May 15, 1923

?

Some Hon. MEMBERS:

Hear, hear.

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

William Gawtress Raymond

Liberal

Mr. RAYMOND:

Let me give hon. members my point of view, and they will see whether that applies to my discussion of it. The tariff is very often discussed merely as a question of political economy, discussed by people who take a theoretical view of things. Most of us are aware that on the basis of mere theory free trade can be argued very successfully, especially upon the presumption that every other country is a free trade country. But as a theory, simply as a theory, it is a dead, cold thing; it is the stillborn child of parents who suffered from academic anaemia. As a theory, free trade is something that never could take its place in the comity of nations to do its part for Canada. When we speak of the free interchange of natural products between Canada and the

The Budget-Mr. Raymond

United States, then we are dealing with something which, if consummated, would somewhat change the aspect of affairs. But we are situated beside a great country, a country of many times our population, with large well organized and well established factories; a country with a high protective tariff against us. What, then, can we hope to do with free trade? We have heard hon. gentlemen opposite tell us that the United States is a free trade country, but when they say that it is evident they have not tried to sell any wheat there; if they had, they would have found a duty of 35 cents a bushel staring them in the face; they have evidently not tried to sell any cattle there. They have not tried to sell woollen garments there, because they would find on woollen goods an absolutely prohibitory duty. And the same applies to cutlery and many other articles. Situated as we are, therefore, we cannot hope to succeed if we have free trade while the United States maintains its present tariff policy.

I do not look upon the tariff purely as a question of political economy that can be argued on a theoretical basis. I regard it from another point of view entirely. It may be a wrong point of view, but I can look back over the history of Canada and I can see that my contention of what the tariff question really involves is amply borne out. As long ago as 1805, 118 years ago, there was a similar discussion going on in Montreal and throughout Canada, which was a small country then. It was considered that the town interests were separated in some way from the country interests, and the question of duties came up. One of the sentiments expressed on the occasion of a great banquet in that time was: "Here is to our agricultural and commercial interests; may they work harmoniously together and both realize their advantages and responsibilities." I think the same sentiment is necessary to-day. But from that time down to the present the tariff question has always been raised in Canada. Some people think it is a new thing, but there have been tariffs practically ever since Canada has been a country. If to cease to have this tariff means-as it does mean-to surrender our market, to give up our commercial weapon of negotiation; if it means to lay our country commercially helpless at the foot of a rival, I say it is contrary, Mr. Speaker, to the spirit and nature of the Canadian people. That is my argument; the tariff is not a question of theory, and it never can be made a question of theory. It is a study in natural psychology. And I would ask you to look at these Canadian people and

see what they are, see where they came from and the spirit of independence that they brought with them. You can go from one end of the country to the other. You can begin with those sturdy men who came from Scotland because they stood by the cause of the Jacobites and would never surrender, and who came over to Nova Scotia and that part of eastern Canada. You can take those people to whom I am, I suppose, by race more nearly related, so I will not say anything about them except that 't is said that the totem of their tribe is the bull dog on the flag and their motto "What we have we'll hold." No surrender has always been their motto. Or you can take those people who inhabit the western part of the country, and you have there a people of a strong, free, independent disposition, whose motto never could be surrender. If you take the people of the old historic province of Quebec why, Sir, the first military governor described them as the best and bravest people in the world-a man of an alien race, a man who belonged to the army that had been successful at the seige, Murray. That was his description of them, and there is nothing in their history from that day to this but carries out his words of that people-the best and bravest people in the world. Now, do you tell me that a people who have that blood of freedom flowing in their veins are going to surrender their market, throw down their boundaries and barriers and lay themselves helpless at the feet of a wealthy rival to the south of us? It is not to be thought of. It puts me in mind of the battle of St. Julien. If you want to see the concentrated essence of the Canadian people I would remind you of the post that was held by a Brantford boy. He got word during the hea' and struggle of that battle when men were falling thickly around him, "Hold the position at any cost"; and he sent back this answer, "We will hold the position till Hell freezes over." I quote that now because it is typical of the spirit of the Canadian people, and come before them in any way you like, bring down your tariff propositions in any way you please, with the duty off this or the duty oft that, but when it is a proposition to throw our markets at the feet of any commercial rival, I tell you what, gentlemen, you will never find it meet the approval of the Canadian people.

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

Robert James Manion

Conservative (1867-1942)

Hon. R. J. MANION (Fort William and Rainy River):

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LIB

Harold Putnam

Liberal

Mr. PUTNAM:

Would the hon. gentleman indicate what his conception is of the "proper

encouragement" to be given?

Topic:   THE BUDGET
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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

The Budget-Mr. Manion

ance in my section of New Ontario, and I

advocated this step to the minister.

Then, Sir, in regard to boots for cripples. It is a small duty it is true, but it is something that will be greatly appreciated by those who are affected. In this connection I have never been able to see why we

should not take off the duties on all appliances for cripples in this country. I do not know why those cripples, who are handicapped before the world to begin with, should not have, at least, the benefit of any remission of taxation which may possibly be given to them. I say this very feelingly, because in the past summer a carpenter in my city, who has a little boy paralyzed from the waist down, found it necessary to buy a wheel chair to send that little lad to school. He told me that he had to pay a duty of $30 on the chair. I took the matter up with the Deputy Minister of Customs and asked if there was not some way by which this could be remedied, but he told me that according to the law, it could not be remedied. It is time, at least as regards cripples, that we should do everything we can to lessen their difficulties in life. That is one of the ways in which it can be done, and the Minister of Finance shoidd extend this legislation as regards cripples' appliances and should carry it out completely.

There is another matter which I wish to lay before the Minister of Finance; unfortunately he is not in the House at present, but I hope the matter will be drawn to his attention. According to my understanding of the budget -and I hope I am wrong-after August 1, the sales tax will not be permitted to be passed on by large dealers. I say 1 hope I am wrong, in certain connections at least, and the following is one of them. The other day I had a letter from a large lumber dealer in Ontario, in which letter he pointed out that he had made large contracts amounting to millions of dollars, under the law as it was before the present budget was brought in. He claims that under this new legislation, if he is not permitted to pass on the six per cent sales tax, he will not be able to continue, that this will put him out of business. It would be at least fair to have the Minister of Finance bring in a resolution to protect men of that kind who have made contracts in good faith under the law as it was.

The fifth point to which I wish to refer and which is, I believe, necessary to build up this country, is that we should have a little less pessimism in Canada than we have had in the past. It is true that conditions in Canada have not been good. It is true that

all of us, not only the farmers on the land, but citizens in the cities, have been up against a very difficult proposition. But I do not think it is necessary for a man in trouble to stand on the housetops and tell his troubles to the whole world. It is true that a foolish optimism is sometimes worse than pessimism, but we have reason for being fairly optimistic in this Canada of ours, and I am going to take the liberty of dealing for five minutes, not with the dreams but with the actual accomplishments of this country.

1. As a wheat growing country, Canada stands third amongst the nations of the world. In wheat export, she stands first. Our total field crops amount to $1,000,000,000.

2. As regards our gold output, Canada stood second amongst the nations last year, with one-fifth of the world's production, Ontario surpassing even California.

3. Canada has the second-largest coal deposits in the world, and it is only a matter of time until our transporta.'ion difficulties are removed so that, at least, we may supply all our own fuel.

4. Canada stands third in production of silver in the world. Last year we produced 21,000,000 ounces, being surpassed by only the United States and Mexico.

5. Canada produces over 90 per cent of the cobalt produced in the world, 80 per cent of the nickel, and 80 per cent of the asbestos.

6. Canada possesses 18,000,000 horse-power of potential riches in waterfalls, and only one-sixth of that has been developed.

7. In pulp, paper and forest products, our exports last year amounted to $200,000,000 worth, or nearly as much as our exports of wheat.

8. Finally, we have millions cf acres of fertile land, fisheries on all sides, iron ore to the extent of hundreds of millions of tons, because of which there is no doubt the day will come, in the not very distant future, when Canada will be one of the largest iron-producing countries of the world; and we have a vigorous, virile people.

These are only a few brief facts showing why this country may feel optimistic, and it might be well for us to forget, to a certain extent, some of the pessimism that we have been displaying too freely in Canada.

In addition to that, the other day I read a .statement bv Doctor O. 1(7 Baker, an agricultural economist of the United States Department of Agriculture, in which he said that there is practically no more potentially agricultural land left unutilized in the United States, that does not involve unprofitable

The Budget-Mr. Manion

expense for reclamation and clearing. He pointed out that in the United States there is a movement to limit production. According to a foreign agricultural economist, in the great grain belt of southeastern Europe, the peasant [DOT] proprietor is lessening production. Therefore grain growers of Canada and Canadians generally may look to the future with a little more optimism. It is true that conditions in the West are not good, but the rest of the country has also been hard hit. There has been a great deal of hardship, not only on the prairie farms of the West, but in the cities and towns. A short time ago we had a discussion in this House as regards mortgages on the farms of Canada. To have a mortgage, one must at least possess something to mortgage, and a large proportion of the people in the cities and towns have nothing that they can mortgage. Even as regards those of them who have homes, seventy-five per cent have mortgages on them. It is true that we must do all we can to aid the West, and it is the desire of every one in this country to do so. Some arrangements must be made for longer credit. Apparently, from the evidence given before the Banking and Commerce committee, longer credits than the banks can give and at interest rates better than the farmers can get at the present time, are necessary on the western prairies. Transportation must be looked into, and as far as we can we must lessen transportation costs. Any unfairness in the grain trade must be removed.

But there are some lessons of history which the people of Canada cannot forget in dealing with questions of this kind, and one of those lessons is this, that the United States, under a protective tariff, has become an immense, powerful, highly developed nation, probably the most highly developed industrial nation in the world to-day. Canada and the United States resemble each other more closely than any other two countries in the world. We are like the United States in people, in area, in resources, in thought, in nearly every way in which it is possible to resemble the United States. Therefore, it would be worth while remembering that Canada can profit by the lessons which she can learn from the United States.

The absurd claim has been made that the United States has been built up under a free trade policy. I use the word "absurd" advisedly, because if the United States is a free trade country, so is Germany, with her sixty-five or seventy million people and her different kingdoms with no tariffs in between. So is France; so is Austria; so is Canada; so are

all those other countries. Russia with a larger area, would be a free trade country also. Free trade and protection refer to international trade, not to internal or home trade. A country which collects twenty to thirty per cent, or even more, upon the vast proportion of her imports, is certainly anything but a free trade country, and that is what the United States does. The following are some of the duties collected by the United States on some of its imports. I will name only ten lines of goods:

Cotton clothing, 30 per cent ad valorem.

Wollen goods, 25 to 40 per cent ad valorem.

Carpets. 20 to 50 per cent ad valorem.

Automobiles below, $2,000, 30 per cent ad valorem.

And those are the automobiles that the farmer and small dealers require.

Cutlery, 25 to 55 per cent ad valorem.

Oil cloth, 20 to 30 per cent ad valorem.

Kitchen utensils, 25 per cent ad valorem.

Wool blankets, 25 per cent ad valorem.

Agricultural products-the Fordney tariff.

In 1920, practically fifty per cent of all imports into the United States were dutiable. Under such conditions, the United States is certainly a protectionist country.

How has protection affected the United States? If hon. members will investigate any of the industries of that country, they will find that they have gone ahead by leaps and bounds. I am going to place on Hansard five of the United States industries.

In 1890, the tinplate industry in the United States was practically non existent; yet by 1920, thirty years later, they produced 3,000,000,000 pounds, and the imports which they had previously obtained from Wales were practically wiped out.

In 1890, the United States produced 4,000,000 long tons of steel. In 1920 they produced

42,000,000 long tons.

In 1890, the United States produced $480,000,000 worth in the manufacture of iron and steel. In 1920, they produced $3,600,000,000 worth, or nearly eight times as much.

The total manufactured products of the United States in 1890 amounted to $10,000000,000 worth, and in 1920 to $60,000,000,000 worth.

The value of the products of their farms in 1890 amounted to $3,000,000,000 worth, and in 1920 to $22,000,000,000 worth. This is probably of more interest to the farmers. These figures which I have given cover a short period of thirty years. Probably there is not a man sitting in this House who was not in existence when the first facts which I have given were occurring, and to-day the figures that I have quoted reveal that all these lines have gone up six, seven or eight times. In the case of

The Budget-Mr. Manion

dozens of other industries, anyone who cares to look up the Statistical Abstract of the United States will find that the same thing is true in regard to every one of them. It is true that the United States is practically selfsupporting because of the high production of all lines of goods in that country. But that is to my mind just another argument favourable to a moderate protective tariff. It is also true that free trade might temporarily assist the farmers of the West; but in my opinion, and as was pointed out by the hon. member who took his seat a few minutes ago, it would ruin to a great extent the industrial cities of the East. And those cities would not suffer alone; the farmers who live in the vicinity of every such industrial centre would be affected as well. Would it be wise for the West to be benefited through the ruin of the East? I would ask another question also, and I would have it clearly understood that I do so out of no disrespect whatever; I ask the question with the greatest deference to hon. gentlemen from the West. All the countries of the world with the exception of Great Britain have been and are protectionist, and England has adopted the protective principle in certain directions recently. But even though England did adopt free trade in 1840, the fact that no other country has adopted it, the fact that all the nations of the world have considered it a poor policy, compels this question: Are we to draw the inference that those people in the West of Canada who advocate free trade have inherited all tne wisdom of the ages, notwithstanding that they are alone in this matter?

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

Robert Forke

Progressive

Mr. FORKE:

Does my hon. friend imagine that the world has been governed by the maximum of wisdom during the last fifty years, when he considers the condition in which it is at the present tiime?

Topic:   THE BUDGET
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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Perhaps it has not been as well governed as it might have been, but I was referring to the tariff.

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

Robert Forke

Progressive

Mr. FORKE:

If the hon. gentleman followed my remarks yesterday he must hav" seen that I was contending that the tariff is the great bone of contention and the cause of ill-feeling, hatred, envy and jealousy, and in short is responsible for the condition cf the world to-day. I contend that the condition of the world at the present time has to a certain extent at least been caused by high tariff walls.

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

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

That is a matter of opinion. I think, personally, that the condition

of the world to-day is due mainly to the fact that the German Kaiser undertook to conquer it. That is my own idea.

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

Robert Forke

Progressive

Mr. FORKE:

Yes, under high tariff walls.

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

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

If my hon. friend wishes

to debate that question I can take it up with him. As a matter of fact the German Kaiser, under a high tariff wall, was conquering the world, and if he had exercised any sense he would have sat tight and conquered it commercially. Indeed, he was gradually encroaching upon England's commerce before the war. I have already on several occasions cited figures to prove that before the war Germany was outdistancing England in very many lines of commerce. She had gained upon England in many directions. For example, the basic industry of all countries is the production of iron and steel, and Germany had surpassed England in thirty years to a considerable extent in this industry. Germany, with her protective tariff, was surpassing England under a free trade policy; and there are very many serious-thinking Britishers who thought that England had been suffering to such an extent that it would be necessary for her to fall back upon the protective principle. I believe, too, that the time will come when she will adopt protection in many lines. There is this to be remembered about Great Britain. Great Britain is a small piece of land, 120,000 square miles in extent, which could be placed in about half the area of northern Ontario. England cannot produce raw materials on a large scale as can the United States or Canada. She must have free trade in raw materials and also to a certain degree in foodstuffs. Therefore what is good for England is not necessarily good for a country thirty or forty times its size, as Canada is.

Topic:   THE BUDGET
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PRO

Robert Forke

Progressive

Mr. FORKE:

But you told us that England would quit free trade.

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

And she has done so in

some respects. My hon. friend is a farmer. Would he tell me what he thinks of the protection given to industries in the United Kingdom now under the Key Industry Act.

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PRO

Robert Forke

Progressive

Mr. FORKE:

The protection which is

enjoyed by the industries in Great Britain at the present time is protection that is given to key industries. That is a little different from straight protection.

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

It is protection to the

extent of thirty or forty per cent, and is intended to keep out the products of Germany and all other European countries.

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PRO

Robert Forke

Progressive

Mr. FORKE:

Some protection has been

given in England to a few key industries.

The Budget-Mr. Manion

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Will the hon. gentleman tell me what the cattle embargo was? Was it a precaution against disease or was it not rather direct protection for the cattle raisers of Great Britain?

Topic:   THE BUDGET
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PRO

Robert Forke

Progressive

Mr. FORKE:

I think it was protection, all right.

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Then the hon. member admits that protection is given at least to many industries in the United Kingdom. I could recount many of the industries in Great Britain and show that the protective policy is being rapidly adopted in regard to a number of them. I do not think that Great Britain will ever go back to an absolute protective policy for the reasons that I have already given. The country is so small in area that she cannot produce on a large scale the raw materials that she needs for her manufacturers and the food that is required for her people. She must therefore of necessity resort to free trade to some extent. But the argument in regard to Great Britain, in view of these considerations, does not by any means apply to a country that is thirty or forty times her size, with immense natural resources awaiting development. Such a vast country could not adopt a free trade policy for reasons that would hold good in a country like Great Britain.

Topic:   THE BUDGET
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PRO

John Morrison

Progressive

Mr. MORRISON:

The hon. member stated a moment ago that the wisdom of this nation did not all lie in the West, and he added that the West had no right to ruin the East. I would ask him this question: Has the East any right to ruin the West by exorbitant taxation through the customs tariff?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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May 15, 1923