March 28, 1933

LIB

James Malcolm

Liberal

Mr. MALCOLM:

He said if it was sound why not apply it.

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

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

It does not sound very

well, I will admit. The hon. gentleman said:

Now, no one can tell how it is going to work out until he sees the result next year.

That is what we call, in slang, a wise crack. He is pretty safe there.

Topic:   THE BUDGET
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LIB

James Malcolm

Liberal

Mr. MALCOLM:

That is logical.

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

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

My hon. friend says that

is logical. If a government should confine itself to the imposition of taxes and similar matters in connection with which the full result could be seen a year before the imposition was made, I do not think we would impose very many taxes in this house. Then the hon. gentleman went on:

I said the same thing about the wheat bonus and I repeat it now in regard to this matter. In principle I am opposed to this sort of legislation, because I do not believe it is sound, but if bonuses are going-

Topic:   THE BUDGET
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LIB

Wilfred Hanbury

Liberal

Mr. HANBURY:

Topic:   THE BUDGET
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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

My hon. friend is not improving his standing here by interjecting that sort of thing.

-if bonuses are going they ought to extend to every natural product and, as someone suggests, factory products as well. I cannot see how you can pick out some part of the community shipping to Great Britain and say to that class that they will have a certain amount made up on what they lose in shipping to Great Britain, while other exporters are given no such consideration. Take for instance the fresh fish producers. According to this they will get a bonus, but the preserved fish man does not.

Then the hon. gentleman went on to a discussion of other items such as canned and salt fish and lumber. A little later he said:

One could name numbers of natural products that fall into the same category. After all, Mr. Speaker, I ask you: Is there any guarantee, except what the Prime Minister said last evening to the effect that the government were considering the matter of machinery, that the man who actually produces the goods will get the .benefit of this bonus? The exporter is the one who will get it, according to the budget speech.

And so on.

Topic:   THE BUDGET
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?

Some hon. MEMBERS:

Oh, oh.

[Mr. Stevens.}

Topic:   THE BUDGET
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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

What is the matter? I do not want to read the whole of the hon. gentleman's speech, but hon. members might listen to this:

I say to my hon. friend that he will not get very far in assisting the fishermen of the east in shipping fresh fish to England. I believe there was about $300,000 worth of fresh fish shipped last year to England whereas the shipments to the United States amounted to something like $6,000,000. If this provision is intended to assist the producer of fish, why does he not get the bonus for the fish he ships to the United States as well as to Great Britain?

So the hon. gentleman proposes to apply this exchange stabilization scheme to goods shipped to the United States, whose money is at a premium.

Topic:   THE BUDGET
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CON

Richard Langton Baker

Conservative (1867-1942)

Mr. BAKER:

I rise to a point of order. It is that the Minister of Trade and Commerce is not being given fair play by hon. gentlemen opposite.

Topic:   THE BUDGET
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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

They do not worry me at all.

Topic:   THE BUDGET
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CON

Pierre Édouard Blondin (Speaker of the Senate)

Conservative (1867-1942)

Mr. SPEAKER:

I did not notice any improper interjections, but the minister should be accorded perfect silence while he is speaking.

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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

In the remarks 1 have just read the hon. member for Shelburne-Yarmouth says there is no advantage to the fishermen in this scheme. I want to ask him this question: Is it of no interest to those who last year exported $1,500,000 iworth of canned lobster to the United Kingdom that each pound sterling they receive should be worth $4.60 to them instead of S3.90 or $4.10? I ask him if it is of no interest to those who exported $3,500,000 worth of canned salmon to the United Kingdom that their pound should be worth $4.60 instead of $3.90 or $4.10? Is it of no interest to the fishermen that these two items alone, totalling over $5,000,000, should bring to Canada a larger return in terms of dollars and cents than would be possible under the existing rate of exchange? Is it of no advantage to the fishermen to obtain that increase? I have worked it out here and on these two items alone it would mean to the fishing industry an enhancement of their returns by over $750,000.

Then, Mr. Speaker, the hon. member turned to the Minister of Finance; with a very solemn look on his face he leaned towards the minister and said: "If the minister wants to help the fishermen of the maritimes why does he not deny licences to trawlers?" That seemed to be a very solemn and a very im-

The Budget-Mr. Stevens

portant matter in the estimation of the hon. gentleman. I took the trouble to look up the facts, and I find a very interesting record in this regard. I say to the hon. member, and in his absence I say it to his leader who was then leader of the government, why when they were in office and when this matter came before them did they not give the relief which they now very seriously tell the Minister of Finance ought to be given the shore fishermen? What are the facts? "Save the shore fishermen," says the hon. member for Shelbume-Yarmouth, "by refusing licences to the trawlers." In 1927, at his instigation, a royal commission was appointed headed by Hon. A. K. Maclean, now of the exchequer court. In 1928 that commission reported; four of the members were against issuing licences to trawlers, with the chairman dissenting. No action was taken. Where was the hon. member for Shelburne-Yarmouth and where was the government of the day at that time? They appointed a royal commission which presented a majority report, but they took no action whatever. Now they come forward and say this government is derelict in its duty in not refusing to grant those licences.

Furthermore the hon. gentleman, who is an able lawyer, drafted order in council P.C. 2196, dated November 2, 1929, which provided for the collection of one cent per pound for fish caught by trawlers in the maritimes. They were allowed to go on and no attempt was made to collect this fee until this government came into office in September, 1930, when the case was taken to the exchequer court. In that court the validity of the order in council was called into question and was thrown out as far as that tax was concerned. It was found to be ultra vires of this parliament. The hon. member who was chiefly responsible for drawing it up claims to be an able constitutional lawyer and when he drew it up he must have known that the order in council was not valid. My hon. friend, his leader and his colleagues in the previous government simply kidded the shore fishermen of the maritimes. There is an old saying in the law fraternity that when a man comes into court he must come with clean hands, and it ill behooves the hon. member for Shelburne-Yarmouth to twit the Minister of Finance upon the question of 'trawlers. The record is there to be seen by anyone who wishes to read.

I come now to a very important question to which I intend to give the closest attention. The hon. member criticized the government very bitterly for the assistance given in the stabilizing of the wheat market. When he referred to this matter the hon. member

for Quebec East (Mr. Lapointe) turned around and said that it was not hedging, it was gambling which the government had indulged in. This is too serious a matter to pass over lightly and I think the house ought to give it very careful consideration as it affects the life and welfare of the three western provinces.

This government has been faced with very serious problems in western Canada, one of them being that in connection with a drought which affected seventy municipalities and which lasted for three years. Large sections of the western provinces were affected. Another serious question which the government had to face was the collapse in wheat prices. Had it not been for the action taken by the government, of which I shall give a full explanation in a moment, the wheat market would have collapsed1 much more and prices would, I believe, have fallen to around the thirty cent level on the Winnipeg market. When we consider the problem of wheat prices we must remember that Winnipeg has become the most important price fixing centre in the world for wheat. The great Liverpool market is a buyers' market, but Winnipeg is the great world market for wheat. Chicago is no longer a world market; it is a great market as it handles the wheat for 120,000,000 people, but it is not a world market in the same sense as Winnipeg. The Winnipeg market is open and free for trading throughout the whole world.

When the hon. member declared that the action of the government was gambling and not hedging obviously he did not understand the action taken or the practice followed in connection with hedging on a market. The daily practice is that a purchaser, say the pools, a milling company, an exporting house or others, purchases a quantity of wheat, for instance, 1,000,000 bushels at the prevailing market price. The grain thus purchased goes forward to a central elevator at the head of the lakes or at Vancouver or to one of the storage elevators in the interior. If the transaction ended at that point the purchaser of the grain would be carrying all the risks of a possible fall in the market and to obviate or minimize that risk, the purchaser sells grain for future delivery. That is, he will contract to deliver wheat at some future time, usually three, six or nine months hence. Such sale is usually made at a price slightly in advance of the purchase price, plus storage charges, insurance, handling charges, et cetera. This is called hedging, or, in other words, insuring one's self against undue risk. It is not gambling but is the most conservative form of doing business. If such a practice is to be carried

The Budget-Mr. Stevens

on there must of necessity be willing buyers. If the hedging process is to be successful there must be willing buyers on the market to contract to buy grain for future delivery. In normal times there are many people willing to take the risk; they purchase these futures, or, in other words, enter into a contract to receive delivery of wheat at some future date for which they pay a margin down as an earnest of good faith. These contracts for future delivery are negotiable and may be passed from one person to another. The price paid is based upon calculations as to the likely price of wheat at a future date, such as May, July, October or December, the usual dates fixed for settlement of such contracts. These calculations are supported by the most minute information collected through various agencies as to the condition of crops all over the world, the amount of wheat available in exporting countries and the condition of supplies in importing countries. The most noted of these avenues of information are the International Agricultural Bureau at Rome, the American government agricultural department crop bulletins, Broomhalls, the Dominion Bureau of Statistics, crop reports as well as a large number of other agencies that gather information and supply it to the public. Up to this point it may be said that the practice is a normal one.

Topic:   THE BUDGET
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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN:

From what communication is my hon. friend reading?

Topic:   THE BUDGET
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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

I anticipated that some

hon. member would be small enough to ask that question. For the information of my hon. friend I say that every word which I am reading was dictated by me merely for the purpose of accuracy and because of its importance.

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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN:

I thought the minister

was reading from a statement.

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

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

Other than one or two

minor changes made in the text, not one word has been changed since I dictated this. I dictated this simply for my own protection and I am not leaning on anyone else.

Topic:   THE BUDGET
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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN:

I just asked if the minister was reading from a statement.

Topic:   THE BUDGET
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CON

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

My hon. friend is not going to get awaj' with it in that way. His suggestion was that I was incompetent to prepare this document.

Topic:   THE BUDGET
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LIB

Joseph Philippe Baby Casgrain

Liberal

Mr. CASGRAIN:

Not at all. Generally

the minister does not read from anything and I was asking what he was reading from.

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

Henry Herbert Stevens (Minister of Trade and Commerce)

Conservative (1867-1942)

Mr. STEVENS:

It is my own.

Topic:   THE BUDGET
Subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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March 28, 1933