August 4, 1903

H. M. WHITNEY.


I thought it was only fair to Sir Charles Tupper that this letter, written not at his instigation, written entirely without his knowledge, should he brought to the attention of the House, as other correspondence from Mr. Whitney was at the time introduced into this House for the purpose of somewhat contradicting Sir Charles Tupper as to the share he had taken in the legislation at that time. Now, coming to the proposal of the government, I regard it as a mere makeshift, a mere temporary expedient. I believe the iron industry of Canada can never be put upon a permanent basis until the duties are so revised as to give the home market, to a large extent at least, to our own people. That the government's present proposal will not do. The effect of a bounty and the effect of customs duties are very distinct. If by means of customs duties you can give the home market to our own people and in that way build up the production of iron and steel in Canada, the result will be that the competition thus stimulated in our own country will reduce the prices of the products to a fair and reasonable basis, and eventually there will be no burden on the people at all, because they will get their iron and steel manufactures and goods in Canada as cheaply as they Mr. BORDEN (Halifax). can get them in any other country. But the' effect of bounties is precisely the opposite. The more you develop the industry by means of a bounty, the greater burden you impose on the people. If you increase the production four-fold by means of a bounty, you increase the burden of the people four-fold. Now, there is good reason, it seems to me, for endeavouring to give our people the home market in respect to this great industry. I do not disguise from *myself, nor does the hon. Minister of Finance disguise from t,he House, the necessity, in case the duties on iron and steel are revised, of revising the duties on other articles which are intimately associated with the use or the production of iron a'nd steel. But is our home market worth anything ? It is estimated that we used during the past year more than 800,000 tons of iron and steel, of which we imported 544,547 tons direct products of blast furnaces and rolling mills of other countries. Surely there should be some opportunity for our own manufacturers to acquire the control of a market like that. We imported last year $33,681,625 worth of iron and steel and manufactures thereof. A considerable portion of those goods could be and ought to be manufactured in Canada. But I submit to the House, and particularly to the Minister of Finance, that it is impossible to give to our manufacturers the home market by a simple system of bounties such as that which he is proposing at the present time. My hon. friend has referred to a possible revision of the tariff in the future. Indeed, he has put these resolutions in such a form as, coupled with his remarks, to suggest that possibly he may be looking forward to a revision of the tariff at an early date. I would have thought, as I suggested at an early part of the session, that it would have been better to make a revision of the tariff at once, and not resort to this mere makeshift and temporary expedient, which will have to be abandoned if the iron and steel industry of Canada is to be put on a permanent basis. If that result is achieved, it can only be done by a very thorough revision of the tariff on these articles. I do not know whether the hon. Minister of Finance has any understanding with the manufacturers of iron and steel with regard to that. The way in which he has dealt with the matter in the House would seem to give colour to that supposition. While I am glad that these resolutions have been brought down and that this small measure of protection has been given for the purpose of aiding and developing this great industry, nevertheless I regret that my hon. friend has not seen fit to adopt the only means by which in my opinion this industry can be put upon a permanent basis in this country, that is, a revision of the customs tariff in such a way and to such an extent that the Canadian producers will enjoy the Can- adian market. I still trust that the government will take the very earliest opportunity -I am afraid they will not have any opportunity if they do not begin very soon- to give adequate assistance to the iron and steel industry in the way I have mentioned.


LIB

Joseph Israël Tarte

Liberal

Hon. Mr. TARTE.

Mr. Chairman, once more we are not doing the right thing. The Minister of Finance is asking this side of the House to place at his disposal a large amount of money, so that he may pay that money into the hands of manufacturers of iron and steel. The hon. gentleman has come to the conclusion, not because, I suppose, he is convinced that protection is good policy, but because some of our industries had very nearly gone to the wall. In other words, he gives relief once more to some industries when lie cannot help himself. Public opinion has forced my hon. friends on the treasury benches to do what they had made up their minds not to do at the beginning of the session. I am very glad that public opinion has forced my hon. friend to do something, but he has not done the right thing. His policy is a policy by piece-meal. It is a retail policy, and I suppose that should some other industries, before the end of the session, be threatened with destruction, my hon. friends on the treasury benches wiil come again to the House and ask for bounties. I share the views of the hon. the leader of the opposition.

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LIB
LIB

Joseph Israël Tarte

Liberal

Hon. Mr. TARTE.

My hon. friend from Victoria says, of course. I do not know what views my hon. friend holds on this subject. He interrupts us very often when we address the House on questions which we believe we know as well as he does and toi which we have given as much study, if not more, and his interruptions he is unable to substantiate by any arguments. I am glad to share the views which the hon. lead-of the opposition has just expressed when he congratulated the hon. the Minister of Finance on doing something. I happened in September last year to have read an article published in the 'Weekly Sun,' which claims to be one of the organs of the farmers of Ontario. In this article comparisons were made between the prices of wire in this country and the United States. I addressed myself to one of the largest manufacturers of iron and wire in this country, and I shall take the liberty of reading the statement which he then sent me. I think it will convince even my venerable and hon. friend from Victoria, because the figures are there and the statement is as clear as the sun on a bright day :

The determination of the Canadians' price of wire is to Canadians a mystery. If a Canadian should want information with regard fo the constitution of the wire market, he must address himself to the American Steel and Wire Trust, who, by reason of the discrepancy in the Canadian tariff which allows barb wire and Nos. 9, 12, 13 galvanized wire to come into this country free, has complete control of the Canadian market.

The American trust has complete control because we have no tariff on those articles.

Last year Canada imported 31,324 tons of wire. Of this 27,908 tons came from the United States] of the remainder about 3,500 tons was made in Canada by the Canadian firm under privilege of the American Steel and Wire Trust. Every year the emissaries of the trust come to Canada and determine the prices which will rule the season in the Canadian market, and even at which wholesale dealers will sell. All wire sold in Canada is sold f.o.b. at Cleveland whether it comes from a Canadian factory or wholesale house.

This is a fine state of affairs. No doubt the free traders in this House are pleased with it. The American trust not only controls the prices of wire, but insists that Canadian wire is sold as Cleveland. Is not that a fine policy ?

Under the free trade tariff the Canadian wire trade is under the complete control and manipulation of the American trust, and the money of the Canadian farmer goes to swell the dividends of the American millionaires. Before the duty was removed, Canadian trade was being supplied by thirteen Canadian factories. The Canadian wire manufacturers have engaged themselves if given due protection to sell their products not above the ruling United States price plus the freight.

This would give the Canadian farmer his wire at as low if not a lower rate than he is getting it now. It would be made by Canadian workmen and it would develop a Canadian market for wire rods which our steel companies should soon be able to manufacture, filling up the gap that now prevents the Canadian farmer from getting his wire from Canadian ore.

After having readi this statement, let me compare the prices here and in the United States of some articles which are protected to a reasonable degree by our tariff. Bar iron is protected by our tariff of 1897 to the extent of $7 per ton. The current prices in the United States are given at $2.25. A Canadian paper gives it at $1.95 to $2_ in Montreal and in Toronto. These were the quotations in September 1st. On iron pipe we have a duty of 35 per cent to pay, is it possible that free traders will stand by a government which imposes a duty of 35 per cent ? Is it logical on their part ? They are free traders, yet they support a government-and I was part of it when this good bit of business was done-which imposes a duty on certain articles a duty of 35 per cent. Our free trade friends are mighty glad when there is no duty and when the Americans slaughter our Canadian market they cheer, but when there is a duty of 35 per cent they cheer again. How do the prices compare in the case of iron pipe, on which there is a duty of 35 per cent ?

Canadian price. American price. Per 100 feet. Per 100 feet.

J-inch

J-inch

1 inch

lj-inch .. ..

lj-inch .. ..

2 inch

7 35

8 95 12 55

4 02

5 77 7 87 9 45

12 60

In all that list of prices, the Canadian manufacturer is the lowest, and that is due to the protective duty of 35 per cent. The result has been, as the leader of the opposition has just pointed out, that competition has been keen between Canadian producers, and so we have the reduction of prices to the Canadian consumer. Now, let us look at another article. Take the item horse-shoes, on which we have a duty of 30 per cent. As a consequence, all the horseshoes used in this country are made within our own territory. They are sold from the factory at $3.35 per hundred pounds, while, if we had free trade or a lower tariff, the American firms would first slaughter our Canadian market and then we should have to pay the American price, which, at the date when this memorandum was placed in my hands, was $3.85. The same is true of horse nails. The cheapest No. 7 in Canada cost $6.90, against $8 to $9 in the United States ; or $11.98 for the best No. 7, against $14 in the United States. What is true of these articles is true of everything else. In other words, if we had a tariff which would protect the industries that could be worked out successfully here, we should have competition and lower prices. Now, the Minister of Finance has told us that last year we paid over $1,000,000 to the manufacturers of iron. If, instead of that system of bounties, we had adopted a protectionist tariff, let us sav of 35 per cent, we should not have been obliged to pay that amount of money. And, instead of importing over $30,000,000 worth of iron manufactures, we should have imported not more than half that quantity. We should have circulated from $15,000,000 to $20,000,000 in this country to the benefit of our farmers, our working men, our merchants, our railways-everybody. In the face of the facts that I have given, in face of the prices I have quoted- and which are not the only ones I could quote-how is it possible to explain the refusal of the government of this country to come to a reasonable and Canadian policy ? Yes, a Canadian policy ; for a policy that allows American manufacturers to cross the line and dictate to our manufacturers, and even our merchants, the prices at which they shall sell, is not a Canadian policy,- it is a Yankee policy and nothing else. If there is another name for it, I am quite ready to accept it; but I cannot find any other name for a policy-I say it again- which allows American manufacturers and American combines to tell our people : You shall not sell for less prices than those we fix for you. I say it is a policy I cannot

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LIB

Joseph Israël Tarte

Liberal

Hon. Mr. TARTE.

understand, a policy I cannot explain-and a policy I cannot support, of course. The Minister of Finance is coming to the rescue of an industry which deserves every consideration at our hands. The nations that possess iron ores are happy nations indeed. We have the advantage of possessing ores and everything else that would lead to a large production of this important staple ; and we have only to adopt the right policy to see this great industry developed as it should have developed long ago. I repeat what I said the other day,-that, being unable to secure the duties, we are obliged to accept the bounties. At the same time, we know that these bounties will not serve the purpose as the duties would have done. From some of the people interested in the iron industries I have learned that, since the Minister of Finance has submitted the bounty policy, that they are in the same position that I am in to-day ; being unable to obtain what they know to be right, they have to accept what is given to them. But, of course, they will not invest a great deal of money. They know that the bounty system cannot be a permanent policy. They know that my hon. friends on the treasury benches give relief to industries only when they cannot help themselves. Consequently those industries that are helped to-day by the system of bounties will simply live from hand to mouth ; they will not develop ; they will not do what they would do if they were certain of the home market. Not being able to do better, I content myself with offering my protest against the policy which is being adopted now, because it is not the policy that ought to be adopted.

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The MINISTER OF FINANCE.

My hon. friend's (Hon. Mr. Tarte's) figures respecting prices are very interesting, and assuming-as I have no doubt I have the right to assume-they are accurate, very valuable. I understand my hon. friend to quote a number of leading articles in which the prices, notwithstanding the changes made in the tariff, are higher in the United States than here.

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The MINISTER OF FINANCE.

Yes, articles on which we levy a duty of 35 per cent, and which we are getting cheaper than the consumer in the United States can buy them. And my hon. friend has told us repeatedly that the American tariff is higher than ours. What, then, becomes of the argument that if you have a sufficiently high tariff, you will have a measure of home competition which will bring down the price of the goods ? My hon. friend has simply proved that high tariff means high prices. Prices of the goods he has ref erred to are higher in the United States than in Canada, and the reason is not that there is a lack of industrial development, or a lack of competition in the United States, but simply and solely

that their tariff is higher than ours. Their tariff is high and their prices are high. Our tariff is somewhat lower and our prices are somewhat lower accordingly.

Now, just a word, if the hon. leader of the opposition (Hr. Borden, Halifax) will permit me, in relation to the four-year-old letter he has read in relation to the part played by Sir Charles Tupper in connection with the iron and steel industry. Sir Charles Tupper is out of politics now, and nothing was further from my thought than that I should endeavour to discredit any part he has had in public affairs. As he has retired I would rather-as would all Canadians- seek the good things he has done than seek opportunity to find fault with him. Let us attack those who are in the battle, not those who have passed out of it. I regret that the hon. gentleman has conveyed the impression that I have, in some way, tried to discredit the part played by Sir Charles Tupper in the matter of the iron industry. There is no foundation for that idea. I have sent for ' Hansard ' but have not yet received it that 1 may refer to the passage. But with the help of the quotation the hon. gentleman has given, I can recollect the facts. Sir Charles Tupper, in a discussion which took place, I think in 1890, was not content to claim whatever credit he might fairly claim in connection with the policy of developing the iron and steel industry, but he went further and was ungenerous enough to state that I had been opposed to granting these bounties, that Mr. Whitney had come to me at Ottawa, and that I had sent him away telling him that I would do nothing. I asked Sir Charles for his authority at that time, and he stated that Mr. Henry M. Whitney was his authority. I said nothing on the subject, but I wrote to Mr. Whitney calling his attention to Sir Charles' statement. Mr. Whitney wrote a letter in reply in which he said that Sir Charles Tupper was mistaken, and he used the words which my hon. friend has used, the words in the letter to Mr. Graham Fraser, that in all negotiations in the matter with me he received every courtesy and consideration, and found every manifestation of a desire' to assist him. These were the facts connected with the discussion which took place in the year 1900. However, 1 only allude to it now to show that neither then nor now was it my desire to make any reflection upon the part played by Sir Charles Tupper. He has passed off the stage of active political life, and I am the last man who would say anything which would deny him any fair share of credit which he may deserve in relation to this or any other matter in the history of Canada, during the long period that he was connected with public affairs.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BORDEN (Halifax).

I read the letter because it indicated that the view which had been expressed in the letter of Mr. Whitney read in this House by my hon.

friend, was a view which did not commend itself, in some respects at least, to the recollection of Mr. Fraser, who was as intimately connected with these negotiations as was Mr. Whitney. The letter itself shows that on the first occasion when application was made to the government during 1898,

I think, the efforts of Mr. Ross and some other gentleman to prevail upon the government to adopt the system of bounties, were absolutely unsuccessful.

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The MINISTER OF FINANCE.

I do not think the letter showed that, and it could not show it for such was not the fact.

Hon. Mr. ROSS (Victoria, N.S.) When the hon. member for the division of St. Mary's (Hon. Mr. Tarte) was speaking, he mentioned that he was going to support the views of the leader of the opposition, and I, in my innocence, just remarked in a kindly spirit,

' of course you do.' Well, the hon. member turned on me rather unkindly for that expression. I may say to the House and to him that it would be well for him if his political life had been as consistent as mine, if it had, he would not be in the position he is in to-day. Now let us review his position. When he was a member of the government there was nothing that could be said about bim by the opposition which was not said. They did not say that he had committed murder, or seduction, or anything of that kind; but there was scarcely a sin you could think of that he was not charged with by the opposition. He turned against his own government, and then the opposition with open arms were willing to receive him. Well, they are welcome to him, so far as the Liberal party is concerned. His position, Mr. Chairman, puts me in mind of a certain species of snake. When they find that the animal is rather too large for them to swallow, they slime him all over and then they can swallow him. That is what the opposition have done with the hon. member for St. Mary's, and they are now welcome to have him to assist them in every way they wish. But coming to the question under consideration, I am not so sure but it would have been well if the iron industry in this country had been allowed to go into liquidation, and that other people had built on its ruins. But we are told by very good political economists that these are infant industries, and since they are, I am willing to sacrifice some of my own principles to support them-not so much on behalf of the men who have invested their capital in them, as on behalf of other industries that are at stake all over the Dominion of Canada, in Prince Edward Island, in Nova Scotia, in New Brunswick, in Montreal, in Quebec, in Toronto, and I may say in every other place in Canada. But there is one thing about this industry that I must menr tion. I am speaking now of other interests in Cape Breton. They are without a manager, and I fear they will never succeed

until they have a proper manager. We had some experience with the sugar refinery that was started in Halifax. A large amount of capital was paid into that enterprise, and they got a manager from Brooklyn, and he landed them $70,000 in debt the first year of his engagement. Now, I have a rather kind regard for Scotchmen generally, and I think if these iron and steel people had sense enough to correct their errors the same as was done in Halifax, by sending to Scotland and getting a manager, they would probably have succeeded. There was any amount of extravagance committed in connection with this enterprise in the Island of Cape Breton. Columns and columns, and pages and pages, were written about the profits that were going to be made; you would think that half the iron industries of the United States were to be closed up by this one industry alone, and they induced, or seduced, innocent people to take stock in the company, who are to-day to a large extent ruined. It puts me in mind of a story of the Duke of Breadalbane. I do not know that a good story has been told in this House for a long time. The Duke of Breadalbane, like all noblemen of Scotland at that time, had a highland piper. One day the clergyman, in going around, regretted to find that the piper did not have much knowledge of Scripture, and he asked him if there was any part of Scripture that impressed him. Yes, says the piper, that golden image on the plain of Dura. When the order was given that at the sound of the harp, the sackbut, the cornet, the flute, the psaltery, the dulcimer and all sorts of musical instruments, they should all fall down and worship the image, if they had had a highland piper there none of that nonsense would have happened, because, instead of being down on their knees, they would all have been dancing. So in this instance, if the people down in Cape Breton had a prudent Scotchman to manage their affairs they would be successful to-day, as was the case with the sugar refineries in Halifax under the management of a Scotchman; they succeeded and are succeeding to this day. One of the greatest difficulties that I see in connection with assisting these iron and steel industries is that they are without a proper manager to look after their affairs. Now let me read from the St. John ' Telegraph ' of an interview with Mr. Buell.

Mr. Buell said the facts were that three months ago he made a proposition to James Ross, president of the company, who was then in Europe. The proposition, if accepted, would have brought the business to a better condition than it is to-day. He decided that he would not remain there subject to the conditions then existing, and he proposed that he administer the business, and he felt sure he could bring about better results. As an alternative, he said that if his proposition were not accepted, he would resign his position, to take effect in three months. It was not accepted, and so he did

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LIB

William Ross

Liberal

Hon. Mr. ROSS (Victoria).

resign and gave up his position this week. Mr. Buell says the natural basis for a big successful business is still there as good as when Mr. Whitney started the works ; there is the location, the materials necessary in the manufacture, all good, but it is the human factor of management of the enterprise which did not bring success for, said he, the people of Canada don't have to be told that the business is not a success. Were his proposition entertained, he felt sure there would have been different results.

There was one observation that my hon. friend from St. Mary's made, that nations that could produce iron and ore were all happy. I think that Spain is the largest exporter of iron ore of any country that we know of and I do not know that the condition of Spain is much happier than that of any other country in Europe.

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CON

Seymour Eugene Gourley

Conservative (1867-1942)

Mr. GOURLEY.

I feel great sympathy for the clergyman mentioned by the hon. member for Victoria, N.S. (Hon. Mr. Ross). He regretted that the piper of the Earl of Bredalbane was not more familiar with the scriptures. I have a similar regret that the government of this country are not better acquainted with the Holy Scriptures. I feel that if the government were, and especially if the hon. Minister of Finance (Hon. Mr. Fielding) were, considering his conduct towards the iron industry of this country, instead of making the speech that he did this afternoon, he should have arisen and humbly followed the splendid example of the psalmist who declared,

' I acknowledge my transgressions and my sin is ever before me.' I feel assured, Mr. Chairman, that if the hon. Minister of Finance had done that, the Liberal-Conservative party would have been prepared to give him that generous forgiveness that Ezekiel promised to the whole world when he said,

' When the wicked man turneth away from his wickedness that he hath committed and doeth that which is lawful and right he shall save his soul alive.' If the hon. Minister of Finance wants to save his political soul alive, he must turn away from the sins he has committed and which he has committed especially in regard to the iron Industry. I am deeply concerned in the iron industry of this country. I am more concerned in those industries which prosper and give character to Canada than in any political success that may arise oat of the matter. I am deeply concerned that Canada shall be a great manufacturing country, and that this country shall acquire the wealth which springs especially from the iron industry. It is well known that the success and wealth of any country are based upon the manufacture of iron, for iron calls into its production the mining of coal and the mining of other minerals all of which industries give character to the country. In my own county we had an iron industry at Londonderry called the Steel Company of Canada. That industry flourished under great difficulties for twenty-five years and it gave to the county of Col-

Chester great prosperity. Farmers within a radius of twenty or thirty miles found a splendid market in consequence of it, and farms that had been uncultivated, farmhouses, and barns that were mean and unsightly gave way to the beautiful homes and fine outbuildings that grace the countryside. Any person who drove through that country could not but see that some magic was at work, and that magic was the successful working of the iron industry there. The Conservative party, opposed as they were by these gentlemen opposite, were cowardly to have listened to their arguments at that time, they should have felt themselves to be more assured of the ground upon which they stood and they should not have hesitated before the carping criticism of these hon. gentlemen. They never gave the iron industry that powerful support which they should have given it. However, they came forward and by the aid of bounties and by encouragement in the shape of tariff legislation, they gave it the lease of life which it previously enjoyed. In reference to the price of goods in a protected. country, I must say that I thought the doctrine that duties increased the price had been exploded long ago. I really felt sorry for Nova Scotia that the hon. Minister of Finance, with whom I have no quarrel and of whom I have always spoken kindly, should seek to lower the intelligence of the distinguished province, of Nova Scotia by the adoption of that argument which I thought had been given up by intelligent men twenty or thirty years ago. If the hon. gentleman had been addressing some audience in Timbuctoo or some audience in Algiers, or in some undiscovered territory in Africa, if there is any undiscovered territory in Africa, I could understand him repeating the argument that a high tariff makes dear goods. The hon. gentleman should be familiar with the history of Canada when cotton and sugar were protected in this country. Hon. gentlemen opposite wasted days and weeks of the valuable time of this parliament in asserting that cotton and sugar would be dear just in proportion to the duties imposed upon these articles. Yet, in four or five years you could buy cotton and sugar cheaper than it had ever been known to be in the history of Canada. What happened in the United States ? They protected steel rails by imposing a duty of $22 a ton. There is one thing about the people of the United States which we cannot help but admire, while not admiring many things characteristic of their system of government, diplomacy, or public life, and it is the splendid courage that they display when they attempt to deal with a question such as this. They make up their minds, and after having made up their minds, they fear the opposition, neither of their own citizens nor of any nation abroad. They wanted to manufacture steel rails. They were building railways all over

the United States, until a few years ago they were sending millions and hundreds of millions of dollars to-the old country and draining their own country. They imposed a small duty for a little while, but they found it did not avail. At last they put on a duty of $22 a ton on steel rails while steel rails were selling at $27 or $28 aj ton in England. They put on by way of duty almost the entire value of the rails and in five or six years rails were selling in the United States at $18 per ton, or $4 less than the duty imposed. How could the duty be added to the price in this case ? This question was threshed out all through the United States by the most competent and logical minds in the United States, men like Henry Clay and Daniel Webster, men possessing the most astute and cultivated minds, men with syllogistic minds, whose reason could not be satisfied with a non-sequiter. These men, having threshed it out from the beginning to end settled the question for ever that there was no connection between duties and prices, but the question was regulated by competition. I thought the hon. Minister of Finance would not have introduced into the House of Commons an ad captandum argument which would only be fit for a public meeting and a public meeting of very ill-informed men at that. I always listen to the hon. member from Montreal, St. Mary's (Hon. Mr. Tarte) with great pleasure, because he has convictions. What we want in Canada are men of convictions, men, who having convictions, will stand by them at whatever hazard and not only stand by them, but seek to impress them upon their fellow-Canadians, feeling that if their convictions are honest and right, they should dominate the whole public opinion of the country and determine the policy of the whole of Canada. I have come to the conclusion, after watching the hon. gentleman's course in this House, that he is sincere and thorough Canadian, although I told the House a few days ago that I had a different opinon a year and a half or two years ago when the hon. gentleman made those unpatriotic speeches in the great city of Paris. I want to tell the hon. member from Victoria (Hon. Mr. Ross) that it is not wroug for a man to change his mind. Only very little and very narrow men pretend that they never change their minds. If I am wrong in the morning I will change my mind fifty times to get right by noon, and if I am wrong at noon, I will change my mind fifty times to be right at night. I would change my mind every hour of the day to be right, until I could lie down at night feeling in my heart that I was at last right. Instead of it being a criticism against a public man that he has changed his mind if his motives are right, it should be a credit to him. Hon. gentlemen opposite boast that they will not change their minds, although they have changed their policy.

7947

The trouble with you gentlemen is that you are in a continuous state of mental hypocrisy. When you gentlemen were in opposition, you permitted your leaders to force you into a false position. You should have stood up like men and said to your leaders : In tills new country these old fogey notions of the Minister of Trade and Commerce (Rt. Hon. Sir Richard Cartwright) can have no place, and you must adopt a policy consonant with the building up of Canada. If the younger men and the stronger men of the Liberal party had not permitted Mr. Blake and Mr. Cartwright and Mr. Fielding and men of that kind to dictate a policy that they must have known was unsuitable to the conditions of Canada, you gentlemen opposite would not 'be in the pitiable position to-day of constantly trimming your sails to meet every adventitious wind' but instead you would present yourselves to the country as a strong government with a strong policy. I am opposed utterly to this bonusing, except as a temporary measure. I suppose that when you have your head in the bear's mouth you have to take any kind of treatment the bear gives you, but if I had my head out of the bear's mouth in connection with the iron industry I would say that this bounty system is a most unscientific and ungracious way of treating the iron industry of this country. We have before us the splendid example of the United States in dealing with the iron industry. In 30 years the United States have sprung into competition with the greatest manufacturing countries in the world, until to-day they are challenging the mother of manufacturing in the products of steel. Yet, in face of this splendid example, this government is foreswearing the -whole experience of this continent, and running amuck against the experience of every able and accomplished man, in attempting to assert this bounty doctrine of theirs. Gentlemen, when your Finance Minister proposed this bounty in your caucus, there should have been some of you strong enough to have said : We are wearing false colours, we

are driven to the wall by the arguments of the iron manufaucturers of this country, let us be honest and say that the course we have pursued for 20 years in denouncing protection, is a. wrong course, and instead of adopting this makeshift policy of bounties, which is only an attempt to square ourselves with the policy of protection, let us give that industry the ample protection it needs. Gentlemen on the other side know very well that a policy of protection would really benefit the steel industry, and would not take the taxes out of the people as this bounty system does. By imposing this bounty system you are not giving the iron industry of Canada one-tithe the assistance that a scientific policy of protection would lend it. You have in the United States a tariff on iron and steel scientifically arranged; it was made by

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CON

Seymour Eugene Gourley

Conservative (1867-1942)

Mr. GOURLEY.

experts from France and Germany, and other countries who assembled at Washington and framed it on scientific principles. With that American tariff scaled down and adapted to the wants and needs of Canada, you would place Canada in a very short time in a proud position, and enable her to cope not only with the United States, but with England and Germany as well. Look at what a mean and miserable policy this government has pursued. When they made up their minds to encourage the iron industry in this country, why did they not grapple with it in a straight forward and honest way, and not in the niggardly fashion which has given a staggering blow to the investment of foreign capital in Canada ? Enormous quantities of capital have been lost in Nova Scotia and in Canada by this makeshift policy. If we had been bold and strong a few years ago, to-day we would have had an iron industry in Canada that would have given character and wealth and power to this country, and would have made us known the world over. In 1894 we commenced by giving a bonus of $2 upon puddled iron and steel ingots made in Canada. That went on till 1897, when the bounty was increased to .83, and then in 1899 this sliding scale was introduced. Just as our iron industry was getting on its feet and gaining strength, the Minister of Finance, as if he were angry that the iron industry was progressing, introduced a sliding scale by which 10 cents were cut off the bounty the first year, 15 cents the next year, 25 cents the next year, and in five years the bounty was to disappear altogether. Whether the Minister of Finance understood it or not, it was the most malicious attack upon the iron industry of Canada that could be conceived by mortal man. I am in a position to say that so soon as this policy was introduced the Canada Steel Company, of Nova Scotia, gave up the struggle. They struggled on for 20 years, hoping that the government and the people of this country would grow up to a strong scientific policy for the protection of the iron industry, but so soon as this policy was proposed, the Canada Steel Company went into liquidation, and that great industry which had spent some $2,000,000 or $3,000,000 of English money in Colchester county became inoperative, and last fall the Drummonds of Montreal came down and bought for $300,000 that property which had cost the Englishmen some $2,000,000 or $3,000,000. How can we hope to encourage capital to come to this country when all that the shareholders get out of an investment of $2,000,000 or $3,000,000 is scarcely enough to pay the costs of winding up the concern ? Is it any wonder that they leave Canada damning the country, and protesting that they will not invest another dollar in it or permit any friend to invest a dollar in a country that pursues such a vacillating policy.' That was the condition of affairs

wlien the Drummonds came down to Nova Scotia and bought that property, and now they are endeavouring to work it up. 1 know that these gentlemen were here since they have acquired the property, endeavouring to induce the government to enter upon a policy of protection. 1 have no warrant to speak for them, but I know that they do not want bounties, because I feel that the bounties are little good to the iron company of Londonderry. It may be some good to the Sydney people, although judging from the quotation of their stock and their financial difficulties, it is not much good to them either. It was thought that the announcement of these iron bounties would strengthen the financial position of the Dominion Iron and Steel Company, but instead of that it seemed to injure the company, and now the coal company has been divorced from the steel company, I fancy preparatory to some further ill-luck happening to the steel company. Now, Sir, I do not wish anything to happen to that steel company, because it would be of untold misfortune to the iron industry of Canada. It would publish to the world that there is something unsuitable in the conditions of Canada for the manufacture of iron and steel, and besidesit would give to that imfamous cad, Carnegie, an opportunity of boasting that he had sized up the iron conditions in Canada better than any other. I call him a cad advisedly, because I do not fancy the fellow can either read or write or has the slightest training, for if he had, he would not be guilty of the low and offensive remarks he made with reference to Canada.

When these bounties were announced some days ago, I thought they were adopted to improve the condition of the iron industry of Sydney. I understood that they would not assist the iron industry of Londonderry to any considerable extent which is not engaged in the manufacture of the particular class of iron protected by theses bounties. But these indstries do not want bounties. Why do we indulge in that unscientific way of helping industries ? I find that last year we imported from the United States $25,000,000 worth of the manufactured products of iron. What the iron industries of Londonderry and Sydney want is to be making and selling those products in Canada and getting that $25,000,000 which we now send to the United States. After depriving the manufacturers of this country of the home market, with which no other market is ^comparable, these hon. gentlemen tell them to go and compete with the foreign manufacturer in the markets of the United States or England or Germany. That is a poor compensation for the loss of their market at home. It must be an aggravating thing for a man who manufactures in this country to go to Montreal or Toronto to sell his goods, and find there some Yankee stealing away the markets of his country, which he

has helped to make. It is one of the basest betrayals a government was ever guilty of to force the manufacturers of this country to see their own markets stolen from them, and then to tell them to go and see what chance they have in foreign markets. Well, we have to take this dribble, and I take it without thanks ; I take it as not worthy of thanks. But I suppose that until * a great wholesome sentiment is created in this country, strong enough to sweep away these gentlemen, we will not do better. But if I judge

the signs aright, I warn these gentlemen that the deluge is at hand, and that the whole manufacturing interests of Canada are not going to be imperilled to give these fourteen or fifteen gentlemen high offices. I would rather let them get out, and give my share to maintain them all their lives with splendid pensions and put in a government that will advance the interests of Canada. I fancied that the day was gone when a minister could call on his supporters to sustain him, no matter what liis principles were, and no matter how much he was injuring the great interests of the country. The Finance Minister should have said : ' I have been wrong in my political teaching ; in my early days I was a pupil of Alfred Jones, of Halifax, one of the narrowest men who has ever lived in the Dominion, or in any other part of the world ; my young mind was moulded by this man before it was able to stand alone, and I should not be judged for my errors, because they are an inheritance.' If the hon. gentleman would say that, I would say to him : ' If you Intend in future to do right, accept absolution, not only from myself, but from the Liberal-Conservative party, which has always been generous in forgiving its bitterest foes.' 1 saw in a Montreal paper the other day the statement by some gentleman that he had the assurance from the government of Canada-he did not say from whom-that in the near future a tariff would be submitted that would amply and sufficiently protect the iron industries of this country- I do not know whether that statement was made with authority or not; but I saw it, and was glad to see it, because I thought in some way it was inspired. But if the Minister of Finance will get up and say : ' We have sinned, but we intend to do better-because it is human to err, and it is God-like to reform and get on a higher platform-and we will give you the bounties to-day as a temporary measure, but before next session we will seek the assistance of experts and will give ample protection to the great iron industry of Canada, which will give this country character and wealth in the coming years.

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LIB

Joseph Israël Tarte

Liberal

Hon. Mr. TARTE.

The hon. Minister of Finance has answered the statement I made in a very peculiar way. I quoted the prices of articles which are protected in this country to the extent of 30 or 35 per cent. I have

shown by those prices that the theory which we hear so often that when there is a high tariff prices are high, is false. My hon. friend answers me :by calling my attention to the fact that in the United States these articles, which are protected there to about the same extent, sell at a little higher price. My hon. friend knows the condition of things in the United States ; he knows that wages are higher, the prices of farm products are higher, so much so that during the last five years they have increased in value 49 per cent, and everything else is higher. But that does not prove the contrary of my statement. When an article is sufficiently protected, there is enough competition to ensure reasonable prices. I expected somewhat the answer my hon. friend has given me, and I was prepared for it ; I know his trend of thought. My hon. friend would perhaps like to know what happens when there is no duty at all. I have proved that when we have sufficiently protected our manufacturers they are able to sell cheaper than their American competitors. Now, let me quote the prices during the past year of No. 9, No. 12 and No. 13 wire, which are free of duty. They are not manufactured here ; we do not manufacture a pound of them. What was the result ? It was very clear, because all the wire consumed in Canada is manufactured and sold by the Americans. They have two prices, one for their own citizens and another for Canadians. The price of No. 9 was $2.G0 in the United States and $2.85 in Canada ; No. 12 was $2.75 in the United States and $3 in Canada ; and No. 13 was $2.85 in the United States and $3.10 in Canada. In other words, when they have slaughtered one of our industries, they charge our people more than they do their own citizens. And we are pleased with that state of affairs ; and because I happen to share the views of those who do not believe in a policy which has that result, venerable men like my hon. friend from Victoria (Hon. Mr. Boss) lecture me. He invites me to remember that some of my hon. friends on the other side of the House were some time ago saying a lot of hard things about me. A lot of things have been said about me during the last thirty years that I have been a newspaper man. I was not killed by those weapons, I am still alive, and I do not care much what is said about me, when I am sure I do not deserve any censure. My hon. friend from Colchester (Mr. Gourley) has alluded once more to what he calls my Paris speeches. He read them in the English language. I am sorry he is not a French scholar.

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CON
LIB

Joseph Israël Tarte

Liberal

Hon. Mr. TARTE.

I invite him to read them in French and not in distorted reports in English, and I say without hesitation that they might have been made by any English citizen sitting in parliament. This little Hon. Mr. TARTE.

incident being closed, let me say only one word more. When there is a sufficient Canadian tariff, we are able to compete with our American friends and neighbours. We are able to sell to our own customers as cheap as, if not cheaper than they sell to their citizens. The reasons are obvious. They have a condition of affairs which does not exist here. There, wages are higher and the cost of living higher. We have everything here necessary to build up large industries, to develop our cities, to furnish home markets to our farmers, and we are doing none of these things. When my hon. friend the Minister of Finance was asking me to believe that a high tariff increases prices, I was very nearly getting up and begging the hon. Minister of Customs to come to my rescue without any delay, because he has allowed-and I am equally responsible with him-an increase in the duties on several things. Let us take cement, he has increased the duty on cement. What has been the result ? Several new factories have sprung up and we are manufacturing first-class cement. We are manufacturing it more and more. What is true of cement is true of everything else.

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The MINISTER OF FINANCE.

My hon. friend gave us some interesting figures a few moments ago, which seemed to bring out very clearly some important facts showing the effect of a high tariff. He has now added to that information something equally important. He has quoted facts in connection with the wire industry, and has shown that the manufacturers of wire in the United States are charging excessively high prices for that article. He has thus proved that in an industry probably protected to the extent of fifty per cent or sixty per cent or seventy per cent, in the United States, the manufacturers are able, through the operation of a high tariff, to create monopolies, trusts and combines, which enable them to dictate prices to their customers.

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LIB

Joseph Israël Tarte

Liberal

Hon. Mr. TARTE.

My hon. friend knows political history better than that. He cannot ignore that there are more monopolies in free trade England than in the United States. When a free trader is put to the wall by a sound argument, he is able to do anything.

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LIB

William Roche

Liberal

Mr. ROCHE (Halifax).

What is desired is to give immediate relief to the iron industry, and the question for us to consider is whether this bounty is more likely to be of immediate benefit to that industry than would be an increased duty. The point to decide is whether an equal amount of bounty in money will assist the manufacturers as well as an equal amount derived from a protective duty. Let us suppose that the manufacturer makes his iron or steel as cheaply as he can, he will have in addition a bounty which will enable him to compete with any other producer. On the other hand, if I

understood my hon. friend, the leader of the opposition, he said that a duty would create greater competition and consequently reduce prices. But our object is to give the manufacturers a higher price or more money; and if you reduce the price at which he sells his article, he is losing money. What then must he do V He cannot reduce the prices of the raw material or the machinery, and he will have to fall back on his unfortunate labourers and reduce the wages paid them. That is one of the effects of the custom system. The bounty gives immediate relief to the manufacturer, and behind that is the question which will benefit the customer the most. But as the question before us now is the giving of immediate aid to the manufacturers, that aid will be most readily given through the bounty system.

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August 4, 1903