October 11, 1932


An hon. MEMBER:

Because he pays rent.

Subtopic:   G8 COMMONS

Edward James Young



Let me explain. He goes into the city and there he has a certain voting power, and he has voted himself paved streets, parks, lights, the best of schools, all kinds of improvements and conveniences. He has voted those things to himself, he has gone into debt for them, and then he has said "Now we must make the farmer pay for these, because we cannot live without them." When I speak of the farmer I refer to all the primary producers; the same thing applies to the miner, the lumberman and the fisherman.

This is a condition that cannot continue. It is responsible in a large measure for the conditions prevailing in this country to-day. Why? When the farmer has to give four days of his labour in exchange for one day of the other man's labour he has got to work four days while the other man sits idle for three and works one. He cannot employ the other man. Your industrial worker must sit idle three days waiting for the farmer to accumulate three days' work, then they both work the fourth day and exchange products. Yet in spite of all this, the fact that the industrial worker is out of work to-day because the farmer cannot employ him, what is he doing? He is asking for unemployment insurance, asking the government to go to the farmer and say, "Here, you cannot employ this man, it is true, but you must give him unemployment insurance when you cannot employ him." And there i* a new party being organized in this country, a Farmer-Labour party, asking for a new deal on behalf of the farmer and the labouring man. A new deall On what basis is this new deal to be made? On the

old basis of four to one? Is the farmer still to be compelled to give four days' labour in exchange for the other man's one? If that is the basis of the new deal we will have none of it. I cannot understand hon. gentlemen in the corner, supposed to represent farming constituencies,-they are not here to-night, they should be-joining up with a group whose aim is to perpetuate that condition. Not only perpetuate that, but compel the farmer to pay unemployment insurance to the men that he cannot afford to hire.

How has this condition been brought about? How have they managed to multiply wages of the industrial worker by two while they cut the farmer's wages in half? Quite simply. It is easy for men living in communities to get together. They got together, they went to their employers, they said, "We want more, we must have a larger share of the product of labour." What did the employer say? He said, "My friends, I would like to give it to you." "If we can get the government to so arrange things that we can make the farmer pay it, we will give it to you." So they came to the government-not this government alone but to every government we have had in this country-and said, "We cannot carry on in this way; we must maintain a higher standard cf living. You must give us a protective tariff; you must shut out other goods; you must put us in a position to demand higher prices from the farmers of this country for the goods we have to sell. Then we will be able to pay our men bigger wages and maintain a higher standard of living." But where was that higher standard to be maintained? It was in the cities. How about the farms?

I ask you, Mr. Speaker, how long this condition can continue. They have succeeded so far; in the last twenty years they have cut the wages of the farmer in half while the wages of the industrial -worker have been doubled. I ask you, Mr. Speaker, if that condition can continue, and I ask you whether, as long as it does continue, prosperity can return to this country.

Subtopic:   G8 COMMONS

Charles Benjamin Howard


Mr. C. B. HOWARD (Sherbrooke):

Mr. Speaker, my reason for taking part in the debate to-night is that I wish not only to protest personally against the condition of affairs as I find them in my constituency and my section of Canada, but also to voice the protests of the electors of the county of Sherbrooke against the actions of the present government in the handling of the affairs of the country.

When I listened to my right hon. friend the Prime Minister (Mr. Bennett) speak in this house last evening I could not help but think

The Address-Mr. Howard

of the same gentleman when he was sitting on this side of the house as leader of the opposition. I remembered a speech which he delivered here on February 24, 1930, when there was not one-tenth the unemployment that we have in Canada to-day, when conditions were prosperous in comparison with conditions as they exist to-day. The right hon. gentleman then spoke as follows:

What about conditions in this dominion at this moment? What about conditions from east to west? It is true that part of the unemployment is seasonal; but since the beginning of the year I have traversed Canada from Victoria to the far east and in every city of this dominion, east and west, there is abnormal unemployment, so that men who are accustomed to give, as I have been, to assist those who are unable to earn sufficient to keep body and soul together, have never before seen such distress as I have seen in the communities I have visited. Yet all that the men have sought is the chance to work. What have we done in regard to the situation? .... What was the Minister of Labour doing? What was the Prime Minister doing? Were they calling conferences? The only conferences they were calling were conferences to determine how best they could ward off the blows of an indignant people. The only conferences they were having were as to how they might increase their power and retain their positions. We must look the fact squarely in the eye that there has been great unemployment in Canada since the first of the year. During the winter we have entered upon we have seen greater suffering and privation than we have known during the last quarter of a century, and yet this government has absolutely failed to take any steps of any description whatsoever to deal with the problem. Is there any answer to that? Do you mean to say that steps could not be taken? Do you mean to say that the Dominion government should make no contribution to provide assistance to provinces and municipalities in matters of this kind? Who brought many of these men into this country? Certainly it was not the provincial governments, for wherever they have been consulted in matters of this kind they have given their answers in no uncertain terms. Now they are being consulted whereas formerly they were not. Yet the Dominion government says: We have no responsibility in the premises. I do not know whether the Prime Minister is correctly reported or not, but the report of his observations was that if the provinces were too poor to take care of them the government might see what it could do to assist them. That is the sense in which his observations came through the Canadian Press. That is not the performance of the obligations of the central government of Canada.

Yesterday the right hon. gentleman wanted to be absolved from some of the preelection promises that had been quoted. May I remind him that before absolution can be granted two things are necessary: One is that a person must be sorry for having sinned, and

the other is that he must be absolutely determined not to do it again. I am not going to quote any of the preelection promises made by the right hon. gentleman; instead I want to read a short article from the Montreal Gazette, of June 27, 1930, as follows:

.... and the King government cannot escape the charge of having neglected to realize that the first duty of the Canadian government is to provide work for Canadians.

That is not a promise; it is a statement of fact, that the first duty of this government is to provide work for Canadians. Let me ask not only hon. members of this house but also the people in my constituency, those in the rural sections of Quebec and in fact the people anywhere in Canada, whether or not the present government has done or is doing anything to provide work for Canadians at the present time. [DOT]

As I have already said, my reason for making these few remarks is that I want to express my disappointment in the speech from the throne, which contains these words:

The problem of unemployment continues to receive the anxious attention of my ministers. Under the powers granted them at the last session of parliament, they have been able to develop further, in cooperation with the provinces and municipalities, a scheme of direct relief to be put into operation during the autumn and winter months to the extent required by prevailing conditions.

Two years ago, Mr. Speaker, we were hurried to Ottawa for a short session of parliament, when practically no unemployment existed. We were told we could not wait until the regular session; we had a special session called for the purpose of "ending unemployment." This year, however, with unemployment much worse - yes, ten times worse; with agricultural conditions such as have never before been seen in Canada; with conditions in our cities known only to those who live in the cities; with industrial conditions to find the equal of which we must go back not to the depression of 1921, not to the depression of 1914, not to the depression of 1908, but for a period of forty years- in these circumstances we are not to give consideration to unemployment, the most important question in Canada to-day.

I want to place upon record a few actual cases in Sherbrooke, and I wish to enter my protest against the way the unemployment situation is being dealt with. I have here on a slip the name of a superintendent in one of the factories in Sherbrooke, a man living on Lincoln avenue, who two years ago was drawing $40 a week as foreman in one of the

The Address-Mr. Howard

plants. His salary has been reduced in the last two years to S19 per week and he is getting only two days' work a week. He has eight children besides his wife and himself to support, or ten in the family. I leave it to this house or to anyone in Canada to say whether a situation of that kind can be tolerated. Yet the present government takes no steps to remedy matters. I have the slip of another gentleman whom I know personally, a man in Sherbrooke, with a family of nine children besides himself and his wife, eleven altogether, and I wish to direct the attention of the house to the seriousness of this particular man's condition.

Some years ago he had that ambition about which the Prime Minister spoke last night, the ambition that characterized the pioneers of this country. And here, incidentally, let me tell the members of the government that the spirit of the pioneers still exists in Canada. All the people want is a chance to work. Well, this man purchased a lot in the city of Sherbrooke. He paid $460 for it and at a cost of $300 he built what some people might call a shack but he calls it his home, of which he is as proud as any man could be of a $50,000 home. But what is the condition of this man today? He has paid for his house, but he has not paid enough on his lot and if the people who own it wanted to put him out they could confiscate his house. Fortunately, however, they are not doing so. Four children sleep in the same bed. Yet this government has the audacity to stand up in the parliament of Canada and talk, without doing anything to remedy such a situation. Another gentleman had that same pioneer ambition. A few years ago he purchased a house for $3,400, and he did so because he had faith in the country and felt assured that there would be no change of government. He paid $1,400 down on that property and today he has outstanding a balance of $2,000 Formerly he was paying $20 per month rent but he cannot meet his payments on the house now. He has not paid taxes for two years and is in constant fear that the house will be taken from him.

Another man purchased a small property in Sherbrooke for $300, and if those to whom he is indebted on account of the house wished to take it from him they could do so. The amount he has paid over a period of years is now all wiped out. The roof is leaking so that he is practically living in the open air. Let me add-and I want this underlined-that this man has seven children besides his wife and himself to support, but he has no revenue coming in, and the milk dealer in Sherbrooke is supplying him with milk and not charging him. He is not cutting off the man's supply 53719-7

of milk when he knows that he cannot pay for it. He has lived sixteen years in Sherbrooke and was employed by the same company for nine consecutive years. I know another gentleman who was eight years in the cotton mills and who has been two years out of work. He had a property for which he paid $1,500, or rather agreed to pay. He had paid $400 on it two years ago, but today he has an accumulation of unpaid interest and taxes so that he is back to his original status.

I know another gentleman who was working for seven years with one of the railways of Canada. He has five children besides himself and his wife to support. He built a $600 home on a $450 lot. He had paid off $250, but today he is back to his original status. He has no revenue whatever. He has a garden around the house and he and his family are living on the supplies they obtain from it. Again, as in the other instance I have already cited, the milk dealer is carrying him.

Iam painting a picture of these conditions, not because I think that Canada is going to the bow-bows, because I do not think there is any danger of that, and I am just as much an optimist as any man in this house. I believe that we have the greatest country in the world, or one which we can make so; but we cannot go on with the present administration in power and expect to get anywhere. Let me cite another illustration-and I am bringing these up because every single one of these men came to my office the day before 1 left to come here for the session, and I took notes in detail myself with a justice of the peace present.

A farmer in Rock Forest, one of the finest rural sections in the county of Sherbrooke, some years ago in the good and prosperous times, purchased a farm for $4,500, on which he was to pay interest at the rate of 6 per cent, reducing the principal at the rate of $500 per annum. I see in their seats my hon. friend from Rrome-Missisquoi, my hon. friend from Chateauguay-Huntingdon and my hon. friend from Compton, and I know that they will appreciate what I am saying because they know what conditions are in their constituencies. This man had reduced his loan by $2,000, but last year he could not pay his $500 of principal and therefore went to the mortgage holder and said that he would pay the interest. He paid the interest, but what happened this year? This year he can pay neither principal nor interest. This is in a farming constituency and hon. members from rural sections will know what farm products are worth at this time. This man went to the mortgage holder and told him his story. The

The Address-Mr. Howard

man holding the mortgage said, "What are you going to do?" The man said he would look after t'he farm and carry on. But the following week a speculator came on the scene. He went, not to the farmer but to the man in the city who held the mortgage and said, "So and so has not paid his interest. How much do you want for the claim?" They bargained and the speculator gave the mortgage holder a cheque for $2,000 for the claim and put the farmer off the land. He resold the property for $.500 down and $3,000 'balance, and came to my office to borrow from the farm loan board $2,000, for his tenant so that he would have made a clean profit and sold the farm to another party, but I put him out. I bring these matters to the attention of the house because I consider that the policy of this government pays little heed to people in the cities and rural sections of the country, and if is time that these things were driven home to their notice.

I know a man from the county of Compton who went around to the farmers buying cattle. He bought forty-seven head of cattle and put them on the Canadian Pacific and shipped them to Montreal, to the stock yards. This happened three weeks ago. The average weight was 1,250 pounds. He paid the farmers nearly 4 cents per pound, and do you know what they offered him in Montreal? They offered him 2 cents per pound, and after staying four days and paying for his board and buying feed for the cattle, he reloaded his stock and shipped them back to Compton, at Eaton's Corners.

Let us now get back to the system which this government has tried to put in force-* direct relief. Some of us do not realize what direct aid is. Let me tell the house what it is in the city of Sherbrooke-and it is as well administered in that city as it is in any other place in Canada. The members of this government thought that the way of giving the work which they promised to provide for the people was too expensive to Canada, because it might injure the capitalist or the speculator. Mark you, I do not say this in a socialistic spirit because I believe in the capitalist system; but I direct attention to these things in the hope that the government will endeavour to mend their ways and to remedy the situation. In the municipality of Ascot, one of the municipalities outside Sherbrooke, there are forty men without any employment whatever. That is a lot of people for a small municipality. They have decided that the best thing to do is to give work to these fellows. They are given two days work per week; they work eight hours

a day and receive fifteen cents per hour in goods, not in money, or an equivalent of $2.40 per week. These men receive their little provisions to keep them from starving, but I ask hon. members where they are going to get money to purchase clothes, to pay rent, to pay for light and gas? I am not finding fault with the way the municipality is handling this, but I do say that direct relief is wrong in principle. I was going to say it is a rotten way to handle the situation.

A short time ago I wrote a letter to a certain gentleman asking for some information I desired. I asked him to reply immediately, but it was some three weeks afterwards before I received a letter. He told me that he regretted the delay in answering but it had been caused by his inability to obtain the price of a postage stamp. He stated that three weeks ago the city gas company had turned off his gas, that the week previous to his writing his electric light had been turned off. He stated that he could live without light but he had three little children who had not had a warm meal in three weeks. His wife was not in good health but he was unable to buy her the necessities she needed. As he said: "Que je fais une vie bien triste." If such things are to take place in a country with the possibilities of Canada; if young children are to be faced with the possibility of their growth being stunted in tender years, then I fear for the future generations.

When I speak later in connection with the industrial conditions prevailing in Sherbrooke 1 shall have more accurate figures, but at the present moment I should like to give the house certain information concerning the relief being granted in the city of Sherbrooke. This city has a population of 29,500. Last Saturday there were fed in the soup kitchens 050 families, representing 3,500 people or one-eighth of the population of the city. The other day a lady came into my office with her coat pinned at the neck and said: "Mr. Howard, I am not here to find fault with the soup kitchen; we are getting plenty of good food and my rent is being paid by the city, but I ask you to look at me and tell me if there is any way in which I could have perhaps just a dollar a week with which to buy some clothes and shoes for the coming winter." I do not make these statements to disparage my home town; nor, as I have said already, do I make them against Canada, but I do make them against the system which we are putting into force. Such a system should not be put into force in a country like ours.

The other day I visited one of the most popular boarding schools in the province of Quebec, a school which is attended by the

The Address-Mr. Howard

boys and girls from the agricultural Protestant minority section of the province. I found that this school had only one-half the attendance of last year. In other words, it will have to operate this year with a deficit of $15,000, and it is now faced with an overdraft of $20,000 at the bank. Why has not this school, one of the finest educational institutions in the good old province of Quebec, the necessary number of students? It is because the farmer has not the necessary $400 to send his boy or girl to school. The boys and girls throughout this section of the country have been hearing this statement made on every public platform in Canada: Do not make the mistake your dad made; go and get an education. The parents have saved and stinted in order to send their children to school. Every professor in the university, every manager of industry, every head of our great institutions has been saying: This is a competitive day; if you get an education you will get a job. What are the conditions today? There are hundreds, yes, thousands of young men with the finest educations ready and willing to do anything, even dig ditches- they can do it better with an education-but they cannot find a job. They are being absolutely discouraged; they cannot find work and do not know what to do. This is the condition which prevails in the country which we love and which we call Canada.

Some men from my section have spent their own money to come to Ottawa to interview the Prime Minister. This was not an organized effort paid for by someone else, but simply a group of men who were willing to pay their own expenses in order to have an opportunity of interviewing the Prime Minister. The Prime Minister is not the dictator of Canada, he is the servant of the people, yet when these men arrived in Ottawa they were refused an audience by the Prime Minister. There were eight of the best farmers in the eastern townships whom I know personally and who are known to other hon. members who were in that delegation. I would hesitate to refuse admission to my home either day or night to any one of those agricultural gentlemen, yet they were refused admission to see "the servant of the people."

Subtopic:   G8 COMMONS

Some hon. MEMBERS:


Subtopic:   G8 COMMONS

Charles Benjamin Howard



Ask them and they will

tell you. Go and see Mr. Charles Green, of Lennoxville; Mr. Hilton Ross, of Brompton road; Mr. J. B. Reid, of North Hatley: Mr. John Ross, of Brompton road, or Mr. Edwin Ducker, of Belvidere road, the head of the farmer association in the county of Sher-53719-71

brooke, and they will all tell you that they were refused admission.

I should like to say a word or two about the amalgamations which have taken place in the railway field. As I have no desire to say anything in connection with a report we have not seen, I shall not refer to the report of the transportation commission at the present time except to say that I do not think the Canadian National Railways is being given a square deal. When economy and saving is made at the expense of the workers, when amalgamations are carried out which put men on the street, it is time that such economy was stopped. A few dollars may be saved on the one hand, but money must be paid out in the form of soup kitchens, on the other.

In connection with the amalgamation of the Quebec Central Railway with the Canadian Pacific, the senior man in the service, a man who had been with the company for forty years, was retired on pension. With that action I have no fault to find, but the next man in line of service, a man who had given twenty-eight years of the finest sendee any man could give to a company, is out on the streets without a job. Naturally he does not know anything but the railway business. The next two men, each with twenty-three years of service, are out on the streets of Sherbrooke. The same applies to the next man with twenty-one years of service, and the next in line with sixteen years of service. If that is the kind of economy to be practised by this government I am against economy if we have to take it in that way. These men should be carried on at least until things improve. These men who have spent their lives in the service of the company should at least receive a square deal. I want to go further than that. As regards the labouring man to w'hom we cater as we do to the farmer, when he knows that all he is going to get for loyal service is to be fired at the discretion of the company, how are we to get efficiency? What kind of service can he give to his company when he sees men after twenty-three, twenty-one and sixteen years of service thrown out on the street without any consideration? The best way to introduce bolshevism and communism into this country is by following out that line of action.

I should like to correct another statement which I have heard on every platform in Canada and which I have heard time and again in this house by the Prime Minister himself, and that is: Oh, if we had not maintained the value of our currency in this part

Subtopic:   G8 COMMONS

Charles Edward Bothwell


Mr. C. E. BOTHWELL (Swift Current):

Mr. Speaker, I should like to refer to one sentence in the speech from the throne, as follows:

The unity, fortitude and capacity of the Canadian people, without which all your labours would have been in vain, shall be now the foundation upon which, with cooperation and faith, we will build a Canada greater than we have yet known.

In connection with that sentence in the speech of His Excellency I want to go back to the opening session of this parliament and quote a few sentences frcm remarks made by the Prime Minister (Mr. Bennett). As reported in Hansard of September 16, 1930, at page 239, the Prime Minister enunciated a portion of the policy of the government as follows:

We propose therefore to provide that so far as may be reasonably possible the requirements of the 10.000.000 people living on the northern half of this continent shall be provided by Canadian producers.

Following out, I presume, that enunciation of policy at that particular session of parliament, legislation was introduced to increase the tariff and the house was assured, in words that I intend now to quote, that no increase in price to the Canadian consumer would result from those increases in the tariff. At page 240 of Hansard of the same session the Prime Minister is reported as saying:

There then remains to be considered the consumer. I was much taken with the observations made yesterday as to the desirability of caring for the consumer; it was a part of every address I made during the last election to the electors of the country. I believed it was the duty of this parliament to protect alike agriculture and labour, industry and the consumer. And I say to you, sir, and to this house, that with respect to the items that are dealt with in these schedules we have definite and quantitive assurances from the manufacturers that their enactment will result in no increase in prices.

At page 242 of Hansard of the same session the Prime Minister, in speaking to an amendment to the customs tariff, quoted the section as follows:-

In the event of the producers of goods in Canada increasing their prices in consequence of the imposition of any duty under the provisions of this act, the governor in council may reduce or remove such duty.

And then said:

That is the embodiment in statutory form of what I said in the opening of my observa-

The Address-Mr. Bolhwell

tions; it confers upon the governor in council power to reduce or remove duties where there has been any effort on the part of the producer to exploit the consumer. Shortly put, that is what the provision is.

We all realize that we in Canada have been * going through difficult times. We know that the primary producers can get but very low prices for their products, and that they will suffer unless they are placed in a position whereby they can purchase goods on a price basis comparable with the prices of the commodities they have for sale. Apparently that idea in the Prime Minister's mind caused him to make the remarks I have quoted. Later in the session he placed himself more clearly on Hansard. At page 501, in reply to the leader of the opposition he said:

But I would answer the right hon. gentleman's question by saying: Yes, I would regard it as an increase in price and I would, if necessary, utilize the machinery of this section to correct it.

That statement was made in answer to a question as to whether or not that section would be operative if prices outside of Canada had fallen. His intention is made clear when at page 531 of Hansard he is quoted as follows:

Where you have an undertaking such as that given in good faith, and you have in a statute a section enabling you to exercise a power in the event of that undertaking not being kept, I certainly would not, as a public official and minister, for a moment stand on any finely drawn legal document, but on the broad basis of an understanding given in good faith. And if that undertaking is not observed the power of the section will be invoked.

Again at page 578 the Prime Minister is reported as follows:

I have indicated to this committee that I agree entirely with the observations of the right hon. the leader of the opposition, and if there should be a great falling off of prices beside us and an effort made to maintain present prices in Canada, that would be utilizing the tariff to increase the prices and would be a violation of the undertaking.

I presume the Prime Minister and his government are at least to some extent entitled to rely on the reports of the standing committees of this house, although I do not know just how far the duty of the Prime Minister extends in regard to analyzing the evidence taken before such committees. I am referring now to the report which was made at the last session of parliament by the banking and commerce committee which investigated the prices of gasoline. I should like to add that discussion in the house on the report was prevented. Under a reference made to the committee from the house a report was brought down which, to say the least, was most misleading. During the investigation witnesses were heard from various oil companies situated in different parts of Canada and some from the United States. A firm of chartered accountants was engaged as auditors, and members of that firm were sent out to get certain information. Towards the closing days of the investigation the auditors returned, not to give the committee information as to the facts they had ascertained, but to give their report on such facts.

Following the report of the auditors a majority of the committee brought in a report which, with the exception of a few recitals at the first, contained practically the exact words of the auditors. No regard whatever was had of the evidence taken by the committee when the auditors were away getting information. Notwithstanding and in contradiction of that report I should like now to refer to some matters proven before the committee. The points to which I shall direct attention show that, in the words of the Prime Minister, the Canadian consumer is being exploited. From the evidence given it would appear that between September 1, 1930, and February 8, 1932, there had been a great drop in the price of gasoline in the United States, but a very slight drop in Canada. At this point I should like to place on Hansard a comparison of gasoline prices in American and Canadian cities as of September 1, 1930. These are retail prices computed in imperial gallons:

September 1, 1930

New York 19-56

Augusta, Me 21-36

Manchester, N.H 20-88

Burlington, Vt 21-96

Buffalo 20-16

Detroit 20-83

Duluth 21-00

Minneapolis 20-64

Grand Forks 23-04

Minot 22-68

Helena 27-00

Halifax 24-00

St. John. N.B 24-00

Montreal, Que 24-00

Sherbrooke, Que 23-15

Toronto 23-00

Border Cities 22-00

Fort William 24-50

Winnipeg 24-50

Brandon 27-50

Regina 30-00

Calgary 27-00

The average United States price in the various cities mentioned was 21-737 cents and the average Canadian price 24-877 cents or a

The Address-Mr. Bothwell

Evidence was also given as to the price of Roumanian gasoline laid down in Montreal, but as it was getting towards the close of the investigation we were not allowed to submit figures. I intend to present those figures to the house tonight. Inquiries were made of a firm in London, England, asking for quotations on oil and gasoline, and their answer was that they could supply Roumanian gasoline, laid down in Montreal with everything paid except duty and sales tax, at a price of 5-9062 cents per imperial gallon. Quotations were also obtained from another source by one of the oil companies in Ottawa, and the price quoted was SI4.50, United States currency, per ton of 2,240 pounds, c.i.f. Montreal, May shipment from Constanza, provided prompt action was taken. That price, without duty and sales tax, amounted to 5-75 cents per imperial gallon.

The question of bootlegging in the United States took up a good deal of the time of the committee. The oil companies contended that bootlegging accounted for the spread between United States and Canadian prices, but I submit that this contention is not borne out by the evidence presented to the committee. At the time that claim was made gasoline could be bought coming from Roumania or from the Dutch West Indies at prices equal to those for which gasoline was being sold in the United States. As a matter of fact the Shell Oil Company imported their gasoline partly from the Dutch West Indies and partly from Chicago, because they were able to get quotations at about the same figure.

Other evidence was given before the committee which I think has some bearing on why the Imperial Oil wholesale price and manufacturing costs were so high in comparison with the McColl-Frontenac and British American companies. The evidence was that the International Petroleum Company, Limited, a subsidiary of Imperial Oil, from which Imperial Oil buys its crude, sells about eighty per cent of its output in the world market and only about twenty per cent to Imperial Oil, at prices that are supposed to be comparable with those charged in the mid-continent field of the United States.

While dealing with the capital structures of these companies I should like to deal with that of International Petroleum, and I will try to be brief. This company is paying a dividend of about forty per cent on the money actually invested in the company. I am referring now to the analysis of the International Petroleum Company which appears in the

Financial Post survey of corporate securities of Canada for 1931. There it is shown that this company has $500,000 of preferred stock authorized with $500,000 of preferred stock outstanding. There were 39,800,000 shares of common stock authorized, of which 14,324,088 were outstanding, of no par value. Both preferred and common stock rank equally as to dividends. Almost all the preferred stock and about 58 per cent of the common stock is owned by the Imperial Oil. In April, 1929, the entire capital stock was split two for one, the par value of the preferred stock being reduced from $5 to $2.50. The number of shares of both kinds of stock was doubled, and outstanding shares were exchanged on the basis of two new shares for one old share. The initial dividend on both common and preferred stock was 12i cents, paid June 26, 1929, and 25 cents paid September 26, 1929, and regularly each quarter ever since. This works out at about 40 per cent. This publication also deals with another subsidiary company, the Andian National Company, which is controlled by International Petroleum. The dividends paid 'by that company work out to about 24 per cent.

In connection with these companies producing and manufacturing oil in Canada, I think the evidence taken by that committee should be drawn to the attention of the Prime Minister. We will consider the McColl-Frontenac Company, for instance, whose report was brought out while the evidence was being heard. The net operating profits of the McColl-Frontenac Oil Company for the fiscal year ending January 31, 1932, amounted to $3,370,186. After deducting reserves for depreciation, bond interest, preferred stock dividend and income tax there remained the sum of $907,958, which was equal to $1.81 on the common stock outstanding. This compared with $1.43 on the common stock outstanding for the fiscal year ending January 31, 1931, so it would seem that while every other company is suffering from the depression this oil company, at any rate, is making more money than ever. I might say also that when evidence was being taken by the committee it was shown that in the United States wages in the oil industry had been reduced anywhere from five per cent to twenty per cent, and it has been stated in this house many times that wages in Canada have been reduced by from five per cent to twenty-five per cent. The oil industry in Canada, however, is the outstanding exception and has made no reduction in wages. The other day I was speaking to an agent for the Imperial Oil Company, who

The Address-Mr. Bothwell

told me that as yet he had suffered no reduction and that he had not heard of any reduction being made elsewhere. So in addition to paying boom wages the oil companies are still able to increase their profits.

I am not going to deal further with that company, but will turn to the British American Oil Company. In 1930 this company earned $1.01 per share and paid a dividend of 80 cents per share. In this connection I should like to direct attention to a statement which has been quoted frequently in this house, but which I think should be quoted once more. The chairman of the board of directors is reported as having said: .

Dealing with an item of $874,000 set aside for depreciation, I said that $174,000, or $700,000 less than the amount set aside, would have been sufficient. The larger amount was written off because 9 per cent of the net revenue is payable to the Dominion government for taxes. We think such a nominal writeoff would have substantially increased the earnings per share as indicated in the figures presented in the foregoing.

Coming to the Imperial Oil, the sworn evidence is that all the money ever paid to the Imperial Oil for stock, either by employees or by the public at large was $64,094,530. An analysis of the financial structure of this company was published in the Financial Post of April 1931, and quoted in the Western Retailer for Aprii 1932. It came out while this hearing was in progress; we had it in the committee. I wish to quote one or two paragraphs from that publication:

A reference to the above table will show that owing to the bonus and series of splits the holders of the first 110,000 shares would today hold 14,080,000, or more than one-half the shares outstanding. These shares cost $15,666,300, and based on the profits paid by this company are valued today at $9 per share or $126,720,000, at a time of depression. The holders of the next 80,000 shares issued are less fortunate, holding today 64 shares only for each share purchased between 1915 and 1917.

No mention is made of the dividends per share subsequent to 1924, when following the second split of four for one, the $25 shares were changed into no par value shares. It requires enormous profits to pay interest on 26,742,792 shares, upon which the market places a value of around $9 per share of approximately $240,000,000. Such profits can only be obtained, we maintain, when there is an absence of competition. The average price on the market of Imperial Oil shares in 1930 was $22.38, which wrould mean that Imperial Oil were endeavouring to pay dividends on the staggering sum of a market valuation of $599,000,000.

Evidence was given as to what the earnings of the Imperial Oil were for 1930, but we have

since received a report of the earnings for 1931 and in the press the figure was given as $18,226,894. On the basis of the money actually paid for Imperial Oil stock at all times, the net earnings for the year 1931 work out at about 28 per cent.

After listening to that evidence given before the committee, we thought we were entitled toi discuss the matter on the floor of this house. We did not believe that the auditors who spent a few weeks going through the books of one company had the right to make a report for the committee. But that is what they endeavoured to do and what was done. We believe that the investigation showed clearly that the oil companies in this country are taking advantage of the tariff and of the fixing of values for duty purposes, and therefore we moved an, amendment directing attention to seme of the matters that indicated why prices should come down. We called attention to the overproduction of crude oil; of the greatly reduced prices of other commodities entering into the manufacture of gasoline; reduction of wages and salaries everywhere except in Canada, and in Canada in every industry except the oil industry, which reduction in wages and salaries averaged from 10 to 15 per cent. We also pointed out the reduced cost of manufacturing through increased efficiency. We showed that you could buy gasoline in other countries at prices comparable with those obtaining in the United States. The evidence given before the committee showed that there had been reductions in other countries between 1930 and 1932 which were not fallowed by the Canadian producers. We showed that there had been in recent years a marked decline in world prices. We showed that advantage had been taken of the increased tariff of September, 1930, and we reached the conclusion that the narrowing of the spread in prices between wholesale and retail, by increasing wholesale prices, which actually happened, and reducing retail prices while importations from outside Canada were restricted, tended to create a monopoly in the industry and to drive out the independent distributor. Evidence was given by witnesses that if they were able to buy outside our refiners, without the dumping duty, they could sell gasoline at 2j cents less than they were selling it. These were the conclusions that must be arrived at from the evidence.

I am sorry, Mr. Speaker, that I shall have to stop here; my time is up.

Subtopic:   G8 COMMONS

John Knox Blair


Mr. J. K. BLAIR (North Wellington):

If I were allowed to do so, Mr. Speaker, I might

The Address-Mr. Blair

on this occasion follow a custom of the house which would put you in a very embarrassing position by asking you to proclaim it eleven o'clock. You are sometimes asked to say that it is eleven o'clock when, as now, it is half past ten, and sometimes when it is midnight or one o'clock. In Washington they move the hands of the clock, making the clock, rather than the Speaker, untruthful. That, I think, is a much better practice; it casts no reflection on the Speaker. Nor am I now reflecting on the Speaker but on the custom. It might be well to abandon that practice or to modify it so that we might more nearly be telling the truth. I am well aware that people try to tell the truth, even my opponents on the other side; but sometimes they try so hard to make a point that the truth seems, according to our ideas at any rate, rather badly twisted.

Everywhere at the present time, on platforms and in other places, we hear the statement that we have turned the corner; we are told that prosperity is just around the corner. Repeatedly during the last two years we have been assured that there was a ray of economic sunshine through the clouds; the clouds were lifting and the situation was improving; the farmers were becoming more prosperous. We have heard so much of that talk that the poorer classes have become very much dissatisfied.

Hope deferred maketh the heart sick. The promises that were made prior to the last election were false promises; they have not been fulfilled. But there was something of speculation in those promises, because there was an element of futurity in them. It was like a doctor making a prognosis; sometimes he cannot interpret the future rightly. But in these promises made in the present day there is not so much an element of futurity as there is an element of observation. When promises are made to be fulfilled in the future they are accompanied by certain obligations. Perhaps when promises are made before elections we should consider that they are apt to be exaggerated and speculative, but it is a different thing when, after two years of severe depression, we are told repeatedly that times are improving. There is an element of falsehood about such statements, and I think this falsity is a little more manifest than it was prior to the elections. I believe that these statements are made with the idea of bolstering up the financial interests and encouraging people to buy. It is rather amusing to hear the poorer classes being urged to buy and thus end the economic depression. It is impossible for them to buy because they have [Mr. Rla'r.l

not anything with which to buy. It is an absurd request to make and those in the higher positions should realize this fact. There is too much money at the top and too little at the bottom.

One of the methods adopted by the government to relieve this distressed condition is to raise the rate of interest paid on governmental bonds. The sale of these bonds has absorbed whatever loose money there was in the country and the farmers now find it impossible to obtain mortgages on their property. It is almost impossible to renew a mortgage on a farm for even half the value, and the same applies to town properties. To increase the rate of wages of money will not help to relieve conditions, it simply accentuates matters. Another method adopted by this government has been to reduce the price of farm products, which is the wages of the farmer. The government has raised the wages of money and lowered the wages of men, both methods being entirely wrong.

I do not think the government realizes the conditions which prevail in the rural communities. Mortgages have been foreclosed on farm after farm, nnd many more would be foreclosed were it not that the mortgage companies fear having a number of farm properties on their hands. I think I am safe in saying that one farm out of five would be sold were this not the case. At the present time it is almost impossible to rent a farm property at more than the amount of the taxes. I do not think that the government has been at all sympathetic with the farming and working classes.

The only person in Canada who cannot enter the House of Commons is the Governor General. I think the Conservative party has made a mistake in choosing as its leader one of the wealthiest men in Canada, a man who perhaps could not be considered a commoner. It would be bad enough if he were simply a private member, but it is worse when he has control of the house. In some countries men of such wealth are not usually considered suitable as members of the legislature, and I think this is one mistake we have made in this country.

Just a word or two on the tariff. Many companies operating in Canada are subsidiary to parent companies in the United States. A previous speaker referred to the oil companies which are subsidiary to the American companies. Many of these companies have agents to look after their interests and sometimes these agents are members of this house and have a say in tariff matters. Almost

The Address-Mr. Mercier (St. Henri)

every industry we can name is subsidiary to an American parent company. Our steel industry is controlled from the American side. They use such names as Canadian bread, Canadian flour, British American oil and Imperial oil, but the money paid into these companies finds its way to Wall street. The consequence is that Canada suffers financially and may in time have to face bankruptcy because of this practice.

There are some things regarding which we are paying heavily, not to Canadian but to United States companies. If we were assisting our own Canadian companies some of that money might come back and be distributed among the poorer classes of this country. As the situation is, however, a large portion of that money finds its way to Wall street. For instance, it has been reported1- and this is worth while investigating

that the parent company of the Imperial Oil Company being some $4,000,000 short, the Imperial Oil Company sent across the line some $12,000,000 to balance their account. I will not vouch for the truth of this; I have read it in different places and it may have an element of truth in it and be worth while considering. The reason I say there may be an element of truth in it is the vast difference tha)t exists between the price of gasoline in Canada and the price across the line. Any person considering the situation would readily say that a difference of some six cents could easily be deducted from the price of gasoline in this country and it would still be above the United States price. As we are handling in Canada some 600,000,000 gallons, this would mean that $36,000,000, or a large portion of it, would likely find its way to the United States.

In times like this when we have such a depression and wish to remove it, the first thing to do would, I think, be to lower the rate of interest. I understand Ramsay MacDonald has set the rate at 3i per cent. The last government loan in this country was, I believe, at four per cent. If there were some way of lowering the rate of interest on our government loans and on bonds, and if a loan of that nature could be used to pay off some of the loans we have previously floated, it would mean a great saving of money to the Dominion. It would also mean that people requiring money for farm mortgages would be able to secure it at a reasonable rate. At the present time it is almost impossible for our farmers to get money at any price even if their security is apparently very good. That being the case, as I said a moment ago, with too much money at the top and too much

poverty at the bottom, surely to lower the rate of interest, the wages of money, and to try if possible to maintain the wages of the working people, would be a means of relieving the depression. It is impossible for the poorer classes to buy goods unless they have some source of revenue. I do not know of any better system that would help to relieve the depression than the one I have suggested. It would mean much to the farmers and to the rural communities.

Subtopic:   G8 COMMONS

Paul Mercier


Mr. PAUL MERCIER (St. Henri) (Translation) :

Mr. Speaker, I rise at this rather late hour to take part briefly in the present debate. This autumn session was called to discuss the trade agreements of the last Imperial economic conference, held at Ottawa, in the course of the months of July and August last. Not being acquainted with these trade agreements, it is difficult to discuss them at present. Perhaps this explains why the people of South Huron did not wish to pronounce themselves on an issue of which they knew neither the import nor terms. No doubt they were satisfied to judge of the government's record which was so well put before them by our friends on your left, sir, the faithful workers of the Liberal party, not only from Ontario, but from all over Canada.

If we are to believe what we have read in the Canadian, English and American press, this conference was the cause of many a surprise to a great number of people, and this in varied fields of activities. Without knowing the result of these agreements, I wonder how the government will settle the trade exchanges with England, if Canada remains on the gold standard while the pound sterling is depreciated. I am not a financier, but according to common sense, it seems to me a difficult problem to solve, under the present circumstances, I wonder how they are going to reconcile our two monetary systems so different from one another.

I read, sir, the speeches of the mover and seconder of the address in reply to the speech from the Throne. I congratulate them both on their literary attainment. After perusing the speech of the hon. member for Jacques Cartier (Mr. Laurin), I have no further doubt that he believes in his leader and will follow his star, until it shoots across the skies to fall into the St. Lawrence river, below Quebec, or in the beautiful county of Montmagny represented in this house by the hon. deputy speaker (Mr. LaVergne) who is at this moment presiding over our deliberations.


The Address-Mr. Mercier (St. Henri)

Since last session many events have taken place throughout this country. We have had a number of by-elections. The results of these by-elections in Quebec and New Brunswick may be looked upon as an approval of the stand taken by the Liberal party, during last session, on the various economic questions debated in this house. The people realized that the claims put forward 'by the Liberal party were just and deserved to be endorsed.

We first had two by-elections on the same date, one in Quebec and the other in New Brunswick. In Quebec we had to contend against all the conservative forces, not only of the Montreal district but also of Quebec. All the fighting element of the Conservative party came to the rescue of the Conservative cause, led by ministers who erected a real Xmas tree, in the middle of June, in the city of Montreal, making all kinds of pledges, such as wharves, etc., offering to supply work to their followers, if the Conservative candidate was elected; bringing dredges from the lower parts of the St. Lawrence and placing them near the Montreal East wharves in order to have the people of Maisonneuve believe that there would soon be work for all if the constituency elected a Conservative member. I am supported in this statement by an interview given to "La Presse" by the hon. Minister of Marine (Mr. Duranleau), which was in answer to criticisms made by Mr. Jean Fauteux, the defeated Conservative candidate, who stated that his party had not sufficiently supported him in this contest. In this interview the hon. Minister of Marine gave proof of his tireless work, and showed how hard the whole Conservative party had fought to storm this Liberal fortress. Although the Liberal majority decreased from

4,000 to 1,500 owing to there being four or five candidates in the contest, candidates of all shades, labourite, communist, conservative and liberal, the liberal standard still continues to float over Maisonneuve. The interview of the Minister of Marine proves that no blame can be attached to the Conservative party as regards the efforts made to win this election, hence, this victory of the Liberal party is the more significant. The new member for Maisonneuve (Mr. Jean) an advocate practising at the Bar, in Montreal, has taken his seat on your left, sir, among us, his colleagues who rejoice, and to help us in safeguarding the people's interests which the Liberal party has always had at heart.

The same day another election took place in the constituency of Royal, in New Brunswick. The hon. Mr. Jones was returned, but with

a majority greatly decreased-from about three thousand to six hundred in round figures. Again there we won a victory if we are to put faith in the speech of the right hon. Prime Minister (Mr. Bennett) when, in answer to the right hon. Loader of the Opposition (Mr. Mackenzie King), he stated: "We have reduced the majority in Maisonneuve." If this argument can be put forth by the leader of the government, it also stands good for the Liberals. We have decreased the Conservative majority in Royal from three thousand to about 600, this is really a moral victory and a happy omen for a Liberal victory at the next general election.

A few months later, the battle bugle called us to take part in the by-election of South Huron, in Ontario, we had nothing to do with the date of this by-election. The Imperial Economic Conference had just concluded its work, from all sides one heard of the supposed success of this conference; the government was under the impression that everything was in its favour. Much had been said about this conference, perhaps rightly if we are to judge by the solemn gathering, at Ottawa, of all the diplomats of the empire. This no doubt was an honour for Canada, and the government relied on the results of this conference to hypnotize the people of South Huron; however, they made no success of it and a defeat was their reward. The . victorious Liberal party increased their majority from 349 to 1,989 votes. This by-election was to the credit of our leader, and the Liberal party and a rebuff for the government. Mr. Speaker, I move that the debate be adjourned.

Subtopic:   G8 COMMONS

Motion agreed to. On motion of Mr. Bennett the house adjourned at 10.55 p.m. Wednesday, October 12, 1932

October 11, 1932