March 23, 1939

LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

There were no imports; from Great Britain; in fact we export washing machines to Great Britain. The imports from the United States amounted to $702,000-last year.

If I may say a word in reply to the two hon. members from Manitoba who have spoken, I would say that the record before me shows that there has been quite an increase-in the imports of washing machines since the 1935 agreement, which, it will be remembered, reduced the duty from 35 per cent to 25 per cent. With the coming into full operation of this agreement the present effective rate of 28 per cent, including excise tax,, will of course be reduced to 25 per cent. But I call attention to the fact that during: the three years 1936 to 1938 inclusive, imports did increase from $272,000 to $702,000. They trebled in value. The number of machines-imported increased five-fold during that period. I shall, however, take note of the-representations that have been made suggesting that a tariff board inquiry might be desirable. I do not undertake that such a reference will be made, but the matter will' be looked into from that point of view. At the present time we have quite an export business; exports have grown as rapidly as; the imports. Last year we exported a total of $1,481,000 worth of washing machines, the great bulk of which went to the United Kingdom, Australia and New Zealand. I shall take note of the suggestions made by my hon. friends and find out what the facts are.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

The statement of the % minister that a reference in this matter might, be made to the tariff board impels me to say that while I have all the sympathy in the-world with the representations made by the two hon. members who have spoken on the-subject, there is another side to the story to which I think I should refer. If a reference-is made to the tariff board, obviously both sides will be heard.

The washing machine industry in the United States is not in a prosperous condition. As far as the story can be gathered from the financial reports of these companies -there are not many of them, but their output is very large-it is not a very attractive one. As a result some of these companies; are actually dumping machines in Canada in order to keep up production and keep down the overhead ratio. That at any rate is what is claimed, and I think there is sufficient evidence to support that view. Briefly stated, the washing machine manufacturers of the United States produced in 1938 about 1,200,000 washers. Yet it is clear from their annual statements, some of which I have seen,.

Canada-United States Trade Agreement

and from information which I consider to be reliable, that the industry not only did not make any money but lost heavily. For instance the Automatic Electric Washer Company, of Newton, Iowa, producing about 30,000 machines a year, in their report showed a loss of $105,000, or approximately $3.50 per machine.

It might also be pointed out that these companies have different grades of machines. They put out a higher priced machine, which is the most profitable type, and which they seek to sell in their own market; and besides that they produce a low priced machine which they can feature in their advertisements to attract buyers. Most of these companies limit the number of low priced machines to a small percentage of their output. I understand the large General Electric Company limit the number of low priced machines to fifteen per cent of their total output. These low priced machines are used as loss leaders. It is also reported that the Easy Washing Machine Company, a well known company over there, lost something in the neighbourhood of $400,000 last year. Their annual production is about 200,000 machines. They make a range of machines selling from $49 to $150.

Another feature of this operation was referred to a moment ago, the attachments, such as electric motors and the tubs, which are usually manufactured separately. It is reported that the manufacturers of washing machine tubs lost on an average about fifty cents a tub last year, and the manufacture of the motors is also reported to have shown a loss.

The Washing Machine Company of Fairfield, Iowa, make a machine selling at $39, but they limit the production of those machines to one hundred a year; and while the company advertise machines ranging in price from $39 up to $100 or whatever the top price may be, the salesmen would be pretty severely taken to task if they placed many of those $39 machines. They are told they can show it, but to advise the purchase of a higher class machine.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

If the company produced only one hundred, they would not be of much use for any purpose.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

No, except for advertising-that they make a machine at that price. But the salesmen were instructed that their efficiency' would be judged by the small number of that class of machine that they placed.

A further point is that certain of these machines have been shipped into Canada at an invoice price of $24.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Out of the hundred?

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

Well, there may have been some of that class. As near as can be ascertained, these machines cost about $34.

I do not say it in any critical sense, but one of the questions which ought to be examined is whether there has not been systematic dumping of lower priced machines on the Canadian market, tending to destroy the industry here.

There is another aspect of this matter which should also be remembered. Usually these low priced machines are in the long run more costly than the higher priced machines-not those at the highest prices, but those moderately priced. A machine selling at what we might call a normal price will usually last a considerable time, being fairly well made, so that the actual annual outlay by the purchaser is comparatively small. Of course they are usually sold on time.

While I am entirely in accord with the view that we should secure for the users of this class of household utensil as low a price as we possibly can, yet in the interest of common sense and the welfare of the industrialists of Canada, which after all is very important, we must not allow ourselves to become the victims of a sort of "loss leader" dumping practice on the part of our friends south of the line. The evidence is pretty clear that the industry in that country has been in a somewhat unprofitable condition for the last few years, and because of that fact there has been a tendency to slash prices.

I think there is one thing that can be definitely said for the Canadian manufacturers of washing machines, that as far as I know-and I know some of them-they have all been putting out excellent machines, supplying the Canadian market at reasonable prices. The value of this industry, together with similar industries, is undoubtedly great, and I must repeat what has been said by some other hon. members during the last two or three weeks in discussing these resolutions as well as in connection with other matters, that after all the value of the industrial market to the farmer is important. I would suggest to my hon. friends who advanced the argument a few moments ago, that the real approach to the problem of the farmers is to secure for them a fair price for their products, which they are not getting to-day. That is my confirmed opinion. I think we will have a much healthier economic condition among the farmers of Canada if we can devise a system under which we can stabilize at a fair level the prices received by the farmers for their products, and I am now speaking particularly of live stock, dairy products and, of course, all grains.

2174 COMMONS

Canada-United, States Trade Agreement

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LIB

Thomas Bruce McNevin

Liberal

Mr. McNEVIN:

Would the hon. member inform us what method he would follow in order to attain that end?

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

I think such a dissertation now would be out of order, but I am not unmindful of the point and am quite prepared to express my views at the proper time, because I have given the question a great deal of thought. At the moment I am merely giving, shall I say, the other side of the story, which we must constantly bear in mind. It would not be fair to put the minister in a position in which in a sense he would be resisting an appeal in the interests of the farmers of Canada, which is virtually the position in which he was placed. As far as I am concerned I certainly wish to uphold the demands of agriculture for better and fairer treatment, yet nothing is gained by glossing over the other side of the picture or, merely for the sake of some momentary encomiums from that quarter, neglecting to tell what are the facts. So I suggest to the minister that when the matter goes to the tariff board-

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I did not say it would.

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CON

Henry Herbert Stevens

Conservative (1867-1942)

Mr. STEVENS:

If and when it goes to the tariff board, both sides of the story should be heard.

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CCF

Major James William Coldwell

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

Mr. COLDWELL:

There have been a number of items upon which I should have liked to say a word, but since this one has aroused some discussion I want to support those who have suggested that such articles as washing machines should be referred for investigation to the tariff board, or that something definite should be done by the government to reduce the duty. If an investigation of this kind be undertaken, I suggest to the minister that since we export a considerable number of these machines to Great Britain, a comparison should be made between the prices of such articles in Great Britain and in Canada. There may be very little difference, but sometimes on picking up English publications we find articles with which we are familiar in Canada advertised at prices which seem to be in line with our own prices or sometimes even a little less.

As one who occasionally passes through the United States I must say that I do not know of any group of articles upon which the differential appears to be as great as between the two sides of the line as electrical appliances and articles of this description. What the hon. member for Kootenay East (Mr. Stevens) has said may be quite true, but I have always been struck by the tremendous difference between the prices of refrigerators, electrical appliances, washing machines and so on. Some twelve or thirteen years ago we

bought a washing machine made in the United States, for which we paid something in the neighbourhood of $160. In store windows across the line I saw the very same machine for sale at less than $100. That struck me at the time as being a tremendous difference in price.

While it is true that the manufacture of such articles means work for those engaged in Canadian factories, I sometimes wonder whether we are not paying far too great a price for the work that is distributed by industries of this description. I think if an industry is uneconomic and is robbing, as it were, a large consuming public in this country, it has no right to receive special consideration.

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CON

Karl Kenneth Homuth

Conservative (1867-1942)

Mr. HOMUTH:

Would wheat come under that?

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CCF

Major James William Coldwell

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

Mr. COLDWELL:

No; wheat does not

come under that, for reasons which we shall probably discuss within the course of the next few days. *

To-day throughout Canada there are thousands of people who lack many simple household utensils. Very many articles have been discussed in connection with this treaty which cause me to say that we should do everything we can to bring into effect what after all is the Liberal policy, as stated over and over again in the program of the Liberal party ever since 1919; that is, to remove the protective tariff from articles which are necessary to the general welfare of the family. I am rising simply to give perhaps still another side of the picture and to suggest to the minister that he give consideration to the request of the two hon. members from Manitoba who have spoken.

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LIB

Robert John Deachman

Liberal

Mr. DEACHMAN:

I am quite certain

that everyone in what is commonly called the rump, as well as those on the main street of the Liberal party, will accept the suggestion of the hon. member for Kootenay East (Mr. Stevens) that we should do everything possible to safeguard the industrial producer and the industrial worker in the Dominion of Canada. But there is some variation of opinion as to what constitutes the best method of helping him. The items we have been discussing recently concern largely iron and steel. I am not particularly interested in this individual item, but looking at the matter from a broad national standpoint I am anxious that the iron and steel industry in Canada should prosper. I looked up the figures in order to see what we have been doing in the last few years, and I bring a message of cheer not only to the hon. member for Kootenay East but to all those on my immediate left who are particularly interested in this problem.

Canada-United States Trade Agreement

In 1933 our production of iron and steel products was 8211,000,000. Those figures have increased year by year. The following year they were $308,000,000, and in the year the Liberals came into office and started to "ruin the industry" they were $390,000,000. The following year they were $453,000,000 and the next year $623,000,000. I do not hear a word of cheer from my friends to my left, although from time to time they have told us that the approach of the Liberal party to office always meant the retreat of industry.

Let me deal with wages, which, in my opinion is a very important factor. They moved up from $69,000,000 in 1933 to $88,000,000 and then to $110,000,000. We, the Liberals, arrived on the scene, and the figures were $126,000,000, $164,000,000-and still the cheering opposition army is silent; nothing but criticism! Then, how many men were employed? In 1933 there were 70,000; then 81,000, 95,000, 107,000; and the army of workers who marched into the iron and steel factories of Canada in 1937 numbered 127,336. Leaving out war years, that level was never touched, except in one year, 1929.

In 1929 production of iron and steel products stood at $738,000,000. We have not equalled that figure so far, but we are closely approaching it, with the $623,000,000 of 1937. In addition it must be remembered that there was, or should have been in the period of 3'ears from 1929 to 1937, at least to some extent a decline in price levels. So that if we could make the comparison on the basis of actual volume, rather than value, we would see that we have almost approached the highest limit we have ever reached in any peace year.

I should like to touch upon another item. My hon. friends are always afraid of imports. Well, in the year in which imports were shut out to the greatest extent, that is in the year 1933, when they fell to a value of $58,000,000, we were producing only to a value of $211,000,000. In 1937 we were importing goods to the value of $150,000,000 and producing them to a value of $623,000,000. So that it seems that as imports grow, so also does production; and industry moves forward as we break down the barriers, just as will the other sections of production in Canada.

The hon. member for Kootenay East referred to dumping. I think someone should offer a prize for the production of a genuine case of proved dumping. I sat and listened before the tariff board, year after year to- I forget how many cases, it must have been about two hundred-and I heard charges and counter-charges made in regard to dumping. The only cases I can recall which seemed reasonably clearly proved were ones in which 71492-137

Canadian manufacturers were exporting abroad at prices lower than they charged at home. No one offers to bring forward the evidence, but when you want to paint the picture of dumping it is the easiest thing in the world, if you are inclined that way, to splash on a ten-league canvas, with brushes of comets' hair. But, after all, if we are going to extend industry in Canada it must be brought about by bringing the products we produce within the capacity of the people of Canada to purchase.

I am quite interested in the statement of the hon. member for Kootenay East. Price policies and production have been clearly discussed in a recent book put out by the Brookings Institution of Washington. I ordered a few copies the other day, and out of kindness to my hon. friend, and the high regard 1 have for him not only because of his interest in this but in other problems, and in his to-day professed interest-I know it is real- in agriculture, I propose to make him a present of a copy of the book, in the hope that he may be converted to that point of view, and that I may have the pleasure of saving at least one brand from the burning.

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CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. MacNICOL:

May I bring the committee back to the item under discussion.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Thank you, sir.

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CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. MacNICOL:

I suggest if hon. members who deal with millions and twirl them around their tongues so easily in committee, without understanding their application, would confine their remarks to item 415b, we would get much farther ahead.

I wish to make only one observation on behalf of the worker in industry-because somebody has to say a word for him. We have heard something about the farmer, and we have had the economist tell us something which perhaps none of us knows anything about-and perhaps he knows no more-

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DLTNNING:

That word should be

expunged-accusing the hon. member of being an economist 1

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CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. MacNICOL:

I am always pleased

to hear the hon. member for Huron North (Mr. Deachman) dealing in millions. Under the 1935 treaty the duty on washing machines was reduced from 35 per cent to 25 per cent. In the calendar year 1935 Canada imported 3,380 washing machines.

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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

3.580.

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March 23, 1939