August 4, 1904

CON

Seymour Eugene Gourley

Conservative (1867-1942)

Mr. GOURLEY.

Quite so. No doubt there are other trusts in Canada that ought to be struck at, but we must approach this matter as best we may ; and as the Minister of Inland Revenue (Mr. Brodeur) has thought fit to mature a measure of this kind attacking one of these evils, I cannot withhold my support from him, because he has not widened the measure, so as to attack them all. In fact, I think it might be better to attack one of these combines first, and make it quite clear to this combine and all others, that, no matter how they may be able to evade the miserable courts of the United States, and the miserable system of laws there, they cannot evade the laws of a British country. I happened to accompany a delegation of men interested in the tobacco industries of Canada who were heard by the Prime Minister of this country and the Minister of Finance and some others two or three years ago. At that time I heard a number of retail dealers discuss this question from end to end. I gave the matter some attention, and afterwards pursued the subject, as far as I could, with the help of our library. I then became convinced that the tobacco industries of Canada were being attacked, covertly and insidiously attacked, by the American Tobacco Company, with the object of exterminating those industries, and installing in their place the American Tobacco Trust. From that moment, I became a convert to any system, or policy, that would nullify that attack by the American Tobacco Company, upon the tobacco industries of Canada. I congratulate the Minister of Inland Revenue (Mr. Brodeur) upon combatting this insidious attack, so far as this measure will combat it. I have not bad the opportunity of perusing the measure carefully, and do not pretend to know exactly what its effect will be. But, let us attack this company as best we can. And if this measure is not enough, I believe that there are brains enough in this House, to make a measure that will be sufficient to accomplish the result desired. I do not suppose that any minister or anybody else

is competent to foresee all the devilish ingenuity that will be employed by this company to get around this law. But what I hope for is that if they display their ingenuity in evading the law, we will have ingenuity enough to put up further defences and ultimately to crush these corporations. Xqw, how did they treat them in England V We heard this morning that the American trust invaded England ; how did they meet it there? Why, they met it as only men who are not aided by parliament could meet it. The whole tobacco trade of England had to form a contra combine in order to preserve their own interests.

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LIB
CON

Seymour Eugene Gourley

Conservative (1867-1942)

Mr. GOURLEY.

Of course. When the English tobacco interests found themselves invaded they were compelled to combine to fight this American trust ; and what was the result ? After combining and fighting between themselves for a while, they agreed to divide up the world. They divided up the world, and they said : Y'ou shall have

that sheep to shear, and we will have this sheep to shear. Now, what was the proper course to have taken? If the English parliament had been open to reason they would have dealt with this matter, and spared themselves and spared the world from being made victims of these two companies. But we know that in England public opinion is so profoundly Conservative that if the tobacco interests had appealed to the House of Commons they would have had to appeal twenty-five years before they could have got redress. The result would have been that the tobacco interests in England would have failed before relief came. Therefore the tobacco interests had to combine, and the result of it is that we have two combines now dividing the world so far as tobacco interests are concerned.

Now, we propose a much more intelligent way. We propose that the tobacco interests in Canada, not being able to fight the American combines, shall be permitted to resort to this parliament, and I am glad to see that they have not found public opinion here so Conservative, they have found that this House of Commons is able and willing to deal with this monopoly, and not stand by and see the tobacco interests of Canada compelled to fight this combine in their own defence. We will come forth and exercise the strong resources of a government to protect our own people, and they shall not be compelled in self-defence to form another combine, which is simply adding to the great evils of the world. Therefore, I think in Canada we have pursued a much better course than they have pursued in England or in the United States.

Now, some reference has been made to the arbitrary power that we place in the hands of the minister. You must always place extraordinary powers in the hands

of any minister when you seek to strike down an extraordinary power that is arrayed against the people of Canada. What more arbitrary power is sought to be exercised than is exercised by the American tobacco trust ? These tyrants who are organized to rob the whole world, are they the men who come to this parliament and say : Oh, you are putting in the hands of a minister in Canada arbitrary powers; That is just the thing we want to do. We want to meet the remorseless tyrants that are invading the world to rob it ; therefore we will place in the hands of a responsiole minister in Canada all the powers necessary, legislative or otherwise, to meet the awful combination of capital that is arrayed against us. It does not lie in the mouth of these hideous tyrants of the United States Tobacco Trust to utter one word against any power, no matter how arbitrary, we place in the hands of some responsible man in Canada to defend the people of this country from their extortion. Therefore, I dismiss that objection. I want to place the most ample power necessary in the hands of the minister to curb these people and to protect the interests of Canadians.

,Now, I read a couple of years ago the history of the Standard Oil Company. I think it was shortly after my attention was called to the tobacco trust; and if ever there has been a remorseless creation it is that Standard Oil Company. They started as a little corporation in the United States, and gradually gathered capital, and then they proceeded to strike down every similar industry in the United States, no matter how big or how little. They have formed themselves into a hostile army entrenched in their own country for the purpose of destroying every similar industry in the United States. They proceeded most intelligently and most ably; first to buy up, if they could, every similar industry ; if they could not buy it up, then they proceeded to destroy it ; they proceeded remorselessly to destroy every man that had any connection with a similar industry and who would not sell out. There are instances detailed in that book of the scientific and cruel methods they took in order to destroy entirely all rival corporations, and ultimately to drive them into bankruptcy or force them to sell out.

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LIB
CON

Seymour Eugene Gourley

Conservative (1867-1942)

Mr. GOURLEY.

They proceeded all over the United States until they practically controlled every oil industry in that country. Then they said : Having captured the United States, let us conquer the world. They went to Russia, they went to China, they went over the whole earth, and brought under their control and aegis every oil industry in the world. To-day they are one of the most hostile forces that exist

against the civilization in the world. Parliaments and legislative authorities in all nations must wake up to the fact that you cannot allow counter organizations and counter combines to be formed to fight evils of this kind, but parliaments must themselves come to the rescue. The hon. member for East Grey (Mr. Sproule) has said that he has been labouring with this government to induce them to act. I have no doubt he will have to labour with this government a long time before he can get them to undertake this difficult task. But if the Finance Minister and the Prime Minister have not given as much attention to these matters as they ought, I am glad to see that the Minister of Inland Revenue has undertaken so far as he can, to look after the special interests with which he is charged. Therefore, he ought to have that much credit. Now there are numbers of trusts all over. Canada that could be dealt with, and what I want is to show these people that we can deal with them, and if we can deal with the tobacco trust successfully, we will have no trouble with these other people. When they know that there is a parliament in this country that cannot be controlled, that cannot be influenced, and that will ruthlessly deal with their business when they attack the public interest of Canada, we shall not have much trouble with them. I want it to go abroad that although the trusts can control the Congress of the United States, they cannot control the parliament of Canada, that this parliament will exercise all the powers necessary in order to control these corporations, just as soon as they attack the commercial interests of our people. When the trusts know that, we will be free from many of the enormous crimes they have committed against the people of the United States and other countries.

Now with regard to Great Britain* the Minister' of Finance said : Oht you have trusts formed there. They have, but they were always formed in answer to the trusts formed in the United States. Trusts were formed in the United States and invaded England, and there was only one defence left for the people of England, and that was to create counter trusts, because, as I have shown, the English parliament is so Conservative that they could never have been brought to the point of providing protective legislation. Now, I want this experiment to be tried in our country to see if we cannot, in one instance, attack the tobacco trusts and control them successfully. If we can deal with these people, then we shall have established a precedent that we can deal with other industries, that we can attack the oil trust, and any other enormous incubus from which our people are sufferers.

My horn friend from Jacques Cartier feared the evasion of this law. I have no doubt they will try to evade it as they try to evade every law on earth, but I hope Mr. GOURLEY.

these people will not be able to override parliament and the courts of Canada. I think that we will be able to hold these people down and control them, no matter how successful they may have been in the past in evading the law. In regard to vested rights I may say that I am in favour of vested rights. Any honest man is in favour of vested rights because vested rights is nothing more or less than standing by property properly acquired by individuals. I would be in favour of vested rights but I want to warn these trust people that as they have never regarded vested rights as sacred, that as they have ruthlessly stricken down all competitors they must not come to this parliament as men with clean hands and claim that they ought to be protected, that the doctrine of vested rights ought to save them. I want to tell this trust here and now that after destroying the property of every man who offered competition to them they are not in a position to plead vested rights. While I am in favour of vested rights I will look very narrowly into their claim for protection on the plea of vested rights. I want to congratulate, not the ministry, but the hon. Minister of Inland Revenue (Mr. Brodeur). I think the criticism of my hon. friend from East Grey (Mr. Sproule) is justified that the ministry as a whole ought not to be congratulated upon having grappled with trusts, but as the hon. Minister of Inland Revenue has broken free from the bad example of his colleagues it shows that the Bible sometimes, under our narrow construction, must be misleading when it says that evil communications corrupt good manners, because in this instance it does seem that the hon. Minister of Inland Revenue notwithstanding his evil associations has attempted to give us a remedy for this evil while his colleagues perhaps have only been giving us the gloved hand.

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Mr. W. S. MACUAREN@

Mr. Speaker, it will be within the recollection of this House that at an early stage of this session I introduced a Bill to do away with the manufacture, importation and sale of cigarettes. .

Some hon MEMBERS. Hear, hear.

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LIB

William Scott Maclaren

Liberal

Mr. W. S. MACLAREN.

I was pleased with the support that was given to this Bill. Sometimes I thought I hardly got fair-play as the Bill went on. I do not know about the straining of the rules of the House but I thought that some hon. gentlemen used them up to their full extent. I am not one of those who complain when he gets cold justice. Some Bills introduced by lion, members during this session got their first and second reading and were considered in committee at the same sitting, but the Bill which I had the honour of introducing in this House was only allowed to pass barely one stage at a time. Notwithstanding-I was going to say the opposition but I will not use such a strong word as that-* the want of sympathy for my Bill which

came from high places both on the government side as well as on the opposition side I was able to get it through the committee stage, but yesterday, or the day before, I noticed that it was slaughtered along with other unfortunates. It is not my intention to speak upon the merits of this resolution which has been introduced by my bon. friend the Minister of Inland Revenue (Mr. Brodeur) although I am in entire sympathy with it, but in looking up this matter I find that there is one thing in connection with cigarettes which I wish to place on record in the House. I have a statement here showing the growth which has taken place in the manufacture of cigarettes in Canada for the last fifteen years and which is as follows :

Number of

Year. cigarettes

manufactured.

1890 ' 34,206,940

1891 41,531,360

1892 40,201,700

1893 47,749,800

1894 70,437,680

Then in 1895 the American Tobacco Company, at which this legislation is especially aimed, came upon the scene, started the tobacco manufacture industry in Canada and absorbed two companies and we see the result in the following statements of the number of cigarettes manufactured and

the number manufactured by the American Tobacco Company : No. manufactured

Year. Number manufactured. by American Tobacco Co.1895 .. .. .. .. 83,854,440 82,000,0001896 .. .. .. .. 86,000,000 57,000,0001897 .. .. .. .. 106,500,000 86,000,0001898 .. .. .. .. 88,000,000 71,500,0001899 .. .. .. .. 105,500,000 96,376,5001900 .. .. .. .. 123,200,000 102,234,0001901 .. .. .. .. 125,000,000 108,000,0001902 .. .. .. .. 138,000,000 109,000,0001903 .. .. .. .. 179,000,000 149,000,0001904 .. .. .. .. 216,000,000 ' 191.000,000

What does this mean ? It means that the manufacture of cigarettes in Canada during the past fifteen years has increased sixfold. That is out of all proportion to the increase in population. It is out of all proportion to the increase of tobacco in other forms. That simply means that there must have been a great market created for the consumption of these cigarettes. A good deal has been said about the hardship of taking away the dear cigarette from the grown up man. I do not object to seeing a man with a pipe or cigar in his mouth but I think it looks very boyish to see a grown up man with a little cigarette in his mouth.

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An hon. MEMBER.

Or a clay pipe.

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LIB

William Scott Maclaren

Liberal

Mr. W. S. MACLAREN.

Well, a clay pipe, or anything but a cigarette. I think that it means that there has been created in this country, a largely increased demand of cigarettes. These cigarettes are certainly

being used by the boys of this country. I do not think that any person sitting down and calmly thinking over the matter will be prepared to say that this increase of sixfold in the manufacture of cigarettes in fifteen years represents the use of tobacqo by grown up people, but I am cpnvinced, on the contrary, that he will be prepared to admit that it represents simply the increased consumption of_cigarettes by boys. The use of tobacco in this form is increasing much more rapidly than that of tobacco in any other form. You cannot go through the streets of Ottawa or of the cities and towns in other parts of the Dominion unless you see bright pictures and electric light signs advertising Sweet Oaporal cigarettes and things of that kind. But, you do not see any such advertisements of black plug tobacco. Not at all. These bright advertisements are for the boy because he is imaginative and their object is to induce him to purchase cigarettes and if that is not sufficient they give presents, coupons and resort to all those little tricks of the trade in order to induce the boys to buy. I am heartily in favour of the resolution introduced by my hon. friend the Minister of Inland Revenue, and I thought I would take this opportunity as I could not get at it in any other' way, of bringing the question of cigarettes before the House and of pointing out these facts. The strictures which have been pronounced in regard to the resolution by the hon. member for East Grey (Mr. Sproule) may in a sense be right. The growth of tobacco is quite an industry in many parts of this country. I repeat that I am heartily in favour of the resolution and if the government seek to go beyond the question of tobacco and to legislate in regard to trusts in connection with the other things mentioned by the hon. member for East Grey I would be heartily with them in that as well as in this.

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LIB

William Alfred Galliher

Liberal

Mr. W. A. GALLIHER.

I endorse the resolution now before the House. I believe it to be a much needed piece of legislation. I do not rise to discuss the subject matter of the resolution now, but to bring to the attention of the Minister of Inland Revenue, as I brought to the attention of his predecessor, and to the attention of parliament last session, a matter in which the tobacco-growers of the Kelowna district in my constituency are deeply concerned. In 1901 an Order in Council was passed by which importers of foreign leaf tobacco were allowed a rebate to the extent of the duty on the cuttings if they exported the cuttings out of the country. This results in a serious harship to the tobacco-growers of the Kelowna valley, and I presume to the tobacco-growers of other parts of Canada. Probably eight-tenths of our cigar-making establishments import foreign leaf for the purposes of manufacture. The consequence of their being allowed a * rebate on the cuttings is, that we are unable

to sell Canadian tobacco leaf to these factories, because the department believes that they could not separate the domestic qut-tjings from the foreign leaf cuttings, and so if they use our tobacco the rebate Is not granted. I do not see any reason why there could -not be a departmental regulation made by which the cuttings from the domestic leaf and the cuttings from the foreign leaf could be kept separate, and the rebate aliowed only on the foreign cuttings when they are exported. I have here a letter from one of the largest tobacco growers in the Kelowna district. He is a gentleman with whom I am personally acquainted, and a gentleman in whom I have every faith and confidence. He says :

Samples of the tobacco I now have in stock have been shown to all the largest manufacturers in Montreal, London, Toronto, &c., and declared by them to he equal to anything grown In the United States.

Tne tobacco growers of the Kelowna valley have gone to a great deal of expense in experimenting on tobacco culture, and by their perseverance, enterprise and energy they have produced a quality of tobacco which the most expert handlers of tobacco in the chief cities of Canada declare to be equal to anything grown in the United States.

But in face of this Order in Council I am unable to sell any to any foreign leaf factory.

And, as I have said, the foreign leaf factories in Canada are at least seventy-five per cent of the total number.

To one firm, an actual sale of 6,000 pounds at excellent prices was made, provided it could be taken into the factory free of duty. They ascertained that this could be done, but if they took it in, the rebate on their cuttings would be lost. As their annual rebate amounted to more than the value of the tobacco, the deal of course fell through. I have tried factory after factory with the same result.

I would impress upon the Minister of Inland Revenue that this is a matter which should receive the serious and immediate attention of his department with the view of finding some means by which the use of the home grown tobacco leaf in these cigar factories would not be practically prohibited.

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LIB

Robert Holmes

Liberal

Mr. R. HOLMES.

I heartily endorse the remarks made by my hon. friend from Huntingdon (Mr. Maclaren) I endorse the proposition now before the House, but I must express my regret that it was found necessary to slaughter the cigarette Bill this session. I am a believer and I am glad to be able to affirm my belief, in the absolute prohibition of the manufacture and importation of cigarettes. The figures quoted by the hon. member for Huntingdon ought in themselves be sufficient to convince this parliament of the * urgent necessity at as early a date as possible, of passing legisla-Mr. GALLIHER.

tion which would be effective in preventing the cigarette evil in Canada. The enormous increase in the sale of cigarettes, which is very largely to the youth of the land, should convince this parliament that no legislation would meet with more general favour-by moralists at any rate, and also by other classes in the community-than the prohibition of dealing in cigarettes. I am as anxious as any one else to get away from here, and I shall therefore conclude by strongly endorsing the remarks of my hon. friend (Mr. Maclaren). I trust that no matter what government may be in power in the future, steps will be taken to overcome the cigarette evil which is so far-reaching and disastrous in its consequences.

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Motion agreed to, and House went into committee on the resolution.


CON

George Taylor (Chief Opposition Whip; Whip of the Conservative Party (1867-1942))

Conservative (1867-1942)

Mr. TAYLOR.

I would now like an answer from the minister to the questions I asked as to why this should be made to apply to persons manufacturing the goods that pay excise, whether whisky, beer, vinegar or anything else, if you mean it to apply to the tobacco men alone.

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LIB

Louis-Philippe Brodeur (Minister of Inland Revenue)

Liberal

Mr. BRODEUR.

Simply to meet the objection that has been made that the Bill should not be too restrictive and that it would be well to apply it to all goods subject to excise. I think the law should be as general as possible. I appreciate the strength of the argument of the leader of the opposition this morning that we should have a general law applying to all trusts, but if you decide to deal with this question only so far as goods subject to excise are concerned, I think you snould not take simply tobacco, but should make a general law referring to all licenses. That is the reason I have proposed that the law should apply to all goods subject to excise.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

The minister will observe that he is not doing either one thing or the other ; he is neither making a general law nor confining the operation of the proposed Act to the cases in which the evil is said to exist. It seems to me he should either do one thing or the other, either make a general law or deal only with the case where the grievance ex-i ists.

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LIB

Louis-Philippe Brodeur (Minister of Inland Revenue)

Liberal

Mr. BRODEUR.

We make it general as far as goods subject to excise are concerned. There would be serious objection to it if we dealt solely with tobacco ; the objection might be raised that we did not apply it to all goods subject to excise. We take this stand, that persons who have licenses from the government, who are only able to carry on their business on terms stated by the government should be subject to this law.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Of course we adopted the principle of the Bill on the

second reading and X shall not repeat anything I said then. I am assuming that the principle has been adopted by the House, and is a good principle on which to act. That being so I think we should either deal with the case where the evil exists or make a general law. You could make a law general in this way, that you could prevent any business from being carried on without a license. It seems to me that that would be the logical outcome of the present law. You are here dealing with the tobacco trust, with an evil which exists in the business of manufacturing tobacco, which cannot be carried on except under a license from the .government. You are not restricting your resolution to the manufacture of tobacco in reference to which that evil exists. You are embracing by the terms of your enactment other classes of business in which no evil, so far as I am aware, is said to exist. If you go that far, ought you not to go further ? That is the point. In this connection I would like to ask about the proposed amendment to the Criminal Code which was discussed last year. To what extent does this system adopted by the American Tobacco Company exist in respect of other manufactures in Canada. I mean the system of selling or consigning goods upon a stipulation that the persons to whom the goods are sold or consigned, shall not handle the goods of any other manufacturer of a similar class of goods. It was alleged last year-I do not know with what truth-that this is a system of very general application. Of course I understand that it is a system which may be innocent, may be productive; of no harmful results at all, so long as you have ten, fifteen or twenty manufacturers engaged in the same business. I realize that the operation of a system of that kind might only become injurious when you have one corporation engaged in the enterprise, controlling perhaps 90 or 95 per cent of the whole business. I appreciate all that, but at the same time I think it would be useful for us to know as this measure is going through the committee, to what extent that system so made harmful by what is practically a monopoly, if we are to accept the statement made by the hon. Minister of Inland Revenue, applies generally in carrying on business in this country.

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LIB

Louis-Philippe Brodeur (Minister of Inland Revenue)

Liberal

Mr. BRODEUR.

I have no special information as to that. The tobacco question was investigated by Judge MacTavish and during that investigation there was some suggestion that combinations of a similar character to this existed in other trades, but the judge did not find it expedient to investigate that question because it was hot within the scope of the inquiry.

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CON

Robert Laird Borden (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. R. L. BORDEN.

Was any complaint made with regard to it, in respect to any other industry ?

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LIB

Louis-Philippe Brodeur (Minister of Inland Revenue)

Liberal

Mr. BRODEUR.

Not that I am aware of. Some mention of it was made during the tobacco investigation but there was no actual investigation of other trades. The reason given by Judge MacTavish was this : He said in his report that he was called upon to investigate the tobacco question, that the opposing parties appeared before him whereas as far as other trusts are concerned, nobody appeared before him and it looked to him as being unjust and inexpedient to make any investigation as to these trades. We are simply dealing with the facts that have been brought to our attention.

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August 4, 1904