May 9, 1938 (18th Parliament, 3rd Session)


Hervé-Edgar Brunelle


Mr. BRUNELLE (Champlain) (Translation) :

Mr. Speaker, the question under discussion is of deep interest to the fanners. They need government assistance, and I am happy to note that this government desires to help them as much as possible. The report of the committee appointed to investigate the prices of farm implements, which we are now discussing, has established the existence of certain abuses on the part of the manufacturers and recommends a further reduction in customs' duties on farm implements.
I wish to take a few moments of the time of the house to express my approval of this report which, from beginning to end, is favourable to the farmers.
The .present discussion will indicate to the entire country that this government is not satisfied with merely praising the farmers of Canada, but really wants to help them. The attitude of the political parties on that point is being clearly defined. The supporters of the government are all stating their approval of the report and of the committee's recommendations tending to the reduction of farm implement prices, while the members of the opposition, from first to last, at least those who have taken part in the present debate, are opposing them.
The situation is clear. On the one hand we have the interests of the powerful, of the financiers, of the manufacturers, and the Conservatives are upholding them. On the other hand, there is at stake the welfare and interest of the weak, of the poor, of those who lack organization and money, the interests of the class which is admittedly the most important, because it is at the root of all national progress, in a word the interests of agriculture, and the Liberal party is upholding them.
It is in 1878 that Sir John A. Macdonald inaugurated a policy of protection for Canadian industries. This policy, it was said, was intended to aid only infant industries. Ever since, the buyer and consumer of Canada has been paying a bonus to the Canadian manufacturers. Ever since, the cost of living has been higher in Canada than in the United States. An automobile selling in Canada for $1,350 can be bought in the United States for $1,000. A radio costing $75 in Canada sells for about $25 in the United States, and so on. Farm implement prices have always been from 10 to 20 per cent lower in the United States.
All that is the result of the tariff policy initiated in 1878 for the protection of infant industries. After sixty years of existence

Farm Implements Committee Report
Canadian industries should be old enough to be weaned. It is now the farmer's turn to come into his own, to be able to pay what he owes and to buy at prices proportionate to those which he obtains for his products.
The Conservative opposition assume the defence of the manufacturers. They are constantly speaking of the inalienable rights of the powerful, of the rich, of the manufacturers, of the trusts-of vested rights. In order to give a plausible appearance to their love for the powerful, opposition members state that they are seeking to protect the workers employed1 in industry. The farm implement industry employs four to five thousand1 workers. I also am anxious for the welfare of these four or five thousand workers, but I am specially concerned about the welfare of the five million Canadians living on the land.
Farmers are sometimes called the monarchs of all they survey. They should be the monarchs of the land, but they are not. They have been dethroned in the course of the last few years, in many cases; they have lost their independence to become, to a great extent, the slaves of their creditors, of the powerful, of the manufacturers including the manufacturers of farm implements. I am not so much concerned in knowing whether the lowering of the tariff will have much or little effect on farm implement prices than I am in doing well what is to be done, in order to have the satisfaction that comes of the performance of one's duty.
On page 1295, we find recommendation No. 23, which reads as follows:
That recent reductions in tariff and other trade barriers resulted in the Canadian companies lowering their prices on certain farm implements imported from the United States, but the United States companies manufacturing a full general line in the United States and marketing these in Canada, did not lower their prices generally on importations other than those affected by the price reductions of the Canadian companies, indicating the lack of free price competition in the industry.
Now let us examine, in the light of statistics, whether it is the farmer or the manufacturer who is worthy of sympathy and assistance. Here is a page in the history of the International Harvester Company and the Massey Harris Company, based on their financial results, as shown on page 1224 of the report:
Financial history of the International Harvester Company of Canada Limited, from 1903 to 1935 inclusive:
In the period from inception to 1912 it earned $3,500,000, paid interest on all advances from the parent company and, if the policy of later years was followed at that time, earned in
addition an undetermined amount of profits retained in the hands of the parent company. This was on a capitalization of $1,000,000.
In the period from 1913 to 1919 inclusive, it earned $3,000,000 plus a profit retained in the United States estimated at $4,200,000 and, in addition, paid interest on all advances from the parent company. This on a capitalization of $1,000,000 up to 1917; a capitalization of $10,000,000 in 1917 and a capitalization of $15,000,000 in 1918 and 1919.
In the years 1920 to 1925 inclusive, it made profits of $800,000 after absorbing the heavy losses of 1921 and 1922; received a surplus of $287,556 from the International Plow Works of Canada Limited and earned for the parent company a profit, retained in the United States and not shown in the operating results of the Canadian company, estimated at not less than $4,000,000. In these years it paid no interest on the advances received from the parent company and the capitalization was maintained at $15,000,000, increased by surplus, reserves and moneys owing to the parent company, to an average of $30,000,000 per annum.
A dividend of $3,000,000 was taken in 1921 by the parent company.
In 1926 to 1935, it earned on a different basis to the foregoing at least $24,500,000 on an adjusted capitalization claimed to be about $39,000,000.
Now as to the Massey-Harris Company Limited.
The company had its inception in 1891 with the merging of the Massey and Harris interests; the paid up capital of the company at its inception being approximately $3,500,000 of which $300,000 was paid in cash and the remainder was given in exchange for the assets of the constituent firms in the merger.
In the period from 1891 to 1912 this original capitalization of $3,500,000 plus $1,000,000 additional cash capital received in 1911, enabled the company to return the following values to its stockholders-
I will not quote the particulars, Mr. Speaker, but those returns amounted to $28,953,349.
During the years 1913 to 1921 inclusive, cash dividends were paid to a total amount of approximately $9,142,000. Stock dividends were declared in 1916, 1918 and 1920 to the extent of $11,044,200. Of these, however, nearly $9,000,000 represented profits in the period ended in 1912.
The period from 1922 to 1925 showed no appreciable change in the position of the company. It paid no considerable amounts in dividends and earned no large profits.
The loss for the period 1926 to 1935 inclusive, will be found stated in another section of this report as over $15,000,000.
The dividends paid during the same period were as follows:
Dividends paid on Preference Stock:
Fiscal year ending in-
7% $ 846,2931927
7% 846,2931928
7% 846,2931929
7% J year 423,147
5% J year 302,247
1930 5% 604,495

Farm. Implements Committee Report
Dividends paid on no par value Common shares:
Fiscal year ending in

1929 $1,269,440
1930 1,637,016

Mr. Speaker, I need not comment upon that for the figures speak for themselves.
. I had not intended to take part in this debate, but my concern for the farmers of my constituency compels me to do so. I am sincerely convinced that we can never do too much on behalf of the farmers. If it can truthfully be said that agriculture is the foundation of our country's prosperity let us be careful lest that foundation should collapse, let us maintain it strong and firm. It is unfortunate, in my opinion, that the farmers should not be better organized and more united, for that is a cause of weakness. I admire the farmers and I am concerned about the welfare, for I believe that in their own way, the Quebec farmers have been heroes in the past, on account of the hardships they had to suffer and the sacrifices they were compelled to make; but their descendants, instead of reaping the benefit of those sacrifices and hardships, are now facing almost insuperable difficulties. I admire the farmers of my province, and I am concerned about their welfare because they are courageous, industrious and serious-minded. I admire them for the reason that if fascism, communism, socialism and other similar doctrines ever really threatened to overrun our country, the last shot fired against them would come from the people of my province.
I will vote in favour of the report and the recommendations of the committee on farm implement prices, because I think it is an indisputable fact that the prosperity of the farm implement industry is directly based upon the prosperity of farming. Consequently, they must cooperate in such a manner that the farmer, when he has to sell his produce at the lowest prices, should not be forced to buy his farm implements at high prices; in other words, whenever the prices of farm products fall there should be a similar reduction in the prices of farm implements, and vice versa.

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