May 3, 1926

LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

I am speaking in reference to "disappointment No. 3," as got out by Besco, dealing with a country with depreciated currency. If it is alleged that our trade with any country with depreciated currency ha3 been affected by reason of a trade treaty, some one else can deal with that. The table continues:

Russia- . Imports Exports1923

$338,907 $ 132,9091925

2.730 14,316,002

In respect to other foreign countries-and some of the other countries must also have depreciated currency-we find the following figures:

Other foreign countries- Imports Exports

1923

*24,679,703 *20,615,4861925

20,777,442 28,734,025

From these figures, in connection with both imports and exports, it does not appear that the depreciated currency of those countries has had any bad effect on the trade of Canada, or that we need any legislation to protect our-

The Budget-Mr. Bothwell

selves against ithe product of countries which have a depreciated currency.

I want to touch for a moment or two on the question of the tariff on automobiles. I think every member who has spoken on the budget has dealt with this subject. We have had deputations appear here and the matter has been presented in various ways from both sides of the House. The same question was before the House last year, and I notice that after the debate in the House a year ago the resolution was defeated by only nineteen votes. That would appear to me to be a pretty fair intimation to the automobile manufacturers in Canada that some legislation would be passed this session. Further than that, I think practically every newspaper in Canada has carried requests for months past in connection with the reduction in the tariff on automobiles. During the darly days of this session a resolution by the hon. member for Macleod (Mr. Coote) was placed on the order paper, showing that he intended to ask for a reduction of the duty on automobiles. We know too that a good deal of lobbying was being done around this House by the automobile interests and speeches of various kinds were, made in this House in the interest of the automobile industry. It strikes me as most peculiar that if it is necessary that the automobile tariff should remain where -it was, no single individual either in this House or in the lobby or anywhere else seems to be able to give us a concrete instance of any industry that would suffer by a reduction in the tariff if it were made. So far as I have been able to find out, no single concrete case has been put ou record to show that any factory, whether having to do with parts or automobiles, would have to close its doors by reason of a change in the tariff. Surely if the experts that have been able to get out books such as we have received from the automobile industry knew that a reduction in the tariff was going to ruin their industry, they would have been able to give us manufacturing costs and facts showing that such a reduction could not safely be made.

But it has been left for Mr. Ford to make his statement that it is quite in order to bring about the reduction, and that statement has not been met by any other manufacturer in Canada so far as I have been able to gather.

I presume every hon. member has received a copy of the book that has been got out by the Ford interests, because we have had it quoted at different times. It would appear from that book that the people of Canada have given the automobile manufacturers fairly good protection. Mr. Ford in the interview that was put on Hansard by the hon.

[Mr Bothwell.]

member for Assiniboia (Mr. McKenzie) stated that in his plant in Canada they use at least S5 per cent of Canadian material. He says in this book of his, and also in the interview that was read by the hon. member for Assiniboia, that the cost of manufacture is about equally divided between wages and material; that is, that wages and material cost about the same. This book of his says that wages paid out in 1925 amounted to $10,138,927. Eighty-five per cent of his product is procured in Canada. If he takes the 15 per cent from the United States, that would mean on his own figures that he would bring in approximately $1,520,838. His production cost, according to the same book on page 6, is given as $19,329,745, being spent for production material, building construction, machinery equipment, supplies, insurance, advertising and other services. He has the money bags appear at the bottom of the picture showing that the company pay to the government $2,962,234.

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

Eccles James Gott

Conservative (1867-1942)

Mr. GOTT:

Whom does my hon. friend

mean by "he?"

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

I should have said the Ford Company instead of "he."

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

Eccles James Gott

Conservative (1867-1942)

Mr. GOTT:

I thought the hon. member

meant Henry Ford.

Topic:   THE BUDGET
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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

That $2,962,334 is used to pay Dominion income tax, customs duties, sales tax on purchases, provincial and municipal taxes, Canadian Government Merchant Marine and Canadian National Railways-as shown in his own publication.

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PRO

Henry Elvins Spencer

Progressive

Mr. SPENCER:

Would it not be more

correct to say that the purchaser of the automobile pays those taxes?

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

I am coming to that.

Those figures Show that the cost of manufacturing in the Ford plant at Ford, Ontario, last year amounted to $33,951,844. He says that 47 per cent is exported. The sales amount to $25,714,166. The value of his product would be approximately $48,517,294, showing a surplus 'there of $14,565,450. How much of that goes in paying commissions and one thing or another I do not know, but from their own book there is apparently that amount of profit on an investment of $31,275,530.

The hon. member for Assiniboia read an interview with Henry Ford in connection with this matter. There is a little more of that conversation that I want to put on record. The interviewer continues:

"Mr. Ford/' I began-, "you have -made two admissions that are very interesting. I wonder if you really wish them to be published?"

The Budget-Mr. Bothwell

"You may write anything I have said," he answered. W'hat are the things I've said?"

"You've admitted that tariff protection encourages indolence in manufacturing and that tariff reduction must produce greater efficiency and economy in your Canadian plant?" "That is true " he said. "What's the other?" _

"You've admitted that Ford cars have been getting a higher price than necessary in Canada." "As part of the general tariff situation in Canada-Yes. It

works that way with every commodity and under every tariff. Free trade and free competition are the only healthy conditions," he repeated.

"I would like to ask you about another point which disturbs us in Canada." "Go ahead," said Mr. Ford.

"There is some belief that tariff reduction may mean withdrawal of American branches in Canada and that all this business will now be placed in United States factories." "I don't know anything about the other fellows," said Mr. Ford briskly. "I only know about our business. It is not that way with us.

How Canadian Company Started "Did you establish your plant in Canada because of the tariff?" "No. I didn't establish it at all. It happened this way. Mr. McGregor (referring to the late vice-.president and general manager of the Ford Company of Canada) was running a buggy works over at Windsor. He came across the river to me one day, about twenty years or so ago, and said: 'Look here, my buggy business is going to pass. I'd like to make your cars in Canada.'

"I'd never seen him before but I liked his looks and said: 'AH right, I'm interested in that sort of

thing. Three months later McGregor opened the plant.

I remember that conversation. We were standing in the alley bock of our first plant over on Mack avenue. That's how the Canadian company started.

I never thought anything about the tariff. I never have in starting a plant."

"What about Manchester?" I asked. "I started the plant in Manchester," said Mr. Ford, "to put industry into the country. Tariff had nothing to do with it. All our plants have been located to serve *different localities, like the twenty or more we have in the United States. I would want to manufacture in Canada for the same reason,"

"And you believe the tariff is not a factor in locating .in Canada" "It is not with me," replied Mr. Ford. * . .

Mr. Ford was silent .for a moment, thinking. The stockholder," he said at last, "is the only person who may lose in the tariff reduction, and he's had enough anyway. We shouldn't worry about stockholders. They don't deserve profits; they don't earn."

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

Eccles James Gott

Conservative (1867-1942)

Mr. GOTT:

Is the hon. gentleman aware of the fact that in the same edition of the Border Cities Star from which he has just quoted, Mr. Henry Ford denied being president of the Ford Motor Works of Canada?

Topic:   THE BUDGET
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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

I do not care whether he is president of the Ford Motor Works or not. We know Ford is a manufacturer of automobiles; that he has been in this business since the Ford plants were started, and that he has an interest in the Ford plant in Ontario. I presume he can speak with authority as to how the plant there was established.

Topic:   THE BUDGET
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CON

Eccles James Gott

Conservative (1867-1942)

Mr. GOTT:

It is remarkable that he should be president of an institution of this size and at the same time not be aware of the fact. I would discount his whole interview.

Mr. BOTHWELL; That is the second interview with Mr. Ford. If my hon. friend wants the name of the writer of the article I will give it to him.

Topic:   THE BUDGET
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CON

Eccles James Gott

Conservative (1867-1942)

Mr. GOTT:

I have them all.

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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

He can verify it if he likes. It is an article compiled by Charles Vining. It is probably only fair to state in connection with this Ford industry that it may be an exceptional kind of automobile plant. But the other plants that are manufacturing in Canada are making automobiles with wheels, rubber tires and equipment to some extent similar to that used in the making of Ford cars. There is of course a difference. There are a number of different cars made in Canada, and other plants may have to import certain parts. But if Henry Ford is correct, as we believe he is, in the statement that wages in Canada are no higher than they are in the United States, and we have the raw material in this country just as they have across the line, then if the other manufacturing concerns in Canada are not able to produce at a profit with the protection that is still afforded them after the reduction has been made, they must be poorly organized or poorly managed. There must be inefficiency somewhere. If the Ford manufacturing concern, getting at least 85 per cent of its raw material in Canada, is able to compete with the Ford companies in the United States, then the other automobile factories here should be able to do the same with a protective tariff of 20 per cent.

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CON

Eccles James Gott

Conservative (1867-1942)

Mr. GOTT:

Do you call the Ford an automobile?

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LIB

Charles Edward Bothwell

Liberal

Mr. BOTHWELL:

Well, my hon. friend may live so near the border that he has some slang expression descriptive of it.

Now I want to touch for a moment on the reduction in income tax, and in dealing with this question I desire to read just a brief extract from an address delivered in England by the Right Hon. Lord Decies, D.S.O., director of the Income Taxpayers' Society. The address is reported in the Daily Mail Yearbook at page 20, and reads in part:

The present Chancellor of the Exchequer, the Right Hon Winston Churchill, in his biography of his father, Lord Randolph Churchill (also a Chancellor of the Exchequer) says: "He (Lord Randolph) desired

especially to diminish those taxes which fell upon the lower middle class. He laboured to transfer the burdens, so far as possible, from comforts to luxuries, and from necessaries to pleasures. He applied much more closely than his .predecessors that fundamental principle of democratic finance-the adjusting of taxation to the citzen's ability to pay." There can be

The Budget-Mr. Bothwell

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL
Sub-subtopic:   FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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May 3, 1926