October 18, 1932

?

Some hon. MEMBERS:

Oh, oh.

Topic:   IS, 1932
Permalink
LIB

Mitchell Frederick Hepburn

Liberal

Mr. HEPBURN:

That is the usual contribution some hon. members opposite make during the whole session, and then they go home and tell their constituents how hard they have been working. When their leader goes into their constituencies to appeal for support in the course of an election, he has to tell their constituents what great men they were on committees.

We have to approach this matter by studying the simple economic problem. Let us examine the position in which Great Britain is at the moment. Is it possible for a country like Britain to increase the price of her raw material without subsequently increasing the price of her finished product? Britain has achieved her position in world trade how? Because she has kept down the cost of production. Bearing that in mind, dio hon. gentlemen think British statesmen would be foolish enough to come over to Canada in order to bind the British manufacturer by a deal whereby he would have to increase his cost of production? That would mean a loss of the world market.

Many farmers throughout the country were deluded into believing that they might secure a higher price for their wheat as a result of the conference. I do not know how much

wheat Britain requires for re-export in the way of flour, but if she ever intends to mill wheat into flour and export it, she cannot pay more than the world price for wheat because if she does, she will have to charge more for flour, and Germany and other flour exporting countries will undersell her.

As regards copper, do hon. members think it is possible for the British manufacturer of metals to pay more for his raw material than Germany does? He cannot, because if he does, he will have to do it at the expense of his export market. As regards lumber, the British manufacturer of furniture cannot pay more for Canadian lumber than for lumber from other parts of the world. The British manufacturer must buy the cheapest lumber or let his export trade go to foreign manufacturers of furniture. That is simple economics. The British shipbuilder must buy the cheaper Russian lumber or else he will not be able to build ships in competition with German shipbuilders. If he cannot build ships in competition with German shipbuilders, he will have to lay off his men and that will aggravate the condition of unemployment in Great Britain.

I want to ask the Minister of National Revenue (Mr. Ryckman), the head of the Dunlop Rubber Company, a question.

Topic:   IS, 1932
Permalink
CON
LIB
LIB
LIB

Mitchell Frederick Hepburn

Liberal

Mr. HEPBURN:

Yes, he will put his

foot in it.

That is why we are facing such grave agricultural problems in Canada, May I refer to some other commodities, dealing first with barbed wire. Of that commodity we import only eight per cent from England, the bulk being imported from other countries. In that connection hon. gentlemen opposite had a

United Kingdom

chance to mislead the people when they showed that in the revision of the tariff schedules barbed wire from England was to be placed on the free list. England is not classified as a great producer of barbed wire, but other countries do export to us large quantities. Now, however, the Canadian fanner will have to pay a ten per cent toll to the special privileged interests manufacturing barbed wire.

On my farm in Elgin county 1 have about twelve miles of fence, the replacement cost of which would be over $2,000. Naturally with the present reduced income from agricultural products one patches up his fences, and we patch with barbed wire. I think during the past two years I have bought enough to hold back the whole German army; other farmers have done the same thing. Now, however, we will have to tell the farmers they must pay ten per cent more for their wire because a Tory government has so changed the tariff on barbed wire that the price must go up. This may be a joke to hon. members opposite, but I know farmers whose fences are broken down and who cannot replace them but would be content to patch them up with barbed wire, who will not treat it as a joke.

Then, there is an increase in the tariff on electrical equipment. We know something about the huge profits the General Electric Company has made in the past. The Prime Minister should know, because at one time he was a director of that company. He knows further, that it does not need and does not deserve any increase in tariff protection. Then there is another point to be considered. Consumption of hydro power in the province of Ontario is falling off tremendously. Why? Because there are fewer rural extensions. People in rural sections cannot afford to install hydro facilities, and the new regulations will make it more difficult for them. In the province of Ontario we are producing in our own plants more than we can consume. We have contracted for a million horse-power, and when the St. Lawrence development is completed and at our disposal there will be another million and a half horse-power available. In the province of Ontario we will have three and a half million horse-power of electrical energy with a market for only one million. On top of that this government is giving the General Electric Company an opportunity to exploit the consumers just a little more. If there is one thing more than another in a rural community which helps to improve the life of the farmer it is electrical energy. The farmer is able to grind his grain and turn his

separator and light his bam by the use of' electricity. The housewife is able to lighten her duties by using the electric washer, the electric stove, and the electric refrigerator. The people in the country will not take kindly to this change when they become thoroughly familiar with it.

I could go on and enumerate many more cases where the cost of production in the rural sections has been increased as a result of this pact that we are asked to endorse. But we have gone beyond that. We have again aggravated the condition of over-production in Canada and throughout the world. What is the matter today? Why are we completely out of gear in regard to supply and demand? Because policies similar to -that of this government have been put into effect in practically every country of the world. What did president Hoover, the great exponent of toryism and high protection in his country-

Topic:   IS, 1932
Permalink
?

An hon. MEMBER:

What is he going to get?

Topic:   IS, 1932
Permalink
LIB

Mitchell Frederick Hepburn

Liberal

Mr. HEPBUBN:

Yes, he will get it, and so will the hon. members opposite. He went up and down the country telling the fanners the same kind of story that the leader of the government told our own farmers in 1930:

" I will find ways of increasing production and still maintaining high price levels." He put up the tariff, stimulated production, but there was not a corresponding increase in consumptive demand. The thing was economically unsound, and farm prices in the United States could not be maintained even with the great power of financial backing of the United States government. Five hundred million dollars were spent in a vain and futile attempt to do something economically unsound. The farmer saw the prices of his product go to record low levels, and now he has to stand taxation to pay for this noble experiment, in other words, to pay for his own folly. Take any of the great major commodities of trade. Take sugar; there again there was false stimulation of production by tariff policy, without corresponding increase of consumption demand, and you have the greatest overproduction of sugar ever known. And what was done in this house. A motion was passed to subsidize' the production of beet sugar in markets already glutted. Another example off the same false economics. Take the case of rulbber. Rubber is down, I believe, to half a cent a pound, the lowest price ever known. Why? Because the British government tried to do something economically unsound-tried to tax the rest of the world1 to pay the British war debt; they imposed an excise tax and

; COMMONS

Imperial Conference-Trade Agreements_

temporarily increased the price. But this is a big world, we are going to find that out, too, before we are through with our silly tariff policy-

Topic:   IS, 1932
Permalink
CON

Ira Delbert Cotnam

Conservative (1867-1942)

Mr. COTNAM:

I will stake my political

future against that of my hon. friend

Topic:   IS, 1932
Permalink
LIB

Mitchell Frederick Hepburn

Liberal

Mr. HEPBURN:

Let me tell my hon.

friend that he hasn't any political future. I saw his colleague from South Renfrew howled down at a non-political gathering m his own riding before a group of farmers-

Topic:   IS, 1932
Permalink
CON

Ira Delbert Cotnam

Conservative (1867-1942)

Mr. COTNAM:

The hon. gentleman never was voted down in his own riding on any occasion.

Topic:   IS, 1932
Permalink
LIB

Mitchell Frederick Hepburn

Liberal

Mr. HEPBURN:

I think the hon. member will have a rather rough passage if he tries to explain-

Topic:   IS, 1932
Permalink
CON

Ira Delbert Cotnam

Conservative (1867-1942)

Mr. COTNAM:

The hon. member voted

in this house to cancel the New Zealand agreement which six weeks previously he had supported in this house.

Topic:   IS, 1932
Permalink
LIB
CON
LIB

Mitchell Frederick Hepburn

Liberal

Mr. HEPBURN:

It was not the abrogation of the treaty that interfered with the butter trade; it was the eight cent duty put into effect by himself and his leader.

Now let us see what is going to happen with regard to wheat. Why have we the lowest price ever known in the history of world trading? Because an attempt was made to do something economically unsound, to disregard the law of supply and demand. President Hoover in his zeal to fulfil some of his promises bought huge quantities of wheat and took them off the market. That stimulated the price of wheat, it is true, but they could not maintain the price, because when President Hoover had to sell that wheat he dumped it on the market and the consequence was to crash wheat prices to the lowest level ever known. But the high price stimulated other countries to increase their acreage and become competitors of ours. Every time we try to do something that is not economically sound, every time we try to disregard the law of supply and demand, we only create a worse condition than obtained before.

Now about the hog question-

Topic:   IS, 1932
Permalink
?

An hon. MEMBER:

Now you are at

home!

Topic:   IS, 1932
Permalink
LIB
LIB-PRO

John Livingstone Brown

Liberal Progressive

Mr. J. L. BROWN (Lisgar):

Mr. Speaker,

after listening to the eloquent speeches this afternoon by the former Minister of Trade and Commerce (Mr. Malcolm) and the former Minister of Justice (Mr. Lapointe), and to the able speech of the hon. member who has just taken his seat, (Mr. Hepburn) a speech characterized not only by sound common sense but also by that humour which is so conspicuously absent on the other side of the house, it is with some diffidence that I undertake to carry on this discussion. Still I feel, Mr. Speaker, that I would not be true to myself, to the people I represent or to the great mass of people in Manitoba who I believe hold views similar to those which have found expression from this side of the house if I did not say a word on behalf of my constituents and present to the house the views which I believe are held by a large majority of the people of the prairie provinces. I should like to compliment the hon. member for Marquette (Mr. Mullins) on breaking away from party control. We know now that there is at least one member on the other side of the house who is not going to submit to that limitation upon their freedom of speech to which most hon. members opposite evidently have calmly submitted.

In discussing this agreement, Mr. Speaker, I am not going to say that there are not some parts of it that are good. Probably it would be impossible for a number of men to meet together and decide upon an agreement of this kind which would not contain some things that might be commended, but I do say that in the main those things that are good might very well have been obtained by other means, without calling this conference at all. So far as duties have -been reduced and so far as this agreement leads to the reduction of the tariff on those things which we use in our daily life, of necessity we on this side must give our approval. But those who represented Canada at this conference did not have the point of view which has been held for many years by hon. members on this side. They approached the conference with the attitude that any reductions made on imports from Great Britain were made as a favour to the British people, while from -our point of view we consider that any reductions that might be made-reductions that we have been advocating in past years-should be -made not only for the benefit of the British people but for our own benefit as well. Therefore we do not consider it any great achievement on the part of the government that in a few cases duties may have been reduced.

So far as preferences have been given to the British people by the reduction of tariff generally we are in hearty accord. So far as preferences have been given by the increase of tariffs, that is a matter to which we will give very serious consideration when we take up the schedules. Speaking generally we are opposed to that method of giving preferences.

348 COMMONS

Imperial Conference-Trade Agreements

I had the satisfaction and pleasure of listening in to the speech of the Prime Minister (Mr. Bennett) in opening the conference, and to the succeeding speech by Right Hon. Stanley Baldwin. When he made the announcement that he came to Canada seeking preferences not by way of increased tariffs but by way of reduced tariffs I felt myself in hearty accord with the principle he enunciated, and so far as that principle has been embodied in this agreement I find myself in accord with it. But so far as that principle has been abandoned-and in a large number of instances it has been abandoned-then to that extent I find myself entirely opposed to the agreement.

It has been said that this agreement means the diversion of trade. I find no objection to the principle of diverting trade from those countries that have not been willing to trade with us to those countries that are willing to give us a fair deal. To some extent at least that principle was embodied in the Dunning budget, and we supported it during the election of 1930. But it is always possible to pay too much for a seeming advantage, and in my judgment that has been done in many cases in this agreement.

Speaking on the address in reply to the speech from the throne I indicated that there were two standards by which the success of this agreement could be judged. The first was: Did it give any promise of increasing inter-imperial trade, and of promoting harmony among the different parts of the empire? The second was: Did it give any promise of increasing trade generally throughout the world, and of promoting harmony among the nations of the world? Let us consider it from the first point of view, that of promoting better relations among the different parts of the empire. So far as it has a tendency to promote inter-imperial trade it will be all to the good, but just what will be the result in that direction can be judged only in the future. It is impossible to tell to what extent we may succeed in that direction. Then we come to the question of whether it has tended to promote better relations among the different parts of the empire, and I think even at this time it is quite evident that the effect has been rather in the other direction. We have had the resignation of several ministers from the British cabinet; we have had the resignation of a cabinet minister in Australia as well. It is true that one resigned because protection was too high and the other because protection was too low, but that does not matter. The significance of it is this, that these ministers have resigned by way of protest against the agreements that have been arrived at by

their representatives. Now it is all very well to say that there has been no compulsion. True, there has been no physical compulsion; no definite attempt has been made by any physical means to impose certain conditions upon the British people. But surely there is such a thing as moral compulsion, and when the Prime Minister went to England, as he-did in 1930, and insisted that the British people must change their fiscal policy, under the threat or promise or statement only, if you like, that if this were not done then there was a possibility of the breaking-up of the empire-perhaps he did not make the statement as categorically as that, but the fact is that such statements were made both in Canada and in England-that, I say, was a moral compulsion which must, of necessity,, have had its effect upon the people of Great Britain. Is that likely to produce a condition of harmony among the component parts of the-empire? I have always felt, and have expressed the thought again and again, that there was very grave danger in trying to build up a united empire by means of protective tariffs.

What about international trade? Is there anything in this agreement which is calculated to break down tariff barriers in the world generally? Absolutely nothing, I know that the Prime Minister asserted, in the course of his remarks, that there was a possibility of its having that effect, but as we look over the agreement, as we analyse the different articles in that agreement, and as we view them in tl e light of the statements that are made by the Prime Minister and his supporters, we cannot but come to the conclusion that these different agreements have done absolutely nothing to break down international barriers and to remove those restrictions on trade which are the fundamental cause of the world's ills today.

Speaking of statements Ithat have been made by the Prime Minister and his supporters, I listened with a good deal of amazement to the leader of the opposition when he quoted from the speech made by the Prime Minister at Calgary:

One thing was certain, however, that nations outside of the empire would be asked to pay some tribute for the privilege of trading within the empire.

I had rather hoped that, for the honour of Canada, for the sake of that peace and good will which I should like to see prevail among men, the Prime Minister would have denied making that statement. The fact that he has not denied it, the fact that.

United Kingdom

no denial has been made of it so far, must force me to the conclusion that the right hon. gentleman was correctly reported when he made the statement:

One thing was certain, however, that nations *outside of the empire would be asked to pay some tribute for the privilege of trading within the empire.

Is such a statement as that calculated to promote a good feeling among the nations of the world? I shall not attempt the flight of eloquence attained by the hon. member for Labelle (Mr. Bourassa) when he discussed that statement, but I am going to deal with it in a plain blunt manner, in such a manner as the Prime Minister sometimes deals with facts. I have no hesitation in saying that a statement of that kind is fraught with danger to the peace of the world. Before the election of 1930 we questioned as to who was to represent Canada at the Imperial conference. We had some misgivings as to how Canada would be represented at the conference in London. Subsequently we were not satisfied with the sort of representation we obtained in 1930. We hoped that the Prime Minister would learn from the experience of the past to modify somewhat the views that he had expressed. Are we not justified in having some misgivings now as to who shall represent us at the coming world economic conference, when the Prime Minister will give utterance to a statement such as I have quoted? I have no hesitation in saying that if that represents the opinions and the attitude of the right hon. gentleman, then he is too dangerous a man to be longer entrusted with the destinies of the people of Canada and to take part in *discussions with other nations. In the time of Theodore Roosevelt an expression came into common use-shirtsleeve diplomacy. Shirtsleeve diplomacy Theodore Roosevelt knew nothing about in comparison with the Prime Minister of Canada.

The Minister of Trade and Commerce undertook to reproach the leader of the opposition for stirring up agitation in England. Well, we need not think that the Liberals of England were so benighted as to require the defects of a treaty of this kind to be pointed out to them by any person in Canada. They Wire quite competent to form their own opinions, and they did so. But why should it be considered an offence for any man in this country to seek to give some comfort to those in England who stand for the principles which we ourselves hold? It may not be considered wise on all occasions

to intervene in the political discussions that are going on in the old country, but it certainly does not lie with hon. gentlemen opposite to condemn anyone on this side of the house for expressing views that are held by a large number of people in the old country. What are those principles? Summed up, they are simply this principle, that each dominion should be permitted, without interference from any other dominion, to decide its own fiscal policy. I say, it should not be considered offensive for any Liberal in Canada to give expression to the same principles as are being advocated by Liberals in the old country. Away back in the years when Joseph Chamberlain's policies were under discussion, the United Farmers of Manitoba, then known as the Grain Growers' Association, passed a resolution in which they repudiated the idea that the farmers of Canada were seeking preferences in the old country market. They declared in that resolution that they were not seeking any advantage at the expense of the British consumer. They declared further that the loyalty of Canada to the British Empire did not depend in any degree upon the giving of such preferences, and to these principles they hold today. There has been no demand by the producers of agricultural products in western Canada that they should have these preferences in the British market, and there has been no indication that the loyalty of Canada was in any degree endangered by the failure to give such preferences.

The principles which have been advocated both in England and in Canada and which have found expression on this side of the house are the only principles upon which unity can be ultimately based. We might very well ask: When did Tory principles ever contribute to the promotion of unity? It has always been the reverse. The natural effect of their doctrines and policies has been in the direction of disrupting empires and creating discord. That has been the case all through history. Such principles brought about the civil war in the time of Cromwell, they brought about the revolution of 1688, and they caused the loss of the American colonies. They occasioned the trouble in 1837 when both the grandfather of the leader of the opposition and my grandfather were somewhat implicated. They brought about the rebellion in the northwest; all through history these have been the inevitable results of Tory policies. Had Tory policies prevailed there would have been no self-government granted to South Africa and the whole course of history would

Imperial Conference-Trade Agreements

have been altered had General Botha and General Smuts taken an opposite position, as undoubtedly they would have done had selfgovernment not been granted. The British Empire owes more than perhaps will ever be known to that magnificent act of faith in Liberal principles displayed by Sir Henry Campbell-Bannerman. I do not contend that the empire has ever been in real danger. As I said the other day, I think a good deal of nonsense has been uttered on this point. I do not think that the empire was in danger of disruption either before or after the conference. In spite of the fact that the policies of hon. gentlemen opposite have a tendency in that direction, I do not think that any real difficulty will arise.

I have faith in the people of the empire and believe that they are held together by greater things than any of these lesser considerations. I am in full sympathy with the former Minister of Justice when he expresses resentment against Mr. Neville Chamberlain for coming to Canada and saying that he had found a weakening in the bonds of the empire. Our hon. friends talk about saving the empire. I am reminded of a story which I used to like to tell during the reciprocity campaign in 1911 when my hon. friends were boasting that they had saved Canada. A mother took her two little sons to the bathroom and left them there to enjoy themselves while she went downstairs. Shortly afterwards she heard the oldest boy crying: "Mother, mother!" and upon going upstairs she found the older boy holding the little fellow in the bath tub. He said: "Mother, I have saved him; the stopper came out and we were both going down." There is just about as much danger of the empire being disrupted because of anything that has happened in the past as there was that the two boys would go down the drain.

I should like to make a few references to the speeoh of the Minister of Trade and Commerce. He criticized the emphasis of the leader of the opposition when he said that we should have world markets. He said: "Yes, of course, we should have world markets," and then went on to say that nothing had been done in regard to the matter and pointed out that which everybody knew to be true, that other nations had been raising higher and higher tariffs against the products of all countries, including Canada. We have always insisted that it was a mad, insane policy on the part of these nations to enforce these increasing restrictions upon trade. One of our main complaints against hon. gentlemen opfMr. Brnwn.l

posite is that they have put Canada into the same mad rush for higher and higher tariffs which tend to throttle trade. The very fact that trade increased by leaps and bounds under the policy of low tariffs is in itself a sufficient answer to the objection raised by the minister.

I shall now refer to another matter dealt with by the minister, the provisions of article 9 of the treaty. The minister is a (past master at evading the real point of issue during a discussion. He undertook to discuss the question of preserving a margin of preference. I did not understand that the leader of the opposition objected to the principle of preserving a margin of preference; what I understood him to object to was the practical situation in which this placed the people of Canada. That practical position is this: In many cases the adoption of this principle makes it impossible for us to lower the general tariff.

Topic:   IS, 1932
Permalink
LIB

William Lyon Mackenzie King (Leader of the Official Opposition)

Liberal

Mr. MACKENZIE KING:

The article says that they must maintain the preference.

Topic:   IS, 1932
Permalink

October 18, 1932