May 9, 1938

CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The evidence was quite the opposite. But that has nothing to do with the matter at the moment.

Let us go a step further. The hon. member for Portage la Prairie (Mr. Leader) said the other afternoon that the implement tariff of 25 per cent imposed in 1930 was the highest tariff that we have had in this country. It was. It was put into effect purposely. It was done for one purpose and one only-to secure the home market to the Canadian producer. I am not putting that forward as a partisan matter. It was intended to do that very thing; it did it, and what was the result? Notwithstanding the fact that we had drought and other bad conditions, there was a lowering of prices in this dominion. There was the effect, and it was logical. How could it be anything else? You have reduced your unit costs because you have given the manufacturer an expanding volume of business, and of course he is able to reduce his price. I have not any doubt in the world that if the agricultural implement producers in this country

had a 17J per cent tariff they could reduce their prices, and I have not any doubt that they would do it.

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

Walter Adam Tucker

Liberal

Mr. TUCKER:

They are producing more units now than they were doing in 1932.

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

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Certainly.

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

Walter Adam Tucker

Liberal

Mr. TUCKER:

Then why, on the right hon. gentleman's argument, are they increasing prices?

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

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The answer is perfectly clear. In 1932 we fixed the price on the basis of 1930. At the present time we have increased costs of raw material and labour, which were not a factor at that time. The undertaking, it will be remembered, was with respect to other factors than raw material. But could we get away from merely partisan thought about this, and just ask ourselves the question whether as business men sitting with a board of directors we would not agree that if we had a market of 10,000 units as compared with a market of one, we could lessen our price? What would we do? I ask my hon. friend who moved this motion, What would he do?

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

John Frederick Johnston (Deputy Chair of Committees of the Whole)

Liberal

Mr. JOHNSTON (Lake Centre):

I would say this to the right hon. gentleman. Everyone, I am sure, will appreciate that the matter of volume is a factor. But with regard to the farm implement people, during the last two years their volume has increased materially, and yet during that period we have had two increases in prices.

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

James Garfield Gardiner (Minister of Agriculture)

Liberal

Mr. GARDINER:

And raw material is down.

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

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

That is a very simple matter. From 1930 to 1935 the increase in volume was negligible. In other words, there never was a fair opportunity to try out the effect of this legislation, because of the drought in western Canada and the severe losses that were experienced there. I put to this house and to my fellow Canadians, forgetting their politics, just this question: Would any one of you, sitting at the head of the table with a board of directors, not say "If I could make my business 5,000 units I could reduce the price per unit as against it only being one or two"? My hon. friend who moves the motion says that is so. All right. Then let us give them the chance.

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

John Frederick Johnston (Deputy Chair of Committees of the Whole)

Liberal

Mr. JOHNSTON (Lake Centre):

What are you going to do on the other hand when, instead of reducing the price, an industry increases the price when there has been an increase in volume?

2684 COMMONS

Farm Implements Committee Report

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

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The answer to that is that you have increased external competition by reducing the tariff to 7i per cent. That is the real reason.

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

Walter Adam Tucker

Liberal

Mr. TUCKER:

They are now selling more at higher prices, so that does not hurt them.

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

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

No; that is not the argument. If my hon. friend the member for Rosthem were engaged in industrial activity, and were consulted by someone who told him that he was making no money and that he found himself unable to continue to operate at all unless he sold more than a thousand units in his business, the hon. member for Rosthem would advise him that the one thing to do was to increase his volume, and by increasing his volume lessen his unit costs.

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

Walter Adam Tucker

Liberal

Mr. TUCKER:

Not if he were selling six million abroad and two million at home.

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

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

The real difficulty is that you could not do it.

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

Walter Adam Tucker

Liberal

Mr. TUCKER:

That is what we are doing now.

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

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

Do you know what we are doing? Again, I am not going to be drawn away from what I shall designate as purely a little business talk to my friends here, and not a political discussion at all. I put it once more to the house whether or not the net result of increasing the volume is not to reduce the unit cost if you give the opportunity for the increased volume to be sold here. That is all. I have gone into this matter at great length because I want to make perfectly clear the purpose of the legislation that placed a high duty, the highest this country has known, upon agricultural implements. It was done, as I said when standing in the Prime Minister's place over there, for the purpose of giving Canadian producers the market; and it was done with two conditions, one affecting the individual and the other the industry. We made it possible that they could become effective if the situation prevailed for which they provided a remedy. It did in the case of glass, and action was taken immediately by the governor in council. What is more; there was one complaint which I recall with regard to prices, and on investigation it turned out that it had reference to raw material and nothing else. Every time any question arose where it was suggested that there should not be an increase in price, we investigated.

How can we hope to maintain this industry unless we can give it a market? I am not unmindful of the fact that one of these companies has a business in Germany, a factory

in France, a couple of factories in the United States, an interest in the Sunshine works in Australia, and works at Brantford and Toronto; but they are not manufacturing abroad solely to sell here, and the prices of their competitors, if they were able to sell their surplus goods in this country, with our limited production as against their mass production, would be lower than ours, and they would put us out of business. We would fail. That is all there is about it. It is the 125,000,000 beside us as against 11,000,000 here that must be considered; it is the unit cost of mass production as against the unit cost of our limited production.

Take cream separators, to which reference has been made. Do we want a cream separator industry in Canada or not? The hon. member for Peterborough (Mr. Duffus) says, "Yes, we need it"; the hon. member for Renfrew South (Mr McCann) says so too. Well, if we want this industry we ought to give it a fair opportunity with competition from abroad. May I point out-and it is one of the reasons I rose in my place-that in 1932, when we negotiated the British preference, we asked the British people, when the preference was given, whether or not they could undertake to provide us with cream separators in addition to what we ourselves were producing. The firm of Lister and Company had been providing cream separators for a long time in New Zealand; they supplied half the requirements there-and in New Zealand they make as good butter as anywhere else. The British government took over the plant when the war broke out, and because of that, the United Kingdom shipped to Canada only two separators in 1932. In 1933 there were shipped 535; in 1934, 956; in 1935, 1,355; in 1936, 1,994; in 1937, 3,163. We gave the preference to those producers who were well established in this country and they added to what we ourselves were doing. We believed that it was desirable to maintain the industry, a belief which is indicated by the addresses in this house, and we therefore passed the legislation to which I have directed attention. Is it desirable to do away with that British preference, to deny to this old and established house the preference we gave them in 1932 and for which they paid handsomely? As the hon. member for Haldimand (Mr. Senn) has made clear in the house, they gave ample compensation for it, and established for our products in their markets a position which more than balanced what we did for them.

As I have pointed out, unless we are prepared to take such action as may be necessary to ensure that volume can be maintained

Farm Implements Committee Report

in Canada we are bound to increase unit costs; and an increase in unit costs means that, without a duty or with a nominal duty, an unfair opportunity will be afforded the country with mass production to compete against us, with our production on a limited scale and with a population of 11,000,000, especially having regard to the fact that over half of our population now find homes in cities and towns rather than in the rural sections as heretofore.

There are other matters to which reference has been made. There is the effect upon our country's economic structure, not with respect to income tax alone but with respect to municipal taxes, provincial taxes, taxes on individuals, and the question of employment, direct and indirect. When I went into the factory in Australia I saw at once that coal was being used in large quantities, and so was coke. That gave employment to the coal mines at Newcastle. I saw at once that there were workmen engaged with wood, and I knew that meant work in the forest and everything connected with the fabrication of wood. I saw steel, and I knew that steel had been manufactured at the plant I had seen a few days before at Newcastle, just as in this country pig iron and steel in Canadian factories gives employment to men in Cape Breton or Hamilton or at the Sault. I realized that all these things combined to create the interdependence of industry, the relationship between the production of the raw material and the production of the manufactured article in its finished form. We must be prepared as men of business to deal with this matter in a purely business way and to provide, not protection for exploitation, but that measure of protection which will ensure equality of opportunity to Canadians with our limited market, in order that they may compete against the mass production of other countries, and that can be brought about only by the methods to which I have directed attention. I suggest that this report, if acted upon, will strike a blow at industry, will increase unemployment, and will render it far more difficult for the government to deal with the complex and difficult problems with which it is faced.

I yield to no man in the desire for cheap agricultural implements for the men who toil on the soil. I have studied this question since I first went to western Canada, and I have no doubt that if the house were prepared, with the legislation which is now on the statute books, to increase unit production in Canada to a point where we might be able with certainty to contemplate a market for Canadian production on the conditions that I have outlined, we would be able to

reduce prices materially, because the unit cost would have been reduced strictly in accordance with increase in volume-and the volume here is so small, with 11,000,000, so insignificant compared with 125,000,000, in the manufacture of machines for use in the cotton fields in the south and in the wheat fields of the north, for use with vegetables and corn, with every kind of production of the farmer, as they are in that great republic, and with unit costs continually being reduced by mass production. What it is proposed to do, as suggested by the hon. member who moved the adoption of this report, would result in lessening the unit production by reason of increased competition for the moment by those engaged in mass production on a scale of which the world has never seen the like.

Let me refer again to what Mr. Fielding said in this house as Minister of Finance when he pointed out the dangers of a people finding their factories closed by competition from abroad. He said: "You will get cheaper goods for the time being, much cheaper; but in the end, when your factories are gone, when your mills are closed, when your countrymen are unemployed, the price will be the price that the monopolist fixes; and you will have no control over him, because you cannot get your Canadians to start again." If any hon. member is interested in reading the history of tariff legislation, he will find in the library many books upon the subject. If the principle my hon. friend contends for had been applied, you would not have what you have in this country to-day, namely, the production of Canadian steel rails for our railways. When I first went west I travelled on rails manufactured in the United Kingdom and in Germany. They bore the mark of Krupp or Barrow and other names. My inquiries-and this is subject to correction-lead me to believe that there is not now a rail on the main line of the Canadian Pacific between Montreal and Vancouver which was not made in Canada. I also believe, although upon this too I speak subject to correction, that the same is true with respect to the Canadian National Railways. Is that not a striking illustration of what I say? We gave them the entire volume of Canadian business. Yet forty years ago practically no rails were produced in Canada.

For that reason I have endeavoured not to enter into a controversy with those who have spoken before me on this question; there will be ample opportunity to controvert what I regard as some mistaken statements which have been made. But I appeal to them to ask themselves whether or not it is doing a service to this country to create an impression which

2686 COMMONS

Form Implements Committee Report

I say, with great deference, I believe is unwarranted, failing to realize that 11,000,000 people, if they are going to continue and maintain their integrity as a nation, must be prepared to see to it by adequate safeguards that they secure for their own manufacturers the largest possible volume of business that the country affords.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

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

Charles Robert Evans

Liberal

Mr. C. R. EVANS (Maple Creek):

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOB CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937
Permalink
SC

John Horne Blackmore

Social Credit

Mr. J. H. BLACKMORE (Lethbridge):

Mr. Speaker, to one without party prejudice- and I think I can claim that-listening to this discussion there comes a sense of bewilderment and frustration. Here we have had about three or four different points of view expressed; one declares that you must have higher tariff, another that you must keep tariffs where they are, another that tariffs must be lowered and still another that there should be no tariffs at all. In the midst of it the Minister of Agriculture (Mr. Gardiner) rises in his place and gives a very fine, straightforward talk. If we could only be sure that the Minister of Agriculture had the disposition, in the first place-which I rather think he has-and the power, in the second place, to do what he implied in his speech he would do. probably we could breathe more easily; but I am inclined to be afraid that about all we will get out of this situation will be more compromise.

Compromise is a very fine thing, Mr. Speaker, providing one individual does not have to do all the compromising. What has been happening for the last forty years in western Canada, and, I fancy, in other parts of Canada as well where there is agriculture, is this: If you can imagine the agricultural interests starting at one end of a line and industry starting at the other, each of them entitled to fifty per cent of the line, probably there was a time when people tried to give each group the fifty per cent of the line to which it was entitled. But gradually the secondary producers have been claiming sixty, sixty-five, sixty-six, seventy, seventy-five and eighty per cent of the line, while the farmers have been continually pressing for at least fifty per cent. Now, with industry calling for eighty per cent of the line and the farmers claiming fifty per cent, it is not difficult to see about where the compromise is going to fall. Unless something is done very quickly the farmers are going to be "compromised" right out of the picture; that is actually happening at the present time to a very dangerous degree.

I think in what I have to say I shall follow the general outline adopted by the right hon.

leader of the opposition (Mr. Bennett). I thought he made a very fine address just before six o'clock, and I am sure he will be quite pleased to consider the problems of the farmers under exactly the same headings that he used. His first question was something like this: Is it desirable to have an agricultural implement industry in Canada? I am going to grant that it is desirable, but I am going to ask this counter-question: Is it desirable that we should have an agricultural industry in Canada? Just as the right hon. leader of the opposition concluded that everyone would answer yes to his question, so I assume that everyone will certainly answer to mine, Yes it is desirable that Canada should have an agricultural industry. Let us start as members of this parliament on that basis: It is desirable that Canada should have an agricultural industry now and in the future. There are several reasons why that is so. I think it is not necessary to stress them before this house, but it might be well to mention just a few.

In the first place, all secondary industries must recognize that without the farmers their prosperity would be greatly hampered, so that to be able to keep the goose laying the golden eggs it is important that we give the goose at least enough feed to keep her alive. But that is not all. While there is a great tendency for people to move from the country into the city-and that we will all grant- still when they get into the city they must be fed, and they are fed largely from the farm. All the fine observations which the right hon. leader of the opposition made this afternoon were perfectly sound, and I do not question them for one minute. But if in time of national emergency we should find ourselves in an extremely embarrassing position without secondary industries, how much more grievous would be our position if we should find ourselves with a seriously depleted agricultural industry? And that is becoming at the present time not only a possibility but a probability.

While we must be able to find food for the teeming thousands who are increasing in numbers in our cities, yet more and more we must look to a more suitable way of feeding all our people. We in Canada are not commencing to consume the agricultural products which our population should consume. I was much surprised at some facts I found bearing on this question which I am now going to submit to the house, and I think hon. members will find them interesting:

An inquiry instituted in the United States and worked out by dietetic experts and agronomists in the United States Department of Agriculture revealed, with respect to agricultural production, that if every person in the

Farm Implements Committee Report

United States could have a thoroughly adequate diet, it would be necessary to bring under cultivation 40,889,000 acres more than were under cultivation in 1933, or 22,391,000 more than the average under cultivation for the five years, 1928-32. The details of the increased production over the average for 1928-32 that would be necessary, are illuminating; they include: An increase of 76 per cent in dairy cattle; 43 per cent in beef cattle; 68 per cent in veal calves; 22 per cent in hogs; 42 per cent in sheep and lambs; 36 per cent in poultry. It would be necessary to increase the acreage under vegetables by 204 per cent; under citrus fruits and grapes 112 per cent-

That item, of course, would not apply to Canada:

and under small fruits 282 per cent. True, the acreage under wheat in this dietetic plan would he reduced 57 per cent, but that would simply remove the United States completely out of the international market.

Lest it be assumed that the cost of this diet is extremely extravagant we add that it amounts to $12.75 per week for a family of five, statisticians of the United States say that only 21 per cent of the people can afford that amount of food.

I am much afraid, Mr. Speaker, that the conditions obtaining in the United States obtain in equal degree in the Dominion of Canada, and that probably only twenty-one per cent of the population of Canada can afford to have what they need of the agricultural products which we in this country are equipped to produce in profuse abundance. But we are adopting from year to year policies which I am convinced are depleting our agricultural productive power. The statement may sound extreme, but all you need to do to realize its truth is just to travel through our great agricultural areas, where you cannot fail to be impressed by the tremendous number of farms that have been deserted. Why have they been deserted? Last year I had the privilege of travelling through a large part of the splendid province of British Columbia, and I was astounded at the number of fertile fruit farms that were standing idle. I was told by people who knew, that it would not pay even to trim the fruit trees. Why? "No sale," they said; "what's the use?"

What are we doing in Canada? We are destroying those fruit-producing areas as surely as I stand here. "Well," some people may say, "what can we do about it?" Well, we are the government of Canada. Perhaps no more needs to be said.

If the United States needs to increase her ability to consume agricultural products, then surely we need to, as well. But the all important thing, as I see it, before we learn how to enable our people to consume these

products, is to see to it that we do not destroy our ability to produce them, so that we shall have them to consume when we learn how to do so. This is a far more serious matter than I fear the average individual in this country realizes. In the report of the nineteenth session of the International Labour Conference will be found this statement;

The cares of the American, Argentinian, Australian, Canadian or eastern European farmer would be conjured away if the urban populations of Europe and America could eat even a little more bread, butter and meat per head.

We are worrying about overproduction on our farms. There is a suggested solution, although up to the present time, strangely enough, though I have listened with great care, I have not heard advanced in this long debate, which has continued ever since the early part of March, a single constructive idea as to how we can enable our people to consume more except the suggestion from the Conservative party that if you put up a sufficiently high tariff wall you will enable your producers to get the home market. I grant that .there may be some virtue in that suggestion. I shall not discuss it at all now, except to say that the most remarkable thing about it is that if that is the solution, it is strange that our people have been fighting over the question for all these generations and have not yet been able to come to a satisfactory decision about it. That is dismaying! If we must continue through another series of generations before we can decide which of these two policies is the better for Canada, what is going to happen to Canada in the meantime?

Is it desirable that Canada should have an agricultural industry? I have dealt with that from two standpoints. There is a third one. Three provinces of this dominion are primarily agricultural provinces. If we destroy the agricultural industry of this dominion, indisputably we destroy those three provinces. I think that can be said with complete confidence. I know it is not clear to a great many people-it would not have been clear to me if I had not gone into the subject with some care; I should still have thought just as an ordinary citizen-yet the policies in operation to-day are destroying those three provinces economically.

Suppose we grant for the sake of argument and progress that it is desirable to have an agricultural industry in Canada; then I should like to follow the two lines of argument which were pursued by the right hon. leader of the opposition. If they apply to the secondary industries they must apply

2690 COMMONS

Farm Implements Committee Report

with equal force to the primary industry of agriculture. His first statement, as I recall it, was that the quality of the product should be of the best. If there is anything which has desolated my feelings during the last seven or eight years it has been to see, in travelling through the splendid agricultural regions of my home province, to what an alarming degree the quality of production has been falling. I was raised on a farm; my roots are right in the soil, and I know whereof I speak. Where, as recently as 1928, we found it profitable to keep up our fine breeds of cattle, both milking and beef breeds, of swine and poultry and sheep, we no longer find it profitable. It now appears not economically sound to spend the amount of money on breeding stock which years ago we expended, for the reason that there is not a sufficient margin to make it pay. The result is that all over the agricultural areas of this country, at least in the three western provinces, people in general are unable to keep up the standard of quality, although there are exceptions. Generally speaking, the products of the cattle, sheep, horse, swine and poultry producing plants are depreciating rapidly, largely because the owners cannot replenish their breeding stock. That is a serious matter. Furthermore, the equipment is deteriorating. It is a rare experience to pass a farm where they have been able to paint the buildings. All over Canada, I find, it is an uncommon thing to see a farm where a new home or a new barn has been erected. As the hon. member who spoke a few minutes ago said, the farmers generally speaking are "getting by" by every means they can contrive with old machinery which should have been discarded years ago. What does that mean? It means that if we should be plunged into a national calamity comparable with the one which overtook us in 1914, it would be impossible for a considerable length of time for us to reach a parallel degree of production. I believe there can be no satisfying answer to that statement. We are not keeping up the quality.

Then, on a great many farms the land has been allowed to become weedy. Why? Because the farmers are not as good as they were? No; because they simply cannot afford to cultivate the land as they feel it should be cultivated. In many places fertility is decreasing because the farmers are unable to provide fertilizers; they cannot apply the crop rotations which should be employed in order to preserve the land; in many instances they are unable to adopt farming methods which will preserve the soil. So to

a disquieting degree we are failing to keep up our quality. I am familiar with the exceptions. There will be in a given area three or four, or perhaps five or six such, depending upon the size of the district; but the majority, the great body upon whom we should depend, are not able to stand up to the difficulties.

The next important statement which the leader of the opposition made, and which is perfectly sound, is that price must cover costs, I believe hon. members who have been indulgent enough to listen to the remarks of our group have realized that over and over again we have stressed that your price must cover your costs. In laying down that principle the leader of the opposition was genuinely progressive in his economics. On that score let us examine the position of the agricultural industry. A farmer's costs are fixed. The leader of the opposition said that a manufacturer's costs are fixed. We will grant that. But few people realize that the farmer's costs are more inevitably fixed than those of the manufacturer. Let us examine them for a few moments. The farmer's handling charges must remain permanent. He has nothing to do with transportation charges. Out in the west an attempt has been made to enable trucks to replace other means of transportation; but, unbelievable as it may seem, there has been-a most assiduous movement to impose such licence fees on the trucks as to hamper that means of reducing costs. The farmer's interest.' rates are also fixed, or were until certain provinces began to move in the matter. His taxes' are fixed. The farmer carries in the main the provincial, municipal and also school taxes throughout vast rural areas, and from those charges there is no escape. Everything he buys has the price fixed, but not by him. It matters not how many members he sends to. parliament: they lift their voices as men crying in the wilderness whom people indulgently and with patience abide, but concerning whom nobody ever thinks it necessary to do anything. .

Consider the manufacturer of this binder of which hon. members have been speaking; does he depend upon supply and demand before he decides what his price is going to' b ? No; he knows in January what the price will be next August, and he manufactures the' number of implements which he thinks will be demanded and can be sold. Contrast that with the situation which faces the farmer. I am not making any charges concerning what has happened in Canada, but this thing has. generally occurred. Manufacturing industries have got together and have agreed upon at

Farm Implements Committee Report

fixed price. This has been brought out time and again by speakers in this debate. I think it was elicited clearly in the investigation. Thus they formed a cartel and they fixed the price.

Now the tariff comes in to help them. Strangely enough, when a tariff question is to be decided, the men who can get close to the powers that be and make their influence felt are the men of wealth, the men who are concentrated. What chance have the farmers, scattered over thousands of miles? Again, their voices are as voices crying in the wilderness, they are scarcely listened to; the result is that the tariffs are set to suit the manufacturers. This painful truth cannot, I think, be questioned. All this debate that we have had during the last few days has tended to show the same thing. We are concerned earnestly about seeing that the Massey-Harris Company recovers its costs, but we are never worried about all the thousands of farmers whether they even survive or not.

It is commonly believed that there is a free market. Many people talk about free markets. I ask hon. members how much freedom there is in the market I have indicated, when these big concerns are able to get together and decide what the prices shall be. How can anyone call that a free market? Some hon. members have suggested in this debate that if we removed the tariff between Canada and the United States it would automatically bring down the prices of implements. I do not argue that; but I notice, from the figures I have of costs across the line, that they have similar troubles there. So, how much good it would do us to remove the tariff entirely, is a debatable matter. Competition among these men does not cut prices; it used to, but they have learned better now. One powerful man in my constituency told me in a conversation years before I was elected that big men do not fight each other. That statement I find has much more meaning than I thought it had when I first heard it. Big men cooperate. Contrast that situation with that of the farmer. The farmer's prices are not protected. If there is any protection it is meagre. I will grant that the hon. member for Brantford (Mr. Macdonald) gave us a fine statement with regard to the amount of protection that farmers have. But when you compare the amount of protection that the farmers have on their prices with the protection these "infant industries" of ours have on theirs, you are impressed mainly by the disparity.

The farmer sells his goods in the open market and competition does have something

to do with his prices; the law of supply and demand also undoubtedly has something to do with them. He has no way by which he can limit production and set a price, producing only what he is able to sell at a given figure. When his price begins to go down he does everything in his power to keep his business going and he increases production more and more, with the result that he only aggravates the situation for himself by producing tremendously more than is required, thereby bringing prices down still further. Contrast that with the situation confronting the manufacturer-and remember incidentally that this situation as a whole faces three provinces of this dominion-and then meditate what are the causes of Canada's "stresses and strains". How can the farmers live under such conditions?

There is another matter to which I should like to refer. The farmers' price fluctuates from day to day. Tens of thousands of farmers are virtually ruined because they are compelled by force of circumstances to sell when the prices are down, and they are mortified a few weeks afterwards to find that prices have gone up, which would have doubled their income from a hard year of toil. Someone else has the advantage; they have not. And usually that person is not in any of the three western provinces. I have not spoken very much for the farmers up to the present time, though my constituency is primarily agricultural. If I start talking about farmers' problems I am perfectly at home; the only reason I have not spoken about them before is that I am intent upon a solution rather than upon railing against their ills. When we in parliament have decided that these difficulties do exist, and when we have decided further, as I am sure we have, that something must be done, what do we now do but shrug helpless shoulders and wave helpless hands and say, "I am sure I don't know what to do". There must be a solution. Consequently I have not spoken very much about the inequities and the disabilities under which my constituency suffers. We know all about these. We fancy that the men whom we sent here in previous years told the house all about them.

Lest there should be some people who may be inclined to think that what I am saying is not completely justified-my statement with regard to the way in which the big interests are able to set prices-let me refer to three or four -bits of evidence. Gardiner C. Means of Columbia university in 1935 issued a document which is called Industrial Prices and Their Inflexibility. In this he shows the way in which prices and production varied between

2692 COMMONS

Farm Implements Committee Report

1929 and 1933. His figures are extremely illuminating. I am going to put the figures on Hansard and then talk about them for a few minutes, because, to a large degree, in these figures lies the cause of our woe in Alberta, as well as the woe in Saskatchewan and Manitoba. At least, here lies one of the causes of the trouble in connection with this very question we are now discussing.

There are two columns, " permanent drop in prices " and " permanent drop in production." The first item is agricultural implements, the very item we are discussing to-day. The permanent drop in prices was six per cent, which means that the lowest drop in the prices of agricultural implements in the United States between 1929 and 1933 was six per cent. Contrast that with what happened to farmers' products! Implement production was curtailed or limited or reduced to artificial scarcity eighty per cent. Let me give the table rapidly and stress the last one, which is agricultural production:

Price v. Production

Permanent Permanent

drop in drop in

prices production

Agriculture implements. 6 80Motor vehicles 16 80Cement 18 65Iron and steel 20 83Auto tires 33 70Textile products 45 30Food products 49 14Leather 50 20Petroleum 56 20Agricultural commodities. 63 6

In other words, prices of agricultural commodities dropped sixty-three per cent, while farmers were able to limit or reduce production to the extent of only six per cent.

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

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Those figures all relate

to the United States?

The Statistical Year Book of 1935-36 of the world economic survey gives certain pertinent

statements: Decline in

Production Price

per cent per cent

United States .. 46-2 29

Canada 27

Germany .. 46-7 28United Kingdom.. . . .. 16-5 7

These have to do with manufactured goods during the year 1932. Truths about agricultural production in various countries are set forth in the following quotation from The World Economic Survey, 1935-36:

In the same period agricultural production maintained an increase of three per cent and agricultural prices declined as much as fifty-eight per cent in Canada, fifty-seven per cent in the United States, and forty-nine per cent in Argentina, while in European countries where governments intervened to shelter their farmers the decline was less; in Germany thirty-five per cent, and Italy thirty-seven per cent, and in Great Britain twenty-eight per cent.

The former figures had to do with secondary industry production. In every instance there was a limit to the production, while in the same period agricultural production showed an increase.

My soul longs for the time when I can see Canada somewhere in the lead of these countries which are doing something for their farmers, but I have not been able to see anything so far.

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

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

To what years do those figures relate?

Topic:   FARM IMPLEMENTS COMMITTEE
Subtopic:   MOTION FOB CONCURRENCE IN SECOND REPORT PRESENTED APRIL 8, 1937
Permalink

May 9, 1938