April 30, 1925

IND

William Charles Good

Independent Progressive

Mr. GOOD:

Just one little section as my hon. friend can see.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

I understand that, by unanimous consent, the hon. gentleman can place this extract on Hansard.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

I am desirous of saving all the time of the House that I can without destroying the force of my argument. The extract is as follows:

Chapter VII.-Petition of the Manufacturers of Candles, Wax-Lights, Lamps, Candlesticks, Street Lamps, Snuffers, Extinguishers, and of the Producers of Oil, Tallow, Resin, Alcohol, and, Generally, of Everything Connected with Lighting.

To Messieurs the Members of the Chamber of Deputies.

Gentlemen,-You are on the right road. You reject abstract theories, and have little consideration for cheapness and plenty. Your chief care is the interest of the producer. You desire to protect him from foreign competition, and reserve the national market for national industry.

We are about to offer you an admirable opportunity of applying your-what shall we call it?-your theory? No; nothing is more deceptive than theory-your doctrine? your system? your principle? But you dislike doctrines, you abhor systems, and as for principles you deny that there are any in social economy. We shall say, then, your practice-your practice without theory and without principle.

We are suffering from the intolerable competition of a foreign rival, placed, it would seem, in a condition so far superior to ours for the production of light that he absolutely inundates our national market with it at a price fabulously reduced. The moment he shows himself our trade leaves us-all consumers apply to him; and a branch of native industry, having countless ramifications, is all at once rendered completely stagnant. This rival, who is no other than the sun, wages war to the knife against us, and we suspect that he has been raised up by perfidious Albion (good policy as times go); inasmuch as he displays towards that haughty island a circumspection with which he dispenses in our case.

What we pray for is, that it may please you to pass a law ordering the shutting up of all windows, skylights, dormer-windows, outside and inside shutters,

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curtains, blinds, bull's-eyes; in a word, of all openings, holes, chinks, clefts, and fissures, by or

dirough which the light of the sun has been in ise to enter houses, to the prejudice of the meritorious manufactures with which we flatter ourselves we nave accommodated our country-a country which, in gratitude, ought not to abandon us now to a strife so unequal.

We trust, gentlemen, that you will not regard this our request as a satire, or refuse it without at least previously hearing the reasons which we have to urge in its support.

And, first, if you shut up as much as possible all access to natural light, and create a demand for artificial light, -which of our French manufactures will not be encouraged by it?

If more tallow is consumed, then there must be more oxen and sheep; and, consequently, we shall behold the multiplication of meadows, meat, wood, hides, and, above all, manure, which is the basis and foundation of all agricultural wealth.

If more oil is consumed, then we shall have an extended cultivation of the poppy, of the olive, and of rape. These rich and exhausting plants will come at the right time to enable us to avail ourselves of the increased fertility which the rearing of additional cattle will impart to our lands.

Our heaths will be covered with resinous trees. Numerous swarms of bees will, on the mountains, gather perfumed treasures, now wasting their fragrance on the desert air, like the flowers from which they emanate. No branch of agriculture but will then exhibit a cheering development.

The same remark applies to navigation. Thousands of vessels will proceed to the whale fishery; and in a short time we shall possess a navy capable of maintaining the honour of France, and gratifying the patriotic aspirations of your petitioners, the undersigned candle-makers and others. *

But what shall we say of the manufacture of articles de Paris? Henceforth you will behold gildings, bronzes, crystals, in candlesticks, in lamps, in lustres, in candelabra, shining forth, in spacious ware-rooms, compared with which those of the present day can be regarded but as mere shops.

No poor resinier from his heights on the seacoast, no coal miner from the depth of his sable gallery, but will rejoice in higher wages and increased prosperity.

Only have the goodness to reflect gentlemen, and you will be convinced that there is, perhaps, no Frenchman, from the wealthy coalmaster to the humblest vendor of lucifer matches, whose lot will not be ameliorated by the success of this our petition.

We foresee your objections, gentlemen, but we know that you can oppose to us none but such as you have picked up from the effete works of the partisans of free trade. We defy you to utter a single word against us which will not instantly rebound against yourselves and your entire policy.

You will tell us that, if we gain by the protection which we seek, the country will lose by it, because the consumer must bear the loss.

We answer:

You have ceased to have any right to invoke the interest of the consumer; for, whenever his interest is found opposed to that of the producer, you sacrifice the former. You have done so for the purpose of encouraging labour and increasing employment. For the same reason you should do so again.

You have yourselves obviated this objection. When you are told that the consumer is interested in the free importation of iron, coal, com, textile fabrics- yes, you reply, but the producer is interested in their exclusion. Well, be it so; if consumers are interested in the free admission of natural light, the produce*s

of artificial light are equally interested in its prohibition.

But, again, you may say that the producer and consumer are identical. If the manufacturer gain by protection, he will make the agriculturist also a gainer; and if agriculture prosper, it will open a vent to manufacturers. Very well; if you confer upon us the monopoly of furnishing light during the day, first of all we shall purchase quantities of tallow, coals, oils, resinous substances, wax, alcohol-besides silver, iron, bronze, crystal-to cany on our manufactures; and then we, and those wlio furnish us with such commodities, having become rich will consume a great deal, and impart prosperity to all the other branches of our national industry.

If you urge that the light of the sun is a gratuitous gift of nature, and that to reject such gifts is to reject wealth itself under pretence of encouraging the means of acquiring it, we would caution you against giving a death-blow to your own policy. Remember that hitherto you have always repelled foreign products, because they approximate more nearly than home products to the character of gratuitous gifts. To comply with the exactions of other monopolists, you have only half a motive; and to repulse us simply because we stand on a stronger vantage-ground than others would be to adopt the equation + X + = -'* in other words, it would be to heap absurdity upon absurdity.

Nature and human labour co-operate in various proportions (depending on countries and climates) in the production of commodities. The part which nature executes is always gratuitous; it is the part executed by human labour which constitutes value and is paid for.

If a Lisbon orange sells for half the price of a Paris orange, it is because natural, and consequently gratuitous, heat does for the one what artificial, and therefore expensive, heat must do for the other.

When an orange comes to us from Portugal, we may conclude that it is furnished in part gratuitously, in part for an onerous consideration; in other words, it comes to us at half-price as compared with those of Paris.

Now, it is precisely the gratuitous half (pardon the word) which we contend should be excluded. You say, How can national labour sustain competition with foreign labour, when the former has all the work to do, and the latter only does one-half, the sun supplying the remainder? But if this half, being gratuitous, determines you to exclude competition, how should the whole, being gratuitous, induce you to admit competition? If you were consistent, you would, while excluding as hurtful to native industry what is half gratuitous, exclude a fortiori and with double zeal, that which is altogether gratuitous.

Once more, when products such as coal, iron, corn, or textile fabrics are sent us from abroad, and we can acquire them with less labour than if we made them ourselves, the difference is a free gift conferred upon us. The gift is more or less considerablein proportion as the difference is more or less great. It amounts to a quarter, a half, or three-quarters of the value of the product, when the foreigner only asks us for three-fourths, a half, or a quarter of the price we should otherwise pay. It is as perfect and complete as it can be, when the donor (like the sun in furnishing us with light) asks us for nothing. The question, and we ask it formally, is this: Do you desire for our country the benefit of gratuitous consumption, or the pretended advantages of onerous production ? Make your choice, but be logical; for as

long as you exclude, as you do, coal, iron, corn, foreign fabrics, in proportion as their price approximates to zero, wrhat inconsistency it would be to admit the light of the sun, the price of which is already at zero during the entire day!

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I have also a very short quotation dealing with the same subject that I should like to quote from a very interesting book by a Belgian named Henri Lambert, who was quite conspicuous during the war. The title of the book is Pax Economica. It is a study of the relationship between international trade and international peace, and I think that is an important subject. I quote the following short extract from this book; page 37:

To deny the benefits of international exchange-and consequently of free exchange-is, in fact, to deny the advantages of division of labour and the increase in productiveness resulting therefrom. It is, therefore, to deny that which is evident. A country which determines to be self-supporting must resign itself to an inferior productivity and standard of wealth. If such a country continues to prosper, it will be by reason of natural advantages, because of high intelligence and labour energy of its inhabitants; because of interior free exchange, and despite its efforts to be self-sustaining.

Now I pass on to the next section of my argument. If the protectionist philosophy and argument are so completely discredited, how comes it that protection has had and continues to have such a strong hold on the world? That is an interesting question and one of paramount importance and I propose to submit for the consideration of hon. members some reasons why, despite the logical discrediting of the protective philosophy, it yet has such a hold upon people generally. The motion my right hon. friend the leader of the opposition (Mr. Meighen) has on the order paper declares what is an obvious fact, that the protective system is widely extended and is very popular. I do not deny that. I want to examine why, in the face of so many good reasons against it, it is so popular. The causes of this condition I shall enumerate. In the first place, the benefits of protection are localized and concentrated while the losses are widely diffused. On this point I desire to read one paragraph from Henry George's book Protection or Free Trade which I commend to the House:

Those who are specially interested in protective tariffs find it easy to believe that protection is of general benefit. The directness of their interest makes them active in spreading their views, and having control of large means-for the protected industries are those in which large capitals are engaged-and being ready on occasion, as a matter of business, to spend money in propagating their doctrines, they exert great influence upon the organs of public opinion. Free trade, on the contrary, offers no special advantage to any particular interest, and in the present state of social morality benefits or injuries which men share in common with their fellows are not felt so intensely as those which affect them specially.

1 icammteaid that to my Conservative friends as a very cogent and clear statement of an obvious fact. Let me give an example to illustrate the point, further. Suppose we consider the tariff on boots and shoes, in which the 174J

Minister of Justice (Mr. Lapointe) is so much interested, or at least in which he is stated to be so interested. Suppose that through a tariff on these articles a certain manufacturer stands to gain $25,000 a year; and suppose that by virtue of the same tariff the consumers of boots and shoes stand to lose $50,000 a year. Divided among 200,000 consumers that would represent a loss of 25 cents each. Now, the individual consumer would likely say that this was a trifle about which he would not worry. The consumers are unorganized and a loss of 25 cents each probably would not occasion any great concern among them. But 7 a.m. $25,000 a year to one man is a considerable sum and he would naturally fight for it; he would contribute to party campaign funds and so get his quid pro quo. That is an illustration of the truth that has been so well stated by Henry George in the extract I have read.

I should like also to submit a very interesting editorial from the Montreal Witness which appeared a few years ago, during the 1921 election campaign, I think.

WHERE IS THE CONSUMER?

It is related that once, in the long departed golden age of the world, it was agreed among mankind that they should all shout at the same moment. It was thought that thus the sound might reach the moon, and provoke some response from the inhabitants of that sphere. The time for the universal shout, arrived, the moment when the tremendous clamor should burst forth. What happened? Nothing! A woman in Norway and a boy in Spain were the only two who opened their mouths. Ah the rest were listening.

Something of this kind has overtaken the consuming multitude in Canada as regards the sittings of the Tariff Commission. The manufacturers are there. They sit in a row outside the rail-lumber, cloth, boots, pickles, glass, reapers, cement-waiting their turn. . As one sits down the next jumps to his feet. But where are the millions whose daily toil is burdened to provide the prosperity these gentlemen cherish so devoutly?

Can no labourer be pried loose from his spade for an hour or so to tell the commission that these well-fed producers are all riding on his shoulders? His hat, his boots, his braces, his socks, his overalls, the spade he wields, the material and furniture of his narrow apartment, are just so many pipe-lines from his lean purse to their fat pocket books. He cannot enter a store but they accompany him. No purchase of his is so small but they take part of the money he lays down. And they attend the session of the Tariff Commission to complain that if the labourer did not support them they would starve to death.

Alas, the consumer is so numerous that he is anonymous. Unorganized, scattered, hard-worked, with no funds wherewith to buy legal brains and literary skill, he perseveres at his digging. And so the country is delivered from the havoc and devastation of a lowered tariff and the gentlemen manufacturers are saved from starving to death.

Let me. now submit again this consideration, that public policies on tariff matters should be based on the interests of consumers and not on the interests of producers; that is the only basis on which we can reconcile the interests of all the people as citizens.

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My second reason is this: that the protectionist appeal is directed to local or personal selfish interests. This to some extent overlaps on the preceding reason, but I should like to direct the attention of the House in that connection to the obvious fact that very often producers get an exaggerated notion of the benefits of protection. For instance, it is not the total nominal protection which ought to interest any producer, from his own selfish point of view; it is the net protection. Indeed the ex-Minister of Finance (Sir Henry Drayton) in his address some time ago pointed out to the House that certain brass manufacturers had a protection of 10 per cent while they had to pay an extra price, owing to a tariff of 15 per cent on their raw materials, and he justly claimed that their net protection had vanished. Our protectionist friends are going to go around the country making campaign promises of this, that and the other thing to each individual community. The appeal will be an appeal to the selfish interests of the particular community or industry, and they are going to forget or ignore the fact, as their listeners will forget or ignore the fact, that protection given in one locality will nullify the protection given in another. I seriously commend that to the consideration of my hon. friends. If I take any part in the campaign I shall call the attention of the electors to the fallacy of that argument, and I can point to the ex-Minister of Finance himself as elucidating that principle, in his address. Take it in connection with the manufacture of tin plate and of tin cans, a very important industry in this country in connection with fruit growing. If my Conservative friends are going to offer protection to the manufacturer of tin cans, say, to the extent of 30 per cent, and the same to the manufacturer of tin plate, what will happen to the first offer? It will be pretty well in the nature of a gold brick, I take it.

We have heard for many years that famous phrase, " Adequate protection to all Canadian industries." One of the first political meetings I attended was addressed by Sir Robert Borden, and that was his stock phrase, his catchword on that occasion. It is a very plausible, a very attractive slogan, but what is there in it when you come to analyze it coldly and dispassionately? What would it really be like if we had "adequate protection " for all Canadian industry, if the farmers were protected from exploitation by the manufacturers just as much as the manufacturers were protected from exploitation by other manufacturers either inside or outside the country? What benefit would " adequate protection" confer, if it were possible, which it is not? Would it be worth while? I do

not see that it would, or that it -would confer any benefit upon any industry. I have had in my mind for many years this picture of " adequate protection to all Canadian industry ": I picture a ring of snakes each swallowing the other by the tail at the same rate. We must postulate that each snake starts at the tail of the one in front and swallows at the same rate so that none has any advantage over the other. What is going to happen? Will hon. members use their imagination? Then they will see a stoppage in the process at some time or other. That is just about what adequate protection to all Canadian industry would be like if it were possible. But it is not possible. I appeal to my Conservative friends, can they protect local industry'; can they protect the farmer, the wheat grower when he exports the great bulk of his products? Can they protect half the industries of Canada? Let them start out to apply this plausible catchword, this attractive policy, to Canadian industry, and what is going to be the result? Simply that the fellows that can pull the wires best are going to get the plums. The leader of the opposition when he comes to debate his motion is going to claim that he can protect the farmer, can protect everybody; but I say he cannot do it, and if he could do it, it would be useless to all concerned.

Now, my third reason is as follows: Protection develops into economic militarism. I want to submit to the House in that connection a concise expression of opinion from an English economist, J. A. Hobson, in his book, Democracy After the War. I quote:

The explanation lies in the opposition between the interests of certain classes within each nation and the welfare of the nation as a whole, and in the ability of these classes to impose their class interests upon the statecraft of their country. Protection is a bad policy for a nation. It diminishes its total output of wealth, distributes it unfairly, imposes a secret, onerous and wasteful method of taxation, breeds political corruption. establishes monopolies and provokes illwill and quarrels with other nations. But it is a good policy tor capitalists in certain well organized industries, who, by their political pressure can frame a tariff that enables them to raise their prices and increase their profits at the expense of the weaker industries, and the consuming public. A part of the illicit profits which it yields can be applied to maintaining and enforcing the political pull and to spreading propaganda representing protection as a sound national and imperial policy. The ill-will which tariffs beget in surrounding nations and the reprisals they evoke go to feet the delusion that trade is fundamentally a form of competition, not of co-operation, and that nations are hostile competitors. The diplomatic and sometimes the military conflicts which ensue from tariff wars confirm this delusion. So protection passes from the position of an unscrupulous scheme of class plunder into that of a patriotic public policy. Finally, giving favouring circumstances, it can be rivetted upon the state as a political and military necessity, for states which

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stop the natural courses of trade with neighbours, cripple their development, " steal " their markets, and othenvise inflict economic injuries, live in fear lest the injured interests in these neighbour states may be strong enough to coerce their governments into forcible intervention.

Let me recall in that connection the economic rivalry between Great Britain and Germany prior to the Great war, and the consequence of it. The Germans wanted " a place in the sun "; and what has this nation, and what have other nations sacrificed? I submit, Mr. Speaker, that the protectionist idea, fructifying in that way was largely responsible for that awful world catastrophe. I proceed:

Given a group of powerful states, each controlled in Jts fiscal and its foreign policy by strong business interests, it is easy to perceive that a generally dangerous situation emerges. Each state, considering the possibility of invasion on the part of a foreign power or group of powers, must look not merely to its forcible but to its economic defences. So a national economy of industrial, agricultural and commercial self-sufficiency assumes the guise of a vital policy, and permanent protection is established as its chief instrument. Under these conditions protection becomes an essential feature of national defence, an economic militarism.

I submit to the House, and to the Conservative party in particular, that there is the goal towards which they are heading-international warfare and world catastrophe. They are heading the wrong way, I think their motives are sincere; I am not questioning the sincerity of protectionists at all, many of them are my personal friends, but I say their philosophy is wrong and is heading the world for disaster. Now I come to the main and last point of my argument.

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Some hon. MEMBERS:

Hear, hear.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

I am afraid it will be longer

than some of my hon. friends would wish, but I will get through it as quickly as I can. The chief reason why protection has such a hold upon the modern world is that the doctrine of free trade as currently conceived, preached, and applied is hopelessly inadequate to meet the actual needs of present-day society. I will go that far with my Conservative friends, and I will go that far in criticism of some of my friends on the other side of the House, that their current conception of free trade is hopelessly inadequate and hopelessly unable to meet the needs of the present day. I think that the protectionists are making an honest effort in a misguided, ill-advised way to meet an actual need. Let me elaborate that thought.

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An hon. MEMBER:

Here is another book.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

Yes, Mr. Speaker, I shall

have to refer to books. Books are my friends,

and I would like to feel they are the friends of everyone who wishes to widen his acquaintance in the worlds of place, and time.

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LIB

Lewis Johnstone Lovett

Liberal

Mr. LOVETT:

Will my hon. friend tell

me when (he intends to break .that new ground?

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

I am breaking new ground now if my hon. friend could only see it.

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An hon. MEMBER:

Break it with the Brantford plough.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

I am of the opinion, Mr. Speaker, that I might conclude my argument more quickly if I were allowed to quote from this book, which expresses the point more clearly, more emphatically, and more concisely than I could express it. I shall quote from Henry George's book on Protection or F'ree Trade. The following is from his chapter on The Inadequacy of the Free Trade Arguments:

Free traders usually attribute the persistence of the belief in protection to popular ignorance, played upon by special interests. But this explanation will hardly satisfy an unbiased mind. Vitality inheres in truth, not in error. Though accepted error has always the strength of habit and authority, and the battle against it must always be hard at first, yet the tendency of discussion in which error is confronted with truth is to mfike the truth steadily clearer. That a theory which seems wholly false holds its ground in popular belief despite wide and long discussion, should prompt its opponents to inquire whether their arguments have really gone to the roots of popular belief, and whether this belief does not derive support from truths they have not considered, or from errors not yet exposed, which still pass for truths-rather than to attribute its vitality to popuiar incapacity to recognize truth.

I shall hereafter show that the protective idea does indeed derive support from doctrines that have been actively taught and zealously defended by the very economists who have assailed it (who, so to speak, have been vigorously defending protection with the right hand while raining blows upon it with the left), and from habits of thought which the opponents no less than the advocates of protection have failed to call in question. But what I now wish to point out is the inadequacy of the arguments which free traders usually rely on to convince workingmen that the abolition of protection is for their interest.

I had intended to quote somewhat more at length from this chapter, but I will abbreviate the argument.

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An hon. MEMBER:

Go ahead.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

Mr. Speaker, one is tempted to lengthen out the discussion owing to these constant interruptions. I will, however, abbreviate by pointing out that the ordinary free trade argument has reference only to the tendency of free trade. Free trade logically is perfectly sound. It ought to produce certain results; it has a tendency to produce certain results, but there may be things in the road. A stone has a tendency to fall to

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the ground but I may hold it up with my hand. And Henry George points out that under certain conditions the natural tendency of free trade is frustrated. Let me read this paragraph from the concluding part of this chapter. He has spoken of the way in which the belief in protection has survived despite all these demolitions. He goes on:

This may also be inferred from what protectionists themselves say. Beaten in arguments, the protectionist usually falls back upon some declaration which implies that the real grounds of his belief have been untouched

My hon. friends in the Conservative party, of course, occupy that position:

and which generally takes the form of an assertion that though free trade may be true in theory it fails in practice. In such form the assertion is untenable. A theory is but an explanation of the relation of facts, and nothing can be true in theory that is not *rue in practice. But free traders really beg the question when they answer by merely pointing this ^ut. The real question is, whether the reasoning on which free traders rely takes into account all existing conditions? What the protectionist means, or at least the perception that he appeals to, when he talks in this way of the difference between theory and fact, is, that the free trade theory does not take into account all existing facts. And this is true.

As the tariff question is presented, there are indeed, under existing social conditions, two sides to the shield, so that men who look only at one side, closing their eyes to the other, may continue, with equal confidence, to hold opposite opinion.

And that the distinction between them may, with not entire inaptness, be described as that of exclusively regarding theory and that of exclusively regarding facts, we shall see when we have developed a theory which will embrace all the facts, and which will explain not only why it is that honest men have so diametrically differed on the question of protection vs. free trade, but why the advocates of neither policy have been inclined to press on to that point where honest differences may 'be reconciled.

Now let me pause to make comment. For years we have had a classic and annual display in this House between protectionists on the one side and those who claim to be leaning towards free trade on the other. Is it not possible that, as both sides are honest, both sides are sincere, both sides are trying to do something for the benefit of the country, yet that one side is looking on one side of the shield as Henry George points out and the other side looking at the other side of the shield. And is it not possible that if they could just turn around and both sides see both sides of the shield there might be a reconciliation? Now, Mr. Speaker, I know the disposition of the House to object to my continuing argument at this hour, but I stated at the outset that I was not responsible for being forced into this position. I do think it is a misfortune that honest men i'l different parts of this chamber who want W io something for the benefit of Canada

[Mr. Good.l

should differ so radically on a question of this kind, and I want to submit that in this little book, if hon. members will read it and study it and meditate on it, there is a possibility of finding reconciliation, a possibility of remedying the unemployment difficulty that my hon. friends in the Conservative party are harping so much upon, without applying the remedy they think to be the only remedy. Now, I desire to close as quickly as possible.

I read the following final paragraph in the next chapter on The Real Weakness of Free Trade.

Trade is a labour-saving method of production, and the effect of tariff restrictions upon trade is unquestionably to diminish productive power. Yet, important as may be the effects of protection in diminishing the production of wealth, they are far less important than the waste of productive forces which is commonly attributed to the very excess of productive power. The existence of protective tariffs will not suffice to explain that paralysis of industrial forces which in all departments of industry seem to arise from an excess of productive power, over the demand for consumption/ and which is everywhere leading to combinations to restrain production. And considering this, can we feel quite sure that the effect of abolishing protection would be more than temporarily to increase the production of wealth?

May I submit this again to my protectionist friends. I think, in a measure, that their point of view is right in contending that under certain conditions it is far better to put up with the economic loss involved in tariff protection than to put up with the economic loss involved in unemployment. I think that is a fair statement of the case.

I sympathize with their objective if there is no other way of remedying the tragic unemployment that we have-if there is this excess of productive power going to waste all the time, men who want to work standing idle because they cannot get jobs; if there is no other way of remedying that situation then, at least, as a palliative or as an emergency measure, I do not know but that I would support something in the way of state action to stimulate business activity. But I would like to submit to them most humbly but most emphatically that theirs is the wrong way to solve the problem, and I do hope that they will turn their attention to a solution of the problem that will not involve the absurdities and the waste that are involved in protective tariffs.

Let me read the following paragraph from the next chapter on The Real Strength of Protection:

The truth is, that the fallacies of protection draw their real strength from a great fact, which is to them ^ as the earth was to the fabled Antaeus, so that they are beaten down only to spring up again.

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How many times have my hon. friends to my right been beaten in argument but spring up again and maintain their position!

This fact is one which neither side in the controversy endeavours to explain-which free traders quietly ignore and protectionists quietly utilize; but which is of all social facts most obvious and important to the working classes-the fact that as soon, at least, as a certain stage of social development is reached, there are more labourers seeking employment than can find it-a surplus which at recurring periods of industrial depression becomes very large. Thus the opportunity of work comes to be regarded as a privilege, and work itself to be deemed in common thought a good.

Heie, and not in the laboured arguments which its advocates make, or in the power of the special interests which it enlists, lies the real strength of protection. Beneath all the mental habits I have spoken of as disposing men to accept the fallacies of protection lies one still more important-the habit ingrained in thought and speech in looking upon work as a boon.

Protection, as we have seen, operates to reduce the power of a community to obtain wealth-to lessen tho result which a given amount of exertion can secure. It " makes more work."

Let, me commend this to my Conservative friends-"it makes more work."

-in the sense in which Pharaoh made more work for the Hebrew brick-makers when he refused them straw; in the sense in which the spilling of grease over her floor makes more work for the housewife, or the rain that wets his hay makes more work for the farmer.

Yet, when we prove this, what have we proved to men whose greatest anxiety is to get work; whose idea of good times is that of times when work is plentiful?'

A rain that wets his hay is to the farmer clearly an injury; but is it an injury to the labourer who gets by reason of it a day's work and a day's pay that otherwise he would not have got?

The spilling of grease upon her kitchen floor may be a bad thing for the housewife; but to the scrubbing woman who is thereby enabled to earn a needed half dollar it may be a godsend.

Or if the labourers on Pharaoh's public works had been like the labourers on modern public works, anxious only that the job might last, and if outside of them had been a mass of less fortunate labourers, pressing, struggling, begging for employment in the brick-yards-would the edict that, by reducing the productiveness of labour, made more work have really been unpopular?

The point I make should be obvious, and I think it is a point which if perceived and followed up should result in a reconciliation of these opposing schools of thought that have been battling one another across this chamber for so many years. Therein lies the solution of the problem that bothers the protectionist. Why, what have we heard in this House during hours and days of discussion on unemployment and the deplorable condition of business? The protectionist sees only one remedy-to make work. Well, perhaps under certain conditions it is better than no remedy at all but I say let us get the better remedy, let us get the remedy that will go to the root of the problem and remove the source of the evil.

I am going to suggest later on what that remedy is. But let me now read the following:

Protectionism viewed in itself is absurd. But it is no more absurd than many other popular beliefs. Professor W. G. Sumner of Yale College, a fair representative of the so-called free traders who have been vainly trying to weaken the hold of protectionism in the United States without disturbing its root, essayed, before the United States Tariff Commission in 1882, to bring protectionism to a reductio ad ab-surdum by declaring that the protectionist theory involved such propositions as these: that a big standing army would tend to raise wages by withdrawing men from competition in the labour market; that paupers in almshouses and convicts in prisons ought for the same reason to be maintained without labour.

There we come to the same question we were discussing some time ago in connection with our penitentiaries, and I had some correspondence, as other members had, with regard to the impropriety of putting free labour out of a job by giving employment to prison labour. The quotation continues:-

That - it is better for the labouring class that rich people should live in idleness than that they should work.

How frequently has that fallacy been preached in this country? I heard it everywhere in my youth-the laudation of the rich men-if they would only spend their money, :lo no work themselves but give work to poor people who are out of a job, what a good thing it would be! The quotation continues:-

Trades unions should prevent their members from lessening the supply of work by doing too much; and that the destruction of property in riots must be a good thing for the labouring class, by increasing the work to be done.

But whoever will listen to the ordinary talk of men and read the daily newspapers, will find that, so far from such notions seeming absurd to the common mind, they are accustomed ideas. Is it not true that the good times during the war are widely attributed to the "employment furnished by government" in calling so many men into the army, and to the brisk demand for commodities caused by their unproductive consumption and by actual destruction? Is it not true that all over the United States the working classes are protesting against the employment of convicts in this, that or the other way, and would much rather have them kept in idleness than have them "take work from honest men"? Is it not true that the rich man who "gives employment" to others by his lavish waste is universally regarded as a better friend to the workers than the rich man who "takes work from those who need it " by doing it himself?

In themselves these notions may be what the Pro'? fessor declares them, "miserable fallacies which sin against common sense," but they arise from therecognition of actual facts. Take the most preposterous of them. The burning down of a city is indeed a lessening of the aggregate wealth. But isthe waste involved in the burning down of a cityany more real than the waste involved in the standing idle of men who would gladly be at work in building up a city? Where every one who needed to work could find opportunity, there it would indeed b# clear that the maintenance in idleness of convicts, paupers or rich men must lessen the rewards of

workers; but where hundreds of thousands must endure privation because of their Inability to find work, the

The Budget-Mr. Good

doing of work by those who can support themselves, or will be supported without it, seems like taking the opportunity to work from those who most need or most deserve it. Such "miserable fallacies" must continue to sway men's minds until some satisfactory explanation is afforded of the facts that make the "leave to toil" a boon. To attempt, as do "free traders" of Professor Sumner's class, to eradicate protectionist ideas while ignoring these facts, is utterly hopeless. What they take for a seedling that may be pulled up with a vigorous effort, is in reality the shoot of a tree whose spreading roots reach to the bedrock of society. A political economy that will recognize no deeper social wrong than the framing of tariffs on a protective instead of on a revenue basis, and that, with such trivial exceptions, is but a justification of "things as they are," is repellent to the instincts of the masses. To tell working men, as Professor Sumner does, that "trades unionism and protectionism are falsehoods," is simply to dispose them to protectionism, for whatever may be said of protection they well know that trades unions have raised wages in many vocations, and that they are the only things that have yet given the working classes any power of resisting a strain of competition that, unchecked, must force them to the maximum of toil for the minimum of pay.

Now Mr. Speaker, may I try to briefly express the thought in my own mind, the problem, and the paradox that faces us, and the reason for all this battling in this Chamber for years and years-which I suppose, will continue: That the free trade argument as expounded refers only to freedom of exchange. Now exchange is part of the productive process, but it is only part, and if we do not have freedom in the other parts of the productive process, if we do not have freedom to produce, of what use is freedom to exchange? The free trade argument as ordinarily preached and expounded, as I say, refers only to a part of the productive process. It does not refer to the fundamental and initial stage in the process, and this is one of the important economic discoveries of the last fifty years, not yet appreciated by most of our people. I want to submit to the House that in the wider and better and fuller conception of free trade, the freedom to produce as well as to exchange, the freedom that applies to all the stages and parts of the productive process, we have a solution to unemployment, and we have a reconciliation of opposing schools of thought. I therefore submit to this House and to this country that it is worth while to make an effort to study rather than to battle. Let me repeat: I said before that our problems were to be solved by study and research and not by partisan recriminations and battling. I believe there is a reconciliation and I believe we can find it. I believe if we have a proper attitude of mind that we can measurably attain it.

Mr. Speaker, on account of the noise in the Chamber, it is difficult for me to make myself heard.

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order, order.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

There is a persistent protest against the prolongation of the debate, for which I disclaim all responsibility. I am ready to adjourn the debate any time. I think I can sum up the argument of Henry George thus-

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The rules of the House are made for the protection, not so much of the majority as of the minority. The majority can always protect itself. I appeal to hon. members of the majority in that they may some day have to invoke the rules in order to protect their rights.

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LIB

Frank S. Cahill

Liberal

Mr. CAHILL:

Is there not a well known

rule against reading speeches in this House?

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LIB

Hewitt Bostock (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Yes, there is a rule against reading speeches, extracts, newspapers, books, but this is what May says on the subject:

Members are not allowed to read books, newspapers or letters in their places. This rule, however, must be understood with some limitations; for although it is still irregular to read newspapers, any books and letters may be referred to by members preparing to speak, but ought not to be read for amusement or for business unconnected with the debate.

In the present instance, I have followed very closely the speech delivered by the hon. member, and I say that he is quoting extracts which are connected with the debate.

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LIB

Frank S. Cahill

Liberal

Mr. CAHILL:

I Should like to make the

suggestion that the government might buy this book of Henry George and distribute it to the members. They would save time.

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IND

William Charles Good

Independent Progressive

Mr. GOOD:

Such remarks ill-become a

member of this House. I want to read, in conclusion, a very clear statement of the point of view that I have been trying to impress upon the House. With that I end my argument, save to say a word or two about my vote on the motion before the House. This is from page 2S6 of Henry George's Protection or Free Trade.

Let us turn again to the tariff question.

The mere abolition of protection-the mere substitution of a revenue tariff for a protective tariff-is such a lame and timorous application of the free-trade principle that it is a misnomer to speak of it as free trade. A revenue tariff is only a somewhat milder restriction on trade than a protective tariff.

Free trade, in its true meaning, requires not merely the abolition of protection but the sweeping away of all tariffs-the abolition of all restrictions (save those imposed in the interests of public health or morals), on the bringing of things into a country or the carrying of things out of a country.

But free trade cannot logically stop with the abolition of custom-houses. It applies as well to domestic as to foreign trade, and in its true sense requires the abolition of all internal taxes-

Will hon. members note this?

-that fall on buying, selling, transporting or exchanging, on the making of any transaction or the carrying on of any business, save of course where the motive of the tax is public safety, health or morals.

The Budget-Mr. Ward

Thus, the adoption of true free trade involves the abolition of all indirect taxation of whatever kind, and the resort to direct taxation for all public revenues.

But this is not all. Trade, as we have seen, is a mode of production, and the freeing of trade is beneficial because it is a freeing of production. For the same reason, therefore, that we ought not to tax anyone for adding to the wealth of a country by bringing valuable things into it, we ought not to tax any one for adding to the wealth of a country by producing within that country valuable things.

I pause there for a moment. We ought not to place a tax upon production inside the country. What are the government doing in that respect? If they will take the taxes off industry in this country, they will solve the problem of unemployment for my Conservative friends. What have the hon. member for St. Lawrence-St. George and other hon. members been declaiming about and objecting to? The taxation of industry. True free trade will not permit the imposition of a tax upon industry. Henry George continues:

Thus the principle of free trade requires that we should not merely abolish all indirect taxes, but that we should abolish as well all direct taxes on things that are the product of labour; that we should, in short, give full play to the natural stimulus to production- the possession and enjoyment of things produced-by imposing no tax whatever upon the production, accumulation or possession of wealth (i.e., things produced by labour), leaving every one free to make, exchange, give, spend or bequeath.

I do not know that I would go quite as far as that as regards death duties. But there is the solution of this perennial controversy. There is the solution of the problem that hon. gentlemen have been wrestling with for weeks and for months as regards the condition of industry. I stated last year in this debate-and it has had no recognition-that in my judgment taxes on industry, on consumption, were unjustifiable. I instanced last year two kinds of taxes that were theoretically defensible. First, there is the income tax and I gave my reasons for it, including in that tax the inheritance tax. And second, there is the tax on land values. I commend to hon. members the considerations that I advanced last year in this respect. I contend now that, as regards taxation and fiscal matters, we are operating in the wrong direction. I object to indirect taxation. I object to direct taxation of many kinds that are now imposed. I object to the taxation of industry. There are other kinds of taxation that are justifiable. As I remarked earlier in my speech, I was hoping that the government would have appointed a committee to inquire into this matter so that we might make some real advance and would not be threshing over old straw year after year; so that we might get down to basic principles.

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April 30, 1925