May 7, 1901

IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN.

I read somewhere that they were not disposed to do that now, but wished to put the onus on the government. I would like to have that question cleared up.

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The MINISTER OF FINANCE.

At the time the very large delegation waited on us no question of the kind was raised. All these gentlemen asked was that the machinery of the Tariff Act might be put in operation. What the government do in this matter is simply to appoint the tribunal and then it is open to all persons interested to present their claims. I may say that I was called upon within' the last day or so by gentlemen connected with the Canadian Press Association, who put some questions to me in regard to that matter. They were aware that they would have to accept a very serious responsibility, but I do not know that they were not willing to accept it; and when Judge Taschereau opens his

court, I have no doubt they will be present and will be prepared to produce such evidence as they can in support of their allegations.

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IND

William Findlay Maclean

Independent Conservative

Mr. MACLEAN.

Have any other complaints been made to the government with regard to other combines, and if so, is it the intention of the government to have them investigated ?

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The MINISTER OF FINANCE.

Each one of these cases will have to be investigated on its merits. I think I am correct in stating that of late no other complaint has been made on which action could be taken. A year or more ago some complaint was made to us, but in the judgment of the government the evidence supplied was not sufficient to make out a case. I had one letter referred to me by one of my colleagues recently, but it did not furnish sufficient information to become the basis of further action.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

I hold in my hand a number of letters with reference to the leather combine, which I have already dealt with in this House, and as to which I know that representations were made to the government.

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The MINISTER OF FINANCE.

I said that there were some matters a year or so ago. That is what my hon. friend refers to.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

This matter was gone into carefully, amongst others, by Mr. Gar-row, an eminent lawyer in the west, and he came to the conclusion that there was a most effective combine in that line, and one most injurious to the small tanners of the country. I hold in my hand a letter from Getty & Scott, of Galt, in answer to a letter from Mr. Smith, of Goderich, asking for information on the subject. In this letter they say :

We have Mr. Blackwell, formerly of the Stratford Shoe Company, cutting stock for us, and he informs us that you have an oak tanned stock which is very suitable for our work. While we are on the manufacturers' list of the Tanners' Association, yet if we can get a good line of stock, and at prices that would pay us to do so, we would not hesitate to break away, as the whole thing is systematic stealing.

As I understand, there are two classes of sole leather made by the tanners of the country-one called ordinary slaughter-tanned leather, and the; other Spanish sole-tanned. Only a few large firms make the Spanish-tanned leather ; and a number of men who deal In leather have entered into an agreement that they will buy all their stock from those parties who are in the combine, because by doing that they get a rebate of 5 per cent on all purchases. The result is that those who are not in the combine are obliged to buy from the parties who make oak-tanned leather, which most of them require, while those tannens who are not in

the combine and who produce only the slaughtered leather, find it impossible to sell their product. In order to get the rebate of 5 per cent, all parties have to agree to buy only from those in the combine, and have to make an affidavit at the end of the year to the following effect:

Copy of Affidavit.

Dominion of Canada, Province of ,

County of .

To wit

In the matter of the rebate allowed by members of the Tanners' Association to purchasers of sole leather from them.

I, of the of

in the county of do solemnly declare [DOT]

1. That I am a member of the firm of

carrying on business of

in the of

and as such have a full and intimate knowledge of all transactions of my said firm or business and know that the statements herein contained are absolutely true.

2. That since the day of

up to the time of the making of this declaration I have neither purchased nor used in any way whatsoever, nor contracted to buy directly or indirectly, nor contracted for the production or manufacture of any sole leather of any kind or description whatsoever (except oak sole leather), save from the following firms: Shaw, Cas-sils & Co., Beardmore & Co., Breithaupt Leather Company (Limited), Logan Tanning Company (Limited), C. S. Hyman & Co., Bowman & Zln-kan, Dowker, McIntosh & Co., Marlatt & Armstrong, Muslcoka Leather Company (Limited), Acton Tanning Company (Limited), Magnetawan Tanning and Electric Company (Limited), Wing-ham Tanning Company, S. Arscott & Co., Benton, N.B.; Warren, Tobey & Co.

3. That my firm has not, neither has any partner of mine, nor has any one acting as my agent, nor has any one acting as the agent of my firm, nor has any one acting as the agent of any partner of mine, nor has any one acting as the agent cf the business described above, nor has any one employed by me or by any partner of mine or employed in connection with the business described above, nor has any one connected with me or with any partner of mine in any way whatsoever in the business referred to above, nor has any one connected with my firm or with the business described above, either purchased or used in any way whatsoever, or contracted to buy directly or indirectly, or received for sale or sold on commission, or dealt in any way with, or contracted for the production or manufacture of any sole leather of any kind or description whatsoever (except oak sole leather), save from the above-mentioned firms.

4. That I and all who are in any way connected with the business described above, have done no act that would disentitle the said business to the said rebate offered upon certain conditions by the firms mentioned above, in two circulars dated December 31, 1895, and January 31, 1896, but on the contrary we have faithfully fulfilled, both in letter and spirit, all conditions contained in said two circulars.

5. That the statement marked Exhibit * A ' to this declaration is a true and complete account of the sole leather purchased or contracted tor by any one connected with the business described above from the above-mentioned firms.

And I make this solemn declaration conscientiously, believing it to be^true, and knowing that

it is of the same force and effect as if made under oath and by virtue of the Canada Evidence Act, 1893.

Declared before me at in the

county of this day of

, 1897.

A Commissioner, &c.

Now, if that is not a combine, I do not know what is, and it affects all the small tanners throughout the country. I could give the names of dozens of tanners who are unable to sell their product for that very reason to the dealers who formerly handled their product. The government have been appealed to on the strength of the provision in the Customs Act which empowers the government, on proof being furnished of the existence of a combine which tended to interfere with the freedom of trade or to enhance prices, to take the duty off goods which are made the subject of such combines ; but, the government, up to the present, have refused to initiate any action in this matter, although representations have been made to them by individuals, and also collectively by petition, from different parties. The Minister of Finance tells us that they are going to take up the question of this paper combine. X can only suppose that is because they are more afraid of the press of the country than they are of the leather men, while the combine I refer to is quite as injurious and affects as large a number of people. I would strongly urge upon the government the wisdom and necessity of attacking this combine, which is a very injurious one, and the effect of which is widely felt among those engaged in the tanning business.

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The MINISTER OF FINANCE.

It is a year or two ago now since I had the papers in relation to the so-called leather combine, and I would not care to speak too positively. But I would call my hon. friend's attention to the difference between that and the present case. What I do remember is that after careful inquiry, it was held that the information furnished with regard to the feather combine was not such as would bring the case within the meaning of the clause in the Customs Act.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

But it would bring it under the clause of the Criminal Code.

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The MINISTER OF FINANCE.

What have we to do with the Criminal Code ? The hon. gentleman had something to do with the legislation on that question and must draw a distinction between proceedings under the Criminal Code and under the Tariff Act. Under the Tariff Act, the reduction or removal of the duty is the relief provided. But in the case of the leather combine a removal of the duty would not have the effect desired at all.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

A number thought it would.

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The MINISTER OF FINANCE.

My recollection is that the complaint of the leather men was not so much with regard to the duty as to the fact that there was an arrangement to shut out the smaller dealers. They said to the smaller dealers : If you deal entirely with us, you will get favoured terms, but otherwise you will not. That is quite a different condition of things from that which is submitted by the paper people. In the latter case, the reduction or the removal of the duty would provide the remedy, but in the former case it would not.

There are two Acts of parliament dealing with this matter-the Tariff, which deals entirely with the duty, and the Criminal Code. Some years ago an Act was passed, initiated by an hon. gentleman on the other side, who is not now present, in which it was made a misdemeanour for persons to create a combine for the purpose of unduly enhancing prices or restricting production, &c. It was found that the word ' unduly ' made the Act inoperative, and some years later my hon. friend from East Grey (Mr. Sproule), I think it was, introduced an Act to remove the word ' unduly ' and that Act passed. At all events I supported my hon. friend. And if the gentlemen who feel aggrieved by the action of the so-called leather combine think they have a case which constitutes an offence within the meaning of the Act, they are perfectly free to take proceedings under the Criminal Code. But it is not the business of the government to initiate proceedings under that code. Any individual can go before a magistrate and take the necessary proceedings.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

Before coming to power, the present government declared that they were opposed to combines and would endeavour by every possible means, to destroy them. This government had it in their power to make representations to the Attorney General of the province to set the law in motion in order to punish these parties. Several of these gentlemen have written me complaining that the government have shown indifference to their request and do not wish to act. There were two ways in which the combine might be attacked. First by a reduction of the duty, and many of those gentlemen who complain believe that that is the real remedy, while others say it is not and that the combine should be attacked under the Criminal Code. If the present government were sincere and disposed to carry out their pledges, they could adopt either one remedy or tiie other.

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CON

David Henderson

Conservative (1867-1942)

Mr. HENDERSON.

I fail to observe the very nice distinction which the hon. Finance Minister has drawn between the two cases of the paper combine and the leather combine, nor do I see how he could assume that the reduction of the duty or the re-

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

moval of it would not be effective in breaking up the leather combine. I have heard one of the largest leather manufacturers in this country say that two per cent of the output of the American tanneries, thrown into the Canadian market, would monopolize every bit of that market. If such a small per cent of the American production would supply the whole consumption of Canada, it seems to me that the government could apply very effectively this clause in the Customs Act and remove any combine that now exists.

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The MINISTER OF FINANCE.

Would the introduction of a sufficient quantity of American leather to flood the market, help the small leather dealer who is making the complaint ?

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CON

David Henderson

Conservative (1867-1942)

Mr. HENDERSON.

The remedy would come in another way. What is wanted is to break up fhe combine.

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The MINISTER OF FINANCE.

You would kill the patient.

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CON

David Henderson

Conservative (1867-1942)

Mr. HENDERSON.

The small man is suffering now and wants the larger man to suffer as well. If the larger man were threatened, I have no doubt that the small men would soon find their remedy.

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LIB

Robert Holmes

Liberal

Mr. HOLMES.

When that leather question came up before the hon. Finance Minister, it came up on representations by a dealer in my own constituency. The statement he made, and which I believe to be in the main true, is that the leather dealers believed there was a combine to crush out the small manufacturers. The agreement produced is one that existed among some of the leather dealers, and when the matter was brought to the attention of the government, the complainants assumed that the machinery of government would be forthwith put into operation to break up the combine. They did not advance any proofs further than the agreement, and wanted the government to go ahead and act. Well, I was given to understand by the law officers of the Crown that the agreement was looked into, and that in their opinion an action at law based on it would not stand.

But the difference between the paper and the leather combine is this, that the gentlemen who made the representations to the Finance Minister the other day certainly gave him to understand that if a commission were appointed, they were prepared to bring up evidence to prove their charge.

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May 7, 1901