May 6, 1938 (18th Parliament, 3rd Session)


Malcolm McLean


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.

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