March 28, 1933

UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEAKMAN:

Did I understand the hon. member to say that under the present rearrangement Germany was asked to pay thirty-one billion dollars?

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

Yes, thirty-one billion -thirty-one thousand million spread over a period of sixty years.

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UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEAKMAN:

I think the hon. member is mistaken.

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

Perhaps I am; I give the figures subject to correction, but they are the latest figures I could secure.

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CON

Peter McGibbon

Conservative (1867-1942)

Mr. McGIBBON:

Were they not wiped out at the Lausanne conference?

The Budget-Mr. Nicholson

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

But the Lausanne conference has not relieved European nations of meeting their obligations to the United States. In my opinion it is unreasonable to expect them to meet those obligations.

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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

Is the hon. member not confusing war debts with reparations?

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

May I ask the hon. member this question: Unless they can collect from Germany, how are other nations to meet their war debts and reparations? Under the Young plan Germany was expected to pay twenty-seven billion dollars in sixty years. I may perhaps be a few million dollars out, but when it comes to the sum of thirty-one billion dollars, a million here or there on one side or the other does not amount to much.

However, in the revaluation of gold the objects to be aimed at are these: (1) Immediate liquidation of Germany's reparations' debts. If I have time I shall attempt to indicate the method proposed. (2) Liquidation of the allied nations' war debts to one another, and particularly to the United States. (3) Provision for the full gold covering of all currencies, inclusive of coins as well as notes. (4) Creation of an international gold coinage, which will terminate the exchange racket which makes international trade virtually impossible. (.5) The removal of grounds for misunderstandings from economic causes. (6) The extension of similar advantages to all nations at the conclusion of the currency treaty between the original six nations.

I add the last object because in the plan put forward it is suggested that it be applied primarily to the six nations involved in war debts and reparations. I do not for one moment suggest that in every detail the Robertson plan is absolutely correct. I do say, however, that when it is submitted, as I hope it will be, to those who handle the details, the plan may be applied to all the rest of the gold standard nations, in the first instance. But if it cannot the methods proposed, I am satisfied, will carry it through. However, I must hurry on.

Any plan for 'the reorganization of world currency on a gold standard basis, and the wiping out of war debts and reparations must be simple, direct and easily understood during the period of negotiations, as well as during the period of its application. It must offer benefits to all the treaty nations in equal proportions and with hardships to none. May I pause to interrupt at this point by stating that many suggestions have been put forward

to 'the effect that the way of escape, if I may use the phrase, is by redistribution of the present monetary world supply of gold. The plain fact is, however, that there is not a country in the world with sufficient monetary gold to cover the currency necessary to carry on its own business. There is not one country in that position. Many of them have such a small amount of gold, that it is but a mere fraction in comparison with the amount they should have. Any plan for the reorganization of world currency on a gold standard basis must recognize the principle that gold is the universal medium. It must reconstruct on a great international basis the very foundations of currency, of resources and credit, and banish the baffling intricacies of exchange between nations. It must embrace the immediate liquidation of war debts and reparations. It must be non-political, and must not include any contentious tariff considerations. The consummation of the plan must not be imperilled during the formative period or otherwise, by including a discussion on disarmament.

What does the plan involve? It is not, as I said, a mere fraction of increase in the gold coverage for the world's currency. It is a genuine revaluation. Is there any justification for that? Why should we revalue gold more than any other commodity in the world? In the first place it has taken the world at least from the time of King Solomon up to the present day to accumulate its present supply of monetary gold, plus that which has been used for industrial and ornamental work. I have a note, which I shall quote from memory, to the effect that since Columbus discovered America the total production of gold in the world for all purposes has been just about $20,000,000,000.

One other point. In relation to any other commodity you wish to name, what does the production of gold mean? If, for example, it were essential for the people of Canada in 1934 to double their production of wheat, live stock, iron, lumber, timber or any other commodity you like to name, it would be physically possible to do it. All we would have to do would be to make the necessary adjustments in labour, and we could double or treble the output of any single commodity, if it were nationally advantageous so to do. But what about gold? I know the suggestion has been made in this House of Commons that the government should employ a large number of unemployed men so that we might double or treble the output of our mines in northern Ontario. How long would it take to double the output of the Lake Shore mine,

The Budget-Mr. Nicholson

for example, and what would we do if we did double the output? All we would do would be to produce gold on an absolutely uneconomical basis, and work the mine out in half or quarter the time.

What is required to bring a gold mine into operation? For every producing gold mine in the world there are hundreds and hundreds of splendid looking prospects which have never amounted to anything, and into which millions of dollars have been put, and no return made. The bringing into production of a gold mine is something about which very few people who discuss monetary matters have any understanding. There is no single commodity of which I can think which is so stable in its annual production, or has followed as steady development for so long a period, as has gold. In the last fifteen years, for example, the world production has varied from $385,000,000 to $415,000,000. In five of these years the production was over $400,000,000 and in ten it was below that figure. True, we have had evidence in Canada of increased production of gold, but it is equally true that there has been decreased production in other countries.

One other point: If we take the world's present volume of monetary gold we will find that it was produced on a wage level not one-sixth of the wage level prevailing in the gold mines of Canada to-day. Consequently, on the basis of its economic value measured in terms of the amount of labour which men must put into the earth to get the gold out, it is due to be revalued, just the same as any other commodity would be under similar conditions.

Now may I come to the formula? The plan is to revalue and redistribute gold. It is to be carried out on a basis that will be fair or as nearly fair as is possible to the countries that have a large amount of gold compared with those who have a small amount. With that in mind it is not possible to do it in one stage, because if you simply doubled the value of gold all over the world you would simply increase the discrepancy that at present prevails in the distribution of the commodity that stands behind the world's currency. If we are ever going to get back on a sound basis of international trade, we must find a yardstick that will be understood in every country in the world and will be the same in every country in the world. The Prime Minister, speaking here yesterday afternoon, indicated clearly some of the difficulties through which we have passed not only during this period but for a generation back; notwithstanding the fact that a large number of countries were ostensibly on the

gold standard, strictly speaking they were not on the gold standard. The plan and formula suggested here is to have one hundred cents on the dollar in gold behind the currency that is issued. That will take care of world trade on the revalued basis.

But to come to the formula. The things to be taken into consideration in order that it shall be fair to all countries are: first, the present position; and second, economic needs.

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UFA

Michael Luchkovich

United Farmers of Alberta

Mr. LUCHKOVICH:

May I ask a question? What is the ratio of revaluation?

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

I will come to that in a moment. Take the United States as an example, having regard to present position and economic needs. The following will indicate the theoretical estimate of the gold required by the United States to carry on her trade:

Actual gold in reserve.. ..$ 4,364,000,000 Annual national income,

$70,000,000,000, divided by .

12, equals 5,833,333,333

Combined export and import trade, yearly average over a five-year period,

$8,629,000,000, divided by

4, equals 2,157,250,000

Moneys not in use, population 122,775,000 at $30 each, equals 3,683,252,850

Total $ 16,037,836,183

The present position is that if the United States carried on her trade on the basis of her currency it would be necessary to turn over her currency nearly 250 times in the year, or about once every one and a half days.

The plan under this formula is, first to have these six nations set up such machinery as they desire, and take over the monetary gold of the six nations on the basis of $40 an ounce. They will then redistribute it in this way: to the countries that contributed more gold in proportion than others a credit would be issued on the basis of $20.67 an ounce; a debit would be applied against the other countries, and the total would be reached in that manner. Without going into the minute details, because every member of this house either has or did1 have one of these books and can go through the formula for himself-I merely want to give an. outline- at that point the gold would be revalued and distributed on the basis of 5 to 1. Lest anyone suggests that this is multiplying the world's currency by five times, bear this in mind1; the world's currency in gold countries now is recognized as being on the basis of about forty per cent gold, forty cents worth of gold for each dollar issued, using the

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The Budget-Mr. Nicholson

dollar as an indicator. Under the new scheme suggested the plan is to have a dollar's worth of gold behind every dollar's worth of currency, consequently instead of five times all you really have is twice the amount of currency available, you are really doubling the currency of the six nations involved.

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UFA

Donald MacBeth Kennedy

United Farmers of Alberta

Mr. KENNEDY (Peace River):

Would not that be a measure of inflation?

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CON

George Brecken Nicholson

Conservative (1867-1942)

Mr. NICHOLSON:

No, just the reverse. Inflation is to issue currency in excess of the gold basis-that is our present position. The whole world's currency is in the shape of an inverted pyramid. This proposal is to provide an international basis, and then all currency issued would be on that basis. It would be understood by all nations.

The next point I wish to touch upon is the means by which the world's war debts and reparations and long and short term obligations can be met by this plan. I will just give a very brief summary of the final situation, for my time is short. The war debts and reparations have been arrived at on the basis of compound interest. After gold has been revalued and redistributed and the new basis for world currency provided, what may happen is, either the debtor nations may say to the creditor nations: Will you accept cash for these debts on the basis of compound discount? or perhaps more probably the creditor nations would go to the debtor nations and say: We will clean up these obligations now outstanding on the basis of compound discount. Then what would the situation be? First perhaps I can take time to illustrate what the position -would be before the payment of war debts. The United States would have in gold $19,000,000,000, France $8,000,000,000, Great Britain, $5,000,000,000, Germany nearly $4,000,000,000, Italy $2,000,000,000, Belgium $1,500,000,000. I omit odd millions; the figures are all available for any one who wishes to see them. Assuming the proposal were accepted that the creditor nations would receive the debts in cash on a basis of 2} per cent compound discount, what would the situation be? The United States would have $19,379,000,000 in gold, less a loan that they might well make to the debtor countries of $9,000,000,000. But they would have also receipts from war debts and reparations and the long and short term loans due them from Germany. I will take Germany's position to illustrate the final outcome. To-day Germany stands with world obligations of $31,000,000,000, a sum absolutely impossible to pay, and all she has behind her currency is $300,000,000 in gold. If this plan were put into effect, if the nations can be

got together to work this thing out-and I believe it can be worked out; I do not think it is in the slightest degree fantastic; it is absolutely sound on the basis of the commodity that the world has recognized as its basis for currency-then assuming that the nations accept these proposals, she would have $2,263,000,000 in gold behind her currency, and she would have one single long term commercial loan, or preferably a loan divided between the three countries with the largest amount of currency, namely the United States, France and Great Britain, of $9,000,000,000, something that, when she has been placed in that financial position, would be perfectly easy for her to carry and liquidate. This would relieve the whole world of this pressing nightmare of national and international debts and would lead the way to a new start in trying to find some plan by which we can get back trade and raise price levels, for we will never raise price levels until we put the people of the world in a position to buy. So long as we remain in this cramped, restricted position we will continue to go down the slide. In one quotation I have here from the editor of The Annalist that is put very -well. We are acting as a man might act in the summer towards a small boy who complains of stomach trouble; the man simply says, "Eat another half dozen green apples and see how you feel."

I have tried to outline, Mr. Speaker, as well as I could the plan that has been suggested and the formula for working it out. I have studied this plan for twelve months; I see nothing in it that is not perfectly sound, and I submit it to the house now in the hope that the government may appoint a committee of the house to join with experts in considering the matter or that the government itself, before going to the economic conference or submitting any proposals there, may arrange for some group to study this problem and present a finding, in the hope that out of it something may come which will bring the whole world back to a sound basis and save humanity what it is very likely to suffer if we continue going down the decline.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock. CRIMINAL CODE AMENDMENT

The house resumed from Tuesday, March 21, consideration of the motion of Mr. Cas-grain for the second reading of Bill No. 46, to amend the Criminal Code (lotteries).

Motion negatived, on division.

!484

Railway Act-Rate Structure

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RAILWAY ACT AMENDMENT


The house resumed from Friday, March 24, consideration of the motion of Mr. Reid for the second reading of Bill No. 50, to amend the Railway Act (rate structure).


IND

Alan Webster Neill

Independent

Mr. A. W. NEILL (Comox-Alberni):

Mr. Speaker, I support this bill and shall take this opportunity of answering some of the objections which have been raised to it. The argument of the hon. member for East Algoma (Mr. Nicholson) is so untenable that it hardly warrants a reply. It is easy to build up an argument based upon premises made to fit the argument rather than upon- premises based upon fact, and that is what the hon. member did. He built up his argument upon the supposition that this bill would compel the railway board to cancel rates. We have no reason to believe that the Board of Railway Commissioners is composed of either fools or knaves or will be so composed in the future. The hon. member's minor argument was that the bill would compel a reduction of rates which would prove to be unprofitable to our railways already in the red financially. There is a wide difference between cancelling rates and asking that rates for the same commodity should be equalized for the same distance. It is extra discrimination when a low rate applies on a valuable product and a high rate applies on a low priced article. The rate for domestic wheat is considerably more than double the rate for export wheat, and by far the greater bulk of the wheat going to British Columbia is for export. The railways compete for this export trade, therefore it must be assumed that the railway heads, being business men, consider that this business pays. If the low rate business pays, surely the railways will not be ruined by handling more business at the same rate. As an illustration, let us assume that a trainload consisting of thirty cars of wheat is being shipped from the prairies to British Columbia. Twenty-nine caTS are loaded with export wheat at the low rate. This business must be profitable because the railways compete for it, yet they say that they cannot carry the thirtieth car loaded with domestic grain except at a rate more than double what they are willing to accept for the bulk of the trade. That does not seem to be a logical argument. The hon. member argued that it would be disastrous to reduce rates but he should not foTget that the railways themselves reduced the rates on export wheat.

The remarks of the hon. member for Fraser Valley (Mr. Barber) consisted mostly of a political attack upon the hon. member for New Westminster (Mr. Reid) w*ho introduced

this bill. I think such an attack was entirely out of place inasmuch as the hon. member for New Westminster did not give a political slant to his remarks. However, the hon. member for New Westminster is quite capable of taking care of that himself.

Now let us analyze and define the situation to see if there is any need for this bill. That is the manner in which we should approach a matter of this kind. A long time ago the rate on export wheat to British Columbia was much higher than it is at the present time, but it was still lower than the domestic rate. Representations were made and the export rate was cut down substantially but the domestic rate was not reduced at all. The spread was made still greater. That happened on at least one more occasion, and I am not quite sure whether or not there was a third deduction. The differential is now very great, being more than double. If it were right to have the differential as it was in the original schedule, it cannot be right to have that differential increased to the extent to which it is at the present moment.

From time to time the governments of British Columbia protested against this differential, but their protests were more or less in vain. This action was taken by governments consisting of different parties. In contesting these applications for reduced rates, I think the railways broke a very important law, that known as the law of diminishing returns. This law works as inevitably as the law of supply and demand. To put it another way, you cannot charge more than the traffic will bear. That is a well known axiom in railway or other lines of business. The result was that they killed the goose that lays the golden egg or, in this case, the hen that laid the golden eggs.

I have before me a communication from a well known businessman in the district I represent. This was written a few days ago and he states that a great many of the remaining flocks of poultry have been shipped out and he believes that not more than fifteen per cent are left. That is to say, there has been a falling off in the poultry flocks in that district amounting to eighty-five per cent. I can corroborate that statement from my own knowledge. I remember people who used to have two, three or four thousand birds but who at the present time have not a single bird. They have been cleaned ou>t and absolutely ruined. This man says that eighty-five per cent have been cleaned out, and I believe he is correct. The railways have lost not only the shipping of feed which these poultrymen would need, but also the shipping of supplies and other accessories. There is also the very

Railway Act-Rate Structure

profitable shipment of eggs back to Montreal. They have charged more than the traffic will bear and they have lost the business.

British Columbia appealed to the Board of Railway Commissioners on several occasions and, failing to obtain redress there because of reasons into which I will go later on, they took their appeal on more than one occasion to the Dominion government. I do not intend to throw stones at either the Conservative or the Liberal administrations, because they both seem to be guilty of having stalled things off. In 1931 a debate took place upon this matter, and the Prime Minister is on record on page 1794 of Hansard of that year. The Prime Minister stated that the Board of Railway Commissioners was a court and that he would hesitate to advise the cabinet to override or even investigate a decision made by that court. He stated that the law was such as to permit an appeal to be made to the cabinet but he used the expression that the cabinet were partisan and he did not think it a good thing to have an appeal taken from what was practically a court and put into the hands of partisan judges. Of course, a partisan judge is an anomaly in itself. I agreed with the Prime Minister upon that occasion and am so on record. In my opinion, such appeals should go to the supreme court rather than to the cabinet. As I say, the Prime Minister said that he believed the experts on the Board of Railway Commissioners were well qualified to deal with such a matter. I quite agree with him in that, but those men should at least be competent to deal with it. Perhaps I am using the wrong word; I do not mean that the members of the railway board are incompetent, but I think the legal expression is that they are not seized with the proper jurisdiction and therefore they cannot give a just decision. They have not the authority to do so, and that is what the bill proposes to give them. I am very sure, although if I were put to it, I could not prove it, that a former member of the Board of Railway Commissioners told me that we would not get justice in British Columbia in regard to that matter until the act was changed because it did not give the board authority to deal with the question. We also heard the hon. member for New Westminster (Mr. Reid), when he was speaking on this subject, quoting very freely from the report of the Duncan commission which was composed of able men. Not only did they say that this action should be taken, but they actually used the very language which the hon. member has largely introduced into his bill.

The Duncan report was considered to be and I suppose still is a valuable document. It was

called the magna charta of the maritimes. I well remember the emphasis with which the opposition of those days insisted that it should be put into effect, and I think it was to a large extent put into force by the government of that day with, I believe, satisfactory results to the provinces concerned. If those men were wise and capable and their recommendations carried weight as they apparently did, why stop at the maritimes? Why, when they came to recommend something of material advantage to British Columbia, was it ignored? There is no question as to their view, because the hon. member for New Westminster put it on Hansard the other night. This bill gives the railway board the power which the Duncan report says they ought to have, and that is all it does, that power which a former member of the board said they lacked and which the Duncan report said in set terms, giving the exact language, they ought to have.

I do not think anyone has really tried to justify these rates; they have not done so openly at any rate, although they may have done so in a covert sort of way. These rates are too unjust for anyone to attempt to justify them. At this point might I mention a danger that has not been put forward before in connection with this legislation. On page 20 of the report of the last imperial conference will be found the resolutions of a general character adopted by that conference as distinct from the specific agreements. The first resolution they passed-at least it is placed first in the summary-is one regretting and deploring any system past, present or future, that the participating dominions might put into effect in the way of a bonus on their exported goods. They deprecated such action.

I have in mind the Patterson scheme of bonus-ing in Australia and other plans of that kind. They pledged themselves at the earliest opportunity to do away with any system of bonusing of that nature. The spirit of that resolution would certainly be entirely antagonistic to imposing any more bonuses. Our present system of railway rates in British Columbia is a clear and definite case of bonusing exported wheat at the cost of domestic wheat. That conclusion cannot be got away from when you charge twice as high a rate for the one as for the other. That regulation is working a wrong ini Canada to British Columbia, but it is also liable to cause very serious troubles in Britain itself because the people there are touchy; they are already asking that a duty be put upon Canadian products and this is an argument ready to their hand.

So we have the situation over a number of years as I have briefly outlined it. The appeal

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Railway Act-Rate Structure

of the British Columbia government and the various farmer bodies who appealed, finally reached the governor general in council in Ottawa, I think two and a half years ago. The government could have done several things: they could have granted the appeal; they could have refused it; they could have referred it back to the Board of Railway Commissioners, which course the Prime Minister hinted would be the one they would take if they did anything at all, or they could have continued doing nothing as they did for quite a period. But they did none of these things. There was a suggestion by somebody in the cabinet, and I more than suspect it came from the Prime Minister, because it was something that would suggest itself to his alert mind. I do not think it was the Minister of Railways (Mr. Manion.), because I do not believe he would have thought of it. Someone suggested that instead of litigation, so to speak, the railways and the consumers should get together. This was not a bad idea at all, because, when you are in any way approaching litigation, it is always wise to compromise with justice to both sides. The only trouble was the method by which this was carried out. We often hear in the house charges thrown at the Prime Minister of being a dictator. Sometimes a dictator is a good thing; I only wish in this case the dictator had himself handled his original suggestions, but unfortunately he turned it over to the Minister of Railways, and the latter and the head of the Canadian Pacific, Mr. Beatty, sat in a poker game with British Columbia interests as the stakes and it was just too bad for British Columbia interests. Had the Prime Minister sat in at that game, I do not think we would have had Mr. Beatty walking off with the hair, hide, flesh and tail of the animal and leaving us with-well, what was left. To change the metaphor to that of the race track, the horse carrying Mr. Beatty's colours came in first and the British Columbia horse was not even in sight when the race was over.

Let me consider for a moment what Mr. Beatty got out of the deal. I could discuss first what British Columbia got out of it, but that could be put on the back of a postage stamp and still leave room for a gerrymandering redistribution map. It is more important to consider what Mr. Beatty got out of it. The first thing he got was the dismissal of the appeal. This was a fatal error for the government to make and a most unfair deal for British Columbia. Mr. Beatty, stipulated and demanded-and he got away with it-that the appeal should be dismissed, not left as a. protection for us in the future, not , left' even

only as a means of enforcing the agreement which was merely a gentleman's one and not binding in law. The appeal should have been left at least as a club to guarantee the carrying out of the agreement, but the minister gave way and I think he made a fatal mistake. I shall give him full credit for one thing lie did, because Mr. Beatty, a smart, capable, able man, was out to get one hundred per cent and a little bit more; he also demanded that this arrangement should be a final ending of British Columbia's claim, but the minister to his credit stood out and said that we must leave the door open. It will be open for British Columbia to start the case again, but we realize the enormous delay and expense that would be. It would take years-and that is not a figure of speech-and great expense to fight the case before the railway board, have it come here and then be stood over for a year or two before it was dealt with.

The second thing Mr. Beatty got away with was this: It is said that be met us half way; that he gave up half the differential. The answer to that is no, and again no, and a thousand times no; he did not do anything like that at all. He met us half way on grain alone. Our claim was for two classes: grain and mill feeds. Mill feeds consist of bran, shorts and middlings and they constitute by far the larger amount of the traffic involved. Let me explain. A hen eats wheat, shorts, bran and, to some extent, middlings. A cow does not eat wheat; it eats bran and shorts, and a hog eats shorts and middlings and does not eat wheat. The consequence is that the quantity of bran, shorts and middlings, that is of mill feeds, carried in relation to the quantity of wheat, will be in somewhat- the same proportion as the size of the hen compared with that of the cow. That is not perhaps exact, but there is a far greater- amount of mill feeds carried than of grain alone.

I see the word "screenings" was put in, and hence we have to raise up our hands and sing psalms and give glorification for being able to get screenings from the prairies at a reduced rate. Every British Columbia man knows that we do not import screenings from the prairies. We can get screenings at a very low price right out of the elevators at New Westminster and Vancouver. That is just a bit of window dressing.

It was right to cut the difference in rates in half. I think it should have been cut out altogether; that is the differential. Why is it not right to do it on mill feeds? There is no answer to that. The Minister of Railways pleads ignorance and says that he did not

Railway Act-Rate Structure

am sorry that he is not in his seat, but he cannot get away with that. I have a letter here showing that a large feed company in British Columbia wired him on February 24 urging him to put mill feeds into the agreement, and he replied that it was too late, that the deal had been consummated by order in council the day before the wire arrived. That is a mistake. The order in council was passed, as he says, on February 25, but it was not the order in council that implemented the bargain at all. The order in council simply dismissed the appeal. It may have been in consequence of the bargain, but the bargain itself is not expressed in that order in council. It is expressed in a letter signed by the two railway heads and addressed to the minister. Anyhow I have a copy of a letter in front of me which I wrote to the Minister of Railways dated February 2, urging the inclusion of mill feeds, and the order in council was not passed until February 25. The agreement was changed in another respect on February 15, thirteen days after the date of my letter. The minister told us in the house the other day that the agreement did not go into effect until March 10, so there was ample time to have adjusted the matter and to have included mill feeds as well as wheat because, as I say, on February 15 a change was made in the agreement.

I said that there was no excuse for such action, but that is going too far. I should have said no justification. There is an excuse and it was put forward by the Minister of Railways and by the hon. member for Fraser Valley (Mr. Barber). They said, and I presume they are correct, although we have not the correspondence, that the British Columbia government accepted this transaction, gave it their imprimatur, O.K.'d it as being satisfactory; but I ask these two gentlemen who say that the British Columbia government accepted that deal, did British Columbia itself accept the acceptance of its government? I do not think so. Did they consult anybody? There is no record. Did they consult the dairy or poultry interests? There is no record. An election is coming on very shortly in British Columbia, and the government will have many things to answer for, for many of which they are not to blame, but it will have a hard job explaining its action in giving consent to such a onesided agreement as that.

But it was not the only blunder which the British Columbia government made. As I said before, Mr. Beatty is a very astute man. He was out apparently to get everything he could out of the innocence of the Minister of Railways. He arranged the deal in the first place-'the evidence is before me; I have

the letters-that the agreement was to apply only to wheat of No. 6 grade and lower, and to barley of equivalent grades. I have been in the feed business for seventeen years myself, and I have very seldom used No. 6 for chicken feed at all. It is almost invariably No. 5 or No. 4. The quantity of No. 6 that I would buy in a year would not amount to muich. Well, we were going to have this brilliant arrangement put through, confined to No. 6 wheat and lower grades, and it would not have been worth a snap of the fingers; and British Columbia government, so we are told, agreed to it. But thank heaven, apparently, there was somebody with more intelligence. Hon. Mr. Hoadley, a minister in the Alberta government, interposed and said: No; it is nonsense to make it No. 6 grade, it should be No. 4; and it was so arranged. Unfortunately the Hon. Mr. Hoadley, apparently representing largely the farmers, did not take the trouble to look into the feed question, or I suppose we should have got redress on that also; but we did not.

The next trick that Mr. Beatty took-he took twelve out of thirteen-was to arrange that the agreement would be in force for one year only, and then we have to go back to the old ra'te. True, the minister provided, and I thank him for it, that then we could begin all over again and go over the long and extensive route of going to the Board of Railway Commissioners and appealing to the government again, at the end of one short year. But the rate was to exist for one year only, and then we could reappeal and go over the whole ground again.

The next trick that Mr. Beatty won was a somewhat similar one. He arranged that the rate was not to come under the railway board, that it was not to be authorized by that board as all other rates have to be. No, this rate was put in a little division by itself subject to nothing except the railway's own good will or to a gentleman's understanding. Had it been arranged that the rate was to be authorized by the railway board, then .at the end of a year the railways would have had to give reasons for changing it, but now they do not. The rate drops automatically, and then it is up to us to go through the whole performance again right from the beginning. I would almost call that a trick and a half to the credit of Mr. Beatty. There is no method of appealing against this thing. If we find that the rate is not being put into effect or that modifications are being introduced of their own conception, we cannot go to the railway board, nor can we go to

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Railway Act-Rate Structure

the government, because the government would say: We do not know what the interpretation was.

Last of all they arranged that nothing was to be any good, so to speak, unless there was a certificate. Just picture to yourself this situation. This is the way it reads:

Agents will not apply these rates unless a certificate in duplicate signed by the Deputy Minister of Agriculture of the province of British Columbia is surrendered by consignee.

Remember this, that before he can give this rate the station agent in Saskatchewan has to have a certificate signed by the Deputy Minister of Agriculture of British Columbia certifying that the wheat or grain is to be used only for feeding stock or poultry or both. That certificate has to be produced in the railway station in Saskatchewan. That is where the rate is to be applied, at the point of origin. It is a silly regulation anyhow. What are you going to use No. 6 or No. 5 wheat for? To feed a Ford car, or to feed people, or to feed stock? The certificate is not necessary, and it hampers business. When I was in the business-I am not now-I very seldom bought carloads of grain by letter. I almost always ordered them over long distance or by telegraph. But now a man wiring to the agent in Vancouver to send a carload from Calgary or Medicine Hat would first have to write to the Deputy Minister of Agriculture in Victoria, go through a certain form of red tapeism, get the certificate, and send it on to the little station in Saskatchewan, and then get his goods shipped. Look at the delay and the annoyance, and what good would it be to anybody when they did it? I have a facsimile of the certificate here, and it says distinctly that it must be stated that the stuff is to be shipped by so and so at so and so, showing that it has to be filled out and produced to the railway station agent before the rate is put on at the point of origin. By the way it also says, and I must hand it to Mr. Beatty for this-I have one or two shares in his company and now I have more confidence in it when -I see how able the -man at the head of that company is-it says:

No miiling-in-transit, stop-off, or reassembling privileges will be permitted.

It is permitted in the case of every other kind of grain, flour and merchandise coming from the prairie. These stopovers are a regular thing; I have taken advantage of them myself. Many small dealers cannot afford to buy a whole carload from the prairies in one shipment, as their requirements do not justify it, and so they buy it in mixed cars in

[Mr. Neill. 1

Vancouver, and in that case I doubt if there would be any benefit in this at all.

Here is another doubtful thing in this gentleman's agreement which might be interpreted in different ways. I am doubtful if it would be of any use at all unless the importer was the -man who actually fed the stuff to his own stock. The certificate must state that the material is for feeding live stock. I am somewhat doubtful whether that would apply in the case of a creamery company, or 1 other dealer reselling. I think it might be narrowed down to poultrymen, and only poultry-men having a sufficiently large number of birds to buy a whole carload of wheat at once. I do not suppose there is a man in British Columbia who would be able or willing to do that.

These are only some of the difficulties I see. The Minister of Railways has unloaded this baby upon our hands. We are supposed to dangle it on our knees and look pleased. But the more I look at the baby the less I like it. I am doubtful about its parentage, and every time I look at it it has darkened in colour. I believe it will turn out to be a nigger before we are finished with it-a nigger in the woodpile. In view of all these things, which are capable of being checked and verified; in view of the fact that we have lost our appeal, and it will take two or three years to get it back; in view of the Prime Minister's definite statement to the effect that these matters were not for decision by the cabinet, and that if ever they reached the cabinet they would be sent back to the Board of Railway Commissioners; in view of the Duncan report, which says that the principle contained in the bill is necessary-in view of all these things it will be only justice to pass the bill.

In it the Board of Railway Commissioners are not- compelled or given power to do anything wrong; they are only given power to do what one of them said was necessary. They are given power to do what the much-heralded Duncan report said was essential and right. That is all that is contained in the bill. If it passed nobody would be robbed or injured; the Board of Railway Commissioners are reputable men who would not lose -their character or reputation over night. The board will take care of railway interests, as they have done in the past. Nobody would be hurt by the passing the bill.

I should like to see reconsideration by the government, so that the bill might at least reach committee. If there is anything wrong

Railway Act-Rate Structure

with the details of it, corrections could be made in committee. I am convinced the spirit behind it is right. We need it; for many years in British Columbia we have waited for it. We have found out what is necessary, and we will not be satisfied until we get justice. *

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CON

William John Loucks

Conservative (1867-1942)

Mr. W. J. LOUCKS (Rosetown):

Mr. Speaker, I notice that on March 7, 1932, there was a discussion concerning domestic freight rates on grain and grain products, and on that occasion I spoke. I believe I said something to this effect, that I wished the bill then before us had gone farther and taken in gasoline, and some other commodities I mentioned. I was referring more particularly to the commodities entering our province from Alberta. Upon that occasion I quoted rates to Delisle. I do not wish to criticize the previous speaker, but it seems to me he has been very critical of the concessions which have already been given. Probably those concessions have been obtained through the efforts of hon. members on this side of the house, along with those of the hon. member for New Westminster (Mr. Reid) who took a very active part in the debate. Upon that occasion I did support the hon. member, and intimated that I was not satisfied with it because it helped only the province of British Columbia. So far as we were concerned, there was nothing coming back. After the explanation given by the Minister of Railways and the fact that the representatives of the four western provinces met in Ottawa during the recess, I cannot help but think that the provinces were intelligently represented. I take it that they came to a satisfactory understanding, and so far as grains coming into British Columbia from the prairie provinces are concerned I believe a fair and reasonable adjustment was made.

The hon. member who has just spoken has mentioned a very excessive rate. I am not saying he is not right. But on the other hand I am convinced more firmly than I was a year ago that our export rate is probably the lowest in the world. I know whereof I speak when I say that our rates are lower than those of the country to the south of us. When in Montana some time ago I had an opportunity to check up, I found that the rate from Big Sandy to Minneapolis, a distance of about 1,000 miles, was 41 cents a hundredweight, whereas the rate from Delisle to Fort William, a similar distance, was only 22 cents, or only about half.

My impression is that if we press too far in the matter of domestic freight rates in

times like these, when we are facing large deficits, there is only one alternative open to the managers of the railroad. If we insist upon a further reduction in domestic rates, they will increase the export rates. I think people in Saskatchewan and hon. members from that province in the house would rather leave the export rate alone than have it suffer for the benefit of the domestic rate. If we press unduly at this time that is probably what would occur. I wish to assure the hon. member for New Westminster that at a later date he will have my support, at a time when the management of the roads can show us that they have eliminated the deficits. We might take further action when the time comes-and I believe it will come- when these deficits shall have been eliminated.

One further observation: I notice that in the bill there is an intimation that power will be taken from the government. The hon. member who has just taken his seat referred to the opportunity we have of appealing through the Minister of Railways. If I interpret the bill correctly, upon its passage that opportunity will be eliminated. At the present time it is not. We can discuss it in the house; we have a say in it; influence can be brought to bear upon the management of the road. But in the measure before us that influence will be eliminated. I cannot quite understand the hon. member, because when the railroad measure was up only a short time ago he opposed it because it was taking control away from the government. To my mind that is the very thing he is doing in this bill-taking control away from the government. So far as British Columbia is concerned, I believe they should be satisfied with the adjustment that has been made. If there is any grievance it should come from the prairie provinces.

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CON

Armand Renaud La Vergne (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Conservative (1867-1942)

Mr. DEPUTY SPEAKER:

The hon. member has already spoken on the bill; he cannot speak twice.

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CON

William John Loucks

Conservative (1867-1942)

Mr. LOUCKS:

I am sorry if I am out of order. I might say, however, I was on my feet when the hon. member got up.

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IND
CON

William John Loucks

Conservative (1867-1942)

Mr. LOUCKS:

I got up, but you did not see me. However I am satisfied to take my seat.

Topic:   RAILWAY ACT AMENDMENT
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March 28, 1933