May 9, 1924

CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

We enjoy no advantages

in the British market.

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

Robert Forke

Progressive

Mr. FORKE:

Our goods do not enter the British market on the same terms as their goods come into Canada.

Topic:   THE BUDGET
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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

Great Britain gives us no preference at all; let us get that fact clearly. There was a slight preference which was in force for about a year as a result of the Geddes resolution, but we get no advantage in the British market to-day for it has been repealed by the present government in Great Britain.

Topic:   THE BUDGET
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PRO

Robert Forke

Progressive

Mr. FORKE:

How can you say that you

get no advantage when you get all that is going?

Topic:   THE BUDGET
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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

I say we get no advantage in the British market.

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

Robert Forke

Progressive

Mr. FORKE:

But you have free trade.

Topic:   THE BUDGET
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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

It is not we who have

free trade; they have.

Topic:   THE BUDGET
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PRO

Robert Forke

Progressive

Mr. FORKE:

You reap the benefits of

free trade in the British markets.

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

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

It is impossible to get

through that barrage. However, I must refute that assertion; we have no preference in the British market. On the other hand, we give to Great Britain 50 per cent, and in many cases a great deal more than 50 per cent, of an advantage in our market. The thing is all on one side. I have no objection to giving a preference to Great Britain; indeed, I want to extend that preference to South Africa, to Australia, to New Zealand, to India and to other parts of the Empire. But having said that, let me add that I want a preference in their markets too. I do not say that we should get a preference equal in every detail to that which we give them, but it should be commensurately so at least. And it is the function of the government to do its best to bring that about.

The Budget-Mr. Stevens

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

Robert Forke

Progressive

Mr. FORKE:

That is the doctrine which

Joseph Chamberlain tried to put over thirty years ago.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

Quite right; and my hon. friend interjects that remark at exactly the right point; for my next observation is this: Canada simply must have a tariff if she is to expand and develop. Conditions here are not similar to those that prevailed in England at the time of the repeal of the Corn Laws. The assumption, in the interruption of my hon. friend, is that conditions in Canada are the same as those that obtain in England and that we ought to fail in our advocacy of this policy because Joseph Chamberlain failed in Great Britain. But what are the facts? We have an abundance of raw material whereas England then imported most of hers. In the second place, we have food to export in very large quantities whereas England imported her food. And while our industries are new and undeveloped, the industries of Great Britain at that time were transcendent. Again, our population is sparse and scattered over a vast area; England's is large and compact. These facts cannot be escaped; they constitute an absolute difference in conditions as between Canada and Great Britain. And, Sir, these are the things that persuaded me years ago that the policy for Canada was the so-called National Policy of Sir John A. Macdonald. I am glad my hon. friend the leader of the Progressive party (Mr. Forke) interjected the remark he did, because I have under my hand a quotataion from John Bright which is apropos.

Topic:   THE BUDGET
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PRO

Robert Forke

Progressive

Mr. FORKE:

We have heard it before.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

My hon. friend is murmuring away; if he has some observation to make I shall be willing, as I always am, to yield him the floor. On February 2, 1839, speaking at Rochdale, at a great open air mass meeting John Bright moved the following resolution of which I would ask hon. members, and particularly my hon. friend, to take cognizance:

That the Corn Laws have had the effect of crippling the commerce and the manufactures of the country, have raised up rival manufactories in foreign countries, have been most injurious and oppressive in their operation with the great bulk of our population, and working classes have been grievously injured by this monopoly of the landed proprietors.

The Corn Laws were an agricultural protection; they protected two elements in England, the landed proprietors and their tenants. And you may discern all through the works on Bright and Cobden, all through their speeches and their biographies, from one end to the other, a prevailing dirge of condemna-

tion of these two elements, the proprietors and their tenants. Indeed, one of the things complained of at this very time was the fact that the tenants of the landed proprietors were getting wealthy at the expense of the manufacturers. Trevelyan, the biographer of Bright has this to say, following immediately on the resolution I have quoted, and it is interesting; it elucidates the resolution:

The tariff that organized the ruin of the British manufacturer did not even pretend to give him protection . . . only a very small part of the tariff was directed to excluding foreign goods of the kinds which they were producing. ... In 1840 out of more than twenty million pounds of revenue raised by customs, the amount levied on plea of protection of British manufacturers scarcely exceeded a million sterling.

The quarrel, then, was with the unreasonable Com Laws; and I myself think they were unreasonable. The country had grown, the population had increased, and Great Britain needed foreign corn. But she had persisted in the retention of these laws. And all through the discussion of the introduction of free trade into England, the Manchester Exchange, the Liverpool Exchange, the Birmingham Exchange, John Bright, Cobden and the whole movement from beginning to end defended the manufacturers as against the landed proprietors,-a condition that does not exist in this country at all. Now, I have outlined in comparison the natural conditions of the two countries; and similarly the social and economic conditions in Canada are exactly the reverse of what they were in England at the time of the repeal of the Com Laws.

I know there are those who say that we should reduce the tariff, do away with these onerous taxes, and levy an income tax. Let me examine that proposition briefly. Cobden and Bright, the great exponents and apostles of free trade, both opposed the income tax and opposed it vigorously, indeed bitterly. Bright opposed it in 1842 urging instead a property tax' on all land and buildings. Why did he urge that tax? Because the land and buildings belonged largely to the landed proprietors and not to the manufacturers. And furthermore, he advocated that the manufacturing industries should be exempt from the income tax. That, however, is by the way. Let me now turn to the income tax. If you introduce free trade you will have no industries, you will lower the earnings of the people, and you will reduce the source from which income tax to-day is very largely derived. That is an obvious fact, and my right hon. friend (Mr. Mackenzie King) ought to recognize it. Undoubtedly every move that is made to interfere with the prosperity of our industries, tends to diminish the source of supply of our income tax. On the other

The Budget-Mr. Stevens

hand, encourage industrial development stimulate manufacturing, give an opportunity for reward for private enterprise, and you will undoubtedly increase your income tax.

I do not think there can be any question of this. And I say to my hon. friends to my left, by all means keep an eye upon the income earnings of the industrial magnates of this country. I do not suggest for a moment that they should foe excluded from payment of income tax. But at least give them a chance to prosper so they can pay such a tax.

I believe also that the tariff should be generally applicable to all classes of industry.

I am absolutely opposed to the principle of this budget in reducing the tariff on certain industries instead] of dealing with industries as a whole. Canada is a large, sparsely settled country with industrial interests that perhaps are not exactly similar everywhere; but in the fullest sense of the term the tariff should apply equitably to all classes of industry. Furthermore, the tariff should be stable in its character, not subject to constant change and variation. Nothing is so harassing to a business or a financial man as to be constantly faced with the apprehension that overnight the tariff may be changed and large quantities of goods on hand or on order, seriously affected by such tariff changes. Nowadays a firm dare not issue a catalogue, for it does not know from hour to hour what tariff changes may be made. Tariff stability, voiced so eloquently by the Minister of Finance (Mr. Fielding)-whom we miss so much from this debate-is what we require to-day.

Now, Sir, I turn to a brief consideration of financial stringency. It is obvious, I think, to all of us that the troubles of Canada are not caused exclusively by tariff tampering. Those engaged in agriculture in Canada as in all other countries, are suffering severely, particularly the fruit growers and the wheat growers. The one-crop farmer always suffers more than the general farmer. In certain sections of California the grape grower is and has been suffering very severely. So, too, with the wheat grower of North Dakota and other states. The wheat growing section of Canada is suffering more than other sections, as is also the fruit growing industry of the Okanagan. The prairie farmers, for instance, complain, and I think their complaints are well founded, that they are heavily in debt and time loans are very hard to get and very dear. One difficulty that is constantly referred to by my hon. friends from 122i .

the prairie provinces is that the farmer there is heavily in debt and finds it very difficult indeed to get money.

Let me draw a brief parallel between the financial stringency in Canada and the international financial problem. We have two viewpoints internationally of this problem: One is exemplified in Great Britain, the other in Germany. Germany refused to acknowledge her war debt, she complained of the burden, and she indulged in repudiation so far as her internal debt was concerned, she also sought a moratorium, and she has been constantly asking to be relieved of her obligations. The longer she persists in that policy so much the more deeply is she becoming involved so far as her indebtedness is concerned. Great Britain took another view; she acknowledged her debts in full, she cheerfully agreed to pay them, and she attacked the problem by imposing very heavy taxation. As a result she inspired confidence in the financial world and funded her great debt in the United States.

Now, what is wanted in Canada in connection with this financial stringency to which I have referred is some sound policy which will enable the farmer of the West particularly to fund his current indebtedness. My hon. friends, I think, will all agree with me that that is one of the most crying needs of the West to-day. It does not profit us nor will it get us anywhere to say to those debtors that they needlessly went into debt in some cases, or that it was through over optimism in other cases; the fact is they are heavily in debt, this indebtedness is drawing large rates of interest, and the farmers cannot fund it. What is required to meet the situation is an opportunity of funding their current debts by term loans at reasonable rates.

Naturally the question arises: Where is

this credit to come from? During the past eight years there has been withdrawn from investment in mortgages and stocks and bonds about two billion dollars of Canadian capital, which has been re-invested in Victory bonds. That represents about the Canadian holding of our war debt. Let us pause to consider what the effect of that is. If you withdraw from mortgage investment the capital of insurance and loan companies and private individuals and tie it up in Victory bonds to the amount of two billion dollars, the money is virtually frozen credit. This is a serious thing. If time permitted I would be prepared to discuss this subject at length. Suffice it to say that one of the functions of parliament to-day is to take that great problem into consideration and find out if there

The Budget-Mr. Stevens

is not some way of liquifying this frozen credit and releasing it for re-investment in the funding of the western debt the encouragement of eastern industry, and so forth. Give to the farmer of the West a chance to fund his accumulated debts, and spread repayment over a long period of years, and you. will go a long way towards bridging the gulf which now exists between his cost of production and the low market value of his products.

Now, Mr. Speaker, I turn to another problem, the solution of which is really another aid to relieve depressed agricultural conditions as well as industrial stagnation, and that is transportation. I have already intimated that Canada has unparalleled railway facilities. What we do require very urgently is increased tonnage for our railways and a more equitable adjustment of freight rates. Tonnage may be increased very materially and very rapidly by the encouragement of industrial development in the Dominion. It has been demonstrated that for every ton of freight which goes out of a factory from three to twenty tons enter. In other words, eVery industry not only gives to the railway the tonnage of its output, but it gives the tonnage of its inward freight amounting to from three to twenty times as much.

I have under my hand an illustration of this, the facts in regard to a factory in western Ontario that has shut down because of the tariff readjustment proposed in the present budget. The company in question has been paying S 12.000 a year to the government in income tax, sales tax, and so on, and it has been paying freight to the extent of $80,000 a year. You are shutting that factory down; you are lowering the revenue of the National Railways and of the Canadian Pacific by $80,000; you are depriving the treasury of $12,000 in taxes, and you are destroying 29,000 tons of freight per annum. That is the case of a small factory making bolts and rods. It is one of the "trifles" of which we hear in connection with the tariff question, but, which, taken with innumerable other factories of a similar character similarly affected, has a mighty influence upon the industrial prosperity of the country.

Give the producer of Alberta and Saskatchewan an equitable freight rate to the Pacific comparable with its rates eastward and you will contribute much toward the solution of this problem. I am not going to enter into any argument as to that, but what I do waDt to point out is this: We have the problem of the tariff and the effect which {Mr. Stevens.]

interference with it may have upon traffic. We have the problem of financial stringency and we have the problem of transportation. It is the duty of this government, it is the duty of this parliament to examine into all these and to see whether something cannot be evolved that will constitute a remedy. I hold, Sir, that the difficulties and perplexities of the people may best be solved by erecting a substantia] protective tariff for the industrial life of Canada, thus giving an impetus not ' only to industry but also to other branches of commercial activity.

I have spoken too long, but will the House listen to me just for a moment while 1 give three word pictures of incidents that came under my own observation within the last two or three weeks? I was out to my home on the coast a week or two ago, and was returning on the Canadian National. As you proceed over the mountains eastward, the great Yeliowhead pass opens up and on either hand you have the towering, snow-capped peaks of the Rockies, a sight, Mr. Speaker, Which stirs the innermost aspirations of the soul. As we came out through the pass the sun was setting; gradually it dropped behind the mountain tops farther west. As its rays receded the valleys and the gorges on either hand turned to a deep purple and; then assumed an appearance of gloomy density, having the effect of sending a chill through the observer. But as I glanced up at the mountain peaks I saw that they were still lighted by the rays of the setting sun which had been withdrawn from the valley and it struck me that those great peaks were as beacons of light to encourage one to greater and better efforts. Then we came on eastward, and the second day we were passing through that forbidding territory in northern Ontario. That section is always a puzzle to me; it is baffling, and in some respects it is almost, I was going to say, repulsive. There we have the problem of northern Ontario with its lakes and its burnt-over forest lands. As we came along I saw a little cabin in a clearing of about five acres, and at the door stood a woman, cheery of countenance, and around her four little children clinging to her skirts and waving to the train as it went by. Out in the little patch of cleared land was the husband preparing the soil for his spring crop, and the thought came to me that this man with his wife and children was solving the problem of northern Ontario which has so long been baffling the statesmen of this country. Then there was another scene, set in a town of Ontario which I visited a few weeks ago.

The Budget-Mr. Eider

I went into the home of a man who for fifty years had worked in the same factory. This type of artisan is the despair of socialist agitators and economic faddists; they do not understand him; they cannot classify him. But there he was, a splendid Canadian citizen, over seventy years of age and still working in the factory where he had toiled for fifty years. I sat and chatted with him and with his wife. He took a great interest in parliament, looking upon it as an institution of great influence and power. I felt that I was in the presence of one who merited my homage, because his life was based upon very simple principles, and in following out those principles he was accomplishing a great deal. His life was that he honoured and revered his God, honoured his king and dealt honestly and faithfully with his fellow men.

These three incidents seem to me, Mr. Speaker, to be a fair picture of Canada. The glories of the Rockies and the beauty of our lakes and our rivers, the fertility of our soil and our great resources-these constitute the body of Canada. But the soul of the country is to be found in the lives and characters of those humble individuals who day by day are solving these problems while we very often sit and waste our time. I felt, Mr. Speaker, and I feel it now, that it ought to be a sufficient reward to any of us to be permitted to share in some measure in the shaping of the destinies of this great country, and in doing so to aim at making it worthy of the sacrifices and of the courage of those pioneers who in the prairies, in the woodlands and in the mountains, are devoting their lives to the development of Canada.

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

William Daum Euler

Liberal

Mr. W. D. EULER (North Waterloo):

Mr. Speaker, when the Speech from the Throne was under discussion some weeks ago I took occasion to give my views fairly fully on the principles involved in the budget now before the House. For that reason I propose to make my observations at this time as brief as possible.

If, Sir, there were no such thing as party politics, and if men were therefore able to judge of the annual financial statement and the proposals made by the Minister of Finance strictly on their merits, then I presume no budget ever framed by the most capable Minister of Finance would receive either unqualified approval or disapproval. I do not count myself an extreme partisan, and for that reason perhaps, I find in the present budget much that commends itself to me as well as proposals of which I do not entirely approve.

May I say at the outset that I sincerely congratulate the government on the surplus which they have declared for the year just closed. I know-and I see that the right hon. leader of the opposition (Mr. Meighen) is shaking his head,-that objection has been raised as to the bona fide character of the surplus. The hon. member for St. Lawrence-St. George (Mr. Marler) and the hon. member for West Lambton (Mr. LeSueur), whom I desire to compliment on a most excellent speech, temperately delivered and well reasoned, threw some doubt upon the character of the surplus. While they did not declare themselves explicity on that point or state definitely their reason for believing there was no surplus, yet I did gather from their remarks that in some mysterious way the expenditures made for the railways on capital account had some bearing upon the surplus. Now, Sir, I have made some little study of accounting and I think I have possibly some reason for saying I can form a business judgment with regard to matters of this kind, and I say that if the sum of $50,000,000 expended by the National Railways in the way of betterments has been entirely expended or partially expended in that way, it has no effect upon the surplus at all.

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

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

May I ask a question?

The hon. member knows I appreciate his intellect. We take a mortgage for the advance, do we not?

Topic:   THE BUDGET
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LIB

William Daum Euler

Liberal

Mr. EULER:

Yes.

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

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

Does the hon. member

consider that mortgage an active or a nonactive asset? ' .

Topic:   THE BUDGET
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LIB

William Daum Euler

Liberal

Mr. EULER:

I say that if the expenditures have been made out of these moneys for the purpose of adding to the assets, in the way of equipment and betterments to the railways, a purpose which will enter directly into the earning power of these roads-if they have been made for that purpose they do not affect the surplus in any way.

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

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

That is not an answer to the question.

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

William Daum Euler

Liberal

Mr. EULER:

Then I misunderstood the question.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE ACTING MINISTER OF FINANCE
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May 9, 1924