March 12, 1937


The house resumed from Thursday, March 11, consideration of the motion of Hon. Charles A. Dunning (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means.


LIB

William George Clark

Liberal

Mr. W. G. CLARK (York-Sunbury):

Mr. Speaker, at adjournment last evening I was referring to the Farmers' Creditors Arrangement Act of 1934, which, as far New Brunswick is concerned, is an iniquitous law. The hon. member for Royal (Mr. Brooks) tried to make it appear that I was taking up this matter because of personal losses. It is true that my company has lost thousands of dollars through this act, but that would not trouble me if any good resulted.. I am speaking, however, for many tradesmen and a host of reliable farmers.

One cannot dissociate oneself from experience, and my experience has been that in many of these cases advantage has been taken of the act to aid dishonesty and increase unreliability. I mentioned that in my opinion the government should not make loans. Under the Farmers' Creditors Arrangement Act debtors may get clear without a cent of cost, and when it is so easy at first why should they bother about their debts thereafter? Here is a sample proposal made under this act:

T propose to retire my obligations both secured and unsecured by apportioning amongst my creditors the annual sum of $200 for a period of ten years with interest on interestbearing claims at the rate of five per centum per annum.

Included in this farmer's statement of debts amounting to some $5,000 is an amount of SI ,895 owing the Canadian Farm Loan Board, which I take it means the government of this dominion. This man proposes to pay only $200 per year on his debts for the next ten years. Here is another farmer, with liabilities of some $13,000. He says:

I propose to ask for an extension of time of fpur years without payments on account of my indebtedness, in order that I may have an opportunity of improving my land and effecting repairs to the buildings on the farm.

At the expiration of the four-year period I propose to convene a meeting of my creditors to consider my situation at that time.

I have many other similar proposals with which I need not trouble the house at present. I only wish to point out that this legislation has made it too easy for some people to get clear of paying their debts, and has deprived creditors of their security.

With reference to unemployment I desire to say only this: Unemployment can be cured

by the adoption of policies that will restore true value to farm lands and to the products of our fisheries. Then with the return of complete confidence on the part of all classes in our country there will be active business, prosperity, good wages, and contentment for all.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
IND

Martha Louise Black

Independent Conservative

Mrs. MARTHA LOUISE BLACK (Yukon):

Mr. Speaker, the Minister of Finance (Mr. Dunning) occupies a most difficult position. He must provide the actual moneys to be paid out for pressing needs, and he must look to the future in order to provide the staggering amount required to pay the interest on those moneys. No matter whether we agree with his policies or not, we all realize that he lives in an atmosphere of horrible anxiety, and is weighed down by enormous responsibility. I believe that all hon. members, irrespective of party lines, will acknowledge that under the circumstances the minister has done the very best possible.

Returning to my constituency last summer I was anxious to find out how some of my Liberal supporters would take the fact that I voted against the trade agreement with the United States. I spoke to one of our very dear friends, a hide-bound Liberal, if there is such an article, who had supported me because of a great favour the previous member for the Yukon had done him. I said, "What did you think of the stand I took?" His reply was, "Oh, I don't know; it all works out the same way in the end. Dunning put on an eight per cent sales tax, and after all what you loses on the swings you gains on the roundabouts."

The isolation of the Yukon will make whatever remarks I have quite different from any of the speeches of other hon. members. We are separated by a land belonging to another nation. We are separated from Canada by seas, mountains and rivers. Since I have sat in the gallery and in the house, in those years from 1921 to the present, I have heard hon. members one after another cast little slurs on the Yukon, with its small population, which they said was always coming to the government asking for money. It was only a few days ago that the hon. member for Pictou (Mr. McCulloch) asked what the government of the Yukon had cost in 1935 and 1936 in-

The Budget-Mrs. Black

elusive. He also asked for information about the population. The answer he received was that the moneys for all expenditures by the federal government during 1935 and 1936 inclusive amounted to $568,081.54. The population of the Yukon on June 1, 193.1, according to the last census, was 4.230. It is probably the same at the present time.

I ask the government and hon. members if it would not be just as fair to ask for information as to what value the Yukon has been to Canada. From 1898 to 1936 inclusive the Yukon has produced in gold alone $193,578,489. From 1925 to 1936 the production of silver in the Yukon territory has amounted to $11,195,090; there is no record of silver production prior to that time. I believe a moderate estimate would put previous production at $1,000,000. The production of lead from 1925 to 1936 amounted to $2,312,772, and prior to that time amounted to possibly $125,000. Customs duties collected on imports entered for consumption in the Yukon territory, from 1898 to 1936 inclusive, totalled $7,262,994.41. Then we must not forget for one moment the great market the Yukon territory has afforded Canadian goods. Millions of dollars have come to Canada from the Yukon every year. The Canadian packers, wholesale firms and machine manufacturers have benefited. From 1898 to 1936 the expenditures of the Department of the Interior in the Yukon territory amounted to $11,489,883. Other expenditures made by the government for the Yukon territory include those for public works, post offices, justice, Indians, telegraph lines-there has always been injustice in connection with that item, because much of the cost was charged to the Yukon when it should have been charged to British Columbia-miscellaneous expenses and mounted police. From 1898 to 1936 expenditures on these items totalled $20,895,649. These, added to the expenditures by the Department of the Interior, make a grand total of the cost of the Yukon to Canada of $32,385,532. I would ask in all reason if we have not returned that amount of money, in view of the fact that we have produced almost $225,000,000. I should say that was very good interest for the government of Canada.

It is said that Seward, Secretary of State under Lincoln, who purchased Alaska from Russia for the United States for the sum of $7,200,000, died of a broken heart because of the ridicule heaped upon him. Alaska was called Seward's icebox and Seward's folly, and yet we all know that within recent years that territory of Alaska in one year alone returned to the United States as much as

[Mrs, Black.]

$120,000,000. Hon. members must try to realize the significance of the fact that the Yukon, a much smaller territory of only 200.000 square miles, in less than forty years has produced at least $225,000,000, and I believe I am safe in saying that the land has not yet been scratched. That amount seems to me somewhat more than a fair return on the national expenditure of $32,385,532. The return is almost $200,000,000 greater than the expenditure. From the first rush in 1898 the Yukon has never asked for mercy, but has asked only justice in all things. When Lord Byng. as His Excellency the Governor General, came to the Yukon, after he had visited the various mining camps, he said to the then member, "Captain Black, I believe you represent the only truly socialistic community in the British Empire to-day," to which the member replied, "No, we are not socialists up here." "On the contrary," was His Excellency's reply, "you are ideal socialists. You have no very rich; you have no very poor; you have no social distinction. Both the men and the women must work, or go without. You take care of your sick and aged, if they have no means of their own." That, of course, is true.

It is in this connection that I want to speak about the old age pensions as they are applied to the Yukon. Many of our men and women have been in that country for from thirty to forty-five years and have not at the present time sufficient to keep them in their old age. Some of them had money and went through it, while others worked steadily almost beyond human endurance for that length of time and- yet have not sufficient to take care of their old age. The local government gives these people $20 a month. It is not called, a pension; it is referred to as a dole, which is a most offensive thing to every self-respecting man and woman. No matter how poor we may be, we all have a right to honest pride. The great majority of these men and women have worked hard while in the Yukon. They receive this $20 a month in the form of a dole and, unless they are absolutely helpless, under the conditions that prevail there they are able to live even on that small amount. Wood can be had for the cutting, there are fish in our waters and game in our woods; there are plenty of moose and caribou, and during the summer months our gardens produce almost anything that anyone might want. Then there is a great spirit of comradeship and generosity among Yukoners which I do not think can be equalled- anywhere else in the wide world. I have lived

The Budget-Mrs. Black

in the Yukon since 1898 and I cannot recall having met half a dozen truly mean men or women.

Many of our people who are entitled to old age pensions would like to go outside where they could be near relatives and friends. At present they are forced to remain in the Yukon because they are deprived of this dole when they leave the country. I contend that the dominion government should pay the whole cost of pensions for these people. If a man or woman lives for five years in British Columbia, after spending twenty-five or thirty years in the Yukon, he or she can obtain only 85 per month, an amount hardly sufficient for even an old person to live on. The government pays the whole cost of these pensions in the Northwest Territories, and if the same could be done in the Yukon it would help our people greatly. They could1 then go outside where they would be more c omfortable, where they would be close to relatives or friends and be able to enjoy some of the amenities of outside life. Sections 1, 2 and 3 of chapter 156 of the revised statutes of Canada give to the residents of the Northwest Territories the right to receive a pension from the dominion government, and I ask this government to consider giving the same right to Yukoners. These men and. women have worked hard and have been a credit not only to the Yukon .but to Canada as a whole. I ask the government to give the same consideration to the people in the Yukon as is given to residents of the Northwest Territories.

Once again I must refer to the superannuation paid to civil servants in the Yukon. The superannuation act was changed by the government in office prior to 1930, and this change has been continued down to the present time. When the government announced through an order in council that Messrs. George MacLean and George Mackenzie, former gold commissioner and acting commissioner in the Yukon, were being paid superannuation on their combined salaries and living allowances, I looked for the same justice to be shown the other civil servants in the Yukon. For years the following civil servants have been contributing on both their salaries and living allowances:

Interior department: Messrs. .Teckell, Grant, Burton, Faulkner and Gillespie.

Justice department: Mr. Blankman.

Customs department: Mr. Betts.

Public works department: Mr. Wyness.

The above list does not include any post office employees, the three officials in the White Horse customs or the eight or ten men who have been retired from the various de-31111-109

partments. It is on record that these members of the government service have paid into the superannuation fund on the basis of salaries and living allowances. Section 2 of the Civil Service Superannuation Act provides as follows:

(1) "salary" of a contributor means the regular salary paid in respect of his service, together with the value of living and residential allowances but does not include allowance or payment for overtime or other extra allowance or pay or any gratuity.

It will be seen by this section that the government promised the payment of superannuation on both salary and living allowance and the employees paid accordingly into the fund. For some time the government retired employees on this basis. Later when certain civil servants from the Yukon and the Northwest Territories were brought down they realized that they would be retired only on their regular salaries. Accordingly they made application to the government for a return of the money they had paid into the fund1 on their living allowances, which application was granted. I think all hon. members will agree that by that act rank injustice was done to those civil servants who remained in the service in the Yukon and the Northwest Territories. Members of the service who for years had been paying on both living allowances and salaries, on retirement, either compulsory or voluntary, found to their consternation and, despair that the government had betrayed' its trust. In many cases incomes were reduced below the actual cost of living necessities. We would have the same thing in a widow going to an insurance company for the $5,000 or $50,000 of insurance for which her husband had paid and being told by the company that as they could not afford to pay all that had been paid for, she would receive only half. That is just what is being done to the civil servants in the Yukon. The Yukon civil servants made their payments when they were due, but the government, in order to make a few friends, changed the act over night and1 has failed to meet its obligations. I am asking only for justice for these men and women who have worked so hard in the north.

Labour organizers are beginning to work among the workmen of Canada, and it behooves the leaders among the employers as well as those among the employees to meet each other on a footing of reason and equity. The fight that is going on in the United States between the leaders Green and Lewis for control of the powerful labour organizations under one head is already finding a repercussion in this country and in my own land to the north. When one realizes that many

The Budget-Mrs. Black

of the labour unions in Canada are so closely bound with those of the United States that before making any settlements regarding policy permission must be given by union headquarters in the United States, the time has come when thoughtful men and women must ask, "Whither are we drifting?" Would it not seem strange to ask Italy or Germany or Russia for permission to carry on our business? As an integral part of the British Empire, would it not be more sensible to have an imperial labour organization?

Times are changing; they have changed. Laws accepted as a matter of course to-day would have been revolutionary fifty years ago. The same will be true of development in another half century.

For a number of years in the north my closest associates and best friends have been the working men and women of that country. At one time I myself cooked for sixteen men, baked bread for as many more, and did all of the work with the assistance of my twelve year old son, baking time off on Saturday afternoons to have candy pulls or other parties for the boys in the Sunday school class I taught at the Forks. I know whatwork is; I know what luxury is. Hard work

never hurt anyone, given good health.

My heart goes out to the women who at the present time must watch their children deprived of the necessities of life. I know that in addressing hon. members of this house I am talking to many who have children of their own; in a special degree they

must realize their responsibility for the wellbeing of our children and our grandchildren. The Minister of Labour (Mr. Rogers) understands as well as if not better than any member of this house the dangers and anxieties of our present situation.

On the whole, labour conditions in the Yukon have been fairly good. Hitherto we have been free from the strikes that trouble the outside world, but this spring, to my shocked surprise, a strike occurred in the silver district. At first a "sit-down" strike was intended, but better counsels prevailed. One mounted policeman visited the camp: he said, "Boys, this is, after all, private property; I think you had better go down to Mayo"; and the boys moved off. I am told that the citizens of that town, the strikers' committee, and the mounted police communicated with the present acting commissioner asking that he order the government liquor shop be closed during the period of the strike. These requests were either ignored or refused-I shall be very careful to obtain exact information upon my return to the Yukon in the

spring. But to the credit of the strikers, they themselves organized a committee to see that there was no disregard of the decencies of life. I believe that the mining company met practically all of the demands of the workers, at least sufficient of them so that the men went back to work. Can anyone in this part of the country or in the United States imagine a strike of several hundred men carried through with absolutely no rowdyism in spite of the fact that there was only one police officer in the entire district? I wonder how many people in this part of Canada appreciate what the Royal Canadian Mounted Police have done in the isolated districts of our great country? Surely high tribute must be paid to the strike committee and the men generally, and also to the lone member of the mounted police who represented the federal authority.

Governments must move with the times, and learn to face new conditions. For the first time in the history of the Yukon I have come to realize that we must meet labour conditions such as exist all over the world. Fortunately we have had almost invariably strict observance of law and order. I have known one mounted policeman to go among a milling mob of several thousand men, including "bad men," as we call them, from the south of the line in Alaska, and step up to one of these men and say, "Boys, I don't think you want those guns with you here. You won't have any use for them. We don't have any use for them." In the early days the mounted policeman was never armed, but no harm was done; men who were known in Alaska as bad men readily gave up their guns. This they did not because of fear of that stripling, not because of the way they expected law and order to be executed in the Yukon, but because everyone in that country knew that the entire force of the Canadian government was back of that one lone mounted policeman. We thank our justice department, we thank our governments-no matter under what regime-for the execution of law and order in the north. True, many times in the early days the police protected the unjust as well as the just, but after all these things work out in the long run.

In closing, Mr. Speaker, may I say that, my remarks are wholly inadequate to the love I bear for that great north land. From the bottom of my heart I thank every member of the government and every member in this house-the Prime Minister (Mr. Mackenzie King), the leader of the opposition (Mr. Bennett), and the Minister of Justice

The Budgets-Mr. Rowe (Athabaska)

(Mr. Lapointe), and every private member- for the great kindness and consideration that they have shown me in the last few weeks.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
SC

Percy John Rowe

Social Credit

Mr. P. J. ROWE (Athabaska):

During the past few days the house has listened to a great deal of destructive criticism of the government. Much of it is fully justified, but a surfeit of that kind of thing, unless accompanied by helpful and constructive criticism, leaves one cold. It leaves me cold for the reason that sometimes the stone throwers live in fragile glass houses. I am fully aware of the value of a vigorous and well informed opposition. In the words of Gladstone, given a strong overwhelming majority with a weak and ineffective opposition, you can corrupt a government of angels. I believe that is so, and yet it seems to me that the evils of the party caucus system outweigh the good points. I would express my appreciation and commendation of the revolts against that system which have been staged in three Canadian legislatures within the last few days. Naturally, of course, I do not want to be interpreted as criticizing or condemning any individual; but this system, which subordinates free and untrammelled thinking, is an evil that must be ended. In view of the circumstances surrounding my own case within the last few days I ask the indulgence of the house to make that remark before beginning an analysis of the budget. I am tired of this never-ending squabble between the ins and the outs under our parliamentary system, the ins of course enjoying all the benefits and spoils of office and the outs everlastingly trying to take their place in order that they may enjoy these benefits. Our objective here should be the creation of an informed, enlightened, intelligent public opinion which in my opinion would unquestionably support a sturdy, individual open-mindedness on the part of the members. I commend and support the remarks of the hon. member for Kootenay East (Mr. Stevens) the other day in which he deplored this situation.

There is something else I should like to refer to. As one of the new members I feel appreciative of the detachment, impartiality and courtesy extended by all members of the house, particularly the government members, when some of us have to indulge in destructive criticism. I believe we all here have on these questions an open mind, a mind which has tried to rid itself of prejudices and prepossessions and tried to understand and evaluate the good in every one of the conflicting economic philosophies that are presented to this house, a mind that is susceptible to new truths, a mind that can forget and live down opinions and put opinions beneath

31111-109i

it. I believe that type of mind, with the council form of government which I am advocating, would ensure greater progress in parliamentary government. And it is just as well to remark that instead of thinking too much about the next election in our policies we should give some thought to the next generation; and instead of thinking in a calculating way about what the country can do for us, we should sometimes think about what we can do for the country. A man should also try to be careful to distinguish between his honours and his honour. There again I do not wish to be misunderstood; I merely lay that down as a general principle.

We of the Anglo-Saxon and the Latin races have an especially precious heritage to guard and keep inviolate against the assaults and encroachments of dictatorships both political and economic. The thousand year old struggle of the Anglo-Saxon race and the French race for freedom, magna charts, trial by jury, freedom of assembly, of the press and of religion, and the secret ballot will have been in vain if we permit much longer the subjection of the world's real fruitfulness to the will of a purely instrumental mechanism, the money system. The fantastic veto, which the political leaders who acquiesce in, agree to and accept this present money system, are placing upon life, the frustration of everyone and the denial of the inalienable and legitimate aspirations of our young people, is becoming dangerously close to a matter of life and death.

I wonder if the unemployed, over a million in this country, who are unemployed because of the policies of sound money governments, can look with the same degree of detachment, impartiality and freedom from prejudice and passion and fear that we can when we come to study these questions. And this very directly links up with the budget. Every four or five years in Canada under our present democratic parliamentary system we have an election. My grandfather and my father used to tell me about it and they used to describe it in this way. It was really a kind of circus and we all dressed up and went to it, and while the political balloon was going up into the heavens and our eyes were fixed upon it some adroit gentlemen were picking our pockets through the device of watered stock, monopolistic control and all that sort of thing. That brings us to the conclusion that preelection pledges are made primarily and specifically for the purpose of getting into office, and once we get into office the science of successful government seems to consist in trying to convince everybody that nothing can be done about anything. That is the layman's point of

The Budget-Mr. Rowe (Athabaska)

view, because we have the result of the system of our budgeting bearing fruit in a million and a quarter of honest, decent, good citizens compelled to endure the heart-breaking degradation of public charity in the form of the dole and unemployment relief. It is therefore an inescapable fact that the fruits of the system are the result of the methods emplo3'ed in handling the production and distribution of the country.

I will now discuss the farmers under the present budgeting system, and I merely point out that a system based as the present one is upon privilege and power is distorted and strained in every direction by inequalities which arise out of the system itself. The unjust property laws and regulations placing in the hands of irresponsible persons who neither toil nor spin the power of life and death, power over the destiny of those who toil unceasingly for small returns, pathetically inadequate returns-such a system, I say, to refer once more to Gladstone's saying, would "corrupt a government of angels". I do not want this government to seek refuge or find consolation in the comparison. I am merely attempting to prove that this government is trying to perform a hopeless and impossible task. Think for a moment of the plight of the farmers in this country. The only purchasing power they have is the proceeds of the sale of their products-grain, fruit, vegetables, hides and wool-and the prices they receive for their production are fixed by the vagaries of chance and the weather in countries beyond the seas where they have to compete in world markets. Farmers therefore have no say whatever about the price that they shall receive, except as they begin to develop cooperative organizations which will in some measure protect them and guarantee an adequate return for the services which they render in the production of indispensable necessaries which we of other classes consume from day to day.

On the other hand when the farmer comes to buy, every single thing that he buys is likewise produced in a market beyond his control. When he buys machinery and clothing and shoes and furniture and building material the price is dictated by people who simply say to him: that is what it is going to cost you, and that is all there is to it. Is it then any wonder that in the absence of any regulatory control of these things we find the farmers flat on their backs in this and every country which operates under that system? Actually it means that the farmers and the workers and the fishermen who produce our goods are regarded as a means

[Mr. P, J. Rowe.J

to an end, which end is the enrichment of those who own and control and exploit them. The harder they work, the more skill and energy they put into their efforts, the poorer they must become. It is a fallacy to say, as the Minister of Labour (Mr. Rogers) said in this house a little while ago, that consumption and purchasing power are determined entirely by production. That is not true. Year after year when we had good crops in this country and other countries, down went the price. A good crop is a calamity, and the harder we work and the more skill and energy we put into our undertakings the poorer we must become.

In spite of our vaunted humanity and Christianity and our glorious empire upon which the sun never sets, the vast majority of our people live in the shadow of a nameless terror, while the privileged few riot in unimaginable luxury. The submerged masses live in a famished world, a world in which they have always toiled- for small returns. They go to bed at night haunted by terrible nightmare dreams of penniless old age, and wake in the morning often pursued by the gaunt wolf of hunger and harassed by a thousand fears and worries over rent, food and clothes, possible sickness with no one to care for the children, and- not enough insurance to protect the family in case of sudden and always ignominious death.

Let us not be deceived by signs of a false prosperity, if we can speak of prosperity while over a million of our people are on relief. This country is now experiencing a slightly increased activity, due in part to the swing of the boom and depression pendulum, the replacement of depleted stocks consequent upon the years of depression, and in part to the enormous increase in the manufacture of armaments and munitions of war, the preparation of a rich harvest for death's sickle, the way of annihilation for multitudes of the humble and nameless of earth's children. This is all being done on borrowed, debt-creating and debt-increasing money and credit, and as sure as to-morrow's sunrise the day of judgment will come in higher taxes and lowered standards of living when we come to pay off the money hucksters, gamblers and belt-tighteners of the money system.

Can the government prevent all this? Certainly it can. It can at once take control of the issue of currency and>

credit, it can restore to parliament its sovereignty, which has been usurped by the chartered banks of this country. That was the mandate upon which this government was elected to office. Why has it not been carried out?

Then we -have this gold business. To me it is simply idiotic to talk about gold as wealth.

The Budget-Mr. Rowe (Athabaska)

Gold is not wealth. It cannot be eaten, it cannot be worn, it cannot be used to heat houses; all the energy employed in the production of gold is wasted energy. That is equally true of the production of armaments. If we would consider for a moment the diversion of that wasted energy into the beneficent channels of production of clothing and shoes and furniture and building material, what a difference it would) make I

I want to review rapidly and briefly what I believe to be constructive suggestions for the assistance of the government in next year's program. I appreciate that this year's program is pretty well defined and that nothing I can say now will have much effect on the policies of the government. But I want to present the point of view of the common people with respect to what the policies of this government seem to be for this year-people who are unemployed and who realize that their unemployment is no fault of their own, no fault of the fertility of the soil; people who are willing to go to work on the idle Land and in the idle factories, producing wealth for themselves and their children. It seems to me if you were to bring in from the streets an unemployed man who sees all that, and who is keenly aware of the attainable possibilities of a planned economy in which is envisaged the maximum application of engineering energy to the production of wealth and its equitable distribution among the producing classes, he would say this, probably with a great deal more bitterness than I say it. I say it with bitterness against the system, not against the government of course. This is true of any government that pretends to defend and1 acquiesce in and operate a system of this kind. I have already said that a government of angels could not do any better, because the system is in reverse-it works backwards. We must say that the government has done nothing for the common people of this country, unless it is to shatter for all time their faith in party politics, in government, and in God' and man.

The first thing I want to condemn is the restoration of the reduction in the indemnity to members and senators. When the low bracketed income people who are rendering indispensable services for our daily well-being witness the spectacle of a group of well-paid people with the power to do it increasing their own salaries while there is a very palpable and evident lack of equity in the distribution of the national income, when the former are compelled to try to balance their personal budgets on a pathetically inadequate income, I say it is an exhibition of un-Christian savagery. Again, to any member of the government or of this house who might be inclined to resent that, I say I do not mean it in a personal sense. But it is wrong and unmoral and un-Christian, and I protest against it.

We had, then, the wage demands of the railway men, which were refused, and we have speculators making millions out of wheat at the expense of the debt burdened farmers. We have the increase in the price of bread. We have enabled loan companies and banks to charge usurious rates of interest on housing loans. We have filled the pockets of armament and munitions racketeers, placing one of them, Arthur B. Purvis, of the du Pont dynasty, at the head of an employment commission which in my opinion is utterly useless. We have ruined the building industry by allowing the prices of base metals to climb to impossible and heartbreaking heights, affecting plumbing, heating and wiring. The reason for that, of course, was clearly stated by the hon. member for Kootenay Bast the other day; it is the result of the export of material to meet the demands of countries which are building up war defences. We have failed to bring back the value of the dollar. We have allowed millions of feet of lumber and other building material to be shipped out of this country while large numbers of our people are living in uninhabitable shacks.

Indeed, Mr. Speaker, we are even boasting about our increased foreign trade, while we have allowed hundreds of millions of dollars' worth of living necessities to be shipped out of this country at a time when our own people are in dire need of these things. I must repeat that the present faulty financial system which fails effectively to develop a home market-which could be done by the issue and control of debt free consumer credit -gives rise not only to the shocking abnormalities I have just mentioned but, by causing needless poverty at home, creates war and international anarchy abroad. Most if not all of the moral diseases of modern society are due to the abnormal conditions under which people past and present have been compelled to live, and of necessity the cure is the removal of the cause. There is one major cause; that is, poverty. Remove want and the fear of want and you automatically dry up the poison-breeding springs of vice and misery and make both tyranny and anarchy impossible. A free, happy and contented people is a peaceful, sober and law-abiding people. When we take the proper, intelligent, scientific steps to remove forever the causes of poverty from our land there will be no more talk of "subversive ele-

[732 COMMONS

The Budget-Mr. Rowe (Athabaska)

ment-s" from within, because "subversive elements" are caused by two things, poverty and injustice, and those two things alone.

There is no physical reason for poverty in this country to-day. We have vast resources in Canada. With regard to my own riding, a few days ago a competent engineer gave me the estimate that the Athabaska tar sand area contains approximately seventy-five hundred billion gallons of oil, or enough to furnish the entire world at the present rate of consumption for 1,800 years. We live in a country that has concentrated within its borders a greater body of vital natural resources than any other land on earth, and I say there is no physical reason for poverty here. The sole reason at present is that we have failed to implement a sound, sane and rational scientific control of the production, distribution and exchange of wealth within the country. The problem of production has been solved; the problem of distribution alone remains, and that is a money problem. Since the dawning of the era of economic plenty, which was ushered in with mass machine production in the nineteenth century, the financial system has operated haltingly and with periodic breakdowns, vet scientific control of the financial system is the only means by which we can benefit from power machine production. The only way to do this is to apply engineering principles to finance. This is the constructive suggestion I wish to offer to the government. I suggest that scientific control of the mechanism of money constitutes the most significant contribution which this or any other government could possibly *make in this power age of mass production and potential plenty, but the time is very short; there is none to lose. If we are to win in this race between ordered planning and immanent chaos we must act quickly.

In looking over the budget I can find very little reason for congratulation. No attempt has been made to survey the capital assets of Canada, either actual or potential. There is no balance sheet showing what we have in the way of wealth, or what standard of living would be possible for our people if we were to put our machinery to work creating goods and services. We have but a summary and list of our debts and expenditures for the coming year, with the amount required to meet these expenditures and the service charges on the debts. Then on the other hand we have a survey of the possible taxation that can be heaped on an already overburdened people.

The present system of finance takes care of production only. It must be adapted to

take care of consumption as well. May I suggest to the government that they take the first constructive step by appointing a potential products capacity commission to make a survey similar to the one conducted by Mr. Harold Loeb in the United States two years ago. I should like to refer to my remarks in this house on March 10 of last year, concerning this question. I want to quote again, as I did on that occasion, from the foreword, written by Mr. Stuart Chase, the eminent industrial engineer and chartered public accountant, to a book called Plan of Plenty, published by the Viking Press, New York. He used these words:

This study is destined, I believe, to have historical importance. It has furnished comprehensive statistical proof for a possible era of abundance; proof which has long been wanted. It gives the lie to the scarcity men, the hucksters, gamblers, and financial jugglers who once promised the end of poverty, and who now, their system in reverse, foretell an America of industrial serfs, peasants, and belt-tighteners, into a bleak and undated future. Where are you going to get the money? they cry. If the abundance men can carry the findings of the National Survey to every hamlet in the land, there will be in the end no question of where the money is coming from. Americans will not be content to idle in semistarvation because the rules of an antiquated money game demand it, when they know that the good things of life are theirs for the taking-and, mind you, the working. An income of $4,400 a year in sound goods and services is not affluence, but it looks like paradise to most families in this country to-day. And it is only a beginning; only the first indication of what the power age can do for mankind, if once it be given an opportunity genuinely to serve mankind.

May I suggest to the Minister of Finance that we have a scientifically controlled means of rectifying our national accounts so that they will present a true picture of the facts of production. Then if we follow this up by financing consumption we make our home market fully effective; we abolish poverty and by the same token we abolish war, because we abolish the necessity of fighting for foreign markets. Remember the words of the late King George V at the opening of the economic conference in London in 1932:

It must not be beyond the power of man to utilize the vast resources of the world to ensure the material progress of civilization.

It is not beyond the power of man, and it is not beyond the power of this government. If this government wants to stay in office indefinitely I suggest that it should turn its attention to this problem, and deal with it along these lines. As far as I am concerned the government is entirely welcome to remain in office. I do not know that I

The Budget-Mr. Maybank

have any particular ambition to remain in parliament, because once we develop the proper scientific system of handling governments and the control of production, then I think parliamentary and civil service jobs will be the least desirable, because you have to please so many people. I am suggesting a plan. We call it social credit. It does not matter what you call it, so long as its engineering and scientific principles are recognized and applied. We must not only apply them but translate them into action 'by effective legislation and enforcement.

As I said in the house last year-and I shall quote my words on this occasion:

If Canada would exhibit before the eyes of all mankind the spectacle of a great people liberating themselves from financial and economic bondage in this way, there is not a government on earth that could resist the demand of its own people, that a similar thing be done for them.

In other words, one example would be worth a thousand sermons. I do not believe that Canada can participate effectively in the entanglements of other countries, but I do believe we can make a significant contribution at this critical point in human history by giving an example to the world of a people deliberately planning the creation of wealth and its distribution, so as to put an end to these maladjustments of poverty and war. The only way we can pay our debt to the pioneers and trail blazers of the past is to assert, not only by words but by effective deeds, that the earth and the fullness thereof belongs to the living. Are we going to pay that debt by handing on to those who follow us across the years a better, happier world than the one we had left to us? The choice is ours.

In conclusion, Mr. Speaker, I have been thinking a great deal about the position of this country in relation to the rest of civilization. It seems to me that a civilization founded upon tyranny and injustice has no more right to continue than had the civilizations of Babylon, Nineveh, Rome and Greece. Indeed, a traveller from Mars standing among the ruins of ancient cities and empires, and seeing on every hand the fallen pillars of prostrate walls reminiscent of ancient glory, must ask the question-and this question must be asked by our own civilization- "Why did these cities fall; why did these empires crumble?" The ghost of the past or, if you like, the wisdom of the ages, answers, "These cities, these palaces and these temples, upon the ruins of which you stand, were founded upon tyranny and built upon injustice. The hands that built them were unpaid. The backs that bore the burdens also

bore the marks of the slave-drivers' lash. Those civilizations were destroyed as this civilization will be destroyed because they bought and sold the bodies and souls of men, women and children." And if there is any lesson to be gained from history, and any challenge to us in this generation, it is that no nation or no institution founded upon slavery or injustice can expect to survive.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Joseph James Duffus

Liberal

Mr. DUFFUS:

Mr. Speaker, I did not wish to interrupt the hon. member when he was speaking, but if I understood him correctly he said that the increase in salaries and in indemnities of members was unmoral. I should like to ask him if it is his intention to accept the increased indemnity?

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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SC

Percy John Rowe

Social Credit

Mr. ROWE (Athabaska):

If the house would give me permission to answer the question, I should be very glad to do so. I said that, and I meant it. In answer to the query as to whether I shall accept the increase I say that I will, and I intend to use it in disseminating information among the people of Canada with respect to the infamies of this system.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Ralph Maybank

Liberal

Mr. RALPH MAYBANK (Winnipeg South Centre):

Mr. Speaker, perhaps I might first, in addressing the house in the budget debate, congratulate the hon. member for Athabaska (Mr. Rowe) both upon the manner of his speech and upon one expression which I noted as he went along. When he came to what I fancy would be called his peroration, and quoted his peroration of last year-had he been here earlier there might have been others to quote-I could not help envying both his facility of speech and his flair for phrase making. In all sincerity I congratulate the hon. member upon his presentation this afternoon. I must be frank to say that in so doing I refer more to the form than to the matter of his speech.

I commend to the house the hon. member's approval-and he spoke, I thought, somewhat feelingly-of the tolerant attitude which he stated had always been shown both by the official opposition and those sitting on the government benches with reference not merely to himself but to other members of his party. I agree that there has been a tolerant and kindly attitude shown by the house. I am glad of it, and I am glad to be numbered among those so described by the hon. member who has just taken his seat. He may think we have been more tolerant than the members even of his own party. So far as I am concerned, I know that I can disagree at any time I like with my party on a matter

The Budget-Mr. Maybank

of principle; so long as I do not get angry enough to walk out, I am pretty confident they will not throw me out.

I wonder, however, if the hon. member would permit me to suggest that upon further consideration he must agree he was wrong in saying that one of the difficulties in Canada is that there are too many people without those things which we are in the main exporting. All hon. members will agree that there is too much misery in the country, but surely the hon. member for Athabaska cannot contend that the fundamental difficulty is that we have not enough wheat, nor indeed unreasonable distribution so far as we need wheat for consumption- and so with practically all other products we export.

The hon. member spoke about certain economic philosophies. He no doubt is aware that the economic philosophy which we in this section of the house are endeavouring from time to time to put before parliament is the exchange of surpluses, in order that we may get more of the things we lack and in that way help to relieve misery; it is not an endeavour to load upon the backs of our people more wheat, more copper, more nickel, more pigs, more hides, and so forth. Surely that is a sound economic philosophy. But no philosophy can be expected to better conditions overnight. I think he ought to remember that ours is a philosophy in contradistinction to his own, which is essentially, as he said, a distribution or diffusion of the monetary unit of the country, which he wrongly described as purchasing power.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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SC

Percy John Rowe

Social Credit

Mr. ROWE (Athabaska):

May I ask the hon. member a question, because I am interested in his analysis? Is the economic philosophy he is now advocating producing good results?

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Ralph Maybank

Liberal

Mr. MAYBANK:

I am glad the hon. gentleman has asked that helpful question. I shall first give my answer, and then during the course of my speech I shall give reasons for my answer. My answer is: Yes, it is producing results. The exchange of our surpluses is improving conditions, but I am just as impatient as the hon. member over the fact that the improvement is not as rapid as I should desire. The only difference between us is that possibly I have better control over myself -and am still able to think even though I am impatient.

I should like to join with others in offering my congratulations to the Minister of Finance (Mr. Dunning) upon the picture he has presented- this year of the country's affairs. Last year he presented a rather sombre

(Mr. Maybank.]

picture, but we had hope at that time that changed1 policies would bring about an improvement. We were faced with the necessity of having to pay a thousand million dollars, or thereabouts, of new diebt put upon, us during five years of rule by the present opposition. The minister's statement this year has shown that our hopes at that time were justified. The minister apologized for the length of his speech, but in order to offset that he said he would try to offer something of a cheery nature. The house, I think, will never weary of long speeches from him provided he can make as many cheerful statements as he did in his presentation this year.

There are two general observations I should like to make with respect to the budget. There will be perhaps a sequel to one of my statements later on in my remarks, while the sequel to the other will appear in the budget of next year. The minister forecasts the probability of a deficit next year of not more than $35,000,000. He hopes that our revenues will come to within that amount of meeting our expenditures. I am inclined to think that he may perhaps be puling the composite leg of this house. I have a feeling that he is perpetrating a gentle joke upon us. He predicted a deficit of $100,000,000 last year, and when I realize how much he bettered that, I cannot but think that he is now playing a little joke when he says that he expects a deficit of not more than $35,000,000 next year. I fancy he expects to do better than that.

The minister would have done much better this year had it not been for what might be called certain acts of God,-a legal phrase with a blasphemous smack about it, but sanctioned by usage. I refer particularly to the drought in western Canada. I suspect that the minister is holding back some good news now in order to give it to us next year. A Scotch member of this house referred to the minister as being a Sassenach but that he had a good deal of the canny Scot about him. Needless to say that Scotchman thought he was paying a compliment to the minister in attributing to him the qualities of a canny Scot. I said to him I thought he was trying to take some credit to his own race, and then I walked away from him as quickly as I could.

I think the whole country is gratified with the announcement that the improvement is such that there is no necessity for new taxes. We sometimes forget that when increases are announced in the budget they are really taxes which are spread over the whole country. Likewise, when reductions are announced, there is a proportionate tax reduction. I think

The Budget-Mr. Maybank

the present budget, with its treaty appendage, is notable for its tax reductions. This is what I was referring to when I said I hoped to give a sequel to one of my statements later on this afternoon. It must be gratifying to all to see the manner in which the patient is recovering under gentle, beneficent Liberal rule and the application of Liberal doctrines. Our trade has advanced more rapidly than the trade of the rest of the world. The improvement last year for the rest of the world was about eight per cent, whereas Canada's trade improved twenty per cent. The fact that we came up to fourth place as an exporting country was doubtless due in large part to our policy of selling wheat for export rather than continuing the silly system of hoarding it in elevators and paying storage tolls.

The deficit this year is S19.000.000 greater than it might have been because of the return of certain moneys to the farmers of western Canada. There has been a writing off of certain debts of Manitoba and Saskatchewan upon the condition that the benefit be passed on to the farmers. This is an act of far-sighted governmental administration and will benefit all Canada. As a representative from the prairies I think it behooves me to express my gratification.

As a general justification of this policy of the government I should like to present to the house a picture of the disaster which has overtaken the prairies during the last five years. Such a picture has been given to the house in one way or another many times, but there is no harm in presenting it again. I hold in my hand a graph which was prepared by Mr. Mitchell Sharp, of the Sanford Evans Statistical Service, for the Actimist, the organ of the junior board of trade of Winnipeg. The story of the disaster which overtook the prairies is indeed startling. Agricultural wealth in the year 1928-29 is shown in the chart as having a value of $528254,010. The following year it had dropped to $380,131,404. The next year there was a further decrease to $212,761,271. The next year another decrease took place to $158,179,522. The following year, 1932-33, there was a slight increase to $159,717,822. The next year another increase occurred, bringing the value up to $159,820,270. The next year, 1934-35, it increased to $197,139,780. In 1935-36 it had increased further to $201,431,932. But it will be seen that even though there has been an improvement in the last two or three years, the fact remains that for every dollar obtained from this source to-day, over two dollars was obtained at the beginning of the period to which I have referred. The mineral development of the country has not been such as to

act in any way as a counterpoise for this dead loss in agricultural wealth.

During that same period, as I think everyone knows, the dollar has been sweating off some of its value. In the light of the tremendous losses to the country as a whole, the fall in government revenue can be easily appreciated. I make these remarks with a view to again expressing gratification, as one representative from the prairies, at the action of the government in respect to this remitted debt of $19,000,000. In spite of the hard times that have befallen that part of Canada in recent years, the prairie mind is both buoyant and optimistic. The west will prosper again and will become once more- and gladly so-the mainstay of Montreal, Toronto and other eastern cities.

A heavy attack has been made since the commencement of this parliament upon the Minister of Finance (Mr. Dunning) by the apostles of what is sometimes called soft money. The minister thinks, no doubt, that he has confounded his critics. I do not know about that. I should be inclined to wait for the reply of my genial though passionate friend from Rosthern (Mr. Tucker), and of the redoubtable member for Vancouver-Burrard (Mr. McGeer) before being sure about that.

Arising out of this budget presentation there is a wage question to be considered. I wish to say a word or two upon the theory of hard versus soft money, because I think it has a close bearing upon the general wage question. My own opposition to what may be called the soft money theory does not arise from any horror through contemplating the fate of the assignats of France, nor the chaos that resulted in the United States at the time of the greenback issue, nor the confiscation in Germany which followed the inflation of the mark, nor yet the Russian ruble orgy. After all, our advocates of soft money argue for what they call controlled inflation, with emphasis upon the adjective. I do not think any person can deny that there might be merit in a controlled inflation. It would be bound to have certain benefits. One of those benefits-perhaps the one which is chiefly spoken about-is that it would make it more easy to pay debts. The value of the dollar would be less in relation to goods, and therefore it would not be so difficult to pay debts contracted some time ago. My disinclination to fall in with that doctrine does not arise from a consideration of various money debacles which have occurred in the world, but rather because I regard it as a scheme to cut wages and other income payments. When in this way we depreciate

The Budget-Mr. Maybank

money ten per cent for t'he purpose of making it, shall we say, ten per cent easier to pay debts, we at the same time cut all wages and salaries in the same degree. The old age pension, instead of being twenty dollars, is immediately cut to eighteen dollars. Every war-earned pension is automatically reduced ten per cent. The insurance which people are keeping up for themselves or their loved ones is reduced ten per cent. Even the aid we are now endeavouring to work out for the blind would have ten per cent less value in terms of purchasing power than we now expect. Such schemes are frankly experimental. I am opposed to experimenting in this way with the wages and salaries of our people and with the pittances granted to the blind and the infirm. To my mind those who advocate action of this kind should be required to make out an overwhelmingly compelling case.

It was a surprise to me to learn of the civil service salary restoration at this time; I had not expected it until next year-which shows what a poor forecaster I would be. Nevertheless I am very pleased, as I believe every hon. member must be, that it has been made. The payment of full salaries will have beneficial effects for the country at large out of proportion to the actual amount thus restored, because the esprit de corps of the service will be improved by more than a mere five per cent. When the government reduced wages it gave a lead to industry in wage cutting; that, I think, is within the memory of us all. I trust that this action by the government will be a counter-signal to all employers of labour, and I hope the government will do all in its power to urge restoration of wage cuts whenever the opportunity occurs, and particularly in industries which have not yet done justice to their 'workers in this regard.

I notice by the newspapers that the government is acting even now, as it should, as mediator in the railway wages dispute, consequent upon the strike vote which the employees have taken. I believe that at the moment majority opinion in the country is against the men on this wage issue, believing that the men should1 wait a while. Frankly, I am not in accord with that opinion, whether or not it is the sentiment of the majority. The railway men see that profits everywhere are increasing; the fact was referred to in accents of satisfaction by the Minister of Finance. They see themselves doing work for a wage seventeen per cent below that paid to other men doing the same class of work. They know that the railways, both the publicly, and the privately owned one have

paid their bond coupons without regard to whether enough money has been earned to meet that obligation; and they feel tha-t their wages ought to be just as much a charge upon the industry as the bondholder is. I confess that I see much justice in their position. If the employers will take the risk of restoring the wage reduction, putting it up to the men to make all possible savings and eliminate wastage, I believe that sufficient money for the restoration of these wages can probably be found.

May I point out that a very large proportion of the work of the railways is done without supervision. Has anyone ever stopped to think how much loss there would be on a railway if a three per cent slowing up of trains were to be effected? That ought to bring home the fact that when there is esprit de corps among the men in this particular industry you will probably have a prosperous industry; and no doubt the converse of that is true. You cannot have a good spirit in labour when there is a sense of injustice, and in all its mediation I would urge upon the government to keep this concept in mind.

I have spoken once or twice, once anyway, about the effect of the shrunken dollar. May I give my authority for the statement? The Labour Gazette for January indicates an upward trend in prices and a downward trend in the dollar. At the beginning of 1933 the wholesale price index was 67-2, and at the end of 1936 it was 85-1, a difference of nearly 18 points. True, this is not the last nor only criterion in estimating the dollar value, but it is important, and no one will dispute the fact that the wage-earner's dollar, and everyone else's dollar for that matter, has been losing some of its purchasing value in recent years. In considering the question of wages that is something that should be kept in mind.

A proper appreciation of the trade agreement which has been brought down in the budget cannot be had until we study it in committee, but enough can be seen to show that this is a great forward step in the direction of trading sanity. It is not inappropriate to refer to the agreement which the new one replaces, in view of the fact that there is much desk-thumping on the part of the present opposition when any supposed benefits of the former agreement are referred to. I do not suppose that anyone would deny that some benefits resulted from the old agreement, nor do I think anyone would have been disposed to deny that at the time

The Budget-Mr. Maybank

that agreement was negotiated. However, it is not at all clear that the benefits are such as are claimed.

Mr. H. V. Hodson, writing in the last bank letter of Lloyds, makes a significant statement. On page 69 of that letter he has a table which I am not going to ask to have placed on Hansard without reading it, and it would not be convenient to read the whole table. I shall therefore give the comments of Mr. Hodson himself upon his own table. At the bottom of page 69 he observes:

An inspection of this table points to several facts as outstanding. First of all, the most sudden and remarkable change of all, the rise in the empire's share of United Kingdom imports, took place chiefly between 1931 and 1932, and therefore is to be ascribed far more t9 the protective tariff itself and the depreciation of sterling than to anything that happened at the Ottawa conference.

Perhaps I should guard myself by pointing out that the protective tariff he there refers to is the protective tariff of Great Britain, which was adopted without any reference to and indeed long before the time of the Ottawa agreement. Again on page 69 there is this comment which I commend to the house:

Unfortunately it is next to impossible to tell from the statistics which of them was dominant in the actual effects of Ottawa; for the figures are influenced by a great many other factors, some of which, like world recovery and the rise of prices, are far more powerful than any adjustment of tariffs in the commonwealth whether upward or downward. The consequences of Ottawa cannot be isolated from the consequences of currency realignments, changing price levels, the pursuit of self-sufficiency by foreign countries, and other outside forces.

Consequently it would appear that the benefits of that trade agreement have probably been grossly overstated. In any event it ought to be perfectly clear to any reasonable person that they have been considerably less than they should have been had the agreement been negotiated in a different fashion. We have still in our memories Baldwin's plea that we should give preferences not by building fences against other people, but rather by levelling them down in respect of ourselves. That plea fell on deaf ears at that time. All the handicaps of 1930, and others, were left against the British. We simply said, " We will treat others worse that we treat you, and that ought to make you feel better." There was no positive, independent benefit to the Englishman with whom we were dealing, nor was there any benefit to the Canadian consumer. There was no lessening of tariff taxation at that time so far as the Canadian consumer was concerned. Not only that, but it is within the memory of all of us that Britain signed the agreement under duress; she felt

she had to sign it. It did not do us any good to force an agreement of that kind. All the journals of England witness to the fact that people who endeavour to deal in that way never do themselves any good. Neither in the case of individuals nor in the case of nations does it do any good to try to drive hard bargains and to overreach. As a matter of fact our endeavour to overreach at that time reacted on us in the psychological way I have been trying to point out, and we never obtained the benefits that we should have had. The present method is different. We have on the one hand actual reductions in favour of those with whom we are dealing, the exporters of the old country, and on the other hand actual benefits in the way of tax reductions for the Canadian consumer.

There are about this new agreement several things which I fancy it would be just as well to point out at this time. In the first place I am struck by the amount of the reductions. I have not had an opportunity to make all the arithmetical calculations I should like to in connection with reductions in duty, but I have gone through the first twelve pages of the schedule and the results are indeed gratifying. I find several 100 per cent reductions, a good many 50 per cent reductions, and many of 33, 25, 16 and 11 per cent. I believe 11 per cent is the least. This is a large tax reduction, aside from everything else. True, not everyone gets the benefit of each one of these reductions, but in view of the fact that all or practically all of the articles in the schedule I am discussing are important in the daily lives of the Canadian people, the general effect of this agreement is an important lowering of taxes for every man and woman in Canada. A few specific items will make this plain. One or two have perhaps been mentioned already, but I took from some newspaper this statement regarding 329 pounds of woollens. I did not rely entirely upon the newspaper report but checked it up myself with the schedule as it was and as it is. On a shipment of 329 pounds of woollens having a value of $114, the buyer was mulcted to the amount of $78; that now is reduced by $20. Woollen socks worth $8 were levied upon to the amount of $5.54; that is reduced by over 50 per cent. Practically all housewives -and their husbands of course, since the housewife would1 be buying the socks for him -will benefit by that 50 per cent reduction. I take from the Winnipeg Free Press of Saturday, February 27, a sentence which will indicate to the house the importance of these reductions:

Woven dress linens bearing 25 per cent minus 10 per cent plus 3 cents a pound, an

1738 '

The Budget-Mr. Maybank

effective duty of from 30 to 40 per cent, depending on price and quality, are now to come in free of duty. Fabrics of cotton with cut weft pile, wholly of cotton, or of cotton and artificial silk, formerly taxed 15 per cent and 30 per cent, depending on the composition, now enter at 5 per cent.

Now sir, in many items the tariff is still quite high and for the textile industry ample. We hear a great deal from time to time about the forgotten, man, but no one seems to say anything about the forgotten woman. Perhaps the finance minister has discovered her, because there is a great deal in this budget of benefit to the housewife. Perhaps it would be as well if the husbands of the country did not find this out too soon-perhaps I should have said nothing about it-so as to allow the housewives, the forgotten women, to get along somewhat more easily for two or three months on their budgetary allowances before their husbands find out about it and cut the allowances, to buy for themselves perhaps razors and fishing tackle and things of that sort, which also come in cheaper under the agreement.

The dropping of article 11 will, I think, be admitted by most people to be a good thing. That must have looked to the Englishman l-ike a trick clause. He expected to have a chance to be heard by the tariff board and in that way get redress from unfavourable rulings previously handed down. But, of course, he little realized the kind of tariff board which had been rigged up against him, or the lead given to departmental officials. These people seem to have developed a doctrine of import prohibition. They do not think of the consumer last, they simply do not think of him at all. The sooner there is some brooming done in regard to the tariff board, and some readjustment of the officials in the Department of National Revenue, the better it will be not merely for this government but for all concerned. I have not forgotten the nefarious inside job of tariff jacking attempted last summer when officials tried to make loggers and farmers pay from $200 to $300 more than they ought to pay for tractor tires, until they were forced' by public opinion to return to their earlier and truer judgments.

Another thing. In examining the schedules you realize what a pampered child of government paternalism is the textile industry. Its protection was indeed prodigious, amazing; one wonders that any person could ever have thought that such a protection could last- S75 carpet carrying $33 protection; hose to the value of $7 protected by a tax of $3.26. That, of course, meant that a woman paid $1.50 for a dollar's worth of hose, if these are the right prices for hose-other hon. gentlemen

will know more about that than I do. At any rate they will agree that when a pair of hose is worth a dollar no woman, and no man buying them for her, should be called upon to pay $150. I think the hon. member for Rosthern (Mr. Tucker) drew the attention of the house a few days ago to a tax of $1.81 on an auto rug having a value of $2.92.

The reductions, of course, are excellent. I do not propose to discuss the evidence given before the Turgeon textile commission or the report that may perhaps be made, but I hope that when the report comes down we shall be able to go forward and make still greater cuts in the textile items. I recall, for instance-of course, this does not exist now- a tariff of $153 on a 25 cent article.

Mr. SPEAKER; Order. I am sorry to interrupt the hon. gentleman, but he has exhausted his time.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Ralph Maybank

Liberal

Mr. MAYBANK:

May I ask the indulgence of the house to present this short argument?

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Walter Edward Foster (Speaker of the Senate)

Liberal

Mr. SPEAKER:

With the unanimous consent of the house.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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?

Some hon. MEMBERS:

Go ahead.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Ralph Maybank

Liberal

Mr. MAYBANK:

I thank you, sir, and

the house, for this privilege. It is patent that the benefits of protection have not been passed along to the textile employees, and that furnishes a striking example of the futility of trying to improve the standard of living of the worker by giving protection to the employer. I have worked out a few examples relative to protection and wages which I should like to place before the house.

In 1930, before the change of government, a pound of yarn worth 31-5 cents had a wage content of 8'02 cents; that is the wage that had to be paid in making a pound of yarn. The protection at that time to the industry in relation to that one pound of yarn worth 31-5 cents amounted to 4-09 cents, which is close to half of the whole wage bill. In October, 1930, by which time we had a change of government, two changes had come about. First the wage content had decreased, doubtless from causes internal to the industry itself. The wage content was only 6-6 cents, but the protection at that time on a pound of yarn, was 8-2 cents. In other words we, the people of Canada, were paying the whole wage bill of the industry and 25 per cent more. The industry was on relief, but on a magnificent scale. As I say, we not only paid the wage bill of the industry; we paid an additional 25 per cent for profits to the employers. That, it would seem to me,

The Budget-Mr. Woodsworth

is a demonstration of the futility of endeavouring to improve the wage standards of workers by giving protection to employers.

There is perhaps a great deal more that might be said on this phase of the subject, directly related to such remarks as I have made so far. I am appreciative, however, of the fact that a concession has been granted to permit me to present this aspect of my argument, and I do not desire to trespass further upon the time of the house.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. J. S. WOODSWORTH (Winnipeg North Centre):

Mr. Speaker, let me say that I heartily agree with the latter part of the speech of the hon. member for Winnipeg South Centre (Mr. Maybank). Undoubtedly protection of an industry is no guarantee that the worker in that industry will be protected.

According to the rules governing this debate we cannot offer an alternative to the proposals of the government. A subamendment must be strictly an amendment to the amendment, and no other amendment is admissible. However, I should like to criticize certain features of the budget. Some are good, of course; some are bad. In determining which way we should vote we have to ask ourselves whether the budget is generally satisfactory and whether it is moving in the right direction. An unusual feature is the inclusion of the trade agreement between Canada and the United Kingdom. To-day we were told that this agreement will be presented in the form of a bill, so we propose to study the agreement and vote on it on its own merits.

In this connection, I should like to compliment the hon. member for Ontario (Mr. Moore) upon having brought before the house some of the fundamental considerations which should guide us in judging an agreement of this character. With two points raised by the hon. member I heartily agree; first in his objection to tariffs being made by way of treaty, and second that this agreement looks in the direction of economic imperialism. I take it that imperialism is simply an extension of the protective system into the international field.

I looked over the debate which took place in 1932 in connection with the first agreement, and I may say that at that time our group took a position somewhat similar to that outlined in this connection by the hon. member for Ontario. I quoted a passage by Sir Arthur Salter, a passage which had been quoted by the then leader of the opposition, the present Prime Minister (Mr. Mackenzie King). Sir Arthur Salter said:

The world as a whole will either move toward a system in which each country can exchange the products which it is best qualified to produce for those in respect of which other

countries have corresponding advantages, or it will move toward an organization, national, imperial or regional, in which each unit will pursue the idea of self-sufficiency, with their standard of living poorer for the loss of world trade. ... We shall move as a whole to a world order in which each national unit will be a unit in the general commonwealth, or to a system of closed and, it may be feared, increasingly hostile units which will add immensely and incalculably to the risk of further wars.

Then at page 428 of Hansard for that year I commented as follows:

I submit that the conference is a move in the direction of an organization, national, imperial or regional; that we are still pursuing the ideal of self-sufficiency, and that, in the words of Sir Arthur Salter, this will inevitably involve lower standards of living and it will develop hostile groups with undoubtedly war at the end of the road. Who can read history and believe there can be a continued increase of tariff walls and of alliances such as we are making without these leading inevitably to war?

And a little later, referring to freer trade relations:

This agreement is not a step in that direction. It is a step backwards, towards less free intercourse between Canada and other nations. No one will doubt this. The Prime Minister himself said in his Calgary speech:

"Nations outside of the empire would be asked to pay some tribute for the privilege of trading within the empire."

Then I concluded with these words:

We are not voting against every particular item in it; let no one make that statement. We are forced to say yes or no, and looking at the matter in a large way, from a Canadian standpoint, we must say no; looking at the matter from the international standpoint, we must say no.

At that time the Liberals in the house stood solidly with us and voted with us. I wonder why to-day the Liberals are taking an altogether different position. The Liberal government brings forward an agreement not very different from that which we all denounced in 1932. There are two, or perhaps three questions I should like to have answered. Have the Liberals changed their minds? Has the agreement worked so well that they have been converted to the: Conservative policy? I think we have a right to expect an answer to that question. Again: Is this agreement sufficiently * different from the former as to indicate a getting away from the policy of protection and the policy of imperialism? I have not heard that question answered, and I think we have a right to an answer. Or are we in such a tight corner in our international affairs that Canada must adopt a second-best policy whether we like it or not? I think the government should be frank with us and tell us exactly why a policy similar

The Budget-Mr. Woodsworth

to that which was denounced by the Liberals in 1932 should now be put forward as their policy.

Let me point out that in the budget the sales tax and sugar tax remain. Further, in spite of the revelations of conditions existing in the textile industry, there is no very material lowering of the tariff. Those conditions are known to exist, although a report has not yet been presented. Further, there is no increase in the higher brackets of income tax. I think under those circumstances the government can hardly expect independent members to vote in favour of the budget.

I have considerable sympathy with the Minister of Finance. There is no doubt that he must raise large revenues. We all do, or at least should recognize that fact. That means heavier taxation. The question is: By what method shall he raise the revenues, and upon whom must the taxes fall? He has said that the budget offers "greater cheer." I submit that it may offer greater cheer to certain industrialists and financial operators, but that it does not offer much cheer to the great body of the people in Canada. Let me quote the minister:

An obvious indicator of the general state of our economic health is the volume of dividend distributions by corporations. It is gratifying to report therefore, that reliable estimates of profits for the past year were the highest since 1930, and reveal an increase of more than thirteen per cent over the 1935 total.

And again:

Profits are the mainspring of economic activity in the system under which we operate.

Undoubtedly that is altogether too true. But he goes on to say:

Increasing profits therefore are the best augury for increasing employment.

And the minister nods his head in approval. Personally I do not think that anything like that conclusion follows.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Would the hon. member admit the converse, that decreasing profits are an augury of decreasing employment?

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
Permalink
CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

We are not discussing the converse; we are discussing the statement of the minister, and I am quite sure he is sufficient of a logician not to think that because the converse is not true, that therefore his statement is true.

Let me illustrate the situation which exists. I turn to some of the figures given before the price spreads commission. Let us take tobacco, for instance. Dividends rose from a usual rate of 7 per cent to 10J per cent in 1933. In the three depression years, 28 executive officials were paid a total of $1,500,000. The company's own figure is understood to be

$1,146,923.65. On the other hand, we find that in six united cigar stores the total wages dropped from $4,600 in 1931 to $2,900 in 1933.

Or, if you like, let us turn to meat packing. Since the merger in Canada, Canada Packers made a yearly profit at the Toronto plant of $900,000. On the other hand, from 1927 to 1933 over 1,600 employees were let out. By 1933 the wages had fallen by 16-9 per cent and the average annual wage in the packing plants was $933.

Turn again, if you will, to the canning industry. In 1933, when the lowest price in five years was paid for tomatoes, the company gave a bonus to certain stockholders, largely its own officers and directors. In the depression years the profits of the American Can Company rose from 9-0 per cent on sales in 1931 to 21-1 per cent in 1933.

Turning to the investigation into milk we find the investigating committee discovered that in 1932, while prices paid the farmers for milk had been reduced, dairy company profits as a whole had been maintained at pre-depression levels. In the opinion of

the committee, profits in some cases were even greater than those shown on company balance sheets. Items listed as "depreciation reserves" and "bad debts," it was thought, were sometimes merely disguises to cover hidden profits. But the milk prices did not reflect the dividends paid.

Let us look at conditions in connection with agricultural implements. From 1927 to 1929 the four large companies made profits of $16,000,000. That did not mean that higher wages were paid.

Let us turn to merchandising. The commission learned that chain stores had weathered the depression in fine shape. Between 1929 and 1933. six large chains increased gross profits from $11,840,935 to $14,421,416, and net profits from $1,568,845 to $1,730.592. Dividends paid increased from $823,690 to $1.243,597-all on net sales which fell from $64,182,714 to $62,616,029.

In the year preceding that in which the investigation took place, the net profits of the Woolworth Company amounted to SI,-960,959, or 21-95 per cent of the cost of goods sold. Dividends paid annually on the basis of $5 per share amounted to $3,750. What about the wages. Fifteen men averaged S7.34 and 120 women $6.78 for a full week's work. Another organization paid 194 grocery clerks from $4.50 to $25.00 for a sixty-one-hour week, and 110 women clerks $7 to $15 for forty-eight hours work, with an average wage for men of $10.69 and for women $10.85. Delivery boys worked sixty-

Industrial Loan and Finance

six hours for SI .50. Employees of a grocery and fruit chain worked from sixty-five and a half to eighty-four and a half hours per week. A married man was employed as a dish washer at S6 a week and his meals, and a girl as a waitress for S10 and1 meals.

I give these figures because they refute the statement of the Minister of Finance that increasing profits are the best augury for increasing employment. There seems to be no connection between large profits and wages or large profits and employment. In a number of the cases I have set out, all the profits went to the country south of the boundary line.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

Topic:   THE BUDGET
Subtopic:   INSTRUCTION TO COMMITTEE OF WAYS AND MEANS RESPECTINO CANADA-UNITED KINGDOM TRADE AGREEMENT
Sub-subtopic:   CONTINUATION OF DEBATE ON THE ANNUAL FINANCIAL STATEMENT OF THE MINISTER OF FINANCE
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PRIVATE BILLS

CONSIDERED IN COMMITTEE-THIRD READINGS


Bill No. 24, for the relief of Joseph Neilson Blackloek.-Mr. Plaxton. Bill No. 25, for the relief of Francis Hector Walker.-Mr. Hyndman. Bill No. 26, for the relief of William Edward Connor.-Mr. Jacobs. Bill No. 27, for the relief of Annie Nemchek Cohen.-Mr. Jacobs. Bill No. 28, for the relief of James Gordon Ross.-Mr. Jacobs. Bill No. 29, for the relief of Florence Anna Iverson Salberg (without amendment).-Mr. Jacobs. Bill No. 36, for the relief of Charles Marsh Doxsey.-Mr. Walsh. Bill No. 37, for the relief of Phyllis Stan-ners Kitchin, otherwise known as Judith Stan-ners Kitchin.-Mr. Walsh. Bill No. 38, for the relief of Ivy Jackson Beaulne.-Mr. Jacobs. Bill No. 39, for the relief of Charlotte Opal Moore Norton.-Mr. Jacobs. Bill No. 40. for the relief of Mildred Tan-nenbaum Sufrin.-Mr. Jacobs.


INDUSTRIAL LOAN AND FINANCE CORPORATION

March 12, 1937