May 12, 1921

L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. D. D. McKENZIE (Cape Breton North and Victoria) :

Mr. Speaker, I propose to speak on the subject of the Budget, I must say at once .that I do not pose as a military critic, nor did I have any expectation that we were going to fight the war over again, and that all the breeze' and enthusiasm and eloquence which during the war served their purpose for the Government were to be rehashed and revamped

this afternoon by the Minister of Militia (Mr. Guthrie). Let me assure the minister that if there is any patriotic assistance necessary for any soldiers in this country, the Opposition is just as anxious as he is to meet their views and their just demands. Can anything be more ridiculous, Mr. Speaker, than the idea that this vote of eleven odd millions which is in the Estimates for the purposes of militia is going to be a godsend to the wives and children and homes of the soldiers of this country? It is not the intention of the vote; such an end cannot possibly be accomplished by it. Now, what judgment are we to pass upon the speech of the hon. Minister of Militia? It is not necessary for the purposes of the militia vote; it has nothing to do with it. It is simply an attempt to throw, dust into the eyes of the returned soldiers and make them believe that the Government is in the right while the hon. member for Shelburne and Queen's and the leader of the Opposition are proceeding in the opposite direction. But nothing of the kind has happened so far as hon. members on this side are concerned as regards assistance to the returned soldier. Let hon. gentlemen opposite read the resolutions that are being sent to them from time to time by returned soldiers, resolutions that are being passed by associations of war veterans all over the country. The last resolution of that kind was passed, I think, by the veterans' organization for the whole of Canada, met in conference in some central city-a resolution calling upon the Government to resign and to let competent men administer the country's affairs. I suppose this strong speech this afternoon is for the purpose of telling the returned soldiers who are passing these resolutions that there is still some kick in the old horse and that something is going to be done.

I do not propose to follow the enthusiastic eloquence of the hon. minister. But could anything be more absurd than for sane men, men who are of age, to be sitting in this House on this beautiful May afternoon discussing expenditures upon war material and war operations in Canada as compared with those of the republics of South America, for instance? Could anything be more ridiculous? We are not an independent nation. We are not defending ourselves against the outside world. Is the Prime Minister or the Minister of Militia prepared to say that we are going to start an expenditure in this country for the purpose of defending ourselves against

our neighbours to the south? Will nine millions of people arm themselves to protect their country against 110,000,000 or 120,000,000 people? Is that what we are called upon to do? Nobody would think for one moment of such a thing. Does the Prime Minister or the Minister of Militia think that the fact that we live alongside a splendid, civilized, God-fearing, law-abiding nation counts for nothing at all? Must me make the same expenditure on armaments, take the same steps for the purpose of protecting our homes, as if we lived down among the Hottentots, in the wilds of South Africa? If that is the theory that is put forward by the Minister of Militia, I assure him that the sound, sensible people of Canada think differently. They are going to take advantage of the fact that they live alongside the class of people that I have just described. We have lived in peace alongside the United States for more than a hundred years, and we want to continue that situation. We do not want to start any trouble between ourselves and our friends across the line or elsewhere by showing that we are spending millions every year upon armaments. Will any member of the Government say that our military expenditures and our military preparations are anything but supplemental to those of the Mother Country and the other dominions? That is the attitude which wie have always taken; that is the attitude which we take to-day. When the Mother Country is in danger, when she declares war, we are with her, just as Australia, New Zealand and South Africa and all parts of this great Empire are with her. It is not my understanding of the sentiments of the people of this country that we are to keep up an army and a navy so far as that will make us an independent nation and enable us to fight against our neighbour to the south of us -if such a ridiculous and absurd condition could possibly be conceived. Sir, when the people of this country look for cheaper food, cheaper clothing, cheaper supplies for the maintenance of their families; when they crave for work to enable them to earn the moneys that they require, the Minister of Militia tells them: "We have nothing to offer to you; we have xio public works for you; the factories are closed. You who have no bread for your children; you who need clothing for the members of your families; you who cannot sleep at night because of the troubles which beset you-you must bear

in mind that the percentage of the cost of armaments to revenue in Canada is less than it is in Brazil. That is what you may feed your children with; that is the consolation the Government has to give you." Sir, it is not necessary to argue that the people of Canada to-day are thinking more of the necessities of life than they are of military matters. I do not think I should occupy any further time in following up these comparisons. Our idea is to get clear of expenditures of this kind so far as we possibly can. Only a few days -ago the ex-Prime Minister, the right hon. member for King's (Sir Robert Borden) delivered an address in this House on constitutional law and constitutional history, on the relations which should exist between one country and another, and on some of the effects of war. And what did he say? He rebuked the Government by saying that the aim should be to drop all appearances of keeping up a military force in this country; that we should come back to peace and harmony and- brotherhood. That, I imagine, should be a sufficient answer to the Government for the policy which they are pursuing in military matters. The right hon. member for King's was in charge of the country's affairs during the war and was familiar with all its phases and all the relations which it brought about as between nations-more familiar with them, perhaps, than either the present Prime Minister or the Minister of Militia. We on this side may not always be willing to follow the right hon. member for King's, but I think this is one case in which the people are quite willing to accept his advice. Let us live as peaceably as we can; let us make as little military expenditure as we can; let us get back as quickly as possible to the happy times of pre-war days. Why did thousands of our boys lay down their lives upon the battlefields of France and Flanders if not to establish peace and harmony in this country and forever to down the dragon of war?

If we are to keep up this warlike spirit after the war is over, if no fruit is to be obtained as a result of those sacrifices, we have, to my mind, largely in vain sacrificed the lives of our boys. Nobody need preach to me any higher ideals of our soldiers than I have; and if the day comes, if ever it comes, when it is necessary for this House to give proper recognition to the way in which it appreciates and values the services of those men, I am sure hon. gentlemen on

[Mr. McKenzie. 1

this side will not be found lacking in expressing in a tangible way the manner in which they understand their responsibilities and duties in that regard. I do not take kindly to the lecture which was handed out to us this afternoon by the Minister of Militia and Defence (Mr. Guthrie), as if it was necessary to preach a gospel of that kind to hon. gentlemen who sit on this side of the House.

Leaving the military business at that, I wish to refer briefly to the first part of the speech of the minister in connection with the Budget. He pointed out the same old fallacy, which has been preached to us for the last number of years, that the Government has a surplus. Can anything be more absurd than to say that we have a deficit of nearly $200,000,000, and at the same time to tell us that we have a surplus? I do not know, nor can I understand, where that surplus comes from. On the face of the figures, which are as plain as they can be, we have a deficit of nearly $200,000,000, but at the same time we are told iby the Minister of Militia that we have a surplus.

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UNION

Arthur Meighen (Prime Minister; Secretary of State for External Affairs)

Unionist

Mr. MEIGHEN:

Perhaps the hon. member would take the figures of total revenue and total expenditure and just subtract one from the other, and see how his arithmetic is improving.

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

There is a statement

of that kind which I will come to in a moment.

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UNION

Arthur Meighen (Prime Minister; Secretary of State for External Affairs)

Unionist

Mr. MEIGHEN:

But the hon. member

does not do so.

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

I claim the same

right as a private member of this House that ministers of the Crown claim.

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UNION

Arthur Meighen (Prime Minister; Secretary of State for External Affairs)

Unionist

Mr. MEIGHEN:

All right.

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

While I am speaking,

I have the same rights as they. The Minister of Militia and Defence scouted the idea of anybody interfering with him; I claim the same right even of the Prime Minister. I am long enough in this House to know what my rights are and I am going to insist upon them.

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?

Some hon. MEMBERS:

Oh, oh.

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

If I can amuse or entertain hon. gentlemen opposite, that does not cost me anything and they are welcome to any amusement they can get out of my remarks.

What I was going to say, Mr. Speaker, is this, that you gave a ruling this after-

noon, that anything which was given as imaginary should not be entered upon the revised edition of Hansard. I would suggest that when you come to deal with today's Hansard, you issue instructions that the speech of the Minister of Militia and Defence, so far as it has reference to this surplus, shall not he entered upon the revised Hansard, because it is certainly of the most imaginary character.

The hon. gentleman speaks about the ordinary expenditure and the ordinary revenue, but he does not tell us what the ordinary revenue is, nor what the ordinary expenditure ,is. The ordinary revenues of this country are revenues similar to those which were collected before the war, before extraordinary taxes were imposed upon the people of Canada. If you are going to compare ordinary expenditure with ordinary revenue, you have to deal with the ordinary revenue and the ordinary expenditure of this country as we understand such revenues and expenditures. What are the extraordinary revenues that we have collected since the war? According to the figures given by the Minister of Finance, we have a right to say that one-third of the revenue collected by the Post Office Department is extraordinary, because the tax of two cents on a letter was raised to three cents. Therefore, about $9,000,000 of extraordinary revenue was collected in that way. I will give the figures from Hansard itself so that there will be no possibility of mistake about the matter. The Minister of Finance (Sir Henry Drayton) in his speech the other day, gave the different classes of revenue. He said that the revenue of the Post Office Department was $26,000,000. I claim that one-third of that was extraordinary revenue. The amount of $40,000,000 was collected under the business profits war tax, an entirely new tax. The amount of $46,500,000 was collected under the income tax, an entirely new tax. The amount of $79,050,000 was collected under the Inland Revenue war tax, an absolutely new tax. Other war taxes amounted to $2,-

355,000. These extraordinary taxes amounted altogether to $176,905,000. If the Minister of Finance or the Minister of Militia will deduct that amount of $176,-

905,000 from the ordinary revenue of the country, and then compare ordinary revenue with ordinary expenditure, there is some justification in the comparison; but if he leaves that amount in the ordinary revenue and makes the comparison in that way, it is not a fair comparison. There might be some justification if the comparison were

used for the first time; but it has been used several times during the war; the same criticism was made, and still they keep talking as if moneys collected in this way comprise merely ordinary collections and they had a right to use such moneys as the ordinary revenues of the country.

I do not propose to follow the speech of the Minister of Militia and Defence any further. I wish to dismiss it by saying, for the reasons that I have stated, that he has not dealt at all fairly with the question whether there is a surplus or not, and the question, on which he spent a whole afternoon, trying to show us that this country is not spending on war as much as some of the smaller republics and small countries in the world which are absolutely independent nations and must defend themselves against other nations that are ready and apt to make war upon them at any minute, is not such a matter as should engage the time of this House for a single minute.

Coming down to the Minister of Finance (Sir Henry Drayton) and the presentment of the case which he has made to the House, I can only say that as sane, fair people would approach a question of this kind' according to the facts as they present themselves, so would I approach the discussion of this question. I do not for one minute presume that anything which I can say will add to the most illuminating speeches that have been made by hon. gentlemen from this side of the House. The speeches made by the hon. member for Shelburne and Queen's (Mr. Fielding), by the hon. member for Red Deer (Mr. Clark), and by my desk mate, the hon. member for Maisonneuve (Mr. Lemieux), are of the most illuminating and noteworthy character, and if it was merely a case of resting upon a clear-cut answer to the speech made by the hon. Minister of Finance, it would not be necessary for this side of the House to say very much more, if indeed anything more upon'the subject.

It was also most noticeable that the speeches made on the other side of the House came from Liberals, or Liberal proselytes, if you choose. There does not seem to be anybody left at all of the Old Guard who knows anything whatever about questions of this kind. I see I have stirred up my good friend from Regina (Mr. Cowan). He is not at all prepared to take a back seat; he is not willing to admit that all the learning and all the knowledge and all the capacity necessary to discuss public questions rests with the Jews

who have gone across over there from this side of the House. He believes that among the Gentiles also there are men who know something about public questions. We also had a very excellent speech from a onetime strong Liberal, the Minister of Marine and Fisheries (Mr. Ballantyne). He still tries to keep some shred, perhaps only a smell, of the garment of Liberalism around him whenever he makes his speeches.

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UNION

Arthur Meighen (Prime Minister; Secretary of State for External Affairs)

Unionist

Mr. MEIGHEN:

He has had the garment fumigated.

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

I am sure that fumigation would be required for anybody to live on the other side of the House. I was simply referring in the most complimentary way to the speeches of my hon. friend.

Then what did we have in the speech that we have just listened to from my hon. friend the Minister of Militia (Mr. Guthrie) ? As I heard him speak, I was trying to figure out whether we were listening to Saul of Tarsus or Paul the Apostle. The transition was very striking indeed. I could not help thinking as the Minister of Marine and Fisheries was making his speech that his friend who was sitting alongside of him, the Minister without portfolio, the hon. member for Yarmouth (Mr. Spinney), was very uncomfortable. I was looking at him from my position of vantage here, and I could see that while the Minister of Marine was pounding his desk, emphasizing his high-as-Haman's-gallows protection, my good friend from Yarmouth was doing a lot of thinking about a speech of his last year. When the tariff walls were being raised higher and higher, and hon. gentlemen opposite were pounding their desks the harder, the higher the walls of high protection were to be raised in this country, I could not help thinking of what my hon. friend from Yarmouth said last year: I

I can only say that I regret that at this stage my hon. friend found it necessary to introduce this 'amendment which comes at a very inopportune time. It has for its purpose, as I assume, the downfall of the Union Government, or their return to the country to get a fresh mandate from the people. I must point out this fact, that since they have been in power I have followed them as a free trade, or rather as a revenue tariff liberal. I am that to-day, but I do not believe that any tariff for other than revenue purposes could be satisfactorily dealt with in this country at the present time

That is the gospiel of my good friend from Yarmouth-revenue tariff or free trade, if you please. I would say to him that it was time indeed when he heard that strong, loud speech from the Minister

of Marine and Fisheries, which left no doubt at all as to the attitude of the Government, to take up his bed and walk, and say to the Prime Minister and the Minister of Trade and Commerce as he passed out of the door: "Fare thee well, and if forever, then forever, fare thee well,"-because there appears to he nothing in common between the views, or the protestations at least, of the hon. minister without portfolio and the statements of the rest of the Cabinet. I presume that, like most other things, he will disappear and the place that knew will will know him no more forever. I think it can be said that as far as representing the fair county of Yarmouth is concerned, he has finished his work. There may be a crown for him somewhere, but not in the county of Yarmouth.

I have referred to the speeches on the other side of the House from men who were formerly on this sid^. I am proud of those speeches. It is some satisfaction to know that the men who have gone away from here, but without whom we can get along so splendidly, because we have such excellent talent on this side of the House- surplus as they were with us, and easily as we could spare them, the other side of the House must needs seize them and put them in the very forefront, as evidently they have nobody else to put up. That is some satisfaction to us on this side of the House, and that is the reason I have alluded to those speeches. I had forgotten to mention in this connection my good friend from North Oxford (Mr. Nesbitt). No man deserves better at the hands of this side of the House to-day than my hon. friend, for the very scathing criticism that he handed out to the Government yesterday. Of course, I did not receive that criticism with any very great acclaim, because I know my hon. friend from North Oxford so well. There is some nigger in the fence; th,ere was something in that speech of his last night by which he is to advantage himself. I have not been able to discover just what it was, but before the general election is over it will be very clear on every barnside in the county of North Oxford just what his purpose was. However, speaking for myself, we expect to get along to some extent with the assistance he gave us last night, but let me assure him that we are not at all deceived as to the real genuine purpose of that speech, and the real spirit of it will come to the fore before many months.

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UNION

Edward Walter Nesbitt

Unionist

Mr. NESBITT:

Tell us what you think the purpose was? ,

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

I told my hon. friend that I had not reached a conclusion. There are so many things it might be. But there were so many barn doors to it that it would be difficult to reach any clear conclusion as to what it meant. However, of one thing I am perfectly clear, and that is that it is not all intended for us; that is one sure thing.

As I was saying, Sir, if the minister's statement were that of a business concern, it would not be found very satisfactory. The financial condition of any institution is the best index to its strength and stability, and the condition of this country at present is not satisfactory, financially or otherwise, if we are to judge by the figures presented by the minister. I do not think it can be said that Canada, financially speaking, is in a very healthy condition. The minister tells us that for the ensuing year, the revenue will be $432,000,000; blit the prospective expenditure-not the $500,000,000 which has been spoken of-is $613,000,000. In other words, there is a deficit, according to my subtraction, of $181,000,000. Per capita, this is $21, and for a family of, say, six, it represents a burden of $126. The national debt has increased from $350,000,000 to $2,350,236,700, an advance of $2,000,236,700. This shows an increase per annum, during the ten years my hon. friends have been in power, of $200,023,670, or a per capita debt of about $260, which, for a family of six, means $1,560. Now, the per capita tax in 1911, the year the Liberal party gave up the reins of power, was about $43, or, for a family of six, $258. At the present time it is $1,560, showing an alarming increase. That in itself speaks volumes for what is being done in the country to-day as compared with the record of our day, and the result is altogether attributable to the difference in policy between the two parties.

In the House a few minutes ago I saw my good friend from Queen's, Prince Edward Island (Mr. Nicholson). It will be remembered that he declared In this House some years ago-I think, indeed, the first year he was in the House-after associating for a while with hon. gentlemen on the other side, and conversing with them, that the policy of the Tory party was to dash away and spend the money; and he is a good business man who has a knowledge of financial matters. Now, following out that programme, hon. gentlemen have certainly spent the people's money to such an extent

that to-day there is hardly anything left with which to carry on the public affairs. The expenditure to-day is $613,000,000, as compared with an expenditure in the year 1911, the year of the election, of $87,000,000 or $88,000,000. It will be recalled that the right hon. gentleman who to-day represents the county of King's, Nova Scotia, and who was at that time leader of the Opposition, stated, either in the House, or in his manifesto, that that annual expenditure of between $87,000,000 and $88,000,000 was in itself prima facie evidence of reckless and corrupt expenditure on the part of the Liberal Government, and proof that the party then in power deserved to be turned out of office, and the charge of public affairs handed over to other people. What does the right hon. gentleman say to-day when he finds that, for practically the same purposes, apart from war expenditures, we are spending not $87,000,000, or $88,000,000, but over $600,000,000, of the people's money? If the expenditure of our day was evidence of bad management and lack of judgment, how much more condemnatory is the present scale of expenditures under this Government?

The Minister of Finance-I am sorry he is not in his place-has shown favouritism to the millionaires, the trusts, and the combines in this country, and, as usual, he has kept a heavy hand upon the poor people. Last year there was a great ado in this House in regard to the tax on luxuries. We were told that the Minister of Finance had at last awakened to the gravity of the situation, and1 was determined to tax tho^e who could afford silks, satins, and all the other luxuries that money can buy. He was going to lay a firm hand on such people and make them contribute to the taxes of the country to pay the costs of the war. There was considerable talk about this, and quite a discussion, and at last this tax was put into operation. Well, what has happened? I see the Minister of Finance in his place now and I am glad of the fact. The hon. gentleman soon caught on to the disposition of the company in which he found himself as a member of the Government; became a friend of the millionaire and of the profiteer, and now things are reversed and he lays a heavy hand upon the ordinary man, who should be helped and for whom living conditions should be made as easy as possible. While he abolished the luxury tax, the only weapon by which he could reach those who are able to travel and who can revel in luxuries, he retains the means for making things

uncomfortable for the poor man and of taking from him practically that which he has not. He allows to escape the ladies with the diamonds and sumptuous furs, the silks and the satins; he lets go the Queen of Sheba, while he chases the little boy with the twenty-five pound bag of flour under his arm. I told a former Minister of Finance in this House when a tax was put on apples that they were taxing the fruit of the poor man. That tax is in force yet. I told him when they put a tax on oil that they were taxing the light of the poor man. They put on the apple tax to please their supporters, and millionaire supporters at that, 'from the great province of British Columbia. On the occasion referred to, I told the former Minister of Finance that by what he had done he had knocked the apple out of the baby's hand and sent him to bed in the dark. Now I am telling the present Finance Minister that while he lets the Queen of Sheba go by in swell array he is having a tax collector stand on the corner, stick in hand, to knock down the poor fellow that has not paid the tax on his twenty-five pounds of flour. All these things constitute evidence that the poor man is visited with the scourge of taxation, while those who can better afford to pay such taxes are allowed to go scot free.

At Six o'clock the House took recess.

After Recess

The House resumed at Eight o'clock.

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

Mr. Speaker, when

you left the Chair at six o'clock I was pointing out the unfairness of the distribution of taxation as presented by the policy of the present Administration and as applied by 'the Minister of Finance. I was pointing out that the class of people who were supposed to be living in luxury and capable of enjoying the fruits of wealth are allowed to escape under the Budget, whereas the poorer classes are visited with taxation. I was pointing out that the man who can buy on a large scale escapes, in some places and under certain circumstancese, the taxation which falls on the poor man whose means will not permit him to buy on such a scale.

I wish to point out further, Sir, that ever since we got into war habits of expenditure this Government has always permitted the barons and profiteers of the Tory party to make millions, whereas ho like opportunity has been given to the rank and file of our people. I wish to

TMr McKenzie.1

point out now, as I pointed out before, the very serious mistake made by the then Minister of Finance (Sir Thomas White) and by his successor, the present minister, in adopting his policy, in lending money to the tune of millions of dollars, money that in a sense we did not have-borrowed money, to foreign countries without security and without very much prospect of ever getting it back. In fact, it is more in the nature of a gift than a loan. What was it given for, Mr. Speaker? There is no record in Parliament of any request having come from those foreign countries for loans. Nor is there any record, so far as any member of the Government has ever disclosed, that any proper provision was made by any of the governments of those foreign countries to furnish business-like security. And those moneys were advanced out of borrowed funds which might have been applied to much better purpose at home.

How were those moneys to be spent? One would suppose that the plenipotentiaries of those foreign countries would come here and make proper arrangements with our Minister of Finance, but there is no record of anything of the kind. As a matter of fact, those loans really were provided so that a coterie of supporters of the Government, manufacturers of Ontario and other parts of Canada, might dispose of the immense stores of material, such as clothing, harness, boots and shoes, and of foodstuffs, such as butter, cheese, flour, potatoes, pork, mutton and beef, which they had gathered up all over the country for the purposes of the war in the expectation that it would continue longer than it did. When peace suddenly came those men were simply overstocked. Those multi-millionaires, those profiteers-* and I do not use this term in any improper sense in this connection-men who during the whole course of the war were piling up millions of dollars, and who could very well bear some of the losses consequent upon peace, could very properly have been left to shift for themselves. But what happened, Sir? A commission was formed and some of the members of this House were appointed to divide these millions of dollars among our multi-millionaires who had those goods to sell. The foreign countries evidently had nothing to say about it. The commission decided among themselves how the money was to be applied for the disposal of the huge quantities of goods stored everywhere throughout the country. Those goods were sold and sent to those foreign countries, and their

owners got their money clean cut and easy -Government cheques were passed out, and they were through with the transaction. But the Minister of Finance is still looking for his principal and interest, and, so far as we on this side of the House can learn, there is nothing yet in sight.

What fault do I find with those foreign loans, Mr. Speaker? First, I find this fault, that this was not a business transaction, that we did not have the money to spare, and that we might have utilized it to much better purpose in developing our own country, and thus spending the money with the maximum of profit to our own people. Further, I find fault in that the loans have not been properly secured. But the worst feature of all is that the poor people of this country, who during the war and at the time of this transaction were paying enormously high prices for the goods they needed for their families, were denied the opportunity of participating in the advantages which would have accrued had those goods been sold here at the market prices. Instead of that, they were taxed to furnish money to enable others to buy these goods as against themselves, in other words, to compete with them in the markets of this country for goods which the people needed but could not buy by reason of the high prices which were maintained in order that these very goods might be sent to those foreign countries at our expense. I submit, Sir, that that transaction alone is enough to condemn any administration which had to do with it.

If we had not at the proper time directed the attention of hon. gentlemen opposite to these things and found fault concerning them, they might well on some subsequent occasion ask why we had not raised the question at the proper time. The records of this House, Sir, will show that I and other hon. gentlemen on this side opposed this transaction as strongly and as vigorously as we could. But the majority opposite feel that they are serving their country, serving the purposes for which they were sent here, by voting down, through the exercise of brute force, any ideas of business principles that emanate from this side. That is the treatment which was handed out to us in connection with this transaction, and it is only in line with the procedure followed by my hon. friends opposite in all matters of like importance since they took office. I point this out as one of the things which the Government have done contrary to the interests of the people, and one of the things which give evidence

of a lack of conception on the part of the Government as to how the business of the country should be handled. The people of Canada cannot be fully awake to the enormity of this political crime, the placing of one hundred millions of the people's money in the hands of a commission for the buying of goods out of storehouses in Canada which could have been sold here at a low price and to the advantage of the people, and the carrying of those goods out of the country at our expense. We do not get a cent of thi money back and the probabilities are that we never will. I repeat that this is simply in line with the policy of this Administration and with the manner in which they have carried on the business of the country.

We have on our hands the old Mackenzie and Mann railway system, the Canadian Northern. We own it; we have paid for it three or four times over, and we are running it. It is still known to the world as the system of the Canadian Northern Railway Company. When the Government want to borrow money for the running of this railway one would think that any sane Minister of Finance or Minister of Railways would regard the credit of Canada as better than the credit of the Canadian Northern Railway Company. But the Government do not proceed in this way; they borrow money in the name of this defunct and bankrupt corporation-a corporation which, while it was moving or had any life in it, never had the reputation of paying its bills, never had any proper standing in the financial world. Why should we continue to carry on business under the name and standing of that corporation? I suppose hon. gentlemen opposite will tell me that I am dreaming. Sir, I am not dreaming; that is the way this Government is carrying on business to-dav. They borrow money in the name of the Canadian Northern. No person questions the credit of this country. I may find fault with the Minister of Finance; I may find fault, and deservedly so, with the Government generally; I may find fault with the policy of hon. gentlemen who are supporting the Government, but I have not the slightest doubt of the sufficiency and the solidity of the credit of this country. If money is to be borrowed we should go into the market as a country with the reputation that we have as business people and borrow it on the strength of our own credit without playing upon the credit of a bankrupt concern such as the Mackenzie and Mann-Canadian Northern Company. I have in

my hand, Sir, a record from the other House which sets forth certain inquiries with regard to the borrowing of money by the Government for the purposes of the railway which I have mentioned. These are the questions that were asked:

1. Has the Grand Trunk Railway or the Canadian National Railways or the Grand Trunk Pacific Railway placed any loan in the United States during the last twelve months.

2. If so, with what firms or persons were

these placed? .

3. Were there any commissions paid or other disbursements of any sort in connection with these loans.

4. If so, to whom were these commissions or other moneys paid?

5. What were the rates of interest?

6. What were the net proceeds of these loans?

The Hon. Sir James Lougheed answers, on the first day of March, 1921, as follows:

1. Loans have been placed In the United States during' the last twelve months by the Canadian National Railways and by the Grand Trunk Railway, as follows:

Canadian Northern Railway Company-

7 per cent equipment trust, series "E" 1920, certificates (Canadian National Rolling Stock, Ltd.), $15,000,000. Dated May 1, 1920; matures May 1, 1935. Issued through Dillon, Read & Co., New York. Net price to Railway Coy., 95. Net proceeds, $14,250,000.

In other words, the bonds or stocks, whichever they were, of this great country can only be sold at 95 when we are selling under the very inviting name and business stamp of the old Canadian Northern. The friends of the old Mackenzie and Mann concern are taking advantage of this opportunity of having another haul out of the Canadian people. Apparently, on the surface, the Government has nothing to do with the matter; it is money that is borrowed by the Canadian Northern, and the old friends of the old Canadian Northern who used to handle the business,-their solicitors, their agents, their brokers, the same people are there doing business at the old stand. The answer continues :

Expenses:

Printing, American Bank Note Co $3,475

Signing certificates, Signature Company. 150 Expenses:

It appears that we have not enough civil servants to do this little bit of business; $150 must be paid for the mere signing of these certificates.

Then there are the following expenses:

Trustees' fees, Girard Trust Co... $ 7,567 46 Legal costs, Duane, Morris & Heckscher and J. H. Barnes, Philadelphia 5,376 39

In all, $16,568.85 for expenses, because Canada, forsooth, is borrowing $15,000,000.

[Mr. McKenzie.)

Canada, with all the machinery and all the credit of the Government, with all the banks that ought to be and that are willing to lend us money, has to spend in New York and elsewhere $16,568.85 in order to borrow $15,000,000, which, to the Canadian Government and to this country, ought to be a very small transaction. But this is the record handed out to this country by the Government itself through the leader of the Government in the Senate.

There is a second loan:

7 per cent twenty year sinking fund bonds, guaranteed by the Dominion Government, $25,000,000. Dated December 1, 1920; matures

December 1, 1940. Issued through Dillon, Read & Co., New York. Price to Railway Co., 96.20.

Then again is displayed to the world how strong a country we are when we do business in another person's name. You will sometimes find a defunct man, a bankrupt, who is no good, who cannot get his head above water, doing business in his wife's name. The Canadian people seem to be unable to do business in their own name and must do business through this old wife, the Mackenzie and Mann concern. Here they are with a credit of $96.20 on $100 they ought to be selling their securities at a premium. What is the result of this $25,000,000 loan? This netted to us, not to Mackenzie and Mann-they did not care what it brought; we must face the music and pay the piper-$24,050,000. No accounts have yet been rendered for expenses. Then there is another loan:

Grand Trunk Railway-

$25,000,000 twenty-year 7 per cent Sinking Fund Gold Debenture Bonds, at 94J net, including commission and cost of distribution.

$25,000,000 at 94| 23,625,000 00

Less expenses 29,794 69

$23,59^,205 31

Expenses:

Cadwalader, Wiskersham % Taft,

New York $15,166 69

Larkin, Rathbone & Perry. New

York

504 55Mr. Miller Lash, Toronto

5,000 00It seems to me that we have heard the name "Lash" before in connection with unprofitable transactions for the Canadian people: ,

The Evening Post Job Printing office,

New York $ 708 45British American Bank Note Company, Ottawa

8,415 00

Then there is another loan to the same company:

$12,000,000 fifteen-year 6J per cent Equipment Trust Certificates, on Philadelphia plan, price 91.65.

Of course, the longer we continue to do business in our wife's name, the worse our credit gets. It is now down to $91.65 on the $100. The expenses are not given; the bills are not sent in; but we must suppose that they will be, at all events, proportionately the same expenses as in the other case. I work it out roughly that our expenses in this connection are nearly $57,000. If that is a sample of the way in which the finances of this country are looked after, it is loud notice to the people of Canada that we cannot any longer leave our business in the hands of the present firm, that is, this Government, and that we must serve notice upon our esteemed friend the Minister of Finance (Sir Henry Drayton) that we will give him three months' notice; that he must look for a job somewhere else and find somebody else who is doing business in his wife's name, as we propose to do business in our own name henceforward.

I happened to notice some loans going through in the province of Nova Scotia just about the same time that those loans are reported to have gone through in connection with the Government of Canada at Ottawa. One would suppose that the credit of the whole of Canada should be very much better than the credit of the little province of Nova Scotia, but such is not the case. I hold in my hand a letter from the Deputy Provincial- Secretary of Nova Scotia under date of Halifax, March 12, 1921. I saw in the newspapers something about their loans; I did not know exactly how they worked out, and I wrote to the Deputy Provincial Secretary to ask him how their loans sold. He tells me that there is one loan, $2,500,000, five-year, 6 per cent, which sold a premium of $1.19; that is, it sold at $101.19 per $100, whereas we are selling at $91.65 up to $96.20, which seems to be the best we can get. On the 5th November, 1920, the province of Nova Scotia sold bonds for another $2,000,000, a ten-year, 6 per cent loan, at $102.02; That is business. On the one hand you have the little province of Nova Scotia with a population of only

500,000 people or thereabouts handling its provincial business, and on the other you have the Dominion of Canada with its great wealth. The people of Nova Scotia go into the open money market of the world, the city of New York or elsewhere and they present the securities of that little province. The Canadian people, doing business in their wife's name, present the security of the big people of Canada and

the wealth of this nation. The monied people in New York will buy the little bond of the province of Nova Scotia at $102.02 in the one case and at $101.19 in the other. Our brilliant friend, the Minister of Finance, goes down to New York with his hat in his hand. Of course, he has to tell the monied men there at once, for he is an honest man and he would not deceive them, that he is a bankrupt himself, but that his wife is all right and he is doing business in his wife's name. He presents his security. They say: "We do not like that kind of business; we do not need to do business with a bankrupt, a man who has failed and who must do business in somebody else's name. If we take your bond at all, Mr. Minister of Finance, it will be with a big slice off it. If you care to accept $91.65 for your bond, we will buy it. We are not anxious for the business at [DOT] all." They told him "you must take Canadian funds; we will not give you good American money for it," and the Minister of Finance had to say: "I have been hawking these bonds all over from Dan to Beersheba, and I must sell them somewhere. Take them; it is the best I can do."

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

Does my hon. friend say that it is a fact that the payment was in Canadian funds?

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

I want to be absolutely honest with the minister. Somebody suggested that to me. It is bad enough for my purposes, whichever way it is.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

There is a good deal of difference between American funds and Canadian funds. Is the hon. gentleman quite sure that the quotations he makes as to New York loans ate not, in the one case, in American funds, and in the other case, in Canadian funds?

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

I' am not at all particular as to the difference. I have the answers given by the colleague of my hon. friend, the leader of the Government in the Senate, and I regard those answers as sufficiently condemnatory of this Government as they stand, putting the very best possible construction upon them. If the Minister of Finance does not know the facts himself, his colleague will tell him.

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CON

Henry Lumley Drayton (Secretary of State of Canada; Minister of Finance and Receiver General)

Conservative (1867-1942)

Sir HENRY DRAYTON:

If that is in the shape of a question, I do know. On the one hand, we have the American funds, the figures used here; on the other hand, the quotations as to Nova Scotia are in

Canadian funds. There is a difference of 15 points between them.

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L LIB

Daniel Duncan McKenzie

Laurier Liberal

Mr. McKENZIE:

As I said before, I am not going to do any cheese-paring with the minister. I say it is absolutely bad financing. It is a scandal on the credit of Canada, that with all our resources we should have to sell our securities at $91.25.

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May 12, 1921