June 12, 1935

LIB

Cameron Ross McIntosh

Liberal

Mr. McINTOSH:

A splendid paper

though.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

It may well be so, compared with the weekly paper which the hon. gentleman runs. Now let us see what in 1928-29 under similar circumstances was the attitude taken by this paper that has no regard for anything that touches the public interest if it can make party propaganda at the expense of any government that happens not to see as it sees. We have not consulted Doctor Dafoe, that is the trouble. As long as you consult him his vanity is tickled and he is quite content that all is well, but if the government do not consult him anything they do is wrong, even although their predecessors did it. Let us see what he said in 1929, when the elevators of Canada were bursting with the largest crop we ever had in our history, when the tariffs of France and Italy and Germany were as I have indicated, when the Argentine was selling its wheat on the markets of the world, so that Canadian wheat could not find a market. What were his words then? On October 4, 1929, he said:

Since July enormous quantities of low-priced wheat have been exported to Europe from the Argentine. Liverpool buyers were

Grain Board-Mr. Bennett

under no necessity to buy Canadian wheat at $1.59 per bushel or thereabouts when they could buy from Argentine at $1.12.

A spread of 38 cents or thereabouts. Then on October 23 what does he say? In the editorial column were these words:

In such a situation, with more wheat offering to buyers than they want, the argument that Canadian wheat should be freely offered at competitive prices seems curious. If it were thrown on the market at prices which made it highly attractive to speculators, it might be bought, but would it be used? The price might fall, and the wheat still remain in storage.

As late as October 23 of that year, 1929, dealing with the carry-over to which I have referred from the crop of 1928 and preceding years, he said:

Whatever the economic effect has been this summer in the Argentine, the fact is that Argentine wheat is being sold at prices in Liverpool which would be disastrous to Canadian producers.

Now I could go on and give further extracts, but I put to the house this question: If it was desirable that the Canadian farmer should not sacrifice bis wheat at a loss in 1929 at the Argentine price to which reference has been made, which was then SI. 12, is it not equally true that it should not be done now? That it should not be done during the last three or four years? That and none other is the question to be considered. There are the figures, and I ask, and the people of Canada have a right to ask, why a great organ of public opinion would endeavour to induce the people to believe in 1928-29 that the right thing to do was to cling to their wheat until they got a decent price for it, and that, in 1935 the right thing to do is to throw it to the winds and let anyone buy it at any price they will. That is the issue.

Now, sir, it is not as though it ended there. I say that my right hon. friend opposite and those associated with him have not the slightest appreciation or understanding of this problem as it then existed. Why? I will tell you: On February 20, 1930, in the last speech from the throne prepared by the right hon. gentleman there occur these words:

The dominion is already recovering from the seasonal slackness evident at the end of the year, and it is not to be forgotten that the bulk of the 1929 wheat crop still remains in Canadian hands for final disposition.

I commend that to thoughtful men. What was done about it? That was in 1930, the crop of 1929 still remained unsold in the hands of the farmers. When we inherited that condition we had to deal with it. And what is more, we did. Now let us proceed. I am going to give some figures with respect to the acres that were sown to wheat in the

wheat-producing countries of the world after the war. I shall give a few figures to show what was withdrawn from production in European countries because of the war. I suppose it is hardly necessary to say that if during the war a country could not produce wheat, and subsequently came back to wheat production, it just means that they supply themselves with what during the war they had to buy elsewhere. Now I have given figures with respect to the prices to which wheat had fallen, and I have endeavoured to give some figures indicating the prices which were being received for that wheat. Look at these figures. In 1932 when we had this enormous crop, when the government supported the operations of the pool to the extent they did, when they bought, for reasons that I shall presently say that no government could disregard, I do not believe dared disregard unless they were prepared for complete chaos in this country, what happened? Let us look at the facts. In February, March and April 1933, the average price was 49 cents at Fort William or 30 cents at elevators in western Canada for No. 1 wheat. The imports at that low price averaged only 11,000,000 bushels a month in that three-month period. The reason was that the importing countries had, as I pointed out, accumulated sufficient wheat to carry them over for that time. Now take the last three months of that crop year. In May, June and July, when the gSvernment was taking action to which I have referred, buyers in importing countries boueht and cleared an average of 21,000,000 bushels a month from Canada. At what price? At 70 cents f.o.b. Fort William. For the six months' period to the end of January in the crop year 1932-33, 285,000,000 bushels were marketed, for which quantity our farmers received only $86,000,000. I wonder if the true significance of that is in the minds of hon. members of the house. In the same six months of 1934 we marketed 177,000,000 bushels of wheat for which the farmers receiyed $107,-

000.000. That is they sold 108,000,000 bushels less wheat than in the corresponding six months' period of 1932-33 but received for it $21,000,000 more money. In the first half of that year, 1932-33, therefore they really paid $21,000,000 for producing and feeding the world with 108,000,000 bushels of wheat. Now has this house realized just what that meant to Canada? Just what it meant to the citizens of Canada, just what it meant to the factories of Quebec and Ontario, just what it meant to the artisans of this country, just what it has meant in the way of maintaining the integrity of the body politic? That is what I put to this house.

Grain Board-Mr. Bennett

I come now to a point which I think is perhaps somewhat interesting as it indicates the average increase of acreage in other countries. I give these figures in order that we may see why this price structure has been what it is. I want hon. members to realize that other countries have also increased their acreage. The average acreage in Canada for the five years 1909-13 was 9,940,000 acres; in 1927-31 it had risen to 24,590,000 acres and in 1933 it had risen to 25,990,000 acres. The acreage for 1933 showed an increase of 161-5 per cent over the average acreage for the five years 1909-13. In Australia the average acreage for 1909-13 was 7,600,000 acres; for 1927-31 it was 15,000,000 acres, while for 1933 it had fallen to 14,970,000 acres. The 1933 figure was an increase of 96-9 over the 1909-13 figure. In the Argentine the average sown acreage for 1909-13 was 16,050,000 acres; in 1927-31 it was 20,500,000 acres; then followed a decrease in 1933 to 19,660,000 acres. In the United States for the period 1909-13 the acreage was 47,100,000 acres; in 1927-31 it had risen to 60,400,000 acres while in 1933 it had fallen to 47,520,000 acres. This latter figure showed an increase of only nine-tenths of one per cent over the 1909-13 figure. If you take these figures you will see that on the basis of the Argentine increase which was only 22 per cent, we should have increased our acreage to less than 13 million acres instead of to almost 26 million acres. For reasons which are obvious these are the increases which should have obtained. Argentina which has been forcing its wheat upon the markets of the world has increased its acreage relatively less than our own country and other wheat producing countries. Further than that, the Argentine had actually decreased its wheat acreage at one time before it started in to increase the area sown. We are sometimes prone to blame the Argentine for the action it has taken in forcing its wheat upon the markets of the world at a low figure.

We come now to another important matter and one which I think should be considered carefully. I intend to refer to a statement by Broomhall's which gives the consumption of wheat in Europe outside of Russia. I pointed out in this house some time ago that Russia first became a factor in the international trade in wheat after her rehabilitation, to the extent to which she was rehabilitated, in 1930 when she was selling wheat at 60 cents per bushel delivered in Liverpool and London. These figures leave out Russia as that country has not been a factor during the last year or two.

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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LIB

Ian Alistair Mackenzie

Liberal

Mr. MACKENZIE (Vancouver):

What is the date of that statement?

92582-227 revisi

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

The hon. member will see as I proceed. The average production of Europe (ex Russia) for the period 1923-24 to 1927-28 was 1,240,000,000 bushels. The average importations by importing countries for the same period were 601,000,000 bushels. The average consumption by European countries was 1,841,000,000 bushels. It will be observed that you have an average consumption during that period of 1,841,000,000 bushels. It has been stated that there has been a diminution in consumption but I give these figures to show that such is not the case. For the period 1929-30 to 1933-34-these are the crop years ending July 31-the average production of Europe (ex Russia) was

1.496.000. 000 bushels. The average imports by importing countries for the same period had fallen from 601,000,000 bushels to

469.000. 000 bushels while the average consumption had risen to 1,965,000,000 from

1.841.000. 000 bushels. I come now to the last crop year, 1933-34. The European production for that year was 1,749,000,000 bushels while for this year the imports had fallen to

374.000. 000 bushels. I ask the house to note that the average imports for 1923-24 to 1927-28 were 601,000,000 bushels and these had fallen to 469,000,000 bushels for the period 1929-30 to 1933-34, there being a further decrease to

374.000. 000 bushels for the last crop year. In this last year the total consumption had risen to the largest figure in history, 2,123,000,000 bushels.

I wonder if the true significance of those figures will find lodging in the minds of hon. members of the house? While the average consumption of Europe (ex Russia) had increased from 1,841,000,000 bushels in 1923-24 to 1927-28 to 2,123,000,000 bushels in 1933-34, at the same time the importations by importing countries had fallen from 601.000.000 bushels to 374,000,000 bushels. There is the answer to your problem and I submit it is quite impossible to find any other answer than that you must take care to accumulate your surplus and by the efforts of your country and other countries remove that from the market at a price which will not destroy those who produce it. That is what you must do.

Before I proceed further I should like to place another authentic statement upon Hansard. I have given figures showing the consumption by world countries. I have shown how these countries have diminished their imports of wheat while increasing their production by the methods to which I have alluded. I now propose to indicate to the house the percentage of the entire quantity of world foodstuffs which Canada has supplied since 1922-23. I notice that the president of

Topic:   CANADIAN GRAIN BOARD
Subtopic:   PURCHASE, STORAGE AND MARKETING OF WHEAT AND OTHER GRAINS
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EDITION


Grain Board-Mr. Bennett the Canadian Pacific Railway made some reference to these figures in a speech he delivered the other day. I am placing these figures on Hansard so they will be there as a record. They are issued by BroomhalPs and show that in the year 1922-23 Canada sold to the world 41-4 per cent of all the foodstuffs consumed.


LIB
CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

No, foodstuffs.

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LIB
CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

Yes. We sold to the world 41-4 per cent of their imparted foodstuffs.

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LIB
CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

I am talking about

wheat. In 1923-24 we sold 44-4 per cent but in 1924-25 this had fallen to 26-9 per cent. In 1925-26 it had risen to 48-6 per cent but in 1926-27 it had fallen to 36 per cent. In 1927-28 it was 42 per cent, in 1928-29 it was 43-9 per cent and in 1929-30 the year in which we inherited our carry over, it had fallen to 30-4 per cent. In

1930- 31 it had risen to 32-9 per cent and in

1931- 32, for the reasons given in the table just presented, it had fallen to 26-9 per cent. In 1932-33 it had risen to 43 per cent. The house will note that this last figure is within one and a fraction per cent of the highest figure since 1923. How does that fit in with the statement that we are losing our markets? According to the figures given at the board of tirade in Toronto the other day, in 1932-33 43 per cent of the world's breadstuffs-I said foodstuffs, but it should be breadstuffs-came from the Dominion of Canada, and the next year, 1933-34, the figure was 37^ per cent. This year the figures as given by the president of the railway were up to the end of April, but I have the figures to the end1 of May, and up to the end of May we have supplied 32 per cent of the world's breadstuffs from Canada-32 per cent, which you will observe is a higher figure than we have had for a total year in some years. It is 6 per cent higher than it was in 1924-25 for the whole year; and since that date, to-day being the 12th of June, we have sold substantial quantities of wheat, one day a million and a half bushels, there being an average of half a million a day during that period; and our percentage is going up rapidly. So that I have every reason to believe-I am not venturing an estimate but merely giving a statement of my belief-that we shall find that this coun-

(Mr. Bennett.]

try will sell its percentage of breadstuffs to the world in 1934-35 at a figure much higher than it has been at any time during the last few years.

Now I am going to give the house one more set of figures; some hon. members may have seen them but I think it desirable to place these figures on Hansard in order to indicate just what action has been taken to deal with this tremendous problem. In the last five crop years, 1934, 1933, 1932, 1931 and 1930, this country produced 1,734,000.000 bushels of wheat, or an average of 346,000,000 bushels a year; and the carryover on the first of August, including that in the United States, was in round figures 127,000,000 bushels. On August 1, 1930, that is what it was This was prior to the harvesting of the 1930 crop. Let us see what we have to add to our carryover, which was the largest we had, of 127,000,000 bushels. We harvest the 1930 crop and we have additional crops amounting in all to

1,730,000,000, all harvested; and at the moment the total carryover of this country is less than 100,000,000 bushels more than it was on the first of August, 1930.. I will deal with the exact figures presently. Let me go one step further, however. The average Canadian carryover in five years of prosperity ended1 July 31, 1929-reckless

speculation, so-called prosperity-was 70,000,000 bushels a year, made up in the manner I have indicated. Now I ask this question: Can the people of this country afford to see the wheat that plays so large a part in our economic life become the sport and play of what is called supply and demand at 38 cents a bushel? That is the issue. That is the whole story. And when I said that part of that wheat was used and consumed, it is only fair to add that part of it was used for other than human food; that is to say, part was used, when the prices of other grains went up, for what I call husbandry food purposes.

Those figures are, I think, perhaps worth considering. They indicate as clearly as can be indicated just what the situation has been. And now I arrive at a consideration of what the situation is. If the house has followed me up to this point, during these years beginning 1930 Mr. McFarland undertook, without salary, to serve his country and western Canada particularly, to the best of his ability. He received no salary, as was stated in the committee a year ago; and he has given himself so unremittingly to his toil that he is now another wreck of this depression, physically. I put this to the house. We did not employ Mr. McFarland; I was in England when he undertook the duties of manager of

Grain Board-Mr. Bennett

the wheat pool. We guaranteed the wheat pool's liabilities later, for the purpose of enabling it to protect and stabilize the Canadian market. Some people have said that that is speculating, and I will deal with that promptly.

The Canadian wheat pool has been, the hedge-taker on the Winnipeg exchange. I am going to explain to the house, especially to my hon. friends from parts of Canada other than the west, what is meant in the use of these terms. I have already given the house a clear statement, though not as clear as I should like, of exactly the bushels of wheat that have been marketed in- a short period of nine weeks in a great year. I trust that hon. members appreciate that it means there has been a movement of wheat just- as fast as it could go through the separators into the elevator and, through the elevator, move to some other point for the purpose of being sold if possible. Now, if the wheat is sold on the market the elevator companies must pay the farmer for it in full, or he may store it and get an advance; but if he does what is done so frequently, he puts his wheat, in the elevator and gets his ticket as to weights, and is paid on the basis of the Fort William price for that grade-it being graded to ascertain its quality -at the prevailing rate of tha-t date, converted into terms of price at the elevator, wherever it may be, whether High River or Okotoks or Gleiehen or some other point. That being so, the bank provides the elevator with credit to enable it to pay in full. No elevator company has liquid capital sufficient to enable it for longer than a few weeks in the year to carry on business with its own resources. It therefore has to seek accommodation from the banks, and the -banks grant a line of credit on the hypothecation of wheat by the elevator company. But they do not stop there. The banks are never willing nor prepared to h-ave a loss by reason of great fluctuations in price, and so they compel their customers, the elevator companies, to hedge their purchases every day, by which is meant that they must find someone willing to buy that wheat. That is a hedge; that is what has to be done. Now I put to this house very simply this single question. When the speculator disappeared from the markets, he having been the hedge-taker in days gone by, and when the purchasers were not on, the market to acquire the wheat, who was going to hedge it? That is the question. Who is going to hedge that wheat? There was only one hedge-taker and that was the Canadian cooperative wheat organization, and they had to take, day after day, thousands and even millions of bushels, 02.582-227*

hedged for the purpose of preventing the development of absolute chaos in the marketing of Canadian wheat. Is there any gentleman in this house who will say otherwise? There were no speculators as in days gone by to take hedges. In days gone by there used to be speculators who took a chance. Many of them from the south had millions of dollars at their disposal; they, including Mr. Cutten whom the hon. member for Temisco-uata (Mr. Pouliot) mentioned, and others, were always prepared and willing to buy on the market as speculators. But with the disappearance of the speculators and there being no demand for export by the purchasers who had heretofore been buying wheat, for the reason before given, namely, that they were producing wheat on the scale I have mentioned, then what? Should we have chaos? Should 5ve have wheat backing up until it could not leave the farm? Should we allow the farmer to have his wheat piled up in great dumps on his farm, or should we do what we did, namely, make it possible, by hedging this wheat, for the buying and selling to continue? That is what w-e did anyway. In hedging the wheat we thereby became ultimately the owners of its unless there was a sale for it, because the hedge taker is the man who becomes the owner of the commodity unless he sells it. That is the story.

I know how difficult it is in the stress and strain of acute partisan politics for hon. gentlemen to agree that anything done by the government of the day is soundly done; but still I put it to the house and to the country: Is there in Canada any living man who would take the responsibility for the chaos that would have resulted had this action not been taken? Now is the time during the debate on the second reading of this bill, not on the hustings where no man can answer, for hon. members to rise in their places and speak. I see the hon. member for West Edmonton (Mr. Stewart) is not present. Let him on the second reading of the bill rise in his place and say that he would not have hedged this wheat nor provided the credit of the Canadian people to save the greatest industry in this country. Let him say that he would support bankruptcy for the whole of western Canada and the destruction of the entire economic structure we have built up during the last fifty years. That is what the matter comes to; let there be no misunderstanding about it. Would any hon. member opposite take such a stand? Would the hon. member for Willow Bunch (Mr. Donnelly) do so? These are not promises; they are achievements; they are the result of what has been

Grain Board-Mr. Bennett

done, and he who runs may read. But if partisanship is so blind as not to be willing to read even the record, so unwilling to grant to your opponents an effort to save the country from destruction and ruin, then of course let your sneering observations be sent to the farmers of western Canada; they are the people to whom they should be sent.

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?

An hon. MEMBER:

Oh, oh!

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?

Some hon. MEMBERS:

Order!

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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

Let the hon. member rise in his place and say that he votes against this bill.

I have indicated to the house why we took the action we did, and I am content to leave that record to the judgment of the future; I am content to leave it to my fellow countrymen, to the man who has toiled with his wife and family upon the soil to produce wheat that in 1932 he could not sell for thirty-eight cents a bushel even though we took what we did for the purpose of hedging. I am content to leave the record to them. I am content to leave it to the more fortunate people who live in great cities and towns in eastern Canada to say whether they believe the action taken was sound. When I listen to the sneers of hon. gentlemen opposite, I invite them to rise in their places and say that they are opposed to this bill. That is the test of their sincerity, and not the sneers they make as they sit in their seats, not the sneers they express as they talk among themselves. Let them speak up like men.

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?

Some hon. MEMBERS:

Oh, oh!

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CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

I am glad to hear hon.

gentlemen opposite laugh as I paint the story of those who have endured toil; I am glad to hear those members to whom such toilers have some right to look for support laugh and jeer. Let the hon. member for Willow Bunch lead the procession.

I should like to refer to what was done with respect to marketing the wheat which we had to take. I have said that we have taken these hedges. We took them in 1933; we took them in 1934 with the only body that was left to do so. Either government support was required or there would be the chaos to which I have referred. Let us see what we have done in the way of selling to Great Britain. The other day I said that I would take several countries and point out what we had done with respect to them. I am not unmindful of the fact that the former Minister of Trade and Commerce (Mr. Malcolm), whom I am glad to see in his place,

TMr. Bennett.]

declared in the house that the trade commissioners can do nothing toward selling wheat. His observation in that regard is a perfectly clear statement and it is one that has met with approval from many hon. gentlemen opposite. He said, as reported in Hansard of March 14, 1929:

The Department of Trade and Commerce is not exercised over the sale of such commodities as wheat, because those commodities find their own markets; but we are interested in assisting the sale of manufactured products.

To that statement hon. gentlemen opposite have given their approval. Let us go a step further and see what we have sold in the United Kingdom in the way of wheat and flour converted into terms of wheat. Up to the end of April of this year, in this crop year, the United Kingdom has imported

136.800.000 bushels of which Canada supplied

48.100.000 bushels or 35-1 per cent. The percentages of her imports that we supplied are as follows:

Percentage of total imports of wheat into United Kingdom supplied by Canada

Fiscal year:

1933-34 34.4

1932-33 50.4

1931-32 25.7

1930-31 25.4

1929-30 22.7

1928-29 36.3

1927-28 33.7

1926-27 31.6

1925-26 36.9

1924-25 30.2

The ten ^ear average being 32-73. Thus far in nine months that is excepting the months of May, June and July, we have already supplied the United Kingdom with 35-1 per cent of its total purchases. How does that sound as loss of markets?

The story is that we have lost with respect to the quality of wheat they have been accustomed to. and therefore the bread to which they have been accustomed is an inferior product. I have given the figures to the house. I have shown that the United Kingdom produced 50,000,000 bushels upon which last year they had a subsidy, which was operative for the year before for the first time. I think it is only fair to say that undoubtedly those percentages prior to 1932 should be increased, because there was no clear distinction between all the wheat that was cleared for the United Kingdom and wheat that sometimes went to continental countries. I remember the former Minister of Trade and Commerce pointing out how difficult it was to secure accurate figures with respect to the matter. But since the preference in 1932. the figures are such that unquestionably I think they may be regarded

Grain Board-Mr. Bennett

as accurate, for these figures were secured from the British Board of Trade. Let us bear in mind the fact that from August 31, 1934, to April 30, 1935, the Dominion of Canada has supplied the United Kingdom with 35-1 per cent of its imports of wheat and wheat flour in terms of wheat. How do hon. gentlemen reconcile that with the statements which have been made not in the house but on the hustings? It is not correct to say "the English are eating more bread," because recently the mills appropriated $2,500,000 for an advertising campaign: "Eat more bread." The quality of the bread, by reason of the very circumstance to which reference has been made, namely the use of softer wheat, had not appealed to the British people as it had previously, and they were using less bread. Eat more bread; that was the cry, and they are spending $2,500,000 in that campaign. I repeat that at the end of nine months of this year this country has supplied the United Kingdom with 35-1 per cent of all its importations of wheat and of flour in terms of wheat.

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LIB
CON

Richard Bedford Bennett (Prime Minister; President of the Privy Council; Secretary of State for External Affairs)

Conservative (1867-1942)

Mr. BENNETT:

Certainly.

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LIB

James Malcolm

Liberal

Mr. MALCOLM:

I should not like to

break the current of my right hon. friend's speech, but he is aware of the fact that in 1929 the total volume of business in wheat done with the British Empire was 229,000,000 bushels and that in 1934 the volume was

112.000. 000 bushels. There is often a great difference between the amount of wheat which the British re-export to other nations and the amount they themselves consume.

It is wrong to estimate that while Britain did not consume as high a percentage of the

229.000. 000 bushels, they were buying less from us. As a matter of fact I think they consumed as much then as they do now, but they re-exported more.

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June 12, 1935