May 6, 1938

THE LATE DUKE OF DEVONSHIRE

TRIBUTES BY THE PRIME MINISTER AND THE LEADER OF THE OPPOSITION

LIB

William Lyon Mackenzie King (Prime Minister; Secretary of State for External Affairs; President of the Privy Council)

Liberal

Right Hon. W. L. MACKENZIE KING (Prime Minister):

Mr. Speaker, hon. mem-

bers of this house and the people of Canada generally will have learned with deep regret of the passing at an early hour this morning of His Grace the Duke of Devonshire, who held the high office of governor general of this country from 1916 to 1921.

The Duke of Devonshire inherited and honourably maintained an ancient family tradition of public service. Before coming to Canada he had already, as a young man, sat in the House of Commons for almost two decades and had occupied important posts in the British ministry. Nor did his active participation in the public life of the old land cease with his term as governor general. From 1922 to 1924 he served as secretary of state for the colonies, which portfolio he held at the time of the imperial conference of 1923.

But it is his years as governor general of Canada which are uppermost in our thoughts to-day. Those who were responsible for the conduct of public affairs during the Duke of Devonshire's term of office realized how much his English traits of composure, of balance and sound common sense contributed to the steadiness of national life in those critical years. In his person the Duke of Devonshire was kindly and friendly, deeply and genuinely interested in the well being of his fellows in all walks of life. Many who knew him even but slightly will recall his quiet, unremitting and generous support of worthy causes and his interest in all that pertained to Canada's social, cultural and economic activities. In his official capacity the Duke of Devonshire discharged his duties with constant regard to British tradition and British constitutional practice.

The people of Canada will recall the charming and delightful personality of the Duchess of Devonshire and the manner in which, along with the members of their lovely family, she shared the interests and labours of her husband. To Her Grace and to the members of the family in their bereavement I should like to extend on behalf of the members of this House of Commons and of the people of Canada the expression of our very sincere sympathy.

Topic:   THE LATE DUKE OF DEVONSHIRE
Subtopic:   TRIBUTES BY THE PRIME MINISTER AND THE LEADER OF THE OPPOSITION
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Leader of the Opposition):

Mr. Speaker, on behalf of those who constitute the official opposition I desire to associate myself with the observations of the right hon. Prime Minister (Mr. Mackenzie King).

The Duke of Devonshire came to Canada at a very difficult time. The war had been in progress for some years, and conditions were certainly anything but satisfactory from the

The Late Duke of Devonshire

standpoint of the allied cause. It was my privilege to see much of him, after I had left this house, because of his active participation in the work of the Red Cross society. Perhaps he could be best characterized as possessing common sense to a very singular degree. His balanced judgment, his calm approach to the problems of the country and that sterling common sense which always manifested itself enabled him to deal with very complex problems, not only of administration but also of policy, affecting not only the Red Cross society but also other organizations that had to do with the life of our country at that time, notably the Patriotic Fund.

The Duke of Devonshire was the first head of his great family to undertake the service of the crown overseas. It was an experiment for the head of that great Whig family, one of the most powerful of all the illustrious families of England. How successful that experiment was and how well he discharged his duties is a matter of history. He was interested in everything that had to do with the welfare of this country. I think one of the most powerful addresses I ever heard made by a public man was an address he made at a time when the fortunes of the war were running very strongly against us. That magnificent courage which is a distinguishing characteristic of men of his race was never more manifest than on that occasion, and I shall carry with me always the memory of that occasion. He seemed to be an apathetic gentleman, but in point of fact he was most observant and had a very keen interest in everything that was going on around about him. I remember his indicating that he thought one of the greatest compliments ever paid to him was by the stock men of the west, who found him possessed of such wide knowledge with respect to live stock that they wondered if they could not secure his services as a judge aiter his term of office had expired here as governor general. He had a very great appreciation of the compliment thus paid to his knowledge of live stock, of farming and of everything that had to do with agriculture. His wide training in public life, to which the Prime Minister has referred, enabled him not only to discharge the constitutional duties of governor general with great acceptance, but to be of the utmost assistance to those who were responsible for government at that time. I know that the prime minister from 1911 until 1921 would, if he were present, pay high tribute to the assistance the governor general gave to him in the discharge of his very onerous duties.

Her Grace the Duchess of Devonshire, a daughter of the distinguished Lord Lans-downe, who had been governor general of Canada, seemed almost intuitively to know this country and its peoples. Her charm and remarkable understanding and intelligence were manifest on all occasions, so that I can say frankly that everyone felt at home in her company. The family, when they were all here, were an aggregation of young men and women such as one would find in any well conducted home.

Our sympathy goes out to the Duchess of Devonshire and to her family in the great sorrow they have experienced. Although the Duke of Devonshire during the last few years had not been able actively to participate in public life, his interest in Canada after his recovery from a stroke was always manifest, and I fancy there are very few Canadians who came in contact with him who have not been invited to partake of his generous hospitality, whether in his home in London or at his great estates in Derbyshire and Yorkshire. Every Canadian was always welcome; the latch-string was always down. He will be greatly missed by all Canadians who knew him, and it must be a matter of profound satisfaction to those associated with him, and to his family, that he was able to make so great a contribution to the public service of the empire at a period of great stress and strain.

I am sure, Mr. Speaker, you will on behalf of this house express our sincere sympathy to the Duchess of Devonshire and the surviving family of our former governor general in their bereavement.

Topic:   THE LATE DUKE OF DEVONSHIRE
Subtopic:   TRIBUTES BY THE PRIME MINISTER AND THE LEADER OF THE OPPOSITION
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FARM IMPLEMENTS COMMITTEE

MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.


The house resumed from Thursday, May 5, consideration of the motion of Mr. Johnston (Lake Centre) for concurrence in the second report of the special committee appointed to investigate farm implement prices, presented to the house on the 8th of April, 1937.


LIB

George Ernest Wood

Liberal

Mr. G. E. WOOD (Brant):

Mr. Speaker,

I have listened with a great deal of interest to hon. members who have given expression to their opinions and their interpretations of the report of the special committee on farm implement prices. After paying strict attention to their contributions I have come to the conclusion that there are only two sides to every question-the side I take, and the wrong side. I sometimes marvel at the ability of some hon. members to bring out the phases

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of a particular argument which go to prove anything they wish to prove, and at their attempts to leave an impression favourable to the cause they desire to support.

The hon. member for Greenwood (Mr. Massey), in high-sounding phrases, endeavoured to pose as a man attempting to clarify the national air from the creation of false impressions, and his statement with respect to the speech of the Minister of Agriculture (Mr. Gardiner) has tended only to strike one more blow upon the wedge being driven between certain sections of the country. Having regard to the record of the party with which the hon. member is associated, he should be the last to emphasize this particular virtue, because I am satisfied that the party to which he belongs has made the greatest contribution towards driving that wedge between the agrarian and the industrial interests.

The hope of Canada lies in a great national party, a party whose principles are liberty of thought, liberty of conscience and liberty of action. There is always more or less of a conflict, under our constitution, between the local and the larger interest, and it is the duty of those who happen to be responsible for the smaller interests to bring the needs of those smaller communities respectfully to the seat of government, so that the different interests may be woven together into a great national fabric which will serve as an instrument to be used for the well-being of the nation as a whole. It must be understood by all that people in different communities cannot be expected to hold exactly the same viewpoints.

I do not propose to enlarge upon the arguments which have been placed before the house by the special committee, because I believe the ground has been pretty well covered. Any figures I may have accumulated have already been given, and I refuse to repeat what has already been said. The fact still remains, however, that no matter what arguments have been put forth, since 1930 neither the implement manufacturer nor the farmer has received a reasonable profit.

I believe there is a solution of our difficulties, and it does not lie in extremes. I wish to go on record as taking what I believe to be the middle-of-the-road course, one which will give adequate protection to industry without jeopardizing the interests of the consumer. My belief is that freer trade is the best form of protection, because after all our interests must be those of the great masses of the people. The working man must be protected; he must have a larger market in which to sell the product of his labours. There must be low cost production so that there may be an outlet for the product of the working man;

goods and services must be available at prices which will not too greatly reduce the purchasing power of the consumer and which will encourage the sale of more goods and produce more opportunities for labour.

When I speak of industry I include all the forces contributing to it. Capital, labour, and the consumer, all play a part in our economic life. There should be harmony among all these classes so as to encourage a reasonably fair exchange of services. Many arguments going back into ancient history have been made in an endeavour to produce evidence to bear out what hon. members have attempted to prove. I feel that perhaps the most futile of all performances is a bemoaning of the past, its mistakes, its missteps, its missed opportunities. We cannot recapture the past, even if we try. Let the dead past bury its dead, and let us live for the future.

I believe we are at the beginning of a new era; we must face conditions as they are. We must accept the facts. It is always wdse to look at the past and to examine the experiences we have had so that we may plan more accurately for the future. I believe legislation in the national interest and capable of application could be brought down in this connection. We have disadvantages to overcome, but on the other hand we enjoy many natural advantages. As people living on that section of God's earth situated north of the forty-ninth parallel of latitude, around the great lakes, we can develop an economic structure by taking a middle-of-the-road course, honestly facing the surmountable difficulties which are blended in with the natural advantages that we enjoy. We can make this country one in which people may have an opportunity to give expression to their choice of whatever particular type of life they wish to pursue.

True, while this is primarily an agricultural country, there are many of our population who are not natural farmers and who find an outlet for their energies in industrial fields. I feel that we should provide an opportunity for these people. In this new era into which we have entered, notwithstanding what our opinions may or may not have been in the past, there are certain conditions which we have to face. There is a tendency to-day toward balanced economics. One of the difficulties that must be surmounted in industrial life in Canada is the fact that our geographical conditions are such that we have an added expense in freight rates on account of having a long haul over a practically barren country. This is particularly true with respect to agricultural implements. This in itself adds to the

Farm Implements Committee Report

cost to the western consumer of many of the products he uses from the industrial east.

A report from the Canadian National Railways shows that we deliver freight on that line for practically -97 of a cent per ton mile. The fact is that there is 1,000 miles of territory along this line in which very little business is done in agricultural implements. This does add to the cost to the consumer.

One of the advantages enjoyed in the United States is the fairly even distribution of farm implements over the whole country. The Canadian manufacturer has to pay freight on this 1,000 mile haul, which extra cost must necessarily be charged to the consumer of his product. I take the view that that has a tendency to increase the cost of Canadian-made machinery to the Canadian farmer. I might note that all this extra cost is not charged against the western consumer; a certain percentage is charged to the Ontario farmer. On a binder weighing approximately one ton there would be an additional freight charge of $10 due to its having to be hauled 1,000 miles through northern Ontario. This should be taken into consideration in making any comparison with United States prices.

A comparison of prices from 1913 to 1925 is hardly fair, because part of the increase in price is due to the fact that some of the equipment was not included in the implements sold in the earlier years. I remember several years ago when a sheaf carrier was not considered in the standard price of a binder. Pole trucks were not used at that time and their cost was not included. We have to look at the situation as we have to face it to-day. There is also the matter of Alemite greasing, but in my view the advantages of this added equipment are more apparent than real. However, it adds around $13 to the price of a binder. We farmers have demanded that it be included and we must pay the price. The same thing applies to the oil bath mower, which adds another $16.50 to the cost. All these things should be taken into consideration when making comparisons. I am prepared to listen to any arguments advanced in favour of this added equipment, but I am a little doubtful as to the value of these things as far as service is concerned. Nevertheless they are the style, we demand them and we get them. As a practical farmer I happen to have in my bam to-day a binder that has cut thirty crops. It never had a pole truck or Alemite greasing but I expect that it will cut a few more crops, or at least I am

51952-166*

hoping it will. I submit that some of these older implements had the ability to do the work just as well as those being sold to-day.

I believe that the industrialists in the Dominion of Canada have an opportunity to manufacture goods for the citizens of this country, but their place in the economic life of Canada is such that they must provide the goods and give a service to society that will compare with the purchasing power of the consumer. It is noticeable down through the history of industrial life in Canada that when the prices of farm products are in close relationship to the prices of manufactured goods, that is when we have enjoyed the greatest measure of prosperity. I should like to draw attention to a chart which goes back to 1917. It shows that the periods in which we enjoyed the greatest measure of prosperity were the periods when the prices of farm products exceeded those of manufactured goods. From 1917 to 1920 agriculture and industry enjoyed an unprecedented measure of prosperity. From 1921 to 1926 there was a considerable slump and during this period the prices of manufactured goods were considerably above those of farm products. From 1927 to 1929 the ratio of farm product prices increased and we again enjoyed a measure of industrial progress. From 1930 to 1936 the prices of manufactured goods were higher than the prices of farm products and we all know the condition of affairs that existed in that period. From 1932 there has been a gradual increase in the purchasing power of the farmer and the accompanying impetus to trade bears out the argument I have made. Prosperity of industry is dependent upon the prosperity of agriculture. I do not think anyone denies this.

I often wonder why there are not more steps taken to improve this condition of affairs and to keep the country from getting into the slough of economic despondency as often as it does. The argument of extremes has been used; we have heard the argument of exclusionists and of those who hold the opposite view. But these arguments of extremists remind me of the farmer who attempted to hook on to his loaded wagon with a long chain at the end of the wagon tongue. When he endeavoured to pull his load he found that when he tried to turn a corner he eventually landed in the ditch. It seems to me that many of the arguments that have been advanced here were simply a hope that by going to the extreme the wished-for results would be obtained. I do not believe anything will be gained by taking that attitude.

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I submit that we should take the middle-of-the-road course and I contend that that is the course taken by this government. They have reduced the tariff whenever it was thought wise so to do. They have acted in a manner that they believed was in the national interest. This process must be slow. I believe this government has gone a long way and the figures prove that it has been successful. Since 1937 the purchasing power of the farmer has been coming up closer to the prices paid for manufactured goods. If we can continue this condition of affairs, there is no question that prosperity will be the result. '

I have every reason to believe in the good judgment of the Minister of Finance (Mr. Dunning). I believe he will follow what has always been the policy of Liberalism and see that no harm is done to industry. The functions of government will be used for the furtherance of industry and the continued development and welfare of the people at large. I hope and trust that we will come to the point when we shall have stability in tariffs. The tariff is an instrument which we have always had, and it could be used for revenue purposes. The protection that a tariff for revenue gives incidentally is justified, but when it comes to applying the tariff to the point of exclusion I do not think there is any justification for it.

In passing let me say that the right hon. leader of the opposition (Mr. Bennett) made, in my opinion, a splendid contribution to the national life of this country during his term of office. During the election campaign of 1930 he used some rather strong phrases, which I am not going to repeat now, to the effect that he would protect the markets of the Canadian people, and I can remember after that campaign how some of my good Conservative friends naturally drew my attention to the election results, and my answer was, "Well, I hope and believe that Mr. Bennett will give us an application of those principles which he has been advocating." I am prepared to give him credit for honesty of conviction; for he did apply high protection, and he was successful at least in showing the Canadian people that that is not the road to recovery. I believe, furthermore, that he convinced many even of his own party of that truth, because they are not talking protection so much to-day. I think the right hon. gentleman contributed to giving the death blow to exclusionist protection at least.

The attitude I am taking may not suit either side, but I do not know that I have a right to take sides. I am trying to give ex-

I Mr. Wood.]

pression to my own views. I had occasion last year to travel through the west and I visited many of my colleagues on their farms. I found them all extremely fine hosts. I had heard down in Ontario that many of the difficulties of the west arose from the fact that the average farmer there did not farm properly but simply mined the soil. I am prepared to say for our western farmers, and my opinion may have some value because I have always lived on the farm, that the west is manned by the finest group of farmers that I think you could find in any section of this country, and I say that advisedly. I believe they are doing everything possible, with conditions as they are, to better themselves and to meet the situation as they find it to-day. Unfortunately there has been a national calamity which has made it very difficult in some respects for our western farmers, but they are facing the future with a courage that I think is wonderful; I doubt whether we farmers in Ontario could stand the adversity which our fellow-farmers in the west are facing so courageously.

I have mentioned that that industry has certain surmountable difficulties in connection with freight rates, but against that the western farmer has the advantage of cheap land. It is marvellous to see the amount of energy they can accumulate with the modern agricultural implements they have to-day. Their land works much easier then ours does in the east, and they have the advantage of cheap land. We ask them to take that natural advantage and blend it with some of the disadvantages they have, and perhaps we can share some of the advantages we have and blend them with their disadvantages. We need the west, and we want the west to prosper, because after all the west is the great market for many of the products of the east.

I am going to take this opportunity to give the results of a little survey I made of what I saw on my trip to the west; last year. I quietly took the opportunity to go to the various country stores to see what I could find that was representative of the town of Paris and the city of Brantford which I have the honour to represent in this house. In almost any community of any size I saw in glaring print "Massey-Harris implements'' and "Cockshutt implements." Travelling through the country where there was roadbuilding I would come across road-building machinery, and almost invariably it was from Adams Limited at Paris. On the way out I noticed that the sleepers were equipped with blankets from Slingsby Manufacturing Co., Ltd., Brantford, and even the men were wearing suitings and overcoats made by Slingsby's.

Farm Implements Committee Report

I have already spoken of the hospitality of my western hosts. As I went into some of their lovely homes I noticed that where they had waxed the hardwood floors, nine times out of ten they were using Johnson's wax, made in the city of Brantford. If they could afford to put a carpet on the floor you would see if you turned it up, that it was a Harding carpet, made in the city of Brantford. I did see some buildings painted, but I saw a lot more that needed paint. Those that looked fresh with paint I noticed were using paint from Scarfe & Co., Ltd., in the city of Brantford.

I went on from Winnipeg to Vancouver. I happened to be standing on the street in Vancouver when I met the hon. member for Marquette (Mr. Glen), and I drew his attention to a truck body that went by, which was made by the Canada Carriage Co., Ltd., in Brantford.

1 went up the inlet to a place called Ocean Falls, a narrow inlet where the only means of communication is by water. There I stood on a wharf which is used by a company manufacturing pulp and paper. They were using pulp machinery made by Waterous Limited of Brantford.

I went on to Prince Rupert, and going through a hardware store I saw they were selling products of the Crown Electric Company of Brantford. In Winnipeg I ran across a Harold Sanderson refrigerator made in Paris. Everywhere I went there were evidences that Penman's underwear, made in the town of Paris, was being widely sold in the west.

I must not overlook the fact that a large proportion of the farmers were using good judgment by buying Brantford binder twine. We are very proud of the Brantford Cordage Company, which has been able to exist in the city of Brantford without any measure of protection. As I went into the homes I would see the Locomotive washer, which is made in the city of Brantford, and looking through the jewellery stores I would see jewellery boxes made by E. A. Gunther of the city of Brantford. Last but not least-I have already mentioned the generous hospitality of our western friends-in our travels through the country, as we stopped at some inn or lunchroom, naturally the ladies always chose a Dinner sandwich and Crispy Crunch made by the Paterson Biscuit Works of Brantford, which was founded by a predecessor of mine who represented that constituency as minister of customs in the Laurier government previous to 1911.

What I wish to draw attention to is that it ill becomes us in the east to speak at all

disparagingly about the west or even about their opinions. I hope I am charitable enough to recognize that what they say is worth listening to, even if we do not agree in every sense of the word. We will take all these various viewpoints and bring them here to the foot of the government, as good Liberals should do. If we are to be national we must welcome various viewpoints. It is only by bringing those various points of view before the government that we shall be able to effect a compromise, which is the only possible basis of solution of our problems. If each one insists on enforcing the will of one particular section of the country, nothing is surer than that the wedge of which the hon. member for Greenwood spoke will bring about disaster.

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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LIB

Malcolm McLean

Liberal

Mr. MALCOLM McLEAN (Melfort):

The fact that the subject of this debate has been before the house off and on for so much of this session-

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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LIB

James Houston Spence

Liberal

Mr. SPENCE:

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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CON

Denton Massey

Conservative (1867-1942)

Mr. MASSEY:

I do not wish to interrupt the hon. gentleman but I am sure that he wants to make an accurate statement. The price reduction was made in October, 1921, and the reduction in duty of 2J per cent was made on May 24, 1922, a matter of eight months.

I was in error when I said six.

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

The figures that I have in my hand are those of the International Harvester Company of Canada, Limited, and I believe they are probably correct:

" Schedule of manufacturing costs, 8 foot binder, using an average burden, 1913, and 1919 to 1936 with sales realization comparable thereto."

The reduction made in October would not be of much value in that year, but 1922 is shown to be the year when the reduction was made. I do not propose to follow that further except to say that it was not the first time that the industry in Canada did make reductions in deference to public sentiment. In 1893 similar reductions were made after a campaign carried on by many people against the comparatively high prices that then prevailed. As one who attended every sitting of the committee which I possibly could, I would say that it is not a single thing alone that has caused an increase in the price of late years or has caused the high prices that have worried the farmers and others in the country. My hon. friend from Greenwood (Mr. Massey) in dealing with the industry said something about the lack of consideration for the workers. He said, referring to the industrial worker:

What of his job, which provides his means oi livelihood, when his expenses are so heavy and when the uncertainties of his position these days are a constant source of echinated worry ?

I confess I had to look up the dictionary for the meaning of the word " echinated." I thank the hon. gentleman for introducing it to the house.

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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?

An hon. MEMBER:

What does it mean?

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

Someone asks what it means. It is descriptive of the problem we are investigating at the moment. It is a "prickly" question bristling with difficulties, and sometimes those who touch the bristles are liable to be jabbed by them. The point I wish to make, while thanking my hon. friend for this addition to the knowledge and culture of the house by his use of that very descriptive word, is with reference to what he said about the difficult position of the worker in the industry, the weight of his expenses and so on. That is one of the complaints I make against all artificial costs and burdens that are laid upon industry in Canada. In the long run the worker does not benefit, and as a net result of all these various burdens placed one on top of the other, constantly pyramiding, there is danger some day of the whole structure falling down. If that table standing there on four legs is tinkered with, if someone says that this corner is too low and therefore puts a piece under this leg, raising it to that extent, we all know what will happen. When you raise that leg for the benefit of the owner of industry, someone else will want to raise the leg next to it for the benefit of the workers in industry and that will leave your table lopsided. Some bright mind will then undertake to raise it at the other end, putting

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a piece under a third leg for the benefit of the financiers and transportation interests, and finally the consumers insist that they should have their corner raised too, and that is sometimes attempted. The result is that your table is raised equally all around, and you can see what that means; the level over all is the same as before. But in the meantime you have added a heavy cost to industry and that additional burden must be levied ultimately against many with small incomes, those in receipt of small fixed payments of various kinds, and who cannot benefit from the adjustments made.

Among the factors which the committee was told contributed to the increase at the present time were materials, labour, factory burden, freights, commissions, time sales, collections, bad debts and the lack of volume. There is another one that they should have added and that is the matter of financing, because unquestionably when any industry gets into the hands of financiers, the money men, who think that wealth consists of money and papers, then it is going to add to the burden of running that industry in many ways which often bring it to the brink of failure. I should like to look at some of the arguments advanced in the committee with respect to various materials, and I notice that there were some curious anomalies. In connection with paint, which is an important item, the price of flax seed went down and the price of linseed oil went up. Undoubtedly that added to the cost of machinery. In connection with lumber, we are told that Canadian white pine and British Columbia fir in 1913 stood at 100 a thousand, I presume. By 1936, white pine was 149 and British Columbia fir 113. But in 1935, a little before the time when the increase in implement prices was put into effect, British Columbia fir stood at 93 instead of 100 as it was in 1913 and as against 108 in 1930. So that these figures do not show any upward trend. Pig iron, taken at 100 in 1913, was in 1935 up to 111.

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The year 1913 is not fair.

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

No, it is too much in favour of the industry, I imagine; 1913 was before the war. If, however, there is any other reason to indicate that it is not fair I shall be glad to take some other year. In 1924 when we were nearly normal, pig iron was 143 as against 111 in 1935, and in 1930 it was 120. Steel bars in 1924 stood at 151; in 1930, 113; and in 1935, 109. Coal shows a little reduction. In 1924 it was 227; in 1930, 218; and in 1935, 190. Linseed oil was 93 in 1932 and 121 in 1935; as against 199 in 1924.

Oak lumber was down from S167 in 1924 to $107 in 1935. Freight on implements was

153-9 in 1931 and the same in 1935. A look

at wages will give us some interesting figures:

1930 1935

Blacksmiths.. ..

236 174Machinists

228 173Pattern makers.

238-8 186-3Moulders

204-7 163-3Painters

195-8 162-5Labourers

191-8 169-2

Apparently those are on a percentage basis. So unquestionably it was not the price of materials or the cost of labour that brought about the increase at that time, and that is borne out by the evidence of Mr. Morrison. Some people have been afraid that the worker in industry was getting less out of it than he did in previous years, due to technological improvements and so on. At page 57 of the evidence taken last year it is shown that the ratio of materials to labour in prime costs during the years 1913 to 1921 compared as four is to one; that is, materials were four and labour one. For the past ten years the figures have been 76 57 to 23 -40, or slightly over three to one. In other words the position of the worker when employed had improved comparatively in that time.

One of the great increases that I find-and I believe it is related to the cost of financing and also to the reduction in sales-is in connection with the factory burden. The Hamilton plant of the International Harvester Company I think is run efficiently, but the factory burden as compared with productive labour was 118 per cent in 1913. In 1929 it was up to 136 per cent. For the fiscal year ending 1932 it reached the figure of 526-80 per cent. In 1935 it was down to 196 per cent, and was still on the way down when this investigation was being held. Somewhat the same situation exists in regard to the Massey-Harris Company, although there the figures are not quite so extreme. I know the books were kept in a little different manner, but approximately the same result is shown. In 1930 the factory burden was 267 per cent in relation to direct labour. For the next few years the figures were as follows:

Per cent to direct labour

1931 476

1932 474

1933 384

1934 270

1935 220

I have in my hand the answers given by Mr. Morrison, in which he admitted that material cost was coming down. I shall not take time to read his answers, because I think that is generally admitted. The same

Farm Implements Committee Report

is true of wages, as compared with other years. As between 1926 and 1936, when the last investigation was held, materials had decreased from 66-1 per cent to 58-2 per cent. Wages showed the following figures: For 1926 an average of 52 cents per hour; for 1935 an average of 49 cents per hour, a decrease of 3 cents per hour or about six per cent. If my memory serves me aright these are the figures of the Massey-Harris Company. The submission was made by the company at that time that by keeping together a skeleton force composed of foremen, straw bosses and men a little above the general rank and file, the cost was greater than it otherwise would have been. Possibly the difference should have been charged to overhead, but in any case the skeleton organization was being kept together in that way, and no doubt that was quite proper. Nevertheless the fact remains that during that period wages dropped by about three cents per hour, or approximately six per cent. It was admitted quite freely that labour and material costs and budens were coming down, but the argument was advanced that selling prices had to be increased because burdens particularly had been so high from 1930 to 1934, the period during which we had 476 per cent as the burden cost of the Massey-Harris Company and 526 per cent as the extreme cost of the International Harvester Company, and it was during those years that money was being lost by the company.

A good deal has been said from time to time with regard to the number of men employed in this industry. I recall quite well that when duties were low several years ago this industry employed a good many thousand men. The figure of employment for 1936 was higher than that for 1935, and in 1936 the number of workers in the Massey-Harris shops was 1,721. The total in 1935, including factory executives, engineers, factory workers, general executives and office personnel at head office and branches was 2,061. When one looks back a few years and remembers the seven or eight thousand men at one time employed by this company, one realizes not only the loss that has ensued to the men who remained on the payroll but the greater loss suffered by the men who were dropped from the payroll, who once worked for the company but who lost their employment because these machines were not being sold.

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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LIB

William Henry Golding

Liberal

Mr. GOLDING:

They employed nearly twelve thousand at one time.

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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LIB

Malcolm McLean

Liberal

Mr. McLEAN (Melfort):

Yes, and that dropped to two thousand only a couple of

years ago. The general manager of the company was asked whether or not he and his company were under any disadvantage as compared with their principal competitor in Canada, and his answer was that he did not think they were under any disability. Neither in wages nor in material was that Canadian company under any disadvantage as compared with their rivals. I have before me figures showing the wages paid from 1926 on, in the different lines of work. I am not going to read those figures, because time is passing quickly, but I do say that Canadian manufacturers are not at any disadvantage in relation to competitors either in this country or in the United States, for the simple reason that wages are somewhat lower in this country. Another United States company which recently established a branch factory in Canada, the John Deere Company, furnished figures with regard to wages paid at the Welland plant. In 1935 the average was 39-2 cents; in 1936 it was 44-5 cents. The company also furnished information as to comparable wage rates at their plant in Wisconsin, indicating that in 1935 the average was 43-1 cents per hour, or nearly 14 cents more than the Canadian average, and in 1936, 57-6 cents per hour or 13-1 cents higher than the rate they were paying in Ontario. Yet the claim is being made that they must get that or this protection in this country because of the higher wages they have to pay, and the higher cost of material. One rather interesting admission was made by the vice-president of the American International Harvester Company, the president of the Canadian organization. The questions and answers on the point are as follows:

Q. I thought that from your long intimate experience you might be able to assist the committee bj1, telling us whether it was lower in the United States or higher in Canada?

A. It would be away lower.

Q. The retail prices of comparable implements ?

A. I should say that they would be lower m the United States than in Canada. I gave you that before.

Q. Would you suggest by what percentage, over a long range viewpoint?

A. I could not answer that. I could not answer it when you asked me it before, and I cannot answer it now.

That evidence is to be found at page 456 of the last inquiry. Unquestionably prices would be lower, according to Mr. Morrison's information.

One of the important points we have to keep in mind is that during the years of so-called depression an immense amount of purchases were required and should have been made, but could not be carri-'1 through because

2622 COMMONS

Farm Implements Committee Report

of lack of purchasing power of the customer. This condition was not confined to the wheat growers of Saskatchewan, Alberta and Manitoba. I am not asking for consideration on farm implements and separators only for the western farmers. The man in the east who has to buy a cream separator or an implement has as much right to consideration as the man in the west. Sometimes the eastern farmers suffer more because of the fact that they carry on a more diversified form of farming. They have to carry a wider variety of implements than do the farmers of western Canada, where the same implements can be used over a greater acreage. Eastern farmers were not able to buy those implements during the years when butter, dairy products generally, animal products and poultry products were selling at very low prices. They had to do without repairs which were required, and as a result there was a backlog, as it is described, which accumulated until the years 1935 and 1936, at which time it was estimated that implements to the value of at least $197,000,000 would have to be purchased at the earliest possible date.

It was at that time that the implement companies, having in mind the burden of past years, their lack oif sales and their financial costs, finally decided they were going to raise the prices. They made that decision at a time when it looked as though many farmers would have to go on the market for requirements of new machinery, and repairs to old. It is because the implement companies took action at that time, when material, labour, interest and other charges were going down, .and because they chose that time to increase their prices, that much resentment has been aroused in the minds of those who have to buy their goods.

There is one interesting point to which I should like to draw attention before my time is exhausted. A former general manager of the Massey-Harris Company, Mr. T. A. Russell, as reported at page 465 of the evidence of 1936, was asked about the question of distribution, and in summarizing the items entering into the high cost of implements I believe the following observations by Mr. Russell are very significant. He is reported at page 465 as follows:

It seems a perfect tragedy on a morning in collection time to see eight men starting out with eight automobiles who have got to be paid by somebody, to collect accounts.

Someone has to pay for the collection of the money. Mr. Russell stated that on one occasion, when he was new in the business, he approached a competitor, a man who had been in the business all his life, and asked

if it was possible for them to join in a certain amount of cooperation, particularly with respect to collections. Apparently he failed in that direction, and made no further effort. He said he would be glad to discuss the matter further. I am hopeful that as a result of the inquiry steps will be taken by the implement companies to help themselves through cooperation, or in other ways.

I am not going to spend much time on some other factors which have hindered and made more difficult the position of the implement companies and their efforts to solve their own problems. In this category would come customs duties and regulations, fixed values for duty purposes, excise taxes, sales taxes and other burdens which have entered into their costs. Some time ago in the house I referred to the apparently irregular manner in which values were fixed for duty purposes as against one implement company and another, and pointed out that the condition led to discrimination and the retention of profits in the United States which should have been shown as having been earned in Canada. That condition has caused a loss to the revenues of Canada, and has also caused loss to the people buying goods so affected. The point has been considered, however, and at this time I shall not enlarge upon it.

I should like to emphasize that when in 1935 and 1936 reductions in tariffs were made on imported implements, those reductions were largely passed on to the customers; there is no argument about that. According to the evidence of the general manager of the Massey-Harris Company and the president of the International Harvester Company of Canada most of those reductions- not quite all-were passed on to the purchasers. A rather significant point in connection with the reduction of values was raised by Mr. Morrison of the International Harvester Company. Counsel was asking him about changes which had been made. The questions and answers are as follows:

Q. Tell me this, Mr. Morrison: who would institute these changes, what would give rise to these different changes that you have related to us; action on the part of the company or action on the part of the Department of National Revenue; or, could you tell us?

A. I do not believe I can give you an answer very definitely in regard to that. The change that was made in January, 1917, was the result of a visit which some of the Harvester men made to Ottawa to discuss the matter with the proper officials.

Q. Can you recall what happened with respect to the change that was made on May 7, 1935?

A. That was the result of representations made to the officials where this change was solicited.

Farm Implements Committee Report

Q. And the one in January of 1936?

A. I do not know what prompted that change.

Q. It was not solicited by your company?

A. I am not sure.

Q. You simply do not know?

A. That is it.

Mr. Morton: It was on the basis of representations which we had made at one time or another to the department.

I read these lines in order that the house and country may be more insistent that when changes are made by the department of revenue they be made in such a way that one may know what he should pay for goods brought into the country, and at what prices goods should be valued, according to their cost.

In the few minutes I have left I should like to draw attention to some of the recommendations in the final report and summing up of the committee, which I believe are most important. Recommendation No. 7 is as follows:

That farmers have a right to expect the price level of farm implements to be based on the most efficient and economical manufacturing and distribution cost.

I believe everyone will agree that that is a reasonable claim, because if farmers can not produce and market in the most economical and efficient manner the goods they have to offer, through the use of these implements, then we must lose our place in the markets of the world. It would be nonsense to talk about using the surplus products at home, because there are not enough people in Canada to use the great volume of products available. The resources of Canada, while extensive, are not greatly diversified. They consist of a few in large quantities, rather than many in smaller quantites. We have minerals and timber and farm lands upon which to get grain and other products, but if we are going to retain our hold on the markets of the world the goods that we sell must be produced and marketed most efficiently. In order to attain that efficiency the farmer has a right to insist that the goods he buys shall be sold and distributed in the same efficient manner.

Recommendation No. 14 of the report of the committee reads.

That the relative increase in the cost of labour has been one of the important elements in the increase of prices occurring between 1913 and 1936.

That is a statement rather than a recommendation. While that is true, I would point out that artificial increases in the cost of living have made the real wages received by the worker in industry less than his apparent wages. This is true with the exception of the

period 1930 to 1935, when on account of the low prices of farm products and foodstuffs his real wages were higher than his apparent wages. While that is so, probably only one man is employed to-day in the implement industry as compared with five or six employed formerly. It would be far better to have

10.000 men working at wages comparable to what they were in 1913 or 1926 than to have

2.000 men working at wages that are apparently higher. Even if they were higher in fact, the results would not be as beneficial with a smaller number of men actually at work.

This decrease in employment has not been due to technological improvements, as is demonstrated by the automobile industry in Detroit. With every improvement in machinery in that industry there have been more hours of labour required at higher wages. The workers in that industry receive the highest remuneration.

Recommendation No. 16 reads:

That it is the opinion of the committee that the cost of cream separators to the consumers should be reduced and with that end in view recommends that this item be placed on the free list.

If nothing else is done at the moment, that is one thing that should be done in order to give our farmers, who are in a most difficult position, a chance to reduce the cost of producing their farm wealth.

Recommendation No. 17 reads:

That reduction in the tariff should and does, in the long run, tend to lower the price level to the farmer, depending on the extent of free price competition in the industry.

Even without much free price competition in the industry in Canada it is evident that the reduction in the tariff has resulted to some degree in reduced prices for goods imported.

Recommendation 19 reads:

That the provisions of the Customs Act and the Customs Tariff Act affecting the importation of farm implements should be clarified and simplified.

Recommendation 20 reads:

That regulations of the Department of National Revenue, under the above provisions, have resulted in the inequality of treatment of importers of a like class and that the whole matter should be the subject of survey by the minister of that department.

I am glad to be able to say that that principle has already been accepted and that an investigation is now under way.

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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LIB

Frederick George Sanderson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The DEPUTY SPEAKER:

The hon. member's time has expired.

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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?

Some hon. MEMBERS:

Go on.

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOE CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937.
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May 6, 1938