February 27, 1901

CON

David Henderson

Conservative (1867-1942)

Mr. HENDERSON.

this country at an enormously increased price over its actual cost, 1 think that fact destroys the whole force of his argument. To my mind if we could judiciously manage the sale of this small quantity of twine, sell it only in small quantities, it would be quite sufficient to maintain a level of prices, and I know that was all that was expected by the late Sir John Thompson when the plant was installed in the Kingston penitentiary. It never was intended that the government should make money out of that twine business, that idea was entirely foreign to those who began this industry there. The sole intention was to use it for the purpose of preventing an undue inflation of price, and so long as we carefully guard the sale of this twine I believe that it is quite sufficient to maintain a control over the price of the entire requirements of the country. I repeat again, if putting the price of that twine at 14 cents a pound is sufficient to enable the American manufacturers to increase their price far beyond its value, on the other hand, retaining the control of the twine in our own hands and keeping it at a low price, will in the same manner affect favourably to the farmers the price of the remaining quantity of that twine which we are unable to produce in this country. I need not say that I should support the resolution of the hon. member for Peel. I think it is a motion in the right, direction, and I hope the government will accept the resolution and be guided by its terms. I pay no attention to what the hon. member for South Brant says when he contends that the increase of 1 cent to cover the cost of selling the twine is not at all sufficient. I fear the hon. gentleman is putting in a word for his own constituents who are large manufacturers of twine, and that, although he pretends to be a friend of the farmer, he is desirous of enabling his constituents to obtain as big a price for their output as they possibly can, notwithstanding that the farming community will suffer in consequence.

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The SOLICITOR GENERAL (Hon. Mr. Charles Fitzpatrick).

I was unfortunately absent when this debate originated the other night, but I have read carefully the speeches that were made, and the conclusion to which I have come is that there is a great deal of inaccurate information in reference to the binder twine industry, either on the opposition benches or in the Department of Justice. The member for Grey made a specific statement which I think it necessary at the outset of my remarks to contradict ; he made the statement that in 1000 the government sold binder twine to their own friends at 7i cents per pound, and that they sold it to the farmers at 14 cents a pound. The question as put to him directly by the Minister of Railways and Canals whether he intended to give to the House the information that they were selling the same twine at the

same time at these different figures. The answer he made was : 'Yes, at the same time and the same quality of twine.' Now that is a serious statement, an extremely serious statement to make, because it necessarily implies dishonesty on the part of the officers of the government charged with the administration of this industry. To that statement I wish to give an absolute, unqualified, positive denial. What the lion..gentleman no doubt meant to say, because I would be loath to insinuate for a moment that a gentleman occupying the position he does in this House would attempt deliberately to mislead the House and the country-what no doubt the hon. gentleman intended to say was that in the year 1899 the output of the Kingston penitentiary was sold to Hobbs Hardware Co. by public tender, and sold to them without competition for 7i cents a pound; and that that twine, so sold in 1899 by public tender was delivered to them in 1900, and the delivery took place in 1900 at the price stipulated and paid in 1899. Their basis of comparison fails absolutely. In one instance you have got the twine that was sold in 1899, as I said a moment ago, by public competition at 7-1 cents a pound, at a time when the raw material was sold at 5J cents a pound ; and on the other hand you have the twine that was sold at 14 cents a pound in 1900 at a time when raw material had actually gone from 5i cents a pound up to 10 cents a pound, at certain dates in that year. Now it seems to me that in discussing a matter of this sort, and especially in discussing it in the interest of that important element of the community which is called the farming class, the least that element has a right to expect is an honest and fair statement.

I will now proceed to deal with the motion, and in speaking of that motion, I would state immediately that we have no quarrel with a portion of it. With a portion of it we cannot have a quarrel, because, since August 1899, we have been doing what that motion says we ought to do. Since August 1899, it has been open to the farming class of this country, who apply to the Kingston penitentiary direct to get binder twine in lots to suit them from the penitentiary, and at what price V At the price of the raw material to which is added the cost of manufacture, and when the purchase is for less than ten pound lots, one cent a pound is added for profit. That has been the system since August 1899. It was in existence from August 1899, for the balance of that season, it was in existence throughout' the whole of the season 1900, and it is well known to hon. gentlemen opposite, those who were here during the course of last session, and those who took cognizance of it but who were not here, that the information was given publicly in this House that the twine was disposed of in this fashion. [DOT] I therefore say that we have no quarrel with that portion of my hon. friend's motion

which asks that the government should go that far, because it is merely giving effect to that which we have been doing since August 1899. But, when it goes farther than that, and asks us to pass a motion that we should dispose of binder twine to the farmer at a price to cover the actuffi cost of the raw material and manufacture with one cent per pound added, and goes on to say that-

No twine manufactured or paid for out of the Dominion treasury shall be sold or disposed of in any other way. ,

It is asking .us to do a tiling which, when my hon. friend comes to consider it, he will see is almost, I was going to say, absurd. Let us not deal with generalities, but with concrete facts. I said a moment ago, that we disposed of our binder twine to the farmer. What happened last year ? At the end of the season, the 1st of August, 1900, we had not disposed of more than half of the whole output for the year. We had half of the output still on hand. What are we going to do with that-keep it over until next year, when it will become practically valueless, and then dispose of it to the farmer, because, if this motion is adopted, we are not free to dispose of it in any other way '! This motion goes too far, as my hon. friend must see at a glance. It is all very fine to ask that we should dispose of this to the farmer, but, why is it that we cannot get the farmer to deal with us ?

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The SOLICITOR GENERAL.

He was hay forked once no doubt. Probably my hon. friend (Mr. Maclean) knows when and under what circumstances. lie has no doubt a knowledge of the transaction. How is it that we cannot get the farmer to deal with us V We have offered this twine to him on the conditions specified by my hon. friend in his motion. Last year half of the output of the penitentiary was left on our hands. I think my hon. friend might go further; when he says that we shall be obliged to give all the twine to the farmer and no one else, he should adopt the other branch of the argument, and so be strictly logical, and say that so long as we have to dispose of the twine to the farmer, the farmer must deal with us, or that he shall find us a purchaser. I said that we disposed of this twine at the cost of the raw material, adding to it the cost of manufacture, and adding one cent a pound. Hon. gentlemen opposite undertook to tell us that the farming class were practically buncoed, to use an expression which I would borrow from the hon. member for East York (Mr. Maclean), by the government in connection with the sale of binder twine; that is to say that they paid much more for their twine than should have been legitimately asked of them. My hon. friend ought to bear in

miiul tlnit binder twine is a marketable commodity like any other. When yon pnt it on tlie market, the i>rice lias to be regulated by tlie law of supply and demand, and in order that the House may determine whether or not the farming community paid more for their twine than they ought to have paid, it is necessary to examine the prices at which others dealing in the same commodity in the same market disposed of their article. Let me point out how that applied. The government had no monopoly of this twine. They were competing in the market with others. What did we find ? We found this circular was issued at the time we were disposing of our twine to the farmers, issued by a concern that sells what they call the Plymouth Binder Twine. These gentlemen are dealing with the Kingston output :

In the hope of moving the accumulated stock of twine at Kingston penitentiary, the warden has again reduced prices, but thus far there has been no visible increase in their orders. With few exceptions, the farmers of Ontario, remembering past experiences, are apparently not willing to take chances with convict-made twine, or they do not consider the penitentiary article .as a bargain, no matter how low the price; otherwise, that twine should have been disposed of as rapidly as made, as the government's price has been, all season, from 1 to 2 cents per pjuud below the market quotations for twine of reputation.

That is what has tiikqu place, and that is evidence of those who are competing with us in the same market. It is that we are selling this twine from one to two cents j)er pound less than our competitors, and yet we are told that we tire endeavouring to impose on the farmers.

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CON
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The SOLICITOR GENERAL.

The date marked on it here in writing is August, 1900. My non. friends have reierred to tlie origin ol this industry at Kingston. They have told us that the intention was to start this industry for the purpose of regulating the price of binder twine in Canada. Bear in mind that the output of Kingston penitentiary is 5(j0 tons a year, and that the amount of binder twine used in Canada, is about 8,000 tons. We import over ten million pounds free of duty. How far are you going to regulate the price of binder twine with the amount we have at our disposal, it is impossible for me to see. But, we are also told that the intention of the government. when this binder twine factory was started in 1894, was that it should be used exclusively for that purpose, that it was not to be looked upon as a business industry to be dealt with on business principles. Let me draw the attention of m.v lion, friend to what took place in July. 1894, when this question was under discussion. At that time Mr. Davin asked that the government should pay the freiclit on the binder twine Mr. FITZPATRICK.

up to the North-west, and Sir John Thompson, then Minister of Justice, said :

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LIB

Andrew Thorburn Thompson

Liberal

Sir JOHN THOMPSON.

I should very much like to be able to do so, but I am afraid I cannot make such a promise. Companies already engaged in the binding twine business are in the habit of paying the freight as far west as Owen Sound, but we would not be able, without involving loss and without calling on parliament to make good that Pss, to pay the freight on binding twine sent to the North-west Territories. .

There is no suggestion there that this is to be dealt with on any other principle but a business principle.

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LIB

William Mulock (Minister of Labour; Postmaster General)

Liberal

Mr. MULOCK.

I should like to ask if binding twine is being sold under ccst?

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LIB

Andrew Thorburn Thompson

Liberal

Sir JOHN THOMPSON.

No, it is not. I mentioned the rates the other day, and I forget them fcr a moment, but binding twine is not being manufactured under ccst-the price covers the cost, and an allowance for the labour of the prisoners.

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LIB

William Mulock (Minister of Labour; Postmaster General)

Liberal

Mr. MULOCK.

Is that calculated as free labour, or as convict labour? [DOT]

[ Sir JOHN THOMPSON. As convict labour, 50 cents per day, because their hours are shorter and work lighter than free labour. The product is sold at a price coveiing tlie cost of the material, also interest on the expenditure for plant, allowance for deterioration, and everything that enters into the calculation of a private manufacturer.

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LIB
LIB

Andrew Thorburn Thompson

Liberal

Sir JOHN THOMPSON.

Not excepting the labour, but excepting free labour prices. We charge for the labour, but less than free labour prices.

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LIB

William Mulock (Minister of Labour; Postmaster General)

Liberal

Mr. MULOCK.

A question here arises with respect to goods manufactured by convict labour, and the prices at which they are put upon the market. The government are calculating the price at convict rates, and are placing convict labour in competition with free labour. There is a large question involved; and I do not wish to enter into it now, but I want to be sure as to what is the practice of the government.

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LIB

Andrew Thorburn Thompson

Liberal

Sir JOHN THOMPSON.

That question does not arise in this instance. The labour is computed at 50 cents per day, and it is w rth no more than that. Convict labour terminates in winter at four or five o'clock in the afternoon ; the prisoners are also later in beginning work, and the work is lighter than with free labour. In addition, I may say that we are selling the product at the same prices as the Central Prison in Toronto, the firm at Brantford, and the Consumers' Cordage Company, alth ugh I have not made an agreement with any of them. That does not look as if Sir John Thompson was regulating the price of the output. He was selling it at the same price that these competitors were seling their product at, and we forsooth are blamed because we are selling It at one or two cents a pound less than our competitors. Now, since 1880, how have we dealt with this output of binder twine ? It has been not only suggested, but it has been made a matter of positive statement that in 1S96 the output of the Kingston penitentiary was disposed of to friends of the government at a figure less

than it cost to produce it. That is charged against us. Let us look how this twine in-*dustry was dealt with previous to 1896. Let us see how those who charge us to-day with dereliction of duty acted themselves, and how many of these gentlemen protested against the action of the Conservative government.

This industry was started at Kingston in 1S94. It lirst began by installing the plant and the people of this country were made to pay $40,000 for a plant that cost the contractor in the vicinity of $18,000.

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LIB
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The SOLICITOR GENERAL.

Yes, this was previous to the elections of 1896. Not only did the people of Canada pay the figure I have mentioned, but they paid it notwithstanding that the government had called for tenders and that they had a tender for a plant of the same sort for $20,000.

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CON

James Clancy

Conservative (1867-1942)

Mr. CLANCY.

I am sure that the hon. gentleman will do himself the justice to produce the evidence of the statement he has made. The Solicitor General made a similar statement last session and he expected the House to accept it without giving any proof beyond the mere statement itself.

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The SOLICITOR GENERAL.

Last session I made the statement and the hon. gentleman (Mr. Clancy) did uot contradict me, but some one on the other side suggested that perhaps my statement was incorrect. What did I answer ? I said the public accounts are there open to you.

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CON
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The SOLICITOR GENERAL.

Now, Mr. Speaker, I wish to be* allowed to proceed. This system of interruption I am not going to stand just at the present time. Last session, when a similar objection was made, I suggested that this matter should be referred to the Public Accounts Committee, and I challenged the hon. gentleman to bring it before the committee. I then said that I would produce Mr. Mackey, the auditor, from Toronto, who was specially charged in connection with the suit-to which I shall have occasion to refer later on-with the examination of these accounts, and who would produce the invoices to prove the statement I made. The challenge I made then I repeat now. I say that this matter would be better dealt with before either the Public Accounts Committee or the Committee on Agriculture, where we would have an opportunity to bring witnesses and to prove the statements I have made. That is (lie place to deal with this question, and not here where we have all sorts of vague statements made by gentlemen on the other side of the House, arising from what I must at least call imperfect knowledge.

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February 27, 1901