April 12, 1910

LIB

Murdo Young McLean

Liberal

Mr. M. Y. McLEAN.

I would not refer to the subject at all had I not on a former occasion drawn the attention qf the House and the government to the dangers existing from the multiplication of these mergers or combines and a necessity for some legislation, which would enable us to regulate them. And I wish to congratulate the hon. minister, and the government on the promptness and courage they have displayed in bringing in this measure. I have considered this Bill very carefully, indeed; and in so far as I am able to judge, it meets the circumstances of the case al-

most at every point. It furnishes the necessary machinery now lacking, and provides a simple, easy, satisfactory, practical and inexpensive method of putting that machinery in operation. Futhermore it is designed to afford protection to the consumer without unnecessarily harassing, or worrying the producer, and I have no doubt it will have that effect. In fact I do not know of any country which has on its statutes a law so simple and effective as this one is likely to be. The difficulty in our present law, as has been explained very fully by the Minister of Labour (Mr. King) is this, that the burden of putting it into operation rests entirely upon the individual. While the exactions of these combines may amount to a very large sum in the aggregate, to the individual they may amount to only a very comparatively small sum, and consequently it is not worth while for an individual to incur the expense, odium, and trouble of conducting a prosecution, and therefore no action is taken, and the combines are permitted to go on and prosper. In my opinion this legislation is calculated to provide this missing link. From the study I have given the subject, I certainly think it will accomplish that object to a very large extent.

My hon. friend from South Lanark (Mr. Haggart) has expressed his general approval of the Bill, but doubts whether there is any' possibility of finding out whether or not a combine exists. I do not think there should be any great difficulty oh that score, because it should be tolerably easy to ascertain what is the proper price of an article, and the proper cost of producing that article, and what would be a reasonable profit. It seems to me there should be no serious difficulty in this matter, and I think that the proposed commission would be an excellent medium for that purpose. It may be asked, is there really a necessity for legislation of this kind? Have we any combines or trusts in this country that are actually injurious to the interests of consumers or any other class? Now, it is very difficult for any individual to say whether or not such combines or trusts exist; but, as has been pointed out by the Minister of Labour today, a very large number of-I will not call them combines, they have now the more polite name of mergers-a very large number of mergers have been established during the past year in addition to those which formerly .existed. The avowed object of these mergers of capital is to reduce the cost of production, and I have no doubt that they will secure that object to a great extent; but if the cost of production is reduced, surely the price of the article produced should be reduced proportionately. Do we find that to be

the result? It may be in some instances. I do not know one single instance in which that has been the result; but I do know of some instances in which we have been informed at least that the contrary has been the result. There are one or two instances which occur to my mini at the moment. One has been mentioned during this discussion,, that is, the cement merger. This merger was organized during the past year. The price of cement, as I am informed, and believe, previous to the merger being formed, was a dollar a barrel. Immediately after the merger was formed and got into operation, the price was increased to $1.50 a barrel. There was also a merger formed of the carriage makers of the country, and I am informed that immediately afterwards the price of certain carriages was increased by at least 25 per cent. I am not prepared to say that that is wrong. I do not know that the price of these articles is greater than their actual value; but I do know that these increases have taken place since these mergers were formed, and I know that there is a very strong feeling in the public mind that these articles are being sold at too high a cost through the influence of these secret combines. I, therefore, think, that legislation of this kind is necessary, not only in the interest of the consumer, but "in the interest of the producer-to give the consumer an opportunity of satisfying himself whether or not these combines exist, and if they do not exist, to enable the producer to free himself from the suspicion cast upon him. Without going any further, I have no hesitation in saying that this legislation shall receive my most hearty support, and I believe that it will receive the approval of a very large majority of the people of this country.

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

Might I ask the hon. gentleman a question before he sits down? I understood him to say that after the cement merger was formed, the price of cement went up from $1 to $1.50 a barrel. That is an increase of 50 per cent. The duty on cement is 12J per cent.

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LIB

William Stevens Fielding (Minister of Finance and Receiver General)

Liberal

Mr. FIELDING.

12$ cents per hundred pounds?

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CON

Thomas Simpson Sproule

Conservative (1867-1942)

Mr. SPROULE.

That would be 37$ cents a barrel. Does the hon. minister think that taking the duty off would bring the price of cement down to what it was before the merger was formed?

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LIB
CON

Richard Blain

Conservative (1867-1942)

Mr. RICHARD BLAIN (Peel).

Mr. Speaker, I have listened with great at-

tention to the speech of my hon. Mend the Minister of Labour in moving the second reading of this measure. I am sure both the House and the country -will be surprised to know that the government, which came into power with the promise that they would abolish all those things that enhance the cost of living, has been 14 years in power, and this is the first real effort they have made to introduce legislation to cure these evils.

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LIB
CON

Richard Blain

Conservative (1867-1942)

Mr. BLAIN.

I am very glad to hear my hon. friend the Prime Minister say 'hear, hear' to that remark, because he was one of the chief movers in an agitation to educate the people of this country to the idea that protection was all wrong, and that when his party came into power it would abolish protection, and when that was done there would be no combines or mergers to affect the prices of goods to the people of Canada. Of course, this is ancient history, and I am inclined to apologize for introducing it on a question of so much importance as the present question. But I would like to draw the attention of the House to the fact that it was not the present government that made the first effort in Canada to cure these evils, but the late government, who in 1889, put upon the statute-book a law which I propose to take a few minutes of the time of the House to place before the House and the country. That legislation was introduced under the direction and guidance of . the late Hon. N. C. Wallace. It is chapter 4 of the statutes of 1889, and is as follows:

An Act for the Prevention and Suppression of Combinations formed in restraint of Trade.

(Assented to May 2, 1889.)

Whereas, it is expedient to declare the law *relating to conspiracies and combinations formed in restraint of trade and to provide penalties for the violation of the same: Therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, declares and enacts as follows:-[DOT]

1. Every person who conspires, combines, agrees or arranges with any other person, or with any railway, steamship or steamboat or transportation company, unlawfully- . . .

(a) To unduly limit the facilities for transporting, producing, manufacturing, supplying, storing or dealing in any article or commodity which may be a subject of trade or commerce; or

(b) To restrain or injure trade or commerce in relation to any such article or commodity, or to unreasonably enhance the price thereof; or

(c) To unduly prevent, limit, or lessen the manufacture or production of any such

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CON

Richard Blain

Conservative (1867-1942)

Mr. BLAIN.

article or commodity, or to unreasonably enhance the price thereof; or

(d) To unduly prevent or lessen competition in the production, manufacture, purchase, barter, sale, transportation or supply of any such article or commodity, or in the price of insurance * upon person or property-

Is guilty of a misdemeanour and liable, on conviction, to a penalty not exceeding four thousand dollars and not less than two hundred dollars, or to imprisonment for any term not exceeding two years; and, if a corporation, is liable, on conviction, to a penalty not exceeding ten thousand dollars and not less than one thousand dollars.

This is the first and only law to be found on the statute-book of Canada which aims to deal with combines and mergers. It is fair to say that subsequently a clause was inserted in the tariff legislation of 1897 by this government, that aimed to cure these evils, and after that a Bill was introduced by the Minister of Inland Revenue, now the Minister of Marine and Fisheries, dealing with a similar matter. But, I am quite correct . in saying that the legislation placed upon the statute-book by the administration of 1889-is the only special legislation aimed at dealing with this important, question. .

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LIB

George Gerald King

Liberal

Mr. KING.

It was in 1897, the year after this government came to power, that the government passed the first legislation dealing with this matter. When the hon. gentleman said it was in 1907, no doubt he doubt he made a slip.

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CON
LIB

George Gerald King

Liberal

Mr. KING.

I would like to ask the hon. gentleman whether the legislation he has just read added anything to the existing legislation on this matter at that time? Was it not merely declaratory of the common law as it then was?

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CON

Richard Blain

Conservative (1867-1942)

Mr. BLAIN.

in the past. I do not offer any special criticism to the department of the hon. minister, but I do not think it requires a special commission to discover evils which are plain to the eye of every man. It is quite within the competency of the Department of Labour to find out, with its present organization, wdiether prices are higher than they should be, and having found that out to correct the evils with the power already at hand. No doubt the Bill makes it easier for the public to institute proceedings to discover whether or not these evils exist, and it proposes that the government shall pay the costs of any trial of the kind whether the charges are true or untrue. That is helpful, and I have no opposition to offer to it. We on this side of the House wall assist in every possible way in that respect. But what the people of Canada are looking for is not new legislation, but enforcement of the existing legislation, and what is the complaint against this government and against the Prime Minister?

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LIB
CON

Richard Blain

Conservative (1867-1942)

Mr. BLAIN.

Oh, yes, there are many complaints, but ~ my right hon. friend turns a deaf ear to them. The charge against this government and against the Department of Labour is, that the government does not put in force the laws already upon the statute-books in respect to combines and in respect to many other matters. Instead of the government striking at these evils with the ample machinery at present under their control, they'are simply introducing a new remedy so as to lead the people of Canada to think that they are doing something for them. If the Minister of Labour had been able to come to this House and to state that he had investigated these evils and found they did exist in Canada, and that the government had put into force the legislation now at their command with a view to crushing these evils, he would have received the commendation of the people of the country, but, he has chosen to place another law on the statute-book which he asks the people to enforce, and not the government whose duty it is to enforce these laws.

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LIB

Frederick Forsyth Pardee (Chief Government Whip; Whip of the Liberal Party)

Liberal

Mr. F. F. PARDEE (West Lambton).

The hon. gentleman from Peel (Mr. Blain) has not grasped the intent of this legislation. I take issue with him when he says that the legislation now on the statute-books might well be used to carry out the purpose of this Bill as framed. Looking at the legislation now in existence, it appears to me most distinctly that the machinery provided is absolutely not ample to give effect to the provisions of this Bill. If it were, I would agree with the hon. gentleman that we should not enact any more legislation than is necessary.

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CON

Edmund James Bristol

Conservative (1867-1942)

Mr. BRISTOL.

Is it intended that chap. 41 of 52 Victoria shall be repealed by this Act ?

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LIB

Frederick Forsyth Pardee (Chief Government Whip; Whip of the Liberal Party)

Liberal

Mr. PARDEE.

I should suppose not.

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CON

Edmund James Bristol

Conservative (1867-1942)

Mr. BRISTOL.

If it is not, you will readily see that the right of every Crown prosecutor throughout the provinces would still exist on an information sworn.

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LIB

Frederick Forsyth Pardee (Chief Government Whip; Whip of the Liberal Party)

Liberal

Mr. PARDEE.

That might be, but if the machinery provided in this Act is better than that provided in any other Act, surely it would be taken advantage of. Now, Mr. Speaker, after the extremely able and comprehensive speech by the Minister of Labour any further argument in favour of the Bill would be mere surplusage. I Tose to say that I am heartily in favour of the Bill submitted by the hon. gentleman. .There can be no doubt that there are combines and combines. In the old days we had the Farmers' Alliance, which started stores and gave to those in the membership of the Alliance cheaper goods than they had been hitherto getting, and we had also the organization of the Grain Growers of the West, the efforts of which were directed towards a similar end. These combines were certainly beneficial in their effects. But there are other combines which have an evil effect on the community, and it is at such that this Bill is aimed. There is a decided conviction in the public mind that whether or not it is merely a coincidence, the price of food and the price of the necessities of life are going up by leaps and bounds contemporaneously with the organization of these combines. The people of Canada are asking that the facts should be investigated and that machinery for that purpose should be provided by the government. The very title of the Bill gives its intent; it is an Act ' to provide for the investigation of combines, monopolies, trusts, and mergers which may enhance prices or restrict competition to the detriment of consumers.' The hon. member for Lanark told us that he did not think it possible that any commission could find out what did or did not enhance prices, but I hardly think the hon. gentleman was correct in that. Do we not know as a matter of fact that it is a systematized plan of the manufacturers that in many cases they do sell goods cheaper to the foreigner than they do to the home market? As I understand it, protection was put on for the sake of fostering industries in the Dominion of Canada and encouraging competition, but it certainly never was the intention that protection should enable these manufacturers to combine together and enhance the price of commodities to the consumers.

If, therefore, as I think there can be any doubt it will be shown and can be shown that foreigners receive goods cheaper than the home market, surely there is an en-

hancement of price to the home consumer. If that is so, it will be only dealing justly with the people of Canada that that should be taken cognizance of and1 that machinery should be provided to overcome that condition. There is no doubt that sugar, groceries, glassware, harness and similar staple goods are subject, if not to a combine, at least to sale at set prices laid down by a combination of manufacturers. The everyday consumer, farmer or other has to pay that. There is ample evidence of this, as can be shown by circulars of manufacturers, merchants and others. If that is so, the very first object of this Bill has been accomplished when it can be shown by evidence taken before one of these commissions that such prices are being charged by reason of the combine and the power of the commission to see that the goods are sold to the consumer at a fair price and at a reasonable profit.' It is the duty of this parliament and of all legislatures to legislate in that way. We are here to legislate for the common good. We know that these abuses are committed every day. We know as a matter of fact, that in Toronto alone, there is one concern that makes thousands of dollars a year simply by collecting rebates and discounts from the jobbers by reason of the combines agreeing to sell only to them. Surely this should be remedied by this parliament at the first opportunity. I say that simply because the farmer, by reason of the enhanced prices, and not because of any combination on his part, but simply by reason of the ordinary law of supply and demand, is now receiving good rates for his produce, and goodness knows the farmer deserves to do well, because for many years he barely made a living and had hard work at that, it is not right to say that he can go on paying for the commodities that he uses at these enhanced prices. I say that he and every other consumer has a right to be protected by this parliament and, therefore, I think this legislation is absolutely necessary.

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April 12, 1910