She desired to get back into the United Kingdom market. If anyone wishes to talk about economic nationalism, I would ask this question: Is there a country in the world which has been a greater exponent of economic nationalism than the United States, with her successive increases in tariff. Tariffs were raised so high that she had surrounded herself with a barrier over which even she could not trade.
So, after two attempts, the President of the United States received power to make trade agreements with other countries. He was permitted to cut by 50 per cent the items in the Hawley-Smoot tariff. There were

Canada-U.S. Trade Agreement
certain other restrictions, but that is the main one. He was empowered in 1934 to reduce that tariff. Immediately the statistical officers of Canada and the United States proceeded to delve into the figures and facts of trade, and to lay the foundation for the setting up of an agreement between the two countries. A draft of that agreement was ready in the summer of 1935. But when it became apparent to the late administration that the concessions the United States expected Canada to give were concessions which in our opinion Canada should not give, the late administration declined to make the treaty. Of course, after the victory of the Liberals in the fall of 1935, the agreement was signed, and since then we have been testing the results.
Still the Liberals use the argument against ms that we do not wish to make agreements. But, Mr. Speaker, surely the difference between us is just this: The price Canada has to pay. That agreement was for three years. The period of three years has expired, and we now have a revision. It was put over with such paeans of praise that when its terms were announced the public read nothing but columns of eulogies in the press of the country. To such an extent did that obtain that the industries affected began to dig into the matter of the agreement to find out where the snag was that should need such a gas attack to put it over. And gradually industry has learned what this agreement means to them.
^ Just as it is not easy for me or any other individual member to take a general view of the whole picture and form an opinion, so there is an opportunity in the house for hon. members with particular knowledge of certain industries in certain parts of Canada to take part, in the debate and to give us the benefit of their wisdom.
I happen to have a little knowledge with respect to two industries in southern British Columbia with which the people I represent are very closely connected, namely the production of fruit and the production of vegetables. In the treatment of tariff matters in connection with fruit and vegetables the Liberal has ever been unfriendly. For some reason or another, which I have never been able to understand, the Liberal government has it in wrong for fruits and vegetables. I consider that this agreement is the third serious blow the Liberal government has given those two industries in the last ten years, and I am at a loss to understand why they should have done it.
Continually Liberals boast of the fact that a Liberal Minister of Finance created the dumping clause. What good was that, when they never used it? In 1926, when for a
IMr. Stirling.]
short time we held office, we put the dumping clause to work; for the first time the Canadian producer had the benefit of the Canadian domestic market during the period of his production, and I defy any hon. member to point to the harm which resulted to the consumer. The Liberals carried on that method of protecting the industry for two years. Then, in 1928, they wiped out all the values for duty, and the flood started again. The reason they took this action on that occasion was that the free trade section of the Liberal party, this party which the Prime Minister told us the other day was a unit in its actions, became so noisy in the councils of the government that the government removed those values for duty, and the markets of our producers were again wide open to the glut from the United States.
I think it is quite evident that the Liberal government realized that they had gone too far; for when the 1930 budget was prepared, the present Minister of Finance (Mr. Dunning) introduced into it a new feature, for which some at least of the fruit and vegetable growers' associations had asked for a considerable time. There was the general tariff of 30 per cent on vegetables and 20 per cent on fruit, and, besides that, there was introduced item after item of minimum seasonal specific duties. The reason for that introduction was that towards the end of the production period in one of the states of the union, when it was extremely desirable to them to get rid of the surplus of their crop, looking across to Canada they saw there an excellent place to send it, unprotected as it was, and they were ready to dispose of it at prices which were next to nothing. It is obvious that 30 per cent of next to nothing is still nearer to nothing, and left alone it was no protection whatever. Hence this addition of minimum seasonal specific duties, below which the tariff could not drop. They were helpful as far as they went. But the Liberals would have nothing to do with the dumping clause.
When the Conservatives came into office again for five years, the values for duty were imposed, the seasonal tariff was maintained, and there was far better protection for the fruit and vegetable producers of all Canada than they had had before.
Then this government, that likes making treaties, made the 1935 one. They wiped out the seasonal duties and reduced the tariff to 15 per cent. True, they made use of the values for duty, although to a lesser extent, because they were dropped to 80 per cent of what they had been. I am quite ready to acknowledge the work of the Minister of National Revenue (Mr. Usley) in carrying out

Canada-U. S. Trade Agreement
that policy; I have heard him say that he does not approve it in principle but that no better way of accomplishing the desired end had yet been attained. It is not an easy piece of work to decide the dates at which those values for duty should go into operation or be taken off, because the areas in Canada where these commodities are grown are pretty widespread and vary in their seasons. That was blow number two.
Now we have blow number three. In blow number three we have had the values for duty reduced again. They have been removed altogether from certain commodities; the period has been reduced, and the three per cent excise is gone. On top of all that we have had one-third cut off the preferences in the United Kingdom market. How the Minister of National Revenue could go to the Annapolis valley and tell the apple growers there that in his opinion the reduction in the preferences would not hurt them, that in his opinion the revised agreement would help the fruit industry, and that the cut in the preference was arrived at as a reasonable arrangement between the British, the United States, and the Canadian fruit grower, passes my understanding, because Nova Scotia with her export of barrelled apples to the United Kingdom benefited greatly by that preference. Before 1932 she met in those United Kingdom markets very large quantities of United States apples, the surplus of the United States grower, and but a small fraction of it, which the United States producer was ready to dispose of at bargain prices. And after the arrangement was made for the preference, there was a steadying of that United Kingdom market of which we in British Columbia, selling boxed apples, also had the benefit. It was a matter of great surprise to us that in the years following 1932 the United States growers were able to send into the United Kingdom market such very considerable quantities of boxed apples. I am dealing now with the boxed apple trade only. Let me give the figures of those shipments:
Canadian and United States exports of boxed apples to United Kingdom
Year	Canada United States
boxes	boxes
1932-	33	
1,802,464	2,419,1001933-	34	
2,007,146	2,183,0001934-	35	
1,625.570	2,095,1001935-	36	
2,181,395	2.401,6001936-	37	
1,719,586	1,521,600
And I was surprised not to be able to get the figures for 1937-38.
But what did that mean? Our apples which are sold by the box are grown under exactly
the same conditions as in the states to the south of us. We know their taxes; we know their irrigation rates; we know their orchard costs; and all of these are similar to ours. We know their freight rates and brokerage. Breaking down the four shillings and six pence per hundredweight, which was our benefit in the United Kingdom market, into terms of boxes of apples, it amounted to forty-four cents a box. It was patent to us that without assistance of some sort the United States producer could not possibly be shipping in those quantities to the United Kingdom and taking forty-four cents a box less than we got. It was a great puzzle for some time how this was being done. But gradually it leaked out that the grower of apples in the Pacific states had been receiving federal assistance. It is not in the form of one definite subsidy paid, but apparently it reaches him under two or three different schemes that we know as the alphabetical schemes in the United States. But there it is; he is getting subsidy help. They made no bones about it last fall when these treaties were being discussed. Their growers talked to our growers; their papers referred to the fact that it did not very much matter to them what the two countries did with regard to this preference, they yet had tfie subsidy. The subsidy is referred to in the trade papers and the ordinary papers in the Pacific coast states, and there is no doubt that they are receiving federal help, whereas of course we do not. The only way, therefore, that the United States producer can benefit from this alteration, this giving up on our part of one-third of the preference, is that he will still further enlarge the quantity of apples sent into that market.
Hon. members who were here in 1932 will remember the care with which it was explained in this house that these preferences had been arrived at after detailed careful discussion between the United Kingdom, Canada and the other dominions. In this particular matter the other dominions, Australia, New Zealand and South Africa, do not enter because their shipping season is different from ours. But here we are, three countries, the United Kingdom, Canada and the United States, all harvesting their apples at the same period of the year. Hitherto we have had the shelter of a preference, and by arrangements between Canada and the United Kingdom we have seen to it that various grades and sizes have been such as to conform with similar grades in the United Kingdom, so they have been quite favourably disposed towards the shipment of our apples
Canada-U. S. Trade Agreement

But now we are going to find in these auction markets a tendency for the United States grower to return once more to his dumping habits and to be ready to receive pittances for his surplus apples, which will set the price for us and for the United Kingdom.
It was commonly reported last year that the government, in approaching this matter, believed that only two constituencies in this country were affected, and it was stated- I do not know how true the gossip is-that they would be very sorry to lose the Minister of National Revenue.


Ernest Lapointe: Certainly would.


Grote Stirling: And one other riding affected was one in British Columbia that they scarcely expected to win. But I would remind them that it is a much more serious matter than that. There are thirty-five ridings in Canada in which apples are grown commercially, and if we are prevented from making 'use of the export benefits of the United King'd0111 market, those apples which we cannot export will tend to back up on the Canadian domestic market, resulting in smaller prices: Every apple grower who sells commercially in Canada will feel the pinch; and if and when he feels the pinch, this government will also feel it.
I do not understand, as I said just now, why the Liberal government have again and again put this load on fruits and vegetables. There are other hon. members in a position to take up the story with regard to vegetables, and I shall have little to say about it; but it is a most important factor in southern British Columbia.
The Prime Minister tells us that the New Brunswick potato grower is pleased with the result of this agreement. My information is quite contrary to that, and I know that the potato producer and the potato industry in British Columbia are certainly not pleased with it; for whereas we let United States potatoes in free, there is no countervailing nature to that item. We have to pay; if we ever did succeed in shipping into the United States.
I would remind hon. members of this fact, which must always be borne in mind when we are dealing with these perishable products. Canada lies north of the United States. The United States from Texas up to Michigan is producing these successive waves of similar vegetables, and as they draw to the end of their season for whatever vegetable you are considering, they desire to get it off their domestic market so as to free that domestic market for the next vegetable coming along, and Canada is so handy as the dumping
XMr. Stirling.]
ground for these vegetables. It is therefore useless to point out to the fruit grower and the vegetable grower that the United States have made some small concession on certain varieties which we might be able to ship into the United States, because our northern country does not ship vegetables into a southern country.
The Prime Minister in his speech used these words in reference to this matter:
United States fresh fruits and vegetables are made available on easier terms to Canadian consumers in those seasons when domestic products are not on the market-
I have often stated in this house that I am not interested in what the tariff is outside the period of our production. He goes on:
-while the Canadian fruit and vegetable grower retains his domestic market in his own producing season.
I maintain that this is a totally inadequate statement after one has studied the terms of this agreement. I also maintain that during the years when tariff protection was given on fruits and vegetables, the consumer has not suffered because there has been ample competition within Canadian production to see to it that these perishable commodities should be sold, and not held for higher prices. But I would also remind the house that if the day comes when the Liberal government, continuing to deliver these blows at the fruit and vegetable industry, succeeds in either destroying this industry in Canada or so reducing it as to make it almost impotent, the consumer will suffer. Once you take away Canadian production and the Canadian domestic market, the result will be that the United States will no longer look upon Canada as a dumping ground but will have arrived at that vision which Mr. Taft saw in 1911 when he so greatly desired the market of the great Canadian northwest.
On motion of Mr. Ilsley the debate was adjourned.
On motion of Mr. Lapointe (Quebec East) the house adjourned at 10.40 p.m.
Monday, February 20, 1939