May 25, 1920


advance by leaps and bounds, whereas food remains relatively stationary. Consequently a larger proportion of the world's people are engaged in making these other products and rendering these other services than are engaged in the growing of food. Do what we will, we would be foolish to try to beat back logic itself, and the whole trend and movement of the age. You cannot defeat these things; you cannot conquer economic forces. Our rural population then is diminishing-not in the absolute, but relatively. The rural population of Britain, for the simple reason that their farmers could not begin to compete with those to whom they were exposed to competition by the abolition of the Corn Law's, has gone down precipitately from great to small until to-day it is almost negligible in relation to the rest of the people. While all this has been going on, have manufactures flourished? Have the great basic industries of England advanced? Did England find herself, when she was confronted with war with Germany, in a position impregnable or even desirable? Why, the story is so plain that everybody knows it. In the great key industries of Britain they found themselves in a position next to humiliation itself. Certainly they pulled through the war; they fought through, muddled through and got through. They got through, and all credit to them, but they got much of their great basic supplies from their Allies. They got their great supplies of iron and steel from other countries on whose friendship they had to depend and without whose friendship their position would have been worse than precarious. Now when Britain was in the war and under Liberal leadership;-not under the guidance of the present Coalition leader, Mr. Lloyd George, but under the leadership of a man revered by the hon. member for Bed Deer, Mr. Asquith-they set about to ascertain why all this trouble was; why it was that they had landed themselves in a position of comparative helplessness and of dependence upon other nations in this regard. I want to lay before this House the facts as to that investigation, in my judgment about as illuminating facts as ever have been presented to the world, on any subject, of commerce or trade. Mr. Asquith's Government appointed through its Board of Trade, presided over by Mr. Walter Runciman, four committees, one on the iron and steel industry, one on the engineering trades, one on the textile


EDITION"


trades, and one on the electrical trades. The committee on the iron and steel trades was composed of seven men. Now, I want the House to keep in mind the fact that these committees were not appointed for the purpose of finding a certain verdict; they were appointed under the leadership of a Prime Minister who was a free trader and who doubtless hoped that free trade would be permanent in Great Britain. They were appointed under the presidency of Mr. Runciman who was also a free trader and who certainly would not engineer his department to bring in a verdict hostile to his own course and principles. But here is the verdict; here is the report, and to it I invite the attention not so much of hon. gentlemen opposite-because in my heart I do not believe that very many of them would disagree with a single line or letter of what I am going to read-but particularly to the attention of hon. gentlemen diagonally opposite, men who, I am bound to assume, are sincere in their discussion of this question; men who have gone up and down the township lines in Western Canada and in Eastern Canada and denounced protection as bondage; men who have pointed to the example of Britain; men who have referred to all whose products receive a protective duty as specially privileged persons-often, indeed, calling them " scoundrels great and scoundrels small." Here is the report of the committee on the iron and steel trades of a committee of Britishers. I do not know what they were before, but I know they were not free traders after they got into the facts: A comparative examination of the iron and steel industries of the U.S.A., Germany and Great Britain reveals the fact that the proportional capacity of production of these three countries stands in the ratio of 40 ; 20 ; 10- United States four times Britain; Germany twice Britain. -millions of tons; and a survey of the historical progress of these industries indicates clearly that as a competitor in the markets of the world the United Kingdom has steadily lost ground. In 1880 Great Britain produced 7.7 million tons of pig iron; the U.S.A. produced 3.8 million tons, and Germany 2.7 million tons. In 1900 Great Britain produced 8.9 million tons, the U.S.A. 13.8 million tons, and Germany 6.5 million tons. In 1913, the record year of British iron manufacture, Great Britain produced 10.3 million tons of pig iron, the U.S.A. 31 million tons and Germany 19 million tons. Forty, twenty, and ten! The committee goes on to say: In 1880, therefore, Great Britain produced 54 per cent of the total output of the three coun- tries. In 1900 her production was only 28 per cent, and in 1913 it had fallen to 17 per cent. To-day it is probably 15 per cent of the output of these three countries-flourishing indeed! and all in the absence of " special privilege " and " scoundrels great and scoundrels small." But, to pass on, what is the remedy? There is a general consensus of opinion among British manufacturers- The men who wanted free trade in 1846, the men who forced it on agricultural England. -that the British interests have suffered severely through the action of foreign syndicates which have been free to exploit the British home markets wherever it suited them to do so, while they themselves were protected from reprisal by the protection extended to them by their respective governments, and that British producers were defenceless against the aggressive methods of their foreign competitors. The general result of these various conditions is that the iron and steel industries of Great Britain have become thoroughly discredited as a field for the investment of capital. That report is signed by seven men out of the nine, and included in the signatures in favour of the report is that of Mr. John Hodge, labour leader of England and later Minister of Labour in the Government of Mr. Lloyd George. But I find two signatures against it, not of the plain people about whom the hon. member for Kent (Mr. McCoig) ranted so much; I find an hon. baronet, Sir Hugh Bell, and what he and a Mr. Davison say was so characteristic of the hon. member for Red Deer (Mr. M. Clark) that I had to look several times at the signature to be sure it was not "Michael Clark." This is what is said by Mr. Davison and concurred in by Sir Hugh Bell who dissented from .the report: While in agreement with the recommendations, and with the greater part of the report, I wish to record my complete dissent from those passages which appear to suggest the necessity. of a change in the fiscal policy of the United Kingdom. No reasons given. The report is all right, they say; it is true that the British iron and steel industries have gone down almost to decay; it is true, they proclaim, that other countries have taken from us the supremacy that we have enjoyed for years; it is true that we found ourselves faced with a war without such equipment in this great basic industry as would alone enable us to survive; all that is true; we hold up both hands as to the truth of every word of it; but we cannot stand for a change in the fiscal policy of England.


PRO

Michael Clark

Progressive

Mr. MICHAEL CLARK:

I suppose my hon. friend knows that Sir Hugh Bell is one of the greatest ironmasters in the north of England and, indeed, in the world, and he probably knows what he is speaking about.

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UNION

Arthur Meighen (Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

That makes it worse

than ever.

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PRO
UNION

Arthur Meighen (Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

Because of the very characteristic that-while it is admitted they have many great qualities-very often pervade the citizens of the British Isles, that dogged devotion to custom, obstinately refusing to make a change, that worship of tradition. These, notwithstanding many qualities that have brought them to the forefront of the world, have undoubtedly held them back and handicapped them in a war, and these, as nearly all of them admit now, have cost them thousands and hundreds of thousands of lives to succeed in the struggle, that has passed. Those peculiarities compelled them rather to muddle through instead of being in a position, by virtue of the very superior characteristics of that nation, to win the war at the least possible expense.

We must remember that this report is not the opinion of dogmatists; this is the deliberate judgment after thorough and complete investigation, the full facts of the matter having been laid bare. Does the hon. gentleman contemplate with satisfaction, to use the words of Lloyd George, a change from the position when free trade came on of supremacy in the iron and steel industry down to a ratio of 40 and 20 to 10 against Great Britain and in favour of the United States and Germany? Does he think that is all right? If it is not, how does he expect it is to be overcome? Do not have any artificial means, he says; everything is all right, cure it, somehow, but do not have the Government do anything. That is the policy of the hon. member for Marquette (Mr. Crerar) and the hon. member for Red Deer (Mr. M. Clark). Let us see, just by a few more quotations, -what these leading Englishmen think of that policy. They say this in the report from which I am quoting:

The war has taught at once how urgent was the need for vast resources of iron and steel, and hrw insufficient were the British iron and steel industries to meet that need. The causes of this insufficiency have been dealt with in some, detail elsewhere, and the committee have made recommendations with respect to action within the industries which they believe will go

m* i !'! i*

far to remedy the defects which the strain of war has only too prominently revealed. Several of these causes, springing mainly from the pressure of foreign competition, cannot be removed by the private action of the industries themselves, and for their elimination direct governmental action is required.

What is that governmental action? They proceed to discuss dumping; they proceed to show that, by virtue of the free trade policy of England, dumping inevitably results that nations pour goods at below cost into England, not necessarily at a loss to the industry in the nation producing these goods because by dodng so, the manufacturers were enabled to increase the scale of their product, and in that way keep down costs, while enabling them to destroy the industries of England at the same time that they were building up their own. They show that in the clearest terms; they advocate protection against dumping, and then they say:

Moreover, the committee are convinced that for the future safeguarding of the iron and steel industries it will be necessary to establish a system of protective duties, and in this opinion they are supported by the practically united feeling of the British iron and steel producers who have given evidence before the committee.

These are from the same class of men who precipitated free trade on England, and they are practically united in their opinion that as things are going the industry cannot succeed, and without the iron and steel industry, what other industry can live? The iron and steel industry is the basis of a huge percentage of all other industries; it is the great substructure of all the industries of the country. But they go on:

The maintenance of a great open market in the midst of the greater producing nations of the world is incompatible with the prosperity and even with the existence of a native iron and steel industry. Under modern conditions, the expenditure of capital is immense; renewals of plant must be rapid and frequent, and amortization must, therefore, be swift. This capital cannot be obtained unless there is reasonable security for the industry into -which it is to be placed. So long as the British home market can be flooded with foreign imported material, a native industry will continue to be unprofitable and will become more and more unsafe.

I ask the indulgence of the House while I read further, because a more succinct and better informed presentation of the case, carrying clearer reasons with it, could not possibly be given:

The conditions of competition between Great Britain and her rivals are thoroughly unequal.

Not because British character and ability are not equal to those of other nations, but for the reasons they set out:

The iron and steel industries of Germany and America are protected from retaliatory action by heavy tariffs.

That is, in a "comparatively free trade country."

Their home market is practically assured to the national industries, and the whole weight of their competitive force can be thrown into the trade in external markets. Great Britain depends for her prosperity much more upon exports than either Germany or America ; but by reason of her free-trade system she has been compelled to divert her greatest strength from exports to the struggle for maintenance of her markets at home. The non-existence of a fiscal policy of any kind renders effective governmental action impossible, since Great Britain possesses no economic weapon by which concessions of any kind can be won from her trade rivals.

Now this is most significant, and I should like this to be read in association with the figures as regards the tin-plate industry given by the hon. member for Fort William and Rainy River (Mr. Manion):

A signal instance of this disadvantage is afforded by the history of the Welsh Tinplate trade after the introduction of the McKinley Tariff in the U.S.A., which resulted in the building up within a few years of an immense tinplate industry founded largely upon labour which migrated from South Wales. .

"Which migrated from South Wales!"

The Welsh industry was for many years well-nigh ruined. Its mills and works were idle; its workmen were scattered far and wide, and cruel distress reigned in South Wales. Yet nothing could be done, save to yield to the operation of "natural" causes.

And as if to avoid plagiarism of the hon. member for Marquette they put the word "natural" in quotation marks. It goes:

The Committee therefore recommend that customs duties be imposed upon all imported iron and steel and manufactures thereof. They are of opinion that a specific duty should be levied upon each class of commodity, and that [DOT] there should be maximum, general and minimum tariffs. The amount of tariff should be determined by consideration of the needs of the Industry protected, and by the needs of the nation as a whole; and the amount of specific tariff should be varied readily, according to the changing demands of national policy.

Another familiar phrase!

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PRO
UNION

Arthur Meighen (Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

No, by the Asquith Government, distinctly a Simon-pure Liberal Government, and it just reported in 1918. It took two years for its work. It goes on:

The existence of a tariff of this nature woyld, in the opinion of the Committee, be of the greatest advantage to the industries and the nation. There is no reason to believe that the price to the consumer would rise.

Listen to this:

On the contrary, the increase in production at home would lead to very material reduction in costs, since it would be possible to effect economies in production by the installation of more complete and better plant. The experience of the United States proves that the stimulating effect upon production through the conservation of the home market results in an actual reduction rather than in an increase of price.

There is scarcely one of the romances in the theory which the hon. member for Red Deer has preached for the last twelve years that is not driven off the stage, or, as he himself expresses it, has not its head cut off at the tail, by this report of experts in his native land. It goes on:

Again, the existence of a tariff will place in the hands of the State a most powerful -weapon of economic defence.

That is the argument urged by the hon. member for Shelburne and Queen's in the

very first Budget Speech he ever made in this House-the existence of a tariff was necessary for economic defence. So impressed was he with that argument, that before his Budget Speech he did what no Finance Minister has ever done before. He made a preliminary statement in the city of Montreal in which he said that on account of the contemplated 75 cents a ton duty in the Dingley tariff, there would be no reduction in the coal duty in this country, and he further stated. in the same speech that if they would dare to put on that 75 cents a ton duty he would retaliate with a duty on anthracite coal itself. Everyone gets to see these views when they get into office. The report goes on:

The weakness of any scheme of imperial preference has hitherto been the inability of Britain to offer any real privilege in return for those accorded to her by the Dominions. The possession of a tariff will enable this country to discriminate in favour of the Dominions and to give them concession for concession.

(8) A tariff will be no less advantageous in the course of negotiations with independent foreign countries. Here, too, Britain has in the past had nothing with which to bargain, and has, therefore, been unable adequately to protect the interests of her subjects.

(9) From the labour standpoint a tariff i3 no less necessary.

And remember this is signed by John Hodge. I emphasize this, because there is a sort of bewildering combination now being sought between the U.F.O. and Labour:

From the labour standpoint a tariff is no less necessary. The anxiety of Germany is to pre-

serve an open market in Britain ; and it will not be to the interest of the workmen employed in the British iron and steel industries to permit the unchecked importation of the product of foreign labour, working under conditions far less favourable than those of British labour.

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L LIB
UNION

Arthur Meighen (Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

No, I will give the signatures. I do not know who they are: G. Scob.v-Smith (Chairman), John King, G. Mure Ritchie, Hy. Summers, Benj. Talbot. From that there is a dissenting statement hy Sir Hugh Bell and Mr. John E. Davison.

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L LIB
UNION

Arthur Meighen (Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

But was appointed in 1916 by the Government of Mr. Asquith.

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L LIB

Rodolphe Lemieux

Laurier Liberal

Mr. LEMIEUX:

Has any action been taken by the British Government along the lines of that report?

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UNION

Arthur Meighen (Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

I do not think any action has been taken except what I shall describe a little later on. Over there they are now going through the contortions and groatfiings and sufferings that precede repentance.

As respects the electrical trades, a committee consisting of six men was appointed, and their report is unanimous. In the Old Country, just as here, these men are appointed for the purpose of a specific investigation, they are appointed because they have special qualifications for the purpose, the committees are composed of representatives of every class. They are confronted in Britain just as we are here, with orators of the same sort as the hon. member for Red Deer, and with demagogues like other hon. gentlemen who go up and down the side lines in Western Canada and elsewhere talking "special privilege." All that, they have to overcome, and they are now in process of overcoming it. The report on the electrical trades says:

Again, foreign governments, appreciating- the importance of conserving their home markets as a basis for the development of overseas trade, imposed protective duties, and exerted influence on State Departments to purchase native goods.

They go on and say:

The necessity for protective duties has been emphasized by many witnesses connected with manufacturing interests and has been frankly recognized by representatives of purchasers.

Of purchasers. That is consumers.

The Committee is convinced that adequate protection is necessary and should be given at least for a period.

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L LIB
UNION

Arthur Meighen (Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

The hon. member for

Quebec East applauds.

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L LIB
UNION

Arthur Meighen (Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Mr. MEIGHEN:

My hon. friend ironically applauds at the phrase "adequate protection." The Finance Minister (Mr. Fielding) whom he supported, the father of this milk and water amendment now before the House described his tariff, the Fielding tariff, as "adequate protection" himself, and I shall quote from his remarks after recess.

At Six o'clock the House took recess.

After Recess.

The House resumed at Eight o'clock.

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UNION

Arthur Meighen (Minister of Mines; Minister of the Interior; Superintendent-General of Indian Affairs)

Unionist

Hon. ARTHUR MEIGHEN (resuming):

The unanimous report of the British Government Committee on electrical trades states:

The necessity of retaining the home markets as a basis of overseas trade has never been properly recognized in this country-

That is, in England; and their recommendation is as follows:

The imposition of import duties sufficiently high to protect effectively the electrical industry.

And this following is something that is of moment in relation to a charge made in speeches of hon. members opposite, that Great Britain had been free from mergers and combines, which they seemed to believe were invariably against the interests of the consumers and the common people. This is the recommendation:

The recognition of the advantage of combination among manufacturers, and official co-operation with such action.

I can be very brief with the other reports; they are all precisely to the same effect.

Mr. CHARLES MURPHY': Is the report from which the hon. minister is quoting signed by the same gentlemen as the report which he read this afternoon?

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May 25, 1920