February 13, 1925

CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

I admit that the tariff is

sometimes a tax, but the Prime Minister makes it a general statement, threatening the people that if you raise the tariff in this country, you increase the taxes. I submit that you do not necessarily do anything of the kind. I am going to try to prove that further and I am sure my hon. friend will agree with me when I have done.

The tin-plate industry in the United States was something which I looked into some years ago. I referred to it in this House about five years ago and I looked up Hansard to refresh my memory as to the facts which

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are these: In 1890 there was in the United States no tin-plate industry to amount to anything and they imported 680,000,000 pounds of tin-plate, mostly from Wales. They put a duty on tin-plate being imported into the United States from Wales, and in 1913, 23 years later, they were importing, instead of

680,000,000 pounds, just 28,000,000 pounds, or a very small proportion of what they had been importing 23 years previously. In manufactured plate they were in 1890 producing only 2.000,000 pounds in the United States. In 1913, 23 years later, after they imposed their tariff, they were producing 2,000,000,000 pounds, one thousand times the amount, and prices had gone down. In addition to prices going down, they had supplied thousands of workers in the United States with work in that industry and they had actually driven the tin-plate industry of Wales nearly altogether out of business and forced many of the tin-plate workers of Wales to come to the United States to reside.

I am not satisfied to stop at that; I am going to give my hon. friends some more proofs. In 1867, steel rails in the United States cost $150 a ton. There was a duty on them, but they were importing too many, they felt, and they raised the duty in 1867, because, if members will remember, the United States became highly protectionist, as it has remained ever since, about 1861. In 1872, five years after they raised the duty, steel rails, instead of costing them $150 a ton, cost $112. Where in that case was the tax that the Prime Minister states the tariff is? In 1876, four years after that, steel rails cost only $39 a ton, or about one-quarter of what they cost in 1867. In 1885, still under the same tariff, they were costing $27 a ton, at which price they practically remained until prior to the war. Of course, the price of steel rails has gone up since then because the war has disarranged prices, but prior to the war the cost of steel rails remained at about $27 a ton. From 1867, with a low tariff, to 1885, with a high tariff, the price of steel rails decreased from $150 to $27 a ton.

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PRO

John Livingstone Brown

Progressive

Mr. BROWN:

Could the hon. member

give the corresponding prices in other countries from which those rails might have been imported during that time?

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

I am sorry I cannot do

that.

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PRO

John Livingstone Brown

Progressive

Mr. BROWN:

Would that not be necessary in order to prove the hon. member's point?

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

It would be, perhaps, if I had been comparing prices in different

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countries. What I am proving is that a tariff is not necessarily a tax; that under a tariff you can lower prices down to one-quarter and even down to one-sixth in that period of time. Further, the greatest producer of steel rails in the world before the war was the United States and also the greatest producer of iron and steel. Not only is that true, but it is also true that Germany, the most highly protected country in Europe, had surpassed Great Britain in the production of iron and steel while Great Britain was producing under free trade. Germany had undersold Great Britain in prices and oversold her in amount in ten of the most important countries in Europe, so that Germany must have been producing her goods at a cheaper price or she could not have ousted Great Britain from ten enormous markets of the world. I could quote Mr. Keynes and various other authorities. I could easily prove my facts, but I do not wish to go into that at the present time. Not only is what I have stated the case; but Sir Gilbert Molesworth, a British economist, stated in a book which he wrote, that between 1861 and 1883, a period of twenty-two years, under protection in the United States, cotton and woollen prices decreased 25 per cent. He gives a list of 214 articles showing the same result under protection with the home market. In other words, under a tariff protection you keep your home market for your producers and prices go down by competition amongst the manufacturers. What is much more important is that you have work and wages for your people instead of driving them to highly protected countries. Large volume production, with plenty of work and wages, is much more important than cheap importation. Of what value are cheap goods if the people of our country have not any money with which to buy them, as is the condition to-day? Cheap importation, I will not deny, will make things cheap. If you wipe away the tariff altogether, many things will be cheap. I am not claiming that what I have said is universally true, that prices do not go up. Some prices do go up; but what is the use of cheap goods if the people are out of work because of killing industry and they cannot buy cheap goods. As I have said before in this House, the cheapest countries in the world are invariably the poorest countries in the world. India and China are the cheapest countries in the world to live in. You can hire a labourer in India or China for probably five, six or eight cents a day. According to the labour wage, which is a good criterion of a cheap or a dear country, they are the cheapest and the poorest countries in the world with regard to the people. It is not cheapness we want; we

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want work and wages for our people to keep them at home in this country. How can you possibly get work and wages for your people and keep your industrial plants going if you allow importations from the cheapest countries in the world which have a low wage rate, because hon. members will remember that, in reply to a question put by me and also, I think, by the hon. member for Red Deer (Mr. Speakman), the Minister of Labour (Mr. Murdock) said that for all classes of labour wage rates in Europe were from one-half to one-fifth the wage rates in Canada. Therefore, with low wages, with low exchange, so that European money does not begin to be worth the amount of money ours is worth, and with lower standards of living than our people will put up with, how can you expect our workers to compete? They cannot compete under those circumstances and at the same time maintain their standard of living. Only under a system of protection is it possible to safeguard our labourers against the low labour costs, the low standards of living, and the low exchange of Europe, and of Asia too, when the countries in that part of the world have begun to produce on a large scale. And in that regard, it is evident that those countries are forging ahead rapidly, particularly Japan. Suppose some particularly brilliant genius arose, let us say, in China and began to exploit the three hundred or four hundred millions of people there, drawing upon them for labour and hiring them at a few cents a day: what chance would the working man in Canada have of surviving under such circumstances? Would my hon. friends still advocate free trade in Canada in that event?

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PRO

Arthur John Lewis

Progressive

Mr. LEWIS:

What about the high cost

of labour in the United States? Do we need protection from that ?

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

Yes, because of the fact

that the factories in the United States produce on so large a scale. My hon. friend from Vancouver Centre (Mr. Stevens) gave a very apt illustration when he pointed out that in the case of a large population it is possible to manufacture more cheaply than we are able to do in this country, so that the goods produced can be dumped into Canada to the disadvantage of the local product. The hon. member gave an illustration with reference to Sparks street which I need not repeat. The fact, however, is that because in the United States they are able to manufacture on a large scale, and because they frequently have a surplus of goods which they do not know what to do with, they are able to interfere materially with our market here; rather than carry

their goods to the following year they dump them here. You may get cheap goods for a little while until the home industry which produces that particular commodity is put out business, but once the Canadian business is destroyed you may depend upon it that the exporters in the United States will put up their price and the consumer here will be worse off than before.

Some hon. gentlemen to my left have described the tariff policy of the party led by my right hon. friend (Mr. Meighen) as being as high as Hainan's gallows. This is absurd; our policy is nothing of the kind. The policy which this party advocates is a tariff sufficiently high to give our manufacturers and producers in various departments of industry a fair opportunity to compete with those of other countries. That is our policy, and nothing more than that. Let me go further. Speaking for myself-and I have no doubt that I express in this regard the views of my right hon. leader as well as of other hon. gentlemen on this side-I will say that the policy I advocate is qualified to this extent, that so soon as it is shown that any industry in this ountry is taking an unfair advantage of the tariff I am prepared to advise the taking off of the tariff on the products of that particular industry, no matter what it might be. And that is the advantage of a tariff commission such as is suggested by my hon. friend whose resolution regarding tariff is on the order paper.

A fact which has impressed me rather favourably this session is the marked extent to which hon. gentlemen to my left have avoided the advocacy of free trade. That I take it is due to the favourable condition in regard to wheat, which has increased in value to $2 a bushel. Personally, I hope that the price of wheat will stay up; I sincerely trust that it will remain at least $1.50 or $1.75, or even $2. I am anxious to see my friends in western Canada make a profit on their production, because living as I do at Fort William, which is tributary to the west, I naturally want to see that section of the Dominion prosperous. Indeed, Mr. Speaker, I am convinced, as I am sure every hon. gentleman must be, that unless every part of the country prospers, the Dominion of Canada as a whole cannot hope to advance. I repeat, therefore, the hope that the price of wheat will stay up; once it is established on a reasonably permanent basis of from $1.50 to $2, say, so that the farmers of western Canada may make a fair profit, I am sure that we shall have no more tariff agitation than we experienced in the west before the war. Why, in 1917 there was only one

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man from the west who talked about the tariff -I refer to Dr. Michael Clark of Red Deer. His was the lone voice in the wilderness and he had practically no support in the House except possibly from my hon. friend for Marquette (Mr. Crerar), who occasionally came to his assistance. Generally speaking, Dr. Michael Clark was the only absolute free trader in the House; and my belief is that if we have a proper price for wheat from now on we shall hear less and less about the tariff question, which I believe will cease to agitate the minds of the people in the prairie provinces, who will come to see, what is an absolute fact, that the tariff has done them very little injury. As a matter of fact, has the tariff had any effect either in raising the price from SI to S2 or in lowering it from $2 to SI? It has had no such effect; and, as I say, if the farmers of the west are assured a reasonable return for their wheat they will be inclined to take a correspondingly reasonable view of conditions in the east and be prepared to accept a fair tariff which will operate to the advantage of the whole country, benefit-ting not only the manufacturer in eastern Canada but as well the farmers who live in the vicinity of the manufacturing plants.

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LIB

James Joseph Hughes

Liberal

Mr. HUGHES:

Suppose the policy my

hon. friend advocates is nationally sound, and suppose we take it for granted that the manufacturers of Canada do not want to take advantage of the customs duties and raise their prices accordingly, would my hon. friend recommend that the excise duty be raised to about the same figure as the customs duty on similar articles?

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

I am not sure that I quite understand the question, but if you put a customs duty on goods coming in and put an excise duty on the same goods produced in the country, you simply have free trade. That is not protection.

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LIB

James Joseph Hughes

Liberal

Mr. HUGHES:

You are protecting the

home market.

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

No, not if you impose an excise tax. Now, I think I have submitted to any open-minded man in this House, or woman either, sufficient proof that the tariff is not necessarily a tax, as has been so generally expounded by the Prime Minister in his western tour and in this House.

When I began to discuss the tariff I was giving reasons for the present deplorable conditions that prevail in this country,-depressed business, unemployment, discontent, and discussions regarding secession, annexation and all that sort of thing. These are condi-

tions such as have not existed in this country for many years. So far as I can remember, looking back over Canadian history, a similar state of affairs has not been seen in Canada since 1878. Between 1873 and 1878, such conditions did exist, but we have not had any recurrence of them from that time on. I submitted in explanation of the present situation two main reasons: first, the unstable tariff policy of this government which, as I believe, I have reasonably proved has been the means of strangling the business of the country and keeping the working men idle; and secondly, the unnecessary expenditures of this government, entailing an unnecessarily high taxation which is weighing as a heavy burden on the business men and as well, to a certain extent, on the labouring classes. My hon. friend opposite (Mr. Marler) yesterday made an excellent speech in which he sought to prove that the government wTas in no way to blame at all for the high taxation, inasmuch as, according to him, most of it was uncontrollable. He made a very fine defence of the government and tried to discharge it of all responsibility in this connection. And I think I am but drawing reasonable inference from his remarks. Now, after making the sweeping statement that the government has been expending money unnecessarily, I should certainly be open to criticism if I did not substantiate this generalization with a few particulars. I shall therefore cite six instances in proof of the statement that expenditures have been made which could have been avoided. Those few illustrations will, I think, suffice to show that I can back up what I have said. First of all there was an increase in the Auditor General's salary from $6,000 to $15,000 a year. For many years we had an Auditor General who was quite satisfactory and who was content to perform the duties of his office at a salary of $6,000 a year. This government, however, appointed an estimable gentleman, against whom let me assure the House I have absolutely nothing to say, a gentleman from Montreal, at $15,000, an increase of $9,000. This I say is an unnecessary increase, for as Mr. Fraser, his predecessor, was willing to perform the duties of the office at $6,000, I submit that it would not have been difficult to get a good man at $8,000 a year to fill the post. Then there was the trip to Wembley of the whips of the Liberal party and the Progressive party, covered by a vote of $20,000 passed last session. I do not believe that ever in the history of our country has a more disgraceful expenditure of public money been made. I do

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not know any reason why a member of this House should get a trip to the Wembley exhibition at the cost of the taxpayers. I have said that on the stump, and I feel it is only fair that I should say it here.

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CON

Arthur Edward Ross

Conservative (1867-1942)

Mr. ROSS (Simcoe):

Did not the chief whip of the party to our right speak in favour of the vote at the time?

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

I am not sure that he

did not support it; but he did not take the trip. I may tell my hon. friend further that every member of this section of the House, perhaps with his exception, voted against it; every member of my hon. friend's party, with the exception of six or seven, supported it, and all the members of the government so far as I remember.

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LIB

James Murdock (Minister of Labour)

Liberal

Mr. MURDOCK:

Do you hold the same view in regard to the trip which your hon. friend from St. John City (Mr. MacLaren) and one of your own party in the upper house with others made to South Africa?

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

That trip was not paid

for by Canada; it was paid for by South Africa.

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LIB
CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

I am discussing Canada,

not South Africa. I can quite understand that my hon. friend and any other member of the government would wish to import South African affairs into this discussion to get away from the problems at home.

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CON

Murray MacLaren

Conservative (1867-1942)

Mr. MacLAREN:

As I have been referred to by the Minister of Labour (Mr. Murdock), I should like it cleared up whether it is correct that he stated that the Canadian government paid my expenses to South Africa.

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LIB

James Murdock (Minister of Labour)

Liberal

Mr. MURDOCK:

No, far from it. I never thought of such a thing. I have been told that the government of South Africa spent several hundred thousand dollars in entertaining you and other gentlemen from various parts of the Empire, and I wanted to know if the same principle would be held by my hon. friend from Fort William to apply to the South African expenditure.

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CON

Robert James Manion

Conservative (1867-1942)

Mr. MANION:

My hon. friend will have

to go and ask the people of South Africa. I have nothing to do with their expenditure. I am discussing Canadian affairs. We have quite enough to do to handle the problems of our country without meddling with the affairs of other parts of the Empire.

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February 13, 1925