June 5, 1922

CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

The hon. member says it did not hurt him, but it has been noticeable that he has been very quiet, and that his voice has scarcely been heard since in this Parliament. It must have had a considerable effect upon the Minister of Agriculture. I was inclined to agree with the Minister of Agriculture, and I could scarcely understand why the Minister of Finance should become so annoyed and exhibit the temper which he did on that occasion. It is quite evident that the Minister of Finance is determined to have his own way in the Government, and if he decides to go through with this budget as it is, undoubtedly it will go through, but if other counsels prevail, and they overcome the views of the Minister of Finance, we do not know what the result will be.

I have already referred to the views entertained by hon. members opposite; some of them are extreme free traders and others are strong protectionists; in fact, we knew very well during the recent

The Budget-Mr. Sutherland

campaign they had practically a policy to suit the requirements of every constituency. This was the policy pursued by the Government throughout the campaign, and, as far as their platform was concerned, I do not believe that they paid very much attention to it. I was of the opinion, all through the campaign, that there was a tacit understanding between the Liberal party and what is called the Progressive party that they were out to defeat the government. Judging frcxm things that have happened since this session has opened, I have not seen any reason to change my views in that regard.

In 1920 a by-election was held in western Ontario, and the present Prime Minister (Mr. King) when he was interviewed on that occasion by a correspondent of the London Advertiser, made a statement with regard to the prospects during the next general election, and this statement was made in reference to a trip which he had just had through western Canada:

The people were most anxious to hear the trade policy of the Liberal party outlined. Of course, a large part of the audience was formed by farmers, who are more or less aligned with the new party, but they gave us a most cordial welcome just the same. Their policy is essentially Liberal, and it was quite plain that they realized we must stand together if we are to get results. The National Liberal-Conservative party is devoting all its efforts in an attempt to bring about a division of the farmers and the Liberals, but their success along these lines has not been very apparent.

That may be quite true; but at the same time, it is evident that every discordant element in this country was lined up with the object of defeating the late government in the last general election. After the elections were over, a different atmosphere prevailed, and this was indicated by the following statement made by the hon. member for Brome (Mr. McMaster). He said: "After the fight is over, why do you say anything about what took place?"

A year ago the present Minister of Finance referred to a speech that was made in the Wesit by the leader of the official Opposition (Mr. Meighen). The Minister of Finance quoted Mr. Meighen as having stated at Winnipeg:

Mr. Fielding has time and again given his adherence to the protective principle, and never in language more unequivocal than employed in recent years.

The Minister of Finance stated:

My right hon. friend is mistaken. I never gave any adherence to the principle of protection. , . If I had to choose between the

two principles by all means I would start from the standpoint of free trade.

That was the statement made by the Minister of Finance on that occasion. The year before in this House, he said, and he was evidently preparing the people of this country for what has taken place:

I do not even think we can expect to get a safe and sound tariff policy by a too rigid adherence to every line and every letter of the tariff platform. I think myself that we will find that we are all prone in framing platforms to put things perhaps a little more strongly than is wise, and we all find when we come to the responsibilities of office that we have to modify our views.

The following day the 'hon. member for Brome in this House used these words in a most vigorous speech:

Mr. Speaker: Protection as a policy for this country is not only dead, but after the next election it will, as Disraeli said, "be damned!"

Those were his views with regard to his policy at that time. The hon. member for Brome, so emphatic and so satisfied in his own mind, even ventured into the field of prophecy on that occasion. We have had further statements with regard to the policy of the Liberal party iby those who, I think we might assume, ought to know what they are talking about. In 1907 there was a proposal before the House to reduce the duty on agricultural implements, and the then hon. member for Souris moved the following amendment:

That the committee reconsider item 445 and that it be amended by striking out the figures 17 i per cent in the general tariff and inserting in lieu thereof the figures 10 per cent.

This is in relation to the duties on agricultural implements that my hon. friends to the left have been advocating so strenuously. What did the Minister of Finance (Mr. Fielding) have to say on that occasion, although a year ago and, indeed, whenever it suits his purpose, he states that he is absolutely opposed to protection and that he favours the idea of free trade? The Minister of Finance spoke on that occasion, and you will find his words quoted at page 5621 of Hansard of that year:

Mr. Fielding: .... by a careful calculation, we are advised that the drawbacks we allow are somewhat less than the disadvantage under which the manufacturer is placed by the reduction of the tariff Even suppose for a

moment that he got everything free and had a duty of 17J per cent on the implement, would that be an extravagant duty as things go in this country? .... I believe this proposal of the hon. member for Souris, if adopted, would do an injustice to an established industry. . . . My belief that if this motion were passed, we would strike a severe blow at one of the great industries of the country. I believe the Inter-

The Budget-Mr. Sutherland

national Harvester Company would find it to its interest to close up its business in Hamilton, at least so much of it as is devoted to mowers and binders, and have them made at the American branch and bring them from the United States. The factory in Hamilton is an American concern. With a moderate duty we have induced American capital to come into Canada and to establish that great industry, and after we have brought it in and established it in Canada I believe that if we were to pass this resolution the company operating that industry would find it profitable to close the Hamilton factory and bring in goods which they make in the United States.

This was the view of the Minister of Finance on that occasion, when hon. members in this House were asking to have the tariff reduced on agricultural implements. The Hon. Mr. Paterson on that occasion stated:

I do not disguise the fact that we propose to give these people nearly the amount of reduction in duty that has been made. For it must be remembered that 175 per cent is no more than a revenue tariff.

The hon. member for Brome the other day was dilating upon the traditions of the Liberal party. I wonder what he has to say with regard to that statement by Hon. Mr. Paterson:

175 per cent is no more than a revenue tariff.

It is not approaching a protective tariff at all. Yet we listened this afternoon to the hon. member for Marquette (Mr. Crerar) and the other day to the Minister of Finance, claiming that the people of this country made a terrible mistake in 1911 when they did not accept the proposition which was made to them by the government of that day and adopt the reciprocity pact of Messrs. Fielding and Paterson. We have heard that during the election campaign, from every platform where it suited their convenience to advocate such a policy. What are the facts with regard to that matter? If you had the tariff that is adopted under the reciprocity arrangement or agreement entered into by Mr. Paterson and the present Minister of Finance on that occasion, you would have to increase the duties on agricultural implements all along the line very materially, and you would place on the free list everything that the farmer raises without his receiving any corresponding advantage. Do you suppose, Sir, for one moment, that had that agreement been adopted by the people of this country, it would have had any influence upon the people of the United States when a change of government took place in that country when it suited their convenience to adopt

a policy which they believed was in their interest? Have they in the past shown any regard or consideration for the interest of this country? Have they not always placed their own, first, last and always? You cannot blame them for doing so. They are looking after their own interest and they would have done so, in any event because this agreement was not a treaty or binding; it was termed simply a pact, which might be denounced at any time by either party to it. We should have been compelled to develop new channels of trade again just as we did in 1866, after the treaty of 1854 had been denounced by the United States government. There were people in this country in 1911 who had a distinct recollection of what took place on that occasion and they were not going to be led into another trap of that kind, when conditions indicated in no uncertain manner the fact that the agreement was more in the interests of the United States than of Canada.

Under the reciprocity pact the duty on waggons was 22J per cent, and we reduced it to 20 per cent. The hon. member for Marquette (Mr. Crerar) claimed that he had a cause to resign from the government in 1919, because he differed from it on its tariff policy. The other tariffs under reciprocity were hay-loaders 20 per cent, reapers 15 per cent, binders 15 per cent, mowers 15 per cent, and windmills 20 per cent, reduced to 17i per cent. What about cement? We have not heard much during this debate with regard to cement. But, oh! how it figured during the election campaign. There was a provision in the reciprocity pact for a tariff of 11 cents per hundred pounds on cement, but the government that succeeded the administration of that day reduced that tariff to eight cents per hundred pounds, at which figure it has remained ever since. These were things that were done for the benefit of the people of this country by the governments after 1911, but they were not provided for in the reciprocity agreement of 1911. The duty on binders, mowers, and these other things was reduced to 12J per cent instead of 15 per cent as proposed in that pact. There were some other things that farmers are vitally interested in that were not provided for in the reciprocity agreement; but to 'hear some members of the Progressive party one would suppose that any one who does not come from the prairie provinces would 'be encroaching on the prerogatives of true farmers to mention these things. We have heard so much about

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\

farming from these gentlemen that apparently there is only one class of people who are qualified to call themselves farmers, and that is the grain growers of western Canada. However, I shall mention some of the other articles in which the farmers of Canada generally are very much interested. Butter was made free under the reciprocity pact. Now, during the past year upwards of two million pounds of butter were brought into this country from Great Britain under the British preference, to say nothing of millions of pounds imported from the United 'States. Does the farmer of Canada not obtain any advantage from a protective tariff in view of these importations? The United States put their tariff on butter up to eight cents per pound, and yet hon. gentlemen in this House who call themselves farmers say they do not need protection, advocate that it should be done away with, and declare that we should have everything free.

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?

An hon. MEMBER:

Hear, hear.

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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

An hon. gentleman says: "hear hear." Does he know that 9,000,000 dozens of American eggs came into this country last year with a tariff of three cents per dozen? We cannot underpresent conditions produce enough eggs to supply the requirements of this country. Hon. gentlemen say it is more profitable to grow Wheat than to bother with these trifling things, and so we import all these eggs from the United States. Take apples, for instance. There was a tariff of 60 cents per barrel on apples, and it has been increased to 90 cents per barrel; and in spite of that increase, during the past year, even though it was the smallest importation of this commodity that has come into the country, upwards of 110,000 barrels of apples were brought into Canada. If I had time to go over the list of articles and to show how many millions, and tens of millions of pounds of beef, pork, bacon and things of that kind have been imported into Canada from the United States, the wheat growers of the west would probably appreciate the fact that those who are carrying on actual farming in Canada do not ask that the tariff shall be removed, but, on the contrary, are strongly in favour of having it increased on many things that farmers are producing to-day in large quantities.

This is absolutely essential under present conditions. As I said at the outset, we are confronted to-day with a condition and not a theory. There is throughout the whole world a tendency on the part of most na-

[ Mr. Sutherland. ]

tions to erect tariff barriers for the protection of their own people from the cheap labour of foreign countries, and to establish their own industries in order to provide employment and a home market for their own people. But hon. members say: "Oh, but we are going to blaze the way for the whole world; Canada is going to set an example that eventually will be followed by all other countries." The hon. member for Marquette this afternoon, venturing into the field of prophecy, which is not always a very safe thing to do, stated that even in Great Britain the protective tariff which has been adopted will soon be discarded. I am inclined to think, however, in view of the statement made by the Prime Minister of Great Britain a few days ago, that that right hon. gentleman is not at all so sanguine in regard to that probability, for he has pointed out that the tendency to-day in all countries is to impose tariffs for the protection of native industry. While he deprecated the fact, nevertheless, it existed and had to be faced. These countries that are protected, in order to maintain an even price at home in proportion to the costs of production, ship out their surpluses. This may be an unfortunate condition of affairs, but it is the actual condition that prevails.

That leads me to a feature of the budget which I was somewhat surprised to hear the member for Marquette speak of in the way he did. I refer to the fixing of the rate of exchange on imports into this country, including German imports. The hon. member for Brome (Mr. McMaster), dealing with this matter the other day, referred to small nations of Europe that had adopted the protective tariff, and he was quoting the imports into those countries and giving the rate of duty collected on the total imports. He did not, however, give the rate of duty collected on the articles upon which a duty was levied. There were many millions of dollars' worth of free goods taken in there, and had he given that he would have shown that the protective tariffs in those countries were higher in regard to many things than is the tariff in Canada. I shall refer briefly to what has been done in the United States. The hon. member for Marquette said that the bill dealing with this question of the exchange on imports was put through the American Congress a year ago, and that there is no possibility of its going into effect. Let me inform the hon. member for Marquette that this bill had its second reading on April 11, 1922, and was referred to a com-

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mittee of the House of Representatives, and is now under discussion in the Senate. Hon. W. E. Andrews, who was for eighteen years an auditor of the treasury department of the United States, and is now a member of the House of Representatives, on April 12 of this year, referring to the rate of foreign exchange pointed out, not with regard to any other country but specifically with regard to Germany, how absolutely impossible it would be for the United States to compete against the goods produced in that country under the depreciated currency of Germany. Yet the Minister of Finance (Mr. Fielding) and the member for Marquette refer to these as most iniquitous measures, and display indignation when the hon. member for West York (Sir Henry Drayton) in moving the amendment refers to the budget proposals as a preference of 21 per cent to Great Britain and free trade with Germany. Some expressions of indignation had been uttered with regard to that statement, but I think the hon. member for West York (Sir Henry Drayton) was well within the mark when he made it. I have here the report of an address delivered by Mr. Charles M. Schwab at a banquet tendered to him by the New York Chamber of Commerce, during the course of which he stated:

Is it possible that after having won the war, we of the allied nations, with everything in our hands, will allow Germany to win the peace through the efforts of her labour?

Germany can to-day put a ton of steel in England at a price $20 a ton cheaper than what it costs England to make it. Germany is to-day selling pneumatic tools in Detroit where formerly we made machinery and shipped it to Germany to sell there cheaper than she could make it.

The difference is solely a matter of labour costs.

Railroad costs must come down, and it is in the interests of national prosperity that our government, acting through the Railroad Labour Board and every other agency, shall reduce railroad wages and bring costs down to a living point.

Now, what does the United States provide for in this bill? Section 304 (a) reads as follows:

Every article Imported into the United States, which is capable of being marked, stamped, branded, or labeled, wtithout injury, at the time of its manufacture or production, shall be marked, stamped, branded, or labeled, in legible English words, in a conspicuous place that shall not be covered or obscured by any subsequent attachments or arrangements,-

And 'so on. I will not read the whole section. But this indicates the steps which *have been already taken by the United States government to protect the country

against unfair competition. Section 315, it will be found, provides that the President may put into effect a tariff to absolutely prevent the unfair competition of imports. It has always been the custom of all governments to accept the currency of the countries from which goods are imported, but it will be seen that the United States government have taken the necessary steps to adequately protect its industries under the bill which is now being considered by the Senate of that country. So I say, Mr. Speaker, there is absolutely no justification for the Government to cancel the legislation which was passed a year ago to protect our industries. But the hon. member for Marquette states, "This is going to prevent trade, and so long as these cheap goods come in we do not care where they come from." Well, I think that anyone who has any regard for our industrial stability will not take such a view.

The hon. member also pointed out that in so far as our protective policy is concerned it is sectional and unfair and that there are many objections to it, and that the people of the West will never tolerate its continuance. He followed that up with the statement that manufacturing could not very well be established in western Canada because conditions there were not conducive to it. Well, some of us remember the predictions which were made by certain of our prominent public men years ago in regard to western Canada. When the Canadian Pacific Railway was first projected it was predicted that there would not be enough traffic to pay for the axle grease of the cars. I am inclined to think that in view of the immense oil, coal and other natural resources in the West the day will come when we shall have very extensive manufacturing industries established there as well as in other parts of the Dominion.

The hon. member for Marquette deprecated a protective tariff because of what he termed its sectional nature. Is it not a fact, although a matter for regret, that during the last few years our people have been inclined to look at matters from a sectional rather than from a national or international standpoint? Have we ever witnessed in our public life a condition similar to that which now prevails? Where did it have its origin, and what is its outcome going to be? Everything new has to be tested and tried before we can be sure of its containing any degree of permanency. We have been told that the old party system

The Budget-Mr. Sutherland

has ceased to be of service to the country, and that something else is to take its place. Well, I would caution anyone who runs away with such an idea to pay some attention to the manner in which this system came in to effect and to the fact that it has been adopted by every progressive country in the world. There were some wise people in the old days just as well as to-day, and this system which has been developed and perfected is now acknowledged by all countries except Russia as the most suitable system for self government. There can be no question as to that, and yet we find people to-day stating that they are going to upset all the old conditions and have a brand new system. Well, innovations have been tried out in different countries, but up to the present time I do not think there is any occasion to get very enthusiastic over what has happened.

When did this new party, styled the Progressive party, originate, and how? We in this corner of the House have been taunted frequently by hon. members to our left and by hon. members opposite with being a remnant of the old Tory party. I would remind hon. members that the old Tory party has to its credit achievements that are now of historic record, and that record its supporters need not be ashamed of. Indeed, in one of the most critical periods of our national existence the leaders of what is termed the "old Tory party", but really of the Liberal-Conservative party, paid very little attention to politics. They realized the danger which confronted the country, and in order that Canada might put forth her maximum war effort they scrapped the old party and by every means in their power encouraged those who were hanging back to come forward and do their duty for Canada, for the Empire and for civilization. Yes, there is a remnant left of the old Tory party, and that remnant will be heard from in the near future, when the people will appreciate what the party did during those critical times. That party will not in this House or elsewhere tolerate such a violation of pledges as we have witnessed on the part of our hon. friends who now occupy the Government benches.

The hon. member for Marquette (Mr. Crerar) was a member of the Union government which was organized in 1917. Was there any discussion when he was taken into the Cabinet as to what the fiscal policy was to be? It is true that he and several of his friends came here from western

Canada and other .parts of the Dominion and discussed with the Prime Minister of the day the conditions under which they would come into a union government, but there was never as far as we know any discussion as to tariff policy. They returned home. What happened in the meantime? The War-time Elections Act was placed on the statute book, because a war time election had to be held and we were determined to see that our men at the front should have an opportunity of exercising the franchise. Eventually, as is well known, the Liberal party were given the appointment of one-half of the election officials under that act, and the Hon. member for Marquette and his friends then entered the Union government. Now they claim they did a great thing for the old Tory party when, as they insist, it was in such dire straits.

Yes, the hon. member for Marquette became Minister of Agriculture in the Union government. This afternoon he stated that he resigned in June 1919 because of his differences with his colleagues on the question of tariff. Well, I want to remind him that greater tariff reductions, particularly in the duties on articles which the people of western Canada are concerned in, were made toy the budget which failed to meet his approval than have been made since the national policy was adopted in 1878. Those reductions were made in order to satisfy the demands of the people of western Canada. Were the government of that day not entitled to some consideration? When the hon. member tendered his resignation the day before the budget was brought down his action came like a bolt from the blue to many people, but there were others who were not surprised. They knew that negotiations had been proceeding even at that date, with a view to organizing a new political party, and that the company of which the hon. member for Marquette was president was contributing funds for the building up of this new party.

I had occasion to be a little suspicious of what was going on in view of certain appointments that were being made in my own constituency, for even during the enforcement of the Military Service Act the hon. member for Marquette took steps to see that appointees of his department were placed on the exemption tribunals.

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PRO

Henry Elvins Spencer

Progressive

Mr. SPENCER:

If I may ask the hon. gentleman a question? He says that the company with which the hon. member for Marquette was connected was contributing

The Budget-Mr. Sutherland

funds towards political organizations in western Canada. Has he any proof of that?

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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

I presume the hon. gentleman is a member of the Grain Growers' Grain Company?

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PRO

Henry Elvins Spencer

Progressive

Mr. SPENCER:

I am a shareholder.

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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

Well, you will find my statement confirmed in one of the annual financial statements of that company.

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PRO

Henry Elvins Spencer

Progressive

Mr. SPENCER:

I beg to assure the hon. gentleman that he is wrong.

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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

That is my proof. I have also the published statement that had it not been for the encouragement received from the Grain Growers' Grain Company and the Minister of Agriculture at that time, a statement that has appeared in agricultural journals in Ontario from the pen of the hon. member for Brant (Mr. Good), who is now an active supporter of the new party-

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PRO

Robert Forke

Progressive

Mr. FORKE:

Will you repeat that statement ?

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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

The member for Brant.

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PRO

Robert Forke

Progressive

Mr. FORKE:

Excuse me.

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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

I am not in the habit of making reckless statements. I have made these statements before in the presence of the hon. member for Marquette, and he has not denied them-nor can he deny them. It is somewhat significant that while the agitation was active in the country to exempt farmers' sons from military service, the then Minister of Agriculture was given the right to appoint on each military tribunal a representative of his department, and I assert that in every instance in Ontario those who were appointed were absolutely opposed to and worked against the government of which he was a member in the election of 1917.

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PRO

Oliver Robert Gould

Progressive

Mr. GOULD:

If the hon. gentleman will allow me a question? You make the statement that funds were subscribed by the United Grain Growers' Company for the purpose of organizing a political party in western Canada, and you add that your statement is proven by the annual statement issued by the company. I think I am safe in stating that either you have read that annual statement wrongly or put a wrong impression upon it. I say that, Mr. Speaker, because I happen to be a shareholder-*

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LIB

George Newcombe Gordon (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

Mr. DEPUTY SPEAKER:

Order. The hon. member may ask a question with the consent of the member who has the floor, but he can hardly make a statement.

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PRO

Oliver Robert Gould

Progressive

Mr. GOULD:

The question I would ask, Mr. Speaker, is: What annual statement does the hon. member refer to?

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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

I could not give the year, but the hon. member surely could not have overlooked it, for I put it on Hansard last session. I did not take the trouble to look it up again, because it has never been called in question. I also made the statement that those who were appointed by the Minister of Agriculture at that time as representatives of his department on exemption tribunals were men who were absolutely opposed to the Union government and to the enforcement of the Military Service Act. I ask the House if that was an honourable proceeding on the part of the then Minister of Agriculture, if he was carrying out the mandate that had been given to the Union government? That happened in the London district, the Toronto district, and the Kingston district. These matters have been referred to in this House before and have never been called in question. There is absolute authority for the statement I have made.

The hon. member for Marquette informed the House this afternoon why he resigned from the Union government. It was because he differed with his colleagues on their tariff policy. What does Mr. Rice Jones, the general manager and first vicepresident of the United Grain Growers' Company say with regard to this matter and Mr. Crerar's acceptance of office? This is the sworn evidence given by Mr. Rice Jones before a parliamentary committee of this House:

At the time he, Mr. Crerar, entered the government, he was drawing $10,000, and he continued to draw on that basis. He said he would not draw any salary unless they thought he should have a nominal salary tor- acting as president. The point is that when he came down the directors did not think he would be down here very long.

Well, if the directors did not think he would be down here very long, they must have expected that the Union government would be defeated at the general election which was then pending. Fortunately for Canada the government were returned with a majority of 46, and consequently might be expected to live its full term of office.

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Mr. McM ASTER@

Will the hon. member permit a question? Is it not possible that

The Budget-Mr. Sutherland

the true construction to be placed on that statement is that the directors thought the Union government would redeem its promise and go out of office as soon as the war was over?

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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

I may inform the hon. member for Brome (Mr. McMaster) that if he was so sanguine that the end of the war was near, his view was not entertained by very many people in this country or anywhere else. The situation was becoming more desperate from day to day, and a few months afterwards the fears entertained by the former government were fully justified by events on the western front, when the fifth army division was practically annihilated. The people in those days were not very sure as to when the war would end, but rather about what might ultimately happen. Again he states:

Mr. Crerar's position at the time was that he should not draw the $10,000, but the directors decided in view of the fact that he did not figure he would be here very long that the matter would stand over.

So he figured that he would not be here very much longer, and the company did not think he would be here very long. A little further on, he states [DOT]

I think that the general view at that time was that it was very doubtful as to how long the Union government would last.

Then on page 824 I find this:

1 may state, if you will go back, that Mr. Crerar has not drawn the $15,000 because that salary was set to take effect whenever he returned to the company.

So a by-law or regulation was passed by the United Grain Growers' Limited increasing the salary from $10,000 to $15,000, but it was conditional upon his returning to the company.

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PRO

John Morrison

Progressive

Mr. MORRISON:

Might I ask what the salary which the United Grain Growers paid to the hon. member for Marquette has to do with the business of the House?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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June 5, 1922