June 5, 1922

CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

The hon. member for Marquette informed the House this afternoon that the reason why he got out of the government was that he differed with them on their tariff policy. I am trying to show to the hon. member and the House that pressure was brought to bear upon the hon. member for Marquette by his company, and that he had either to give up the salary as president of the company or cease to be a member of the government.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

John Morrison

Progressive

Mr. MORRISON:

There was never the least bit of pressure brought to bear on the hon. member for Marquette by the company.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

Then all I can say is that the sworn evidence given by Mr. Rice Jones was not in accordance with the facts.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

Thomas Alexander Crerar

Progressive

Mr. CRERAR:

It is not very often that I interrupt an hon. member making a statement, but I cannot allow to pass unchallenged the remarkable doctrine or explanation, or whatever it is, that my hon. friend from South Oxford is trying to give the House. As to the statement he has just made, there is not a particle of foundation for it. My hon. friend has drawn very largely on his imagination to produce the state of mind in which he now finds himself.

Mr. McMASTER. Withdraw.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

It was in September of 1918 that Mr. Rice Jones informed a committee of this House that this regulation or condition was passed by the company of which the hon. member for Marquette is president.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

Thomas Alexander Crerar

Progressive

Mr. CRERAR:

I again protest. No such regulation was passed, and when I say that I think my hon. friend should take my word.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

I am very glad to hear the hon. member for Marquette make that statement. He states that no such regulation was ever passed. I state most emphatically that I am giving the sworn evidence of the general manager and first vice-president of his company before a committee of this House.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

Thomas Alexander Crerar

Progressive

Mr. CRERAR:

You are drawing an inference from the evidence that is not warranted.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

I am drawing no inference. I am giving the exact words of Mr. Rice Jones. I was a member of the committee, and I thought it was a most remarkable statement for him to make at the time. As to the hon. member's desire to serve the farmers of this country, almost one of the first things which he did was something to which I have referred on several occasions. On September 1st the Grain Growers' Grain Company and the Alberta Elevator Company amalgamated under the name of the United Grain Growers, Limited. I do not suppose he will deny that

The Budget-Mr. Sutherland

fact. The president of the new company, the hon. member for Marquette, was sworn in as a member of the government on the 12th of October, 1917. On October 25, 1917, one of the first things that he did was to grant the right to the manufacturers of a certain commodity known as oleomargarine in this country to adulterate butter. By the adulteration of butter, greater injury has been done to the interests of real agriculture in this country than most hon. members or most of the people in the country realize. Almost the next move made by the president of the Grain Growers, Limited, was to contract with the terminal elevators for the recleaned screenings at $35 per ton. The president of the company also made the statement that previous to the war the sum received for screenings was very low, hardly worth considering, about four or five dollars per ton. By this act of the hon. member for Marquette, a great injury was also done to agriculture through the spread of weed seeds.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

John Morrison

Progressive

Mr. MORRISON:

Does the hon. member think this is the annual meeting of the United Grain Growers?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

If the hon. member was as anxious to advance the interests of his country as he is to defend his leader and his party, he would be rendering a better service. I am taking the statement of his leader that the reason why he got out of the government was that he differed with them on the tariff, and I have pointed out to the House that there was a greater reduction in the tariff that year than has ever taken place since the National Policy was first adopted.

The next thing the hon. member for Marquette did was to change the grain standards which permitted the millers of this country to adulterate mill feed, and that has been going on practically ever since.

The next thing he did was to be a consenting party to placing an export duty on dairy produce going from this country. I could give you a lot more things that happened while he was a member of the Government, but I am not going to trespass on the time of the House.

One of his colleagues, Hon. Mr. Rowell, in the House stated on June 12, 1919:

But I say to the House and to the country that if I was prepared, as all my colleagues, were, to support the Finance Minister in coming down to this House during this war year without any revision of the tariff, I do not believe that I am absolved from supporting him when he has revised the tariff in a measure according to the lines that I desire. I feel there is a double obligation upon myself to stand by the Minister of Finance and my other colleagues who have made a partial revision in the tariff along lines which I believe to be just and right in the public interest.

We had a staunch free trader in the House at that time, Dr. Clark, and what did the hon. member for Red Deer have to say to the hon. member for Marquette who had seen fit to resign on account of the tariff? He said:

I cannot agree with my hon. friend from Marquette. I think this is the only disagreement I shall have with him in describing the budget as a protectionist budget. I think a fairer thing would be to define it and I think history will so define it as a budget tending towards free trade.

That was the view held by the hon. member for Red Deer, and no one who sat in this House at that time will call his free trade proclivities in question. His view was that the budget tended towards free trade. The tariff was not an issue in the elections at that time. I must now leave that subject and pass on to the customs tariff.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEAKMAN:

Did the hon. member for Red Deer support that budget at that time which 'he characterized as tending towards a free trade budget? If he did, I should be very much surprised.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CON

Donald Sutherland

Conservative (1867-1942)

Mr. SUTHERLAND:

I have given you his words. I have not looked up the vote. I am quoting from Hansard the words which the hon. member from Red Deer used on that occasion. Protection has been condemned in no uncertain tones by the hon. member for Marquette and other members supporting the Government. After listening to the address which was delivered condemning certain members of this House for not offering something of a constructive nature, what did the hon. member from Marquette have to offer to take the place of the policy which we have in this country to-day? Did he offer a single constructive suggestion? Did he intimate to this House how he was going to raise the revenue? If he did, I did not hear it. This committee of the House to which I have referred had some information from others who have been and are supporters of the member from Marquette. We had as a witness before that committee, the present Premier of Ontario, Mr. E. C. Drury. This evidence was printed and in it he gave his views on taxation. The following questions were asked and answers given:

Q. Taking your farm as a typical case, do you object to a 1 per cent separate land tax.

The Budget-Mr. Sutherland

A. I would not, if I were relieved of the other ordinary tax.

Q. Have you any knowledge of that being generally acceptable.

A. It is part of the platform of the United Farmers in Ontario, which was adopted unanimously at the last convention. I think that is the acceptance of the term at the present time.

By the Chairman:

Q. All other taxes being eliminated except the direct tax on land?

A. That is the ultimate object.

This is the statement made by Mr. E. C. Drury with regard to the taxes on land. Then he was further examined as follows:

Q. That platform is to tax unoccupied land?

A. No, beg pardon, to tax the unimproved value of land.

Then a question was asked by another member of the committee:

Q. Out west "unimproved land" has a different interpretation?

A. Mr. Crerar was taking that up when I left the Chamber. I think his interpretation agrees with mine-not a tax on unimproved land, but a tax on unimproved land value.

This is the method which the hon. member put forward, but he did not have the courage to intimate to the House what his policy would be with regard to that matter. This is a plank in the platform of the Progressive party, and this is the system by which they would raise the revenue of the country, not a tax on unimproved land, as some people imagine, but on the unimproved value of all lands. I have here a paper issued by the single tax people, called the Square Deal and it contains the platform of the Progressive party. It is headed:

We Claim the Earth is the Property of the Whole People.

And their proposal in this paper is that they will exempt everything that has been created by labour and that the taxes must come on the land for everything, and everything that has been created by artificial methods shall be exempt from taxation. These are the steps which, I presume, would be taken if these people were entrusted with the reins of government in this country to bring about the reforms which they are advocating. Conditions are altogether too serious in this country to take chances on any such wild schemes as have been outlined so far to take the place of the custom which prevails in this country. A free trade policy may be an ideal one if adopted in all countries, but owing to the fact that our neighbours to the south are erecting tariff barriers so high as to be absolutely prohibitive, in view of the fact that other countries are

doing the same, and that the old motherland is the country to which we must, under present conditions, look for a market to dispose of our surplus produce, it would be most suicidal to give up our markets to the surplus products of highly protected countries, which would be dumped in here at times and absolutely demoralize our own markets.

The hon. member from Qu'Appelle (Mr. Millar) made a statement in the House the other night that more money should have been raised while the war was on, that the government had developed extravagant habits, and that it was hard to get away from them. It may be that they have developed extravagant habits, but the people of this country will have to come to their senses and realize that these extravagant habits, for the time being, will have to be dispensed with, and that the obligations with which this country is confronted cannot be settled by saddling a tax on a certain class of people, and excluding all others in the community from the tax which is proposed under the scheme outlined by Mr. Drury in his evidence before a committee in this House.

Just a word or two with regard to matters contained in the budget. I notice that the doubling of the sales tax is going to be a very serious matter indeed to many of the struggling industries in this country at the present time. I am going to refer to a few of the items which are exempt from taxation, but will not mention them all by any means.

Meats and poultry, fresh; milk, including butter-milk ; cream ; butter ; cheese ; oleomargarine, margarine, butterine or other substitutes for butter; lard, lard compound and similar substances, made from animal or vegetable stearine or oils; materials for use solely in the manufacture of oleomargarine or any substitute for butter or lard.

Any of these substances and substitutes are to be permitted to come into the country without any tariff. There is to be no sales tax upon them, but, in face of that, we find a tax on one of the most important [food products in some sections of the country and one that is now used very largely by people on the ocean liners, in the mines, and by those who have to go into the interior, far from the settled portions of the country and the people generally. There are. twenty-seven milk condensories in the Dominion of Canada. Some of them are very large, employing hundreds of hands. I see that 310,858,503 pounds of milk were condensed or converted into milk powders in these factories

The Budget-Mr. Sutherland

during the past year and 105,898,450 pounds of this commodity was manufactured in the county a portion of which I have the honour to represent. A little over 34 per cent of the total condensed milk product of the Dominion of Canada was manufactured in the small county of Oxford and I hope that when the Minister of Finance comes to deal with this question in the budget, notwithstanding his strong advocacy of the exemption of the articles to which I have referred, he will still take steps to see that justice is done to this important industry which has developed in this country and in which many millions of dollars are involved. I might point out that for the county of Oxford alone last year-and it was practically, with the exception of one factory, all manufactured in the constituency I represent-the value of the product was $4,574,878. There is an excise tax of 14 per cent; it is proposed to increase the sales tax by 50 per cent, so that this will practically mean a sales and excise tax of 6 per cent on this commodity, whereas all these other substitutes for dairy products are to be exempted from any customs tariff and from the sales tax. I would ask if it is fair, when it is well known that this industry is at the present time suffering owing to the fact that there is a large accumulation of goods on hand in the warehouses of this country, to permit all goods such as are mentioned in the budget resolutions, to come into this country free of all tariff regulations and free from the sales tax, and to impose a tax of 6 per cent upon condensed milk and powdered milk in Canada. I hope, when this matter is before the House in committee, the minister will give it his very careful consideration, because many factories are at the present time finding it very difficult to dispose of their produce and to continue in business.

I am glad to see the Minister of Finance (Mr. Fielding) in his seat, because there is something to which I should like to call his attention, in view of the fact that some of the heavy liabilities that confront this country at the present time are a heritage from the government which was in office prior to 1911. We have had a considerable discussion regarding the railway situation in Canada and the need for reducing rates in connection with railway transportation, and I think every one agrees that something must be done along that line. The railway situation is one that has not developed recently. The present Minister of Finance was Minister of Finance of the government of that day when the building of the Transcontinental was launched in Canada in 1902 and 1903. The Minister of Finance and the Prime Minister of that day claimed, in their statements in the House and in the country, that all it would actually cost the people of Canada would be between $13,000,000 and $14,000,000; at least, that amount of money set aside and placed at interest would pay for -the whole Transcontinental line to the advantage of every one in this country. What did the Minister of Railways of that day have to say with regard to the proposition when it was brought into the House?

Hon. A. G. Blair: Bet me tell the House, In the first place, however, what the right hon. gentleman did not say in explanation of his course.

He is referring to the then Prime Minister.

He did not deny that there had not been deliberation; he did not affirm that the government of the country had availed itself of all proper sources of information; and had waited until they had exhausted all the means in their power to ascertain what the conditions were in the various portions of the country which the road was to traverse; he did not tell us the need which had arisen for us to jump headlong into a scheme of this kind; he did not tell us that he had summoned to his assistance the wisest counsels which the country could afford; he did not tell us that he had sought the assistance of experts in order to know what the traffic con. ditions were which would make this railway desirable; he did not even pretend to tell us that he had done these things.

The Hon. Mr. Blair goes on:

What does the right hon. gentleman mean when he says " The flood of tide is upon us, that leads on to fortune; if we let it pass it may never recur again." What does the right hon. gentleman mean when he says: "If we let it pass the voyage of our national life, bright as it is to-day, will be bound in shallows." What does the right hon. gentleman mean when he says: "We cannot wait because time does not wait." I think, Mr. Speaker, and I say it with respect to my right hon. friend that it would have been as correct if not as poetic for him to have said: " We cannot wait, because Senator Cox cannot wait."

This was the statement made by the Minister of Railways of that day who evidently had not been consulted when this scheme had been entered into by the government of which he was a member, and it is the irony of fate that the Minister of Finance of that day should be called upon to face some of the obligations which this country has had to shoulder as a result of what the hon. member for Marquette

The Budget-Mr. Sutherland

(Mr. Crerar) termed the "wild cat" schemes that had been launched with regard to railway construction in this country. The late government has been charged by some hon. gentlemen opposite with not managing the affairs of the railway as they should have done. The late government found that they had either to go on advancing million after million of dollars to those companies or to take them over because they had to meet those deficits annually. When the Minister of Finance claims 'before this House that these obligations are the result of war, I say that they are not by any means all the result of war conditions, but largely the result of mal-administration on the part of the government of which he was a member on that occasion. We are today in this country "paying the penalty for the policy that was pursued, for the steps that were taken upon that occasion, without due consideration, to build railways many years in advance of the requirements of Canada. This statement was made, not only by the Minister of Finance, but by the then Prime Minister in a speech delivered in the City of Toronto on October 5, 1907. The then Prime Minister stated on that occasion:

I will not bore you with figures; I will give you the figures compiled by the experts of the Finance Department, who calculate that what we would pay in interest for seven years represents a sum in cash which, if it were put in the bank today, would amount to a little more than $13,000,000, and a little less than $14,000,000. That is all we would have to pay for the construction of the road if our expectations and contracts prove to be as accurate as we think they are. I ask you, my fellow-citizens, if we can get that tremendous railway for $14,000,000 do you think that will be so very heavy a burden for the Canada taxpayers?

And so on. This was the statement made by the Right Hon. 'Sir Wilfrid Laurier in Toronto in October, 1907, with regard to the railways. On that occasion he also referred to another matter which the Minister of Finance of the present day has evidently forgotten about. I have the Toronto Globe report of the speech delivered by the Right Hon. Sir Wilfrid Laurier on that occasion:

I am proud to say that under our regime the manufacturers always sleep soundly and never fear interference with the tariff. We have made very few changes in the duty. We chiefly introduce new principles rather than make changes in the duty. For instance, one of the changes was made in 1904 when we introduced the anti-dumping clause. Why did we adopt such a policy? Why did we introduce that anti-dumping clause? We introduced it for the reason I gave a moment ago, that it was essential to the success of manu-

facturing that the man who is engaged in business should know exactly the conditions under which he would operate and we put in this clause to prevent the demolition of the market.

This is the very policy that is required in this country to-day, and which was put into effect last session to prevent the importation of cheap goods from foreign countries by reason of the depreciated currency and the almost abolition of the German mark. It is somewhat significant that the German government kept the printing presses constantly going in order to turn out these marks as rapidly as possible; and they were produced to such an extent that people in this country and elsewhere were buying them at about eight cents, and then six cents, and later on at less, and now they are worth one-third of a cent. I believe it was the intention of Germany to depreciate the value of the mark for the purpose of bringing about the conditions that now prevail, and I contend that it would be fatal to the industries here to permit German goods to come into Canada on the terms proposed, because it would put out of business those who are manufacturing the same goods in this country, and would thus throw out of employment those labourers whom we should take care of in Canada.

Now, I say that instead of $13,000,000 or $14,000,000 being the cost of the Transcontinental Railway, the total up to the present time, in my opinion, is $354,000,000. The conditions with which we are faced to-day in regard to the railways is largely attributable to the mismanagement of previous years when money was borrowed in every part of the world and the railways were built far in advance of the times. We have roads to-day in many instances paralleling each other, and it would be wise to close one where we have two, and in some instances as many as three lines. These are some of the matters that must be considered by the Government; and I would also emphasize the great need there is for rigid economy in the administration of the public affairs of the country. It is significant that notwithstanding the dismissals that have taken place in the Civil Service there should have been a very substantial increase in the cost of civil government during the present session, although the supplementary estimates have not yet been brought down. These are questions that must be seriously considered by the Government before we can hope to have any real progress in the direction of substantial economy.

The Budget-Mr. Irvine

In view of what has been brought out in this debate, Mr. Speaker, I shall have no difficulty in supporting the amendment that has been moved by the hon. member for West York (Sir Henry Drayton), because it is quite obvious that the Government have not dealt fairly by the people. They professed during the election campaign that they would adopt a certain policy, and the people took them at their word. But the attitude of the Liberal party on this occasion is on all fours with what they did in 1896. In this connection I may quote from a speech of the Hon. J. I. Tarte delivered in 1903, with regard to the professions that had been made by the Liberal party before they obtained office. The remarks I am about to quote may be found in Hansard of April 20, 1903, at page 1634:

I say It openly, I say it from the bottom of my heart, that I fully expected that the Liberal party, with which I have been connected during the last ten years, would carry out the policy it was understood in 1896 they would carry out. I am weighing my words.

I ltnow what arrangement, what understanding took place between some public men. X know what took place. I do not divulge any secrets. I know what we did in the election of 1896 in Montreal. I see within the radius of my eye public men who, at our request, came to the city of Montreal, went to the manufacturers, with the knowledge of the leaders of the party, and told them not only would the tariff not be disturbed, but it would be changed in the right direction when the proper time came. There was no secret about that. X shall not give names. There are men who hear me-X am sorry there are not more on those benches-who know that I am perfectly' right. I am out of office because I could not stay in office under the present circumstances. I have had only but pleasant ielations with most of my colleagues and have for the most of them the greatest respect. But I could not possibly stay in office when I knew that the policy we are following now is not the right policy-when I knew that understanding took place formerly.

Here was a member of the Liberal government of that day deploring their betrayal of public confidence; and I have a distinct recollection of a campaign carried on in our county at which the leader of the party and his chief lieutenants were present at that time. They preached the policy that is now advocated by hon. members to our left, practically that of free trade, or commercial union, or unresticted reciprocity, or a combination of all. Sir Richard Cartwright was for seventeen years a representative of the constituency I have now the honour to represent, and that was his slogan during the whole of that period. And here was the Hon. Mr. Tarte, a member of the government of that day, putting on record in Hansard that it was by trickery of that kind that they had obtained office, afterwards disregarding their pledges and promises. I say, therefore, that the motion of the hon. member for West York, censuring the Government for making pledges to the electors of the country which they never intended to put into effect, is a motion that should receive the unanimous support of the House. The policy of the party now in office is one that cannot find approval in the country, and I shall therefore vote for the amendment that so properly condemns it.

Mr. WILLIAM IRVINE. (East Calgary) : The members who have taken part in this budget debate have offered, no doubt, their very best advice to the administration, in full view of the situation in which the nation is placed, and with that sincerity of purpose and that spirit of patriotism which should characterize the utterances of statesmen. It would be interesting if not educational to review comprehensively the wide range of subjects that have in some remote way been related to the main theme which, as I understand it, is the consideration of the most effective, as well as the most equitable, method of raising the estimated financial requirements for current expenditures. But I refrain from reviewing the debate in any hypercritical mood, and choose to offer my humble suggestions, as other hon. members have done, in the hope that those who occupy the highest office of the state, as well as the hon. members of this House, will give me a hearing and at least sdme reasonable consideration.

It is indeed a matter worthy of the highest congratulation that the Minister of Finance (Mr. Fielding) has had the singular honour to present to Parliament his sixteenth budget; and I am sure that the people of Canada highly appreciate the distinguished services which the minister has so generously given during his many years of public life.

Adding my congratulations to those of the many hon. gentlemen who have preceded me in debate, I wish to state that it is my hope that the hon. Minister of Finance will long retain that splendid vigour which he now enjoys and thus be able to give to Canada many more years of service. I congratulate him not only on having been privileged to move his sixteenth budget, but on the budget itself as a great achievement of political genius.

The Budget-Mr. Irvine

the value of unimproved lands or natural resources.

Now, this statement does not completely represent our real credit, for our real credit implies the ability to produce and deliver goods, and with the prevalent industrial anarchy-for that is what it is-we have never had an opportunity to test properly our ability to produce, except during the time of war, when a great number of our men were at the front. It is quite reasonable to suppose, that in comparison with the production of 1921, when our factories were running on short time-many of them closed altogether-and when 10 p.m. unemployment was current throughout Canada, we can very materially increase our production and thereby our credit if industry were properly organized and running to capacity. So I insist that while this is a very handsome balance sheet indeed, it does not represent all our real credit, which implies our ability to produce goods and deliver them as and when and where required.

Now, I want to give you the figures of Canada's production for 1921:

Canadian Production Agriculture, 1921-*

Field crops .. ..5931,865,000 Farm animals .. 98,424,000

Wool 2,975,000

Dairy products .. 260,337,000 Fruits and vegetables.. .. .. 40t,00'0l,0i00i

Poultry and eggs. 55,0041,000'

Fur farming.. .. 1,065,000

Maple products .. 4,174,000

Tobacco 2,393,000

Totals 8

Fisheries 1921 (estimated).. ..

Minerals, 1921 (preliminary...

Furs, seasons 1920-21

Forest products, 1919 (estimated)

General Manufactures, 1919 $3,520,731,589-

This figure of $3,520,731,589 includes fish canned and preserved, log products, wood pulp and clay products production, which would reduce the amount to be added in with Canadian production to approximately $3,300,000,000 for general manufactures not included in above headings..

Total Canadian production.. .. $5,244,866,772

Let me quote here a very significant statement of the statistician. He goes on to say:

The above is a statement according to the latest available figures under the headings usually included in "production", it does not include all activities which may be regarded as

"productive" from a stnictly economic point of view, such as transportation and trade activities. Railway gross earnings, for example, in 1920 amounted to $492,101,000, street railway gross earnings to $47,000,000 ; telephone and telegraph gross earnings to $45,000,000, etc.

So you will see that when I say we have at least an annual production in Canada of $6,000,000,000, I am well within the mark; that estimate of our annual production is a very conservative one. Just to indicate that it is, I would point out that in addition to our annual production of consumable goods, we produce annually a large amount of what might be called capital goods, existing in the form of public improvements, new or improved manufacturing plants, railways, canals, harbours, dry docks, ships, telegraphs, telephones, houses, roads and similar forms of capital goods. Now, if our total production in Canada be $6,000,000,000 and our annual consumption as estimated by the statistician is only $2,000,000,000, then we have a difference of $4,000,000,000 between our consumption and our production. The statistician, in reply to my question as to what would be an average wage for the Canadian breadwinner, stated:

We have no annual statistics of average wages, but in 1911 every individual on salary and wages was asked by the census to state his or her total earnings during the preceding year. The result showed an average of $592.75 for each male, and $313.12 for each female.

That is a very low average, and I want to add that in that estimate there was no allowance mads for those who received high salaries and those who received incomes from profits in corporations, and the like. I am going to make my estimate in this way. I am going to estimate our population as around nine millions, and that one in every five of a family is a bread-winner or earner of money, and I am going to grant to each bread-winner an average income of $1,000. You will agree with me that that is giving them a really higher wage than would be borne out by the facts. If we make that calculation, we shall find that we have something like two billion dollars worth of wages and salaries paid out to Canadian bread-winners in a year. That is the measure of our consuming power. I am going to assume that we consume all of that, that nothing is laid by, that we spend everything in consumable goods. If we consume at all, having only two billion dollars to purchase with, we should have four billion dollars worth of goods left on our hands, because we have an annual production of six billion dollars worth of goods. If those are

1,396,233,000

35,441,000

172,327,580

10,151,594

330,713,598

3,300,000,000

The Budget-Mr. Irvine

the facts-and if they are not, I hope the speakers on the Government side of the House will challenge the figures and give the correct ones-it is a very strange thing to hear hon. members on the Government side of the House talk about the necessity for economizing and for increasing production, and to hear the leader of the Progressives plead for strict economy. What is the value of strict economy when you are not able, as shown by earning measurement, to consume much more than one-third of what has been produced? If a man has a salary of $6,000 a year, and he can only manage to consume $3,000 of it, we all reckon that man is in a fairly good financial position. Is not that our state? That is precisely the position which Canada finds itself in to-day, measured in terms of our national credit. There is something very wrong with the belief that Canada is poor. What need to pinch when your production much more than doubles consumption? This "great lie" of poverty should be dropped from the philosophy of the Government.

The credit question is without doubt at the very centre of our national problems of trade depression, railway deficits, high taxation and unemployment. Canada's credit is good, as must be evident from the comparison which I have just given, and we should make collective use of our real national credit for the purpose of developing our home market. By increasing the purchasing power of the people they would be able to buy a larger percentage of that extra four billion dollars worth of goods that they are unable to purchase at the present time. Germany in using her national credit has once more outwitted her trade rivals and left the financiers of the world in consternation. She has successfully prevented the industrial stagnation which of very necessity prevails in other countries of the world where the old system of financing is still in operation, guided by the knights of high finance. There is practically no unemployment in Germany.

The hon. member for Fort William (Mr. Manion) quoted in this debate from an article in the English Review of October, 1921, written by J. Austin Harrison. I shall repeat his quotation, because I think it is germane to my argument:

Germany is doing a brisk trade, is industrially prosperous, has few unemployed and has a growing export which, to the consternation of the Allies, threatens to grow more real and valuable as the depreciation in the value of Germany's currency increases. He says that this will still further close British markets, increase unemployment, because

Britain is forced to buy food at a great loss to herself and cannot compete in Europe with countries whose currency is depreciated.

Here is another quotation by the same speaker, given in this debate, from the Literary Digest of November 26, 1921: ,

Returning travellers report Germany humming with industry, her workers well paid and well clothed and fed, with taxes the lowest in Europe and a promising export trade stimulated by her cheap money which permits her to under-bid England, France and America on foreign orders. Thus the cheap mark helps Germany and hits every one else.

One other quotation in this connection will give the quietus to the wild statements that I have heard hon. members make with regard to the position of the workingman in Germany. I have here an article from a well informed writer in a recent number of the London Economist, who says:

. . . The belief that the German workman works for long hours is mistaken. He works for eight hours, in coal mines for seven hours; if a bill already submitted is passed he will work in all mines for seven hours, and last year in the Ruhr mines a general strike was threatened in favour of six hours. The assumption that German workmen work, and will work, for extremely low w-ages is based on confusiion between nominal wages, gold wages, and real wages. German gold wages are very low. The German real wage, the only wage tnat comes into account in considering1 working class contentand "apparent acquiescence," is not low. It is considerably higher than before the war. The cost of living index (Statistical Bureaus) is 880; the Wages Index (Frankfurter Zeitung's) is 1,132 ; in other words, real wages are 30 per cent higher than before the war. Further, German workmen show the same persistency as British or American workmen in pushing up or keeping up wages. Between January, 1920, and April, 1921, the cost of living in Germany rose 50 per cent, whereas nominal wages, always as the result of agitation, rose 120 per cent; so that the present movement is altogether for a higher real wage.

Mr. Arthur Kitson, writing in the New by the way Mr. Kitson is a British manufacturer who has been very successful in business, and a student of financial affairs for over forty years, and I submit that his opinion is worthy of at least consideration

says:

The fact that the only countries where trade is really flourishing are those (like Germany) which have abandoned the gold system, whilst those where the revival of the system has beer either attempted or achieved (such as Great Britain and America) are suffering the worst period of trade depression ever known, conveys no meaning to the sound-currency association.

How has Germany accomplished this wonderful economic feat? She has done it by printing paper money and by fixing

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Mr. McM ASTER@

Will the hon. member permit a question?

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LAB

William Irvine

Labour

Mr. IRVINE:

Yes.

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Mr. McM ASTER@

Has the hon. member not forgotten to mention the double liability, which affects all banks? Has that not something to do with the security on which the bank is allowed to issue currency?

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LAB

William Irvine

Labour

Mr. IRVINE:

I do not think that the double liability has anything to do whatever with the principle of credit issue that I am discussing. I frankly confess that I have made no pretence to be a financier, and you have all seen that already, of course. I do make a pretence, however, to be able to see a principle and to say how it is working out

159J

in our national life. I maintain that this is a privilege which is granted to the banks, a statutory privilege which permits the monopoly of our social or national credit, and credit has become, in our complicated modern civilization, an absolute necessity of human life and prosperity. That is the contention I wish to make. Here is the problem in a nutshell. When a bank issues new money it really issues paper notes based on its assets. It lends this to a farmer for his note which is issued on his assets. But while the assets of the bank are of no more value than the assets of the farmer, the latter must pledge a great deal of his assets for the use of a very small portion of the notes representing the assets of the bank. But this is not all. Why should the farmer who has exchanged a superior note for the loan of an inferior one be compelled to pay a toll called interest on the transaction? This used to be a riddle. It is now as clear as day. The banker through a statutory privilege charges the farmer for the use of his own credit.

It is this private monopoly of social credit that accounts for the fact that we have to-day a huge national debt. That debt is spoken of in the budget; it will be spoken of, I fear, in many more successive budgets, and it is very doubtful if it will ever be paid if we go on financing as the budget proposes to do. The national debt of Canada as given by the Minister of Finance (Mr. Fielding) is now $2,427,269,798. This means that our annual interest is $138,223,000. The interest alone on this debt, says the Minister of Finance, calls for an enormous sum of money, greater, indeed, than the whole expenditure of Canada a few years ago. At that rate, I suggest that we shall have to do more than pass self-denying ordnances, for we shall almost have to have no expenditure at all before we can even pay the interest on our national debt. But this does not represent all our debts Every municipality has debts; every city, I venture to say, is burdened down more or less; every province has its debt, in addition to the national debt. Not only that, but many of us have our homes mortgaged, and it has been said by some-I do not know to what extent it is true-that some 75 or 80 per cent of the farmers have their farms mortgaged. Therefore, our national debt does not begin to represent the real indebtedness of Canada from the point of view of finance.

The Budget-Mr. Irvine

The first thing to do, in my humble opinion, is to stop making more debt, to stop making multi-millionaires by allowing them to lend our own credit to us in order that they may charge us very highly for the privilege. Let us use our own credit and issue our own money thereon. It would take all the gold in Canada, I believe, and, perhaps, something more than that to pay the interest on our national debt for one year. If you go outside the realm of Canada for a moment or two, in order to make a comparison, we shall see that what we owe is merely a drop in the ocean. The post-war debt of the nations of the world is placed at $354,181,523,786. Allowing an average rate of 4 per cent interest on this enormous sum, I figure that it would take $14,167,260,948 to pay the interest for one year. It will take $38,800,000, to pay the interest for one day, and some hon. members had better figure out what it will take to pay the interest for a minute and see if we can do it.

This, then, is the situation. The more we borrow on the present system, the more interest we shall have to pay, the more inflation will follow, the less will be the purchasing power of the people and the more difficult it will be for them to pay taxes and more impossible to pay the national debt. If we follow then this beaten path of financial monopoly which leads into the thickets of despair and national bankruptcy, the scenery does not look very well; but the scenery is brighter and more inspiring, indeed, if we can step out of the rut and march in another direction. Deflation follows the inflation of our currency, and that has happened to such an extent that our people are in the position to-day where, as I have proved to the House, they cannot buy back more than one-third of what they are producing. What then will the workmen think when they receive the message of the Minister of Finance asking them further to deny themselves? They have little more to deny themselves save existence; and if they deny themselves existence, that would not pay our annual expenditure, nor our war debt, nor our national debt. I contend, then, that we must find some way of placing our people in a position to purchase the necessaries of life. Put an end to the under-consumption by using our own credit, and industry will soon be humming. Make consumption possible and production will look after itself. It will not be necessary for the Government to send

highly-paid lecturers to tell the farmers to raise wheat and potatoes, if they know there is an excellent market for those things. Let us make it possible for the people of Canada to consume, by giving them money with which to purchase on their own credit, and you will find that you do not have to trouble much about your foreign markets nor about your tariff; that your industries will be humming, and that you will be able thereby to pay whatever national debt there may be, to pay the deficits of this year and to continue to prevent deficits in successive years. I am arguing for a new system of national credit in connection with this budget, because that would not only reduce our financial burden in the way of giving our people something with which to pay taxes, but it would shut off the interest taps of the financiers, so that our national debt will not continue to grow. Those are the two reasons. It will shut off the interest taps of the financiers, stopping, at its source, the debt that is inundating us and, at the same time, by increasing the purchasing power of the people, they will be enabled to buy back what they are producing and thus give them an opportunity to pay the taxes which have been heaped upon them by the present budget. It is hopeless for us to try to catch up with our national debt, which is travelling, I may say, at a speed that is twice as fast as the utmost speed with which we can follow it.

Before giving an outline of a system which is known as the Douglas system, and which I do not contend is the only possible way, I want to state that there are in connection with this system certain fundamental principles which I claim to be undeniable, and these I want now to emphasize. The details of working them out, as given by the Douglas system exponents may or may not be practicable, but 1 will leave that to the Government to find out. I want to insist first of all that the definition which Major Douglas has given of credit is, so far as I know, unchallengeable and hinging upon that definition, there are two important principles which, I say, are also unchallengeable if the definition be correct. As I say, hon. members may possibly not be able, from the incomplete outline that I am going to give the House, to understand the system, or, understanding it, they may not agree with it. But I submit that they will not be able

The Budget-Mr. Irvine

to puncture the definition of credit, nor the principles which follow as natural cor-rollaries. The definition of the Douglas system of credit is:

The correct estimate of ability to produce and deliver goods as, and when and where desired.

If that definition is established, then credit is acknowledged to be a community-created thing. If credit is a community-created thing, then it is only reasonable that it should be community-controlled, especially when we consider how essential it is to national prosperity. I am not aware that this definition has ever been challenged. Will any hon. member of this House challenge it? If it .is true, I repeat, that our credit is our ability to produce and deliver goods, that implies, not only plant, equipment, management, and labour power, but the consumer.

Goods cannot be delivered unless there are consumers, and therefore credit is really a social or collective asset. Granting that it is a social asset, and one which by its power and its proper use may bring prosperity, or by its misuse may bring depression or poverty, it is in the highest national interest to see that this powerful instrument of credit is takeft from the hands of financial kings and placed in the control of the nation. In further support of the argument that credit is a social asset, I will quote briefly from the bulletin of the National City Bank of New York. The writer says:

First of all, the condition essential to credit is the maintenance of an orderly state of society, which includes a stable government having the support and willing obedience of the people-

I think he might have changed that statement and said a government which willingly obeys the people. That would be better. However, he goes on:

-recognition of property rights, general willingness on the part of the people to work and maintain an effective state of industry. These are the foundations of credit everywhere; and the more clearly it appears that they are understood, and the benefits thereof recognized by all classes, the better the credit of a people will be.

That is a statement from the mouthpiece of a bank. If there are those who have some doubts about the definition as given by Major Douglas, they surely cannot have much doubt after such a statement from a banker himself. That must certainly be reassuring. Now, those who to-day control credit control also the issuing or holding of money. In that respect I desire to quote

the late Hon. H. R. Emmerson, at one time an eminent minister of the Crown in our own Parliament. In speaking on banks and banking on January 30, 1913, as reported in Hansard at pages 2424 and 2434, and while referring to interlocking directorates, the Hon. Mr. Emmerson said:

There is lurking in every section and paragraph of this bill-

By the way, I think it was the present Banking Act.

-an atmosphere of that menace.

Namely, interlocking directorates.

While those influences in the United States are limited to, say, ten men as controlling the great financial interests of that country, we in Canada have the condition of practically twenty-three men controlling the great corporate interest, the financial institutions, the insurance companies and the trust and loan companies of the country. . .

We grant great concessions to these banks in the matter of the issuance of their promises to pay. Their Bills and notes go broadcast

throughout the country How much

does the government get from these institutions as compensation for the right and privilege to issue their I.O.U's? After all they are but the I.O.U's of these banks and it is a privilege which a very greatful and kindly disposed people through their Parliament have granted to these institutions.

You will see from that quotation, from one of our great statesmen now passed away that financiers control credit. The aim of banking is to produce money, while the aim of the industries which money stimulates should be to produce goods. As a result of the present credit system the purchasing power in the hands of the people is chronically insufficient to purchase the products of industry. This unfortunate condition has come about because the present methods of financing permit the charging of capital production to the consumer in the form of high prices. In this way the people of the community may, for example, pay for a factory many times over, and yet never own one cent's worth of that factory. Now, the shortage in purchasing power brought about by the credit system leads directly to a struggle for foreign markets, and if that struggle is successful it usually leads to war, while if it is unsuccessful it leads to that kind of poverty and unemployment with which we are so familiar in Canada. The remedy for these conditions is to be found in the increasing of purchasing power; but the mere creation of new money is not itself a sufficient solution. That would lead us to what is commonly called the "vicious spiral", which was in evidence during the

The Budget-Mr. Irvine

war. Although I will not suggest this to the Minister of Finance (Mr. Fielding), it might be a splendid thing for Canada to revive the inflation that prevailed during the war until we have paid our war debts. If we did that it would very materially reduce our actual war debt; for if I mistake not, we sold our Victory bonds at a time when our dollar was worth something like 33 cents. We had about $100,000,000 in gold reserve, and had in circulation over $300,000,000 in paper money. That meant that the purchasing power of the dollar was reduced one-third at the time the victory bonds were sold. If we re-established the gold standard and then paid the national debt, we would multiply the national debt by three. I say therefore that it would be a good thing if we would bring into force again that inflation that obtained during the war until we shall have paid off our national debt But money alone will not be a solution. If we merely issue money there must be corresponding regulation of prices; otherwise we shall have a repetition of the vicious spiral, which means high wages after the loan, higher costs, higher prices, then more borrowing, more inflation, higher wages, higher costs, higher prices, infinitely repeated.

I want now to present very briefly a practical outline of the proposed system of Major Douglas so that hon. members may have an opportunity of studying the matter if they so desire. I am going to place on Hansard a few tables, which if hon. gentlemen care to follow them at their leisure, they will discover the steps in a practical way which Major Douglas proposes in putting into effect his credit system. If it is true that the mere issuing of money leads to inflation and to the vicious spiral, we must begin by seeking the establishment of a just price. A just price, according to his proposal, will bear the same relationship to the cost of the goods, as the total national consumption bears to the total national production. Now, there are four factors involved in finding the just price of a commodity. We first have to deal with the cost of production; next, the just price, or selling price to the consumer; next, the total national production; and, fourthly, the total national consumption. The selling price of the goods to be consumed in Canada, must be arrived at by finding the ratio between production and consumption; and this formula will give you the means of ascertaining that just price. If you want to find the cost of a ton of coal, you must multiply

CMr. Irvine.]

the cost price of that ton of coal by the value of the total consumption and divide it by the money value of the total production. The total national consumption will therefore be seen to include capital depreciation and exports, and the total national production will include capital appreciation on imports. My next table deals with credit issue and price regulation. This is issued through the national clearing house, which will function in a similar capacity to that of the clearing house of our banks to-day. The Douglas system does not presuppose the demolition of any institution now in existence. Let me follow the production of boots beginning with the tanners and ending with the consumers, applying the Douglas credit system in each transaction involved.

Credit Issues & Price Regulation Example: Boots

Tanners' raw hides ] $3,000 in-

(Datum value) $ 500 | voice to

Semi manufactures (che- f clearing

micals, powers etc.) .. 2,500J house.

Wages and salaries.. .. 2,500 1 $2,750 cost

Profit (10% on out of (-plus profit

pocket cost) 250 J at factory.

Clearing house issues cheque in favour of tanners for $3,000 by means of which tanners deal with their accounts for supplies. Clearing house wnites up its capital account by this sum. Tanners owe $3,000 to clearing house.

Boot manufacturers

Leather (from tanners). ..$5,750 ] $8,250 inl voice to

Supplies (pegs, thread f clearing

power etc.) 2,500 J house.

Wages and salaries.. .. 2,500 ] $2,750 cost [DOT]

Profit (10% on cost of 1-plus profit

labour) 250 j at factory.

Cleaning house issues cheque in favour of boot manufacturers for $8,250. Boot manufacturers pay for supplies, including $5,750 to the tanners, who in turn retain $2,750 and pay back $3,000 to the clearing house. The tanners disposed of, boot manufacturers owe $8,250 to the clearing house.

Retailers

Boots (from manufacturers) $11,000

Profits (including expenses, etc.) 1,500

Cost $12,500 1,250 prs. $10

Clearing house issues cheque in favour of retailers for $12,500. Retailers pay $11,000 to manufacturers, who pay off their debt of $8,250 to clearing house, and retain remainder.

Just price to consumer-

Costt Price Consumption Production $10 $5 $3,000 million $6,000 million

The retail credit invoice is duplicate otf bill paid by purchaser of boots.

The Budget-Mr. Irvine

The retainers turn in $12,500 on retailers invoices to clearing house, and are credited with 50% of that sum against original cheque sent them. They recover remaining 50% from actual purchasers of boots and reimburse clearing house. The manufacturers account balanced at clearing house, who write down their own credit by that amount. The credit capital of the community is thus written up 50% of $12,500.

In this connection I would point out to my hon. friends who are so fond of talking about the tariff that if they introduced this credit system the iniquitous tariff would automatically die, because goods produced in Canada would be sold at a price which no outsider could possibly compete with. Goods would be sold in that ratio between our power to produce and our power to consume, and at the present moment it would mean that our goods would be sold at half the present price. Would it not be a happy day for Canada and for this House if the tariff question were buried so deep down, Mr. Speaker, that a thousand excavators would never find a sign of it again?

I repeat that I am not basing my full faith on any details of the Douglas scheme;

I am going to hint at other schemes which have been proposed by such prominent men as Mr. Henry Ford and Mr. T. A. Edison. Certain propositions that they are making to-day are worthy of the consideration of thinking people. But apart from their theories certain practical attempts have been made to inaugurate a credit system such as they advocate. These attempts have been made in regard to specific industries and also in regard to cities, and I want to give briefly an account of two of such efforts.

The first instance to which I shall refer occurred in the island of Guernsey in the days of Governor do L'lsle Brock. When I mention that name it will no doubt remind hon. members of the famous general, Sir Isaac Brock, who fel. at Queenston Heights fighting for this great dominion. It may be interesting to know that he came from the Channel islands, and I believe he was related to the governor to whom I now refer. There was in the parish of St. Peter's in the island of Guernsey great need for a public market. A number of enterprising citizens organized themselves into a committee and proceeded to raise the necessary money in the usual way, which was to go to the governor and secure his assent to the issue of interest (bearing bonds to be sold in Paris or London. When the committee presented their case to the governor he asked them the following pointed questions :

Have we the necessary number of mechanics to build the market house?

Have we the material, the rocks, bricks, lumber, lime and sand, tools and teams as well as the food supply necessary during the operation?

To these very pertinent questions the answer came from the committee that they had. Then the governor spoke to them as follows:

Here you tell me that we have within ourselves everything needed to build a market house, yet you desire me (to bond you to the bankers in Paris or London (or a material which is of no manner of use in the constructions of the house. Strange anomaly! Is it your intention to build a market house for bankers? If so, then vou are correot in your endeavour to get paid by those bankers, but in such case, you should not place yourself under bondage to those bankers besides. If those (bankers pay you for the house and hold you in bondage also, demanding an annual tribute, they will soon have both the house and the money they paid you. It will be no relief to say that we make the renters of the market stall pay that tribute to the bankers. The renters will be part of us, and will demand of their customers that tribute in higher prices for goods. So we, jointly, will have to pay tribute in perpetuity for an article which, as I said, is not of any use to us. Allow me, gentlemen, to propose a better plan, for building our market house, than by way of money and bondage. Having, as you avow, men and materials among us, all that is necessary to do in the case is to keep account of each man's contribution in work or materials, that, in the future, we may (balance equitably the expenses of the building. This can best be done by means of a money which lays no claims to interest nor discounts. Instead of bonds, I will issue $22,000 market house scrips of different denominations (as money) and with these pay the men and purchase the materials, then make these scripts receivable, at par with the legal tender money of the realm, for the rent of the market house stalls.

The committee took the advice of the governor. The market was built. The rent of the stalls was used to recall the script, and in ten years all had been recalled, and the building stood as a monument to cooperative financing.

A special anniversary was held by the community to celebrate their co-operative success. The governor in a speech to the people, pronounced the following impressive tribute:

Well done, good and faithful servants. While living you have performed your work with equity, and now departing you leave no interest-extorting bonds, nor mortgaged home behind, but instead, you open the portals to a brighter financial era. May the toilers learn wisdom from this example.

Fellow citizens: For the first time in the history of this Island you have learned to make your own money, you have built your own market house without borrowing one cent. without losing one cent in discount, and with-

The Budget-Mr. Irvine

miration and appreciation of the sterling character and sincerity of the hon. leader of the Progressives. I would ask hon. gentlemen on this end of this side of the House, who will be more interested in my criticism perhaps than those who sit opposite, to grant my sincerity in this matter. If I criticise the Progressives it is not that I have lost faith in them. I still have the confidence I have had for many years that in the United Farmers movement we have the greatest and the most hopeful influence in the political life of Canada to-day. Their leader, I repeat, is a man of unimpeachable character, so anything I say should not be taken in a personal sense. With this statement, I feel free to say what I have to say on the amendment to the amendment.

While we have had the statement of the Liberals, and the chuckling acquiescence of the Tories in the budget which has been presented, and their little consistent resolution to censure the Government, what have we got from the Progressives? That is a question that I want the hon. members of the Progressive group to consider, as well as all other hon. gentlemen in this House. I want the people of Canada to consider it also, for I do not know of any other group that is more responsive to the people who sent them here than this particular group that I have the pleasure of sitting with. So I want the people of Canada to investigate their proposal, and if it is not a right one, to say so, and then I am sure that the hon. members of the Progressive group will respond the next time. If as I think they have diverged from the path of democracy that they have championed so vociferously, I hope it is only a momentary aberration, and that we shall find them suddenly swinging back to their true path in their right mind.

But what is to become of the fiscal policy of the organized farmers of Canada? I am asking this question because in the first place I have been a member of that organization longer than seventy-five per cent of hon. members here representing that organization. I have done more, I say without hesitation, to organize that movement than perhaps any other hon. gentleman on this side of the House. Moreover, I have given pledges to farmers in my own constituency, and have been sounded out upon this very question of their fiscal policy, and upon that ground I take the right even to criticise this great industrial group, or party, if you choose, and to voice my opinion upon their policy. The

farmers' platform was drawn up by the farmers themselves-and that is the point I want to emphasize. It is not like the Liberal platform, drawn up by a few Liberals, by themselves. The farmers' platform was drawn up by hundreds of thousands of organized farmers in Canada, as representing their opinions of how the country should be financed, and how our national business in general should be conducted. Therefore, the Progressives are in a unique position in this regard. The Liberals may violate their platform, because they made it themselves, but the Progressives cannot violate their platform, because they did not make it. It was made by the people they are here to serve, and that is the only thing we have to justify us in being here. If we do not make that distinction now and make it so clearly that there can be no misunderstanding about it, then I say I would just as soon cross the floor providing they would have me, which I doubt. If we cannot succeed in doing that, what is the use of calling ourselves anything different from the other old parties? If the fiscal policy of the organized farmers put out by the Canadian Council of Agriculture, and endorsed by the annual conventions of the organized farmers in every province where there is an organization, was good enough to elect the representatives of the farmers to Parliament, it is good enough to be moved by the hon. leader of that group in this budget debate. And if it has not been moved, I ask again, what has become of it? I am very deeply disappointed.

But before I deal with the speech of the hon. leader of the Progressives and his resolution in detail, I would like to refer to the keynote of his song, if you wish, as appearing in his pastoral letter-I am calling it that-to the people of Canada at the last election. He said "Let us get away from the bogs and mires of intrigue and corruption into the upland where the air is pure and sweet." Now, that is a very pretty thing, and I fancy we all want to join in the chorus of that song. But where are these uplands? I want to get my foot on the uplands. I fail to find these uplands in the amendment which has been proposed by the leader of the Progressives. I want to summarize his proposals, or his speech rather. I think that I am not hypercritical when I say that it was more or less platitudinous in the cry for economy. My reply to him is what I have already given. Look at the facts. Why plead for a greater

The Budget-Mr. Irvine

economy when we are producing twice as much as we are consuming, and when greater economy initiated by this Parliament and passed down through the various institutions of this country will paralyze the trade in Canada and increase our unemployment? I reply to the leader of the Progressives in the same way that I replied to the budget in that regard.

Then, I think he made an inadequate attack on the sales tax. That is a striking injustice to the consumer. That tax was made on the lowlands, where the air is not pure and sweet, and those who are on the uplands, where the air is pure and sweet, should have something more to say about that tax than the leader of the Progressives has said. Then he made an amazing condemnation of the stamp tax because it . would fall very heavily on large corporations. I was surprised, Mr. Speaker, to hear that. As a matter of fact, in my opinion the stamp tax will fall much harder upon the poor man who may have to issue ten cheques to pay $50 out of the bank. In doing so, he spends 20 cents to draw out $50, but a large corporation can save every cent possible by writing large cheques, but, apart from that, I was rather disappointed that the hon, member for Marquette should have gone out of his way to criticise this tax because it struck the big corporations.

Then, of course, he attacked militantly the Conservative party. That party seems to be a sort of red rag to the Progressives. Why should we worry about the Tories- poor Tories? Do not worry about them, do not get afraid of them at all, and do not bother criticising them. I am not sure that they are absolutely worthy of it, in point of politicial strength and influence. Do not trouble about these attacks on the Tories. Let us cut to the line and put out our own positive constructive programme. Never mind the Tories-they are playing their own game. The attack of the leader of the Progressives on the Tories was more or less a Liberal defence. I submit the Liberals can defend themselves, but there was absolutely no constructive proposal put forth by the leader of the Progressives. Why was the Farmers' platform not moved as a constructive proposal. Possibly the reply would be that they could not put the Farmers' platform in the amendment to the amendment, else it would not have been an amendment to the amendment. Well, there may seem to be some reason in that, but the constitutionality of the amendment to the

amendment already having been challenged, it might as well have been challenged for putting the principle in it as for putting nothing in it, might it not? By moving the new fiscal policy hon. gentlemen would have had the opportunity of stating clearly to the House and to Canada what were the principles upon which he and his party were elected. I am going to put on Hansard the fiscal policy of the Progressive party. Here it is:

Canadian Council of Agriculture's Tariff Proposals

Our tariff laws should be amended as follows:

(a) By an immediate and substantial allround reduction of the customs tariff.

(b) By reducing the customs duty on goods imported from Great Britain to one-half the rates charged under the general tariff, and that further gradual, uniform reductions be made in the remaining tariff on British imports that will ensure complete free trade between Great Britain and Canada in five years.

(c) By endeavouring to secure unrestricted reciprocal trade in natural products with the United States along the lines of the reciprocity agreement of 1911.

(d) By placing all foodstuffs on the free list.

(e) That agricultural implements, farm and household machinery, vehicles, fertilizers, coal, lumber, cement, gasoline, illuminating fuel and lubricating oils be placed on the free list, and that ail raw materials and machinery used in their manufacture also be placed on the free list.

(f) That all tariff concessions granted to other countries be Immediately extended to Great Britain.

(g) That all corporations engaged in the manufacture of products protected by the customs tariff be obliged to publish annually comprehensive and accurate statements of their earnings.

(h) That every claim for tariff protection by any industry should be heard publicly before a special committee of parliament.

Have we heard that discussed in this House? Have those industries which receive protection in the present budget proved to Parliament that they ought to get these benefits? I think not.

Canadian Council of Agriculture's Fiscal Plank

In order to provide the necessary additional revenue for carrying on the government of the country and for the hearing of the cost of the war, direct taxation be imposed in the following manner:

(a) By a direct tax on unimproved land values, including all natural resources.

(b) By a graduated personal income tax.

(c) By a graduated inheritance tax on large estates.

(d) By a graduated income tax on the profits of corporations.

(e) That in levying and collecting the business profits tax, the Dominion government should insist that it be absolutely upon the basis of the actual cash invested in the business, and that no considerations be allowed for what is popularly known as watered stock.

The Budget-Mr. Irvine

(f) That no more natural resources be alienated from the crown, but brought into use only under short-term leases, in which the interests of the public shall be properly safe-guarded, such leases to be granted only by public auction.

Now, Mr. Speaker, there is the programme of my Progressive associates. Though I am not a Progressive, I have been closely associating with them, being a representative of an economic group, similar in aim and with a corresponding educational programme, I am taking the liberty to make this criticism. Progressives will agree with me that their programme is one that they need not be ashamed of, and it should have been moved, I repeat, by the leader of the Progressive party or by some other member of his party, so that their opinion and the opinion of the farmers who have spent thousands of their own money to build up an organization to send representatives here might be heard.

In conclusion, Mr. Speaker, I simply want to intimate that, in the Farmers' programme, there are two principles that ought to be emphasized more emphatically, one being the tax on unimproved land values; the other an inheritance tax. I am glad the hon. member for Brant (Mr. Good) gave us a most excellent presentation of single tax, and therefore, I merely wish to endorse the argument and the presentation of the philosophy as presented by thehon. member for Brant. I believewe should place a tax upon land, not only because the farmers of Canadahave declared for that, but because itwould be a tax which would not fall upon labour and would not even fall upon capital, but a tax that would fall upon the land exploiter and would result in forcing land into use. We were hearing something today from the hon. member for North Winnipeg (Mr. McMurray) about the necessity of bringing in more immigrants. Why, he says, that is how to pay our national debt. I submit it is not a very good advertisement for Canada that it should be said upon the floor of this House that our national debt is so great that we cannot pay it, so we shall have

to get some people from Europe to come to Canada and help to pay our debts. But that is on the side. If we want to get immigrants into this country, it would be very good for us if we could get more free land; and if under the land tax, as some critics say, we would not get the money, we shall get the land back. We would thus have an opportunity of settling

the immigrants whom the Government proposes to bring from other countries. At the estimate of $8,000,000,000 of land values in Canada, I would put a tax of 2 per cent on the land and thus bring in $160,000,000, more than the Minister of Finance (Mr. Fielding) will collect off his candy tax in many years.

The next thing that I want to emphasize,-and then I am through-is the tax upon inherited wealth. Those are two principles in the Farmers' platform that require to be emphasized. We ought to have emphasized others, I admit, such as the more steeply graduated income tax. The privilege of the inheritance of wealth is based upon the same old fallacy upon which rested the divine right of kings. The divine right, if you will, of the inheritance of wealth, is no more necessarily fixed than the divine right of kings, and I believe the best way to abolish the inheritance of wealth is by taxation. I am in favour of an inheritance tax, in the first place, because we need more revenue, and in the second place, because I want to abolish the inheritance itself.) The inheritance takes away the right of the producer to have what he produces. Inheritance of wealth means inheritance of poverty, and the divine right of kings and the divine right of inheritance are based, as I say, on the same fallacy. If we could tax the inheritance, it would ultimately pass out of existence, and we would thereby arrest a tendency to the concentration of wealth as well as put a great amount of money into our treasury. Instead of taxing the candies of little children, instead of taxing the food supply that is none too great to the present consumer, because he cannot purchase it, instead of taxing the food of living children, let us put a tax on dead millionaires, and I believe posterity will thank us, and we shall incidentally get some revenue.

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PRO

Harry Leader

Progressive

Mr. HARRY LEADER (Portage la Prairie) :

Mr. Speaker, as I am a new member of this House, with very little experience in the art of public speaking, it may be rather an imposition to ask hon. members to stay here and listen to the few remarks that I shall have to offer. It seems, however, incumbent upon a member of Parliament-and the people at home expect it -to take part in the debates in this House and make at least one speech during the session. I hope to convey to the House the sentiments that I hold and to interpret the

The Budget-Mr. Leader

viewpont of my constituents who have honoured me with their confidence.

I am sorry that circumstances, over which I had no control, made it impossible for me to be present when the Minister of Finance (Mr. Fielding) delivered his budget speech. The subject matter of that speech is a distinct disappointment to me, and I am sure it is a disappointment to the great majority of my constituents. While it is true that on many articles a reduction in the customs tariff has been effected that would give material benefit to the general public of Canada, it is also true that the increase in the sales tax has taken away the benefits that would accrue by the reduction in the customs duties. The effect will be that the Government have only shifted the load from one shoulder to the other, and the weary taxpayer of this country goes on with his burden. It seems to me that the practice of governments of Canada, both provincial and federal, is to apply their energies not to the reduction of debt mostly contracted during the war, but rather to find new sources of revenue to take care of ever increasing expenditure. If I am not a politician, I am at least a practical business farmer, and I know that inevitable ruin would be the result of my operations if I did not live within my means and curtail my unprofitable expenditures.

I wish to state my approval of the action of the Minister of Finance in approaching the government of the United States with a view to securing better trade relations with this great natural customer of ours. The door is shut for the time being, it is true; but can we not hope that, in the near future, better trade relations will be established between the two countries? Mr. Speaker, I wish to confess to a political sin-and this is another indication that I am not a politician. I think it was the hon. member for Fort William and Rainy River (Mr. Manion) who, upon being asked how he voted on reciprocity, said that he voted for reciprocity, and that he had no apology to make. I want to confess that I voted against reciprocity, and I wish to apologise to the people of Canada for doing so. At the same time, I wish to state emphatically that I thought I was polling an intelligent vote according to the dictates of my conscience. In those days I considered that I was a real politician, and the welfare of the Conservative party and the election of a Conservative member for Portage la Prairie meant more to me then than favourable trade relations. I will confess

from my seat in this House that I made a blunder.

The rejection of reciprocity has been little short of a disaster to the country, especially to the agriculturists of Canada and I know this is the viewpoint of the great majority of my constituents. Let me take the livestock industry in which I am interested. The farmers of Canada raise hundreds of thousands of cattle that cannot be taken care of by the home market, excellent as that market is. We are told that the home market is the best market there is, and I believe it is. The stock raisers in the East have a home market which they can take care of. We have practically no home market in the West; 85 per cent of our home market is in the East, but the distance is so great that transportation charges eat up the profits, and we must look for wider outlets. Owing to the embargo maintained in the Old Country against feeder and store cattle, we must look to the United States for an outlet; and notwithstanding the duty of 30 per cent imposed by the Fordney tariff, we are selling thousands of Canadian cattle in the United States market, under this very grievous handicap. If we had reciprocity, that would be a great stimulus to the livestock industry of this country. To-day the hon. member for North Winnipeg (Mr. McMurray) stated that he had raised cattle, driven them eighty miles and sold them for 2 h cents per pound. The hon. gentleman, I notice, is not engaged in that occupation now; he has taken up the occupation of a lawyer. I do not blame him, because we shall all have to do so if present conditions continue.

Some hon. members say that there is very little difference between the two old political parties, and I know that that belief is prevalent throughout the country. The hon. member for South Oxford (Mr. Sutherland) referring to the Progressive party wondered where it got its origin. Well, let me tell him that the Progressive party originated from the conviction that there was no appreciable difference between the two old parties; the embodiment of that conviction is the membership of 65 in the Progressive group in this House. We had no faith in the Liberals, because their attitude in office has always been different from their professons out of office. I may be wrong, but I am informed that a great leader of the Liberal party once made the statement that if the Liberals were given

The Budget-Mr. Leader

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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?

An hon. MEMBER:

An awful penalty!

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF THE DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRO

Harry Leader

Progressive

Mr. LEADER:

I feel certain that this

would have a tendency to appreciably curtail many speeches of those who are fortunate enough to be absent during the greater part of the sittings.

There is a verse which I commend to the attention of hon. members; it runs something like this:

If you would be pungent, be brief.

For it is with words as with sunbeams,

The more they are condensed, the deeper they burn.

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