[DOT]eery low. point. With the advent of the modern refrigerator, experience has demonstrated that during this surplus period perishable product can be purchased and stored for later marketing. It has been found that well selected and well stored product, with improved transportation, permits of the shipment of such products to remote markets hitherto little considered. The inevitable effect has been to establish higher buying prices for butter, eggs and poultry during periods when under earlier conditions they broke badly in price. Through these conditions producers have secured much higher prices. Such results are inevitable, indeed, the whole cold storage and refrigerated transportation policy of the present Minister of Agriculture has been * conceived to this end.
The opening of the Northwest and the inrush of new settlers, and the development of the mining camps in New Ontario, have increased in a very remarkable way the demand for farm products in this ' province. Years ago when fowl were abundant in the fall of the year, they were disposed of in large quantities upon this market and Montreal, through commission houses, and sometimes at very cruel prices. They were badly bandied and badly sold. The result was that notwithstanding handsome profits to the retailer, consumers secured poultry for two or three months in the year at very low prices. Now large dealers have their agents through the country instructing farmers how to dress their poultry or are themselves dressing it for them. The market which they first secured for such product was in Great Britain. This year not one bird has been shipped there, hut all the surplus has gone to the Canadian Northwest. I know of one firm alone who made a contract to deliver 42 carloads of poultry for shipment west, for distribution from Winnipeg to the British Columbia coast.
It is noticeable that in this presumably producing country, we have practically no surplus butter for export. By reason of the marked improvement in the quality of butter through manufacture in creameries, the consumption at home has greatly increased. In addition there has been the added demand from New Ontario and the West. The consumption of milk, too, in big towns and cities, owing to the great increase in the use of cereals, has taken cream which otherwise would have gone into butter. A few yeare ago tens of thousands of cases of eggs were exported to Great Britain. During the past years not one case was sent out of the country. All were required for home consumption, the added demand coming from the West and the mining camps in New Ontario.
The real situation in Ontario is that new markets of large dimensions have recently been opened for her products in the West, with its new settlers and railway,construction, and the mining camps in New Ontario. At the same time a greatly increased outlet has developed in the towns and cities of the province, by reason of the steady increase of the non-productive population.
I think this letter states very clearly what has been one of the causes of the improvement of the condition of the farm-Mr. KING.
ers of this country which has helped to make more profitable some of the business in which the farmers have been engaged. But, there have been other factors that have helped to take away in part some of the advantages which the farmers would otherwise have had. The greater difficulty of securing farm labour and the higher cost of labour have taken away much of the advantage which perhaps the farmer would have gained from the better arrangements described in this letter. However, the important point to consider is that much of the increase in prices that has taken place is simply an index of the greater prosperity that has resulted from a better policy in the interest of the farming community of this country.
There are other causes that have also-contributed to the rise in price. First of all, we/ have the great extravagances of tl)e wealthy class. Under the conditions of development and expansion described, opportunities have been afforded to investors, to the possessors of great natural resources, and to those who have had to do with their development and the distribution of products and produce, a means of acquiring wealth such as comes but seldom to a people in the life of a nation. Unfortunately, the riches thus reaped do not always become generally distributed; while the prosperity is real enough, it somehow seems to converge into the hands of a few. This-wealth so suddenly, and in many cases so easily acquired, has given rise, not infrequently, to standards of living to which its possessors were strangers a few years before. Money easily obtained has been lavishly displayed and spent, sometimes on more and better food, sometimes on moTe and better clothes, often on more and dearer luxuries.
This extravagance of the rich considered in all its bearings, and in particular of what it has demanded of its host of imitators, has done much to enhance the cost of living. Wealth centred in the hands of the few has helped to determine the price at which the many have been obliged to pay. The result has been that through the extravagances to which I have referred, we have come to have large demands for certain classes of commodities that are not commodities that are produced for the mass of the people, and capital which would otherwise have been invested in those things in which the mass of the people are more interested has been withdrawn from those occupations and been put into such-businesses as making automobiles and the like in order to supply the demand -of those who have become very wealthy. It is in this sense that it has been well and truly said that the high cost of living is the cost of high living or the cost of living high. So much by the way of general statement.
To examine in a more critical and scien-
tific manner the causes of the increase in the rise of prices, it is necessary to consider first, what prices in reality are. Rightly understood they are the value oi commodities in terms of gold. It follows, therefore, that whatever effects the relation of commodities to gold in the matter of supply or demand of either of these factors will have its effect upon prices. Prices are the result of an equation of which commodities and gold are the two factors; an increase in the former relative to the latter means a lowering of prices, an increase in the latter relative to the former an increase in prices. That the supply of gold has vastly increased is a matter of statistical record. That this increase relatively has been so considerable as to affect prices is the belief of many leading economists, among the number such eminent financiers as Sir Edgar Speyer, who recently paid us a visit, and such eminent authorities as Professor Taussig, of Harvard; Professor Fisher. of Yale, and Professor J. B. Clarke, of Columbia. In fact, there is practical unanimity as to this being one of the main causes.
When we look at the gold side of the question, we find that the total gold production in the world has been doubled in the last decade, and that ten years ago it was practically double what it had been ten years before that again. Against the increasing production there is, of course, to be placed the increased amount of gold necessary to meet the needs of a population vastly larger, and further, the large amount of gold consumed in the arts, though the increase in the amount of gold used in the arts is, I understand, estimated by the best authorities to be considerably less relatively to the amount in use as a medium of exchange.
This is a circumstance of course which sooner or later comes to affect all countries alike, for the flow of the precious metals is such that though invisibly and imperceptibly, they gradually tend to find their level in all parts of the world. This cause may account for relative increases over periods of time, but the causes which account for actual prices in different countries are necessarily of a different nature.
There is, however, a further influence closely associated with the production of gold, which, however, is more impalpable and incalculable, and which comes into play in the shape of credit, by virtue of which one comparatively small quantity of gold does duty for vast movements of currency. The service which credit can render in this connection is enhanced in this country by the splendid system of branch banks which extends throughout the country. Credit, of course, rests primarily on confidence, which in turn, is has-' ed upon the actual or prospective wealth. The extent to which credit is likely to play
a part in affecting prices will depend upon the degree of confidence m the business community. The whole level of prices will be found at intervals to be swayed according to the confidence or timidity of purchasers and investors. The rapid recovery from the panic of 1907 is attributed by many to the increased confidence which this increased organization has been able to produce.
Leaving now the gold and credit side of the equation, and coming to the commodity side, there are a variety of causes connected with the demand and supply of commodities all of which have their effect upon prices, Everything that enhances the demand, the supply remaining the same, is likely to increase prices; everything diminishing the supply and the demand remaining the same will have the same effect.
I have already made mention of the extravagance of the rich, and the increased ostentation in display, in some respects the criminal extravagance ot our wealthy classes, and the great luxury, and higher level of living of all classes. Within a lifetime the scale of living in North America particularly in towns and cities has beep revolutionized. The luxury of yesterday has become the necessity of to-day. For the very wealthy take automobiles alone. What is believed to be a fair estimate of the output in the United States for one year is 160,000, while the output for the past seven years is placed at over 400,000.
But to come to the standard of living of the average man. Our homes are more commodious, and better furnished than they were, equipped with all manner of conveniences unknown to our fathers. Electric light has taken the place of the kerosene lamp, furnaces have replaced box stoves; we travel, not on foot, but by electric car; children enjoy educational advantages which were not within the reach of their parents. Much shopping is done by telephone. Proprietary goods have taken the place of staple food products. Amusements and diversions have gained a hold on the people which they did not possess before. As a slight but forcible illustration of the difference in standards, let me mention one fact brought to light by the prices investigation conducted in the Department of Labour, to which I have already referred. The inquiry shows ,that there has been a' marked 'lifting' of the popular taste in the matter of _ cotton goods. Some coarser lines of goods' which * were in demand twenty years ago are not now manufactured at all, there is no demand for them; the class buying such goods twenty years ago, now buy goods of better quality. The present goods cost more than those of the past, but they are as a matter of fact in most cases of considerably better quality. Unquestion-
ably a change in the standard of living has been brought about with the large increase in our scale of expenditure, an increase which the credit system has helped to enhance.
Intimately associated with the higher or more luxurious standards of living are the changed habits of the people resulting from and in marketing and distribution. To refer to only one we should denote the falling into disuse in all our larger cities and towns, of the old, central markets, and the necessarily increased cost of retail food distribution. Where purchases are made direct from the purchaser the additional middleman profit does not play so important a part, but where goods, are delivered not only at one's door, but in preserved or canned form, some increase in price1 to meet the extra cost of service alone is inevitable. The fact that all retail trade is based on direct purchase from the producer must, unless the purchaser in the first instance is demanding too excessive a profit, entail some enhancement of prices. There are but few commodities to-day as compared with fifteen or twenty years ago, which householders purchase in any way other than through the retail dealer.
Particularly important in this country, however, is the other cause which has already been mentioned, namely, increased poipulation, including immigration, and in this connection the increased demand for goods in remote, and inaccessible parts. Increased population means an increased number of mouths to fill; settlement in remote districts means increased difficulties in satisfying existing needs. Products have to he brought long distances, involving additional elements in handling, transporting, packing and commissions to middlemen.
Those causes are self-evident, but arising out of them are causes of even greater potency, though not as apparent at first blush. The estimated population of Canada according to the census of 1901 was 5,371,315. The estimated population at the beginning of the present year was over 7,000,000, an increase of approximately 33-75 per cent in less than ten years.
But what- is even more important as accounting for the increased demand which has effected prices, is the enormous expenditure in connection wfith industrial expansion which has been going on, expenditures made verv largely out of borrowed capital on railways, towns, public works, and other large undertakings. Corporations and governments, national, provincial and municipal have been particularly borrowing for investment or at least for expenditure in the country. According to Mr. B. E. Walker of the Canadian Bank of Commerce, the amount of foreign capital invested in this country in the year 1909, amounted to $200,000,000. Many of these enterprises have not yet become productive, hence they affect Mr. KING.
almost exclusively for the present, the demand side of the equation. The demand has been in the first instance for the materials consumed in the actual undertaking, then for the labour, and the commodities necessary to supply the labourers engaged upon the work, but the circle of industrial and trade activity once set in motion has gone on widening until it has reached all but the outermost edge of the community.
Reference has been made to farm labour. In that connection, one might quote many statistics to show just how considerable has been the increase in the cost of farm labour. But the increase in the cost of farm labour is only part of the general increase in wages throughout the Dominion. I have here a statement prepared in the Department of Labour, showing the rates of wages prevailing in the building trades in different cities of Canada from 1900 to 1910. In the city of Halifax, taking only the building trades, it would appear that the wages have risen for the different classes of labour in the building trades for those 10 years from 7 per cent to 424 per cent, depending on the particular class affected. In St. John, the increase has been from 10 per cent to 42 -6 per cent. In Montreal, it has been from 24 per cent to 834 per cent for one class, the,average being about 66 per cent for some of the higher classes. In Toronto, the increase has been from 16 per cent to 45 per cent, in Winnipeg, from 11 per cent to 64 per cent, in Regina from 25 per cent to 50 per cent, in Calgary, from 25 per cent to 68 per cent, in Vancouver, from 25 per cent to 66 per cent. These figures, taking all the classes in the building trades for these different cities, considering percentage of increase in wages, go to show an average increase of from 26 -6 per cent to 55 -9 per cent in the several localities or an average of 39:4 per cent, taking the whole, And with this increase in wages has gone a shortening in the hours of labour. Of course, the wage question and the price question are very closely associated. The increase in prices has made the working classes feel the necessity of getting an increase in their wages. They have the smallest income, and with the increase in -prices brought about in this way they have had to supplement their earning capacity in some way, and ^so there has been this increase in wages throughout the building and all trades in Canada. On the other hand, the increase of wages has operated to increase prices. The employers, having to pay more for labour, have found it necessary to tack on something to the prices at which they were selling the goods, and so the two things, wages and prices, have followed each other in what has been described as an upward spiral relationship in 10 years. This in-
crease in wages in towns and industries has operated again on the wages on the farms. Wages being on such a high level in the cities men have left the farms to go into the cities, and in doing so they have not only diminished the supply of labour on the farms, but have created an extra demand in the cities for the produce which the farmer turns out, and in that way the farmer has been handicapped in part from two sides. It is really startling when we consider all these things to see how, while we have had all this great increase, this rise of prices in the city, this increased prosperity for different classes, the movement in some parts of the Dominion has been away from the farms into the cities. We have been getting more men on the land in the west. But let us take Ontario. Mr. James, the deputy Minister of Agriculture in Ontario, recently prepared an estimate of the population of the cities and towns of the province, and he estimated that while the population of the cities and towns had increased during the past decade by 295,400, there had been an actual decrease of 61,858 in the rural population. The rural population of Ontario decreased from 1,108,874 in 1899 to 1,047,016 in 1909, while during the same period the population of the cities increased from 901,874 to 1,197,274. Those figures of themselves would help to explain part of the difference of one of the causes of the rise in prices, and help to answer the question as to whether the farmer has or has not really gained all the advantage which has come from increased prices.
Mr. BL4IN- That is not a new condition of things as I understand it. The former census showed exactly the same thing for Ontario for the last 35 years.