Mr. KYTE (resuming):
Mr. Speaker, before the House rose at six o'clock I pointed out that the only result of placing wheat upon the free list on the 16th of April last was to increase the price of flour to the consumer, a price that had already reached such a height as to make it in many instances impossible for the working people throughout Canada to obtain for themselves and
their families the quantity of flour necessary for their support and sustenance. On the Montreal market, on the 17th day of April the price of flour had advanced 30 cents a barrel which meant a total advance of $1.40 in a week. Manitoba brands jumped 40 cents a barrel and Ontario brands jumped 60 cents a barrel by the 18th day of April. The cause of this rise in the price of flour is not the scarcity of wheat in Canada, because the market reports of that date informed the public that there was in Canada a surplus of 81,500,000 bushels of wheat. The export trade had ceased owing to the German submarines, and notwithstanding the fact that we had this large surplus of wheat in Canada, and notwithstanding the fact that the amount of the duty on wheat had been taken off by the Order in Council of the 16th of April, the price of flour continues to rise. The Financial Post, on the 17th of April had this to say:
Flour advanced twice during the week, a total increase of seventy cents a barrel, a record for flour, which brought the price up to $10.70. The highest figure for flour prior to this was $10.50 in November last. The export flour business fom Canada is practically at a standstill. The Ogilvie Flour Milling Company informs the Financial Post that space is not available for ordinary commercial business overseas. The high cost of living is a regrettable economic fact, over which the packers and canners and other distributors of foodstuffs have no control. The enormous and eager demand for our products has brought about the situation. The remedy, as far as the Canadian consumer - is concerned, is to reduce his demands.
During all this time, no effort was made on the part of the Department of Labour, that had particular charge of the question of prices under the proceedings which it had originated some months ago, to regu-iate the price of flour and other foodstuffs in Canada. The Minister of Finance stated this afternoon that the milling industry in Canada had made larger profits since the war began than any other industry. His statement is borne out by an announcement in regard to the Ogilvie Milling Company which was published in the month of October last, and which reads:
A bonus of 4 per cent, for the year ended August 31st last was declared by the directors of the Ogilvie Flour Mills Co., Limited, on its $2,500,000 common stock, at a meeting held here yesterday afternoon. The bonus will be paid on October 1st along with the regular quarterly dividend of 2 per cent., making a total distribution out of the year's profits of 12 per cent.
The bonus declared yesterday is the first extra distribution to be made by the Ogilvie Company since the stock was listed on the Montreal Exchange in 1908, although bonus payments have been popular with other milling concerns when an exceptionally good run of business has been struck. When the stock was listed the common shares were returning 7 per cent.; the rate was advanced to S per cent, in 1910 and has been held steady at that level through good times and bad.
A year ago, when exceptional profits from wheat brought the earnings up to the phenomenally high level of 95 per cent, on the common,-
That is apparently an error.
-the directors held to their conservative course, and shareholders received the usual 8 per cent and nothing more. Investment values added to by this conservation of resources have naturally been potent in increasing the earning power of the stock. The status of the company, with a large supply of liquid capital at its disposal, has changed from that of a borrower to a lender.
At yesterday's meeting the directors took the view that the results of another year's business having been extremely satisfactory, there was no reason why an extra distribution of profits should be withheld any longer.
So you will see, Sir, that the enormous prices that have been charged for foodstuffs are not due to the economic conditions brought about by the war, but rather to the advantage that has been taken of the war by the milling industry of this country to boost the prices at a time when the boosting of such prices might possibly be attributed to war conditions. I say again that the Department of Labour should have taken this condition of affairs into account and taken steps similar to those taken by other countries to prevent the undue enhancing of the prices of foodstuffs.
The Budget proposals brought down by the Minister of Finance do not indicate either courage or originality. It is the fourth Budget that has been presented to the House by the hon. gentleman since the war began. In the first session after the commencement of the conflict, the tariff was increased on certain lines, largely having reference to articles of household consumption, and again in the session 1915, another increase in the tariff was proposed by the Government and carried through this House. Last year, war taxes were levied upon the profits of certain manufacturers under conditions which have yielded to this Government the sum of $12,500,000. The Minister of Finance this afternoon took great credit to himself for adopting a system of taxation upon war profits; but the total amount of revenue obtained by
the Government from this source, according to the statement of the Minister of Finance, is $12,500,000, whereas the increased revenue obtained by the Government by reason of the increased tariffs which were placed upon foodstuffs amounts to something in the neighbourhood of $60,000,000. So, while the manufacturing interests, those who are engaged in the manufacture of war materials, and whose business has improved by reason of war conditions and the increased price of monufacturers generally, have contributed to the revenue only $12,500,000, the consumers of Canada have contributed vastly more than that; and as a consequence we have the conditions that now exist in Canada in respect to the increased cost of living. It would appear that the monied interests in this country are still paramount. We know that in 1911 the issue in Canada between the two parties was whether there should be a Government in power whose policy was to reduce the tariff and thereby reduce the cost of living, or whether there should be a Government in power backed up by the interests that found it to their advantage to oppose the reciprocity pact and thereby maintain a continuation of high tariffs in Canada. The gentle manner in which the Minister of Finance has touched the manufacturing interests by war taxation goes to show that those interests are still in control of this Government, and that the welfare of the consuming population of Canada is a secondary consideration. During the last three or four years there has been an enormous increase in the acquisition of wealth by the manufacturing interests of Canada. No such corresponding advantage has accrued to our consuming masses or to the working men who have to depend on their day's pay for the support of their families. I have here a statement taken ' from a financial newspaper of the earnings of certain corporations in Canada during the last year which shows that the Dominion Bridge Company declared a dividend for the year of 16 per cent; Price Brothers, Limited, declared a dividend of 16.1 per cent, and in regard to the Dominion Textile Company, the Financial Post states that it hears that a bonus is on the cards for the shareholders of that company which is known to have had a successful year, the sales having reached the sum of $13,000,000. It says that the preferred stock will pay a dividend of 7 per cent and the common a dividend of 6 per cent. The profits of the Canadian Locomotive Company for the cur-
rent year amount to $700,000, being 35 per cent on common stock of $2,000,000, after paying $15,000 for preferred dividends.
Stanfield's Limited, after paying bond interest, sinking funds and contingencies, showed a profit of $109,688.83, equalling 141 per cent upon the preferred and capital stock of $750,000.
The net earnings of the St. Maurice Paper Company were $363,909 in 1'915, and $2,832,277 in 1916. The balance, after interest and depreciation were deducted, amounted to $1,582,792, equalling 15-8 per cent on the $10,000,000 stock outstanding.
The Union Bank Paper Company, which owns 75 per cent of the stock of the St. Maurice Company, had interest charges of but $187,000 per annum, and the depreciation charge of about $1,061,000 last year was exceedingly liberal. The Financial Post says that it is safe to assume that at least another 5 per cent or 6 per cent of actual stock profits is concealed in the 1916 depreciation charges.
The figures for Ames, Holden & McCready for the ten months of the fiscal year which will close on April 30, shows a very large increase in turnover over the previous year, and the profits will also show a very satisfactory gain.
Steel and Radiation Company: In 1914 their business amounted to $774,231.36, and profits $13,797.02; in 1915, business $342,344:81, and profits, $123,086.20, and in 1916, business $457,389.87, and profits, $303,601.33. This discloses the extraordinary circumstance that notwithstanding their business in 1914 was almost double their business in 1916, in the former year their profits igere only $13,797.02 as compared with $303,-"601.33 in 1916. Last year the Dominion Textile Company earned profits of $1,481,195, equalling 12,5 per cent on the common stock. The Consolidated Rubber Compai y had net sales in 1915 amounting to $7,522,147; in 1916, $12,094,695. Their profits in 1915 amounted to $534,978, and in 1916 to $905,205, or 22 per cent upon the common stock of $4,125,000. The Ogilvie Milling Company declared a dividend of 8 per cent on $2,500,000 common stock, and a second bonus of 4 per cent, making a total profit divided among the shareholders of 16 per cent. It is stated that the actual earnings of the Company amounted to over 25 per cent.
The Gould Manufacturing Company had profits in 1915 of $99,069, and in 1916 of $229,447, equalling 24 per cent upon the common stock of $750,000. The Canadian
Fairbanks-Morse declared dividends amounting to 39.97 per cent, upon a common stock of $1,480,600. The Dominion Steel Foundry paid 60 per cent in dividends during 1916. The Brandram-Henderson annual statement indicates a large increase in profits during the year. The surplus available after paying bond interest and preferred dividends and making liberal allowance for contingencies amounts to 13-8 per cent of the common stock outstanding, while the total surplus now amounts to about 36 per cent.
The Belding-Paul-Corticelli Company, after allowing for preferred dividends for the year, it is understood can show a surplus equal to 10 per cent on the common stock. This will be equal to 15 per cent on the preferred, compared with 71 per cent in 1915 and 4-9 per cent in 1914.
I quote these figures to show that, notwithstanding the war conditions from which every person in this country is supposed to be suffering, one element in Canada is certainly not suffering by reason of those conditions, for these manufacturing concerns are declaring dividends to their shareholders very much greater than any they ever declared in times of peace.
Subtopic: THE BUDGET.
Sub-subtopic: DEBATE ON ANNUAL STATEMENT OF THE MINISTER OF FINANCE.