April 12, 1910 (11th Parliament, 2nd Session)

LIB

George Gerald King

Liberal

Mr. KING.

That would only go to emphasize the significance of that fact. If the farm labour had become relatively less in the previous years, it would, of course, intensify any effect which a reduction in farm labour at the present time would have.
There are other causes which might be mentioned also. There are causes which in the long run are going to be of great service to the mass of the people. For example, the widening of markets in different parts of the world. European countries were formerly receiving much of their grain from other countries than Canada; to-day they find the supply in these countries diminishing, while the demand is increasing at home, and they are looking to this country to supply them with the necessities of life in a larger measure than ever before, and with improved transportation and cold storage facilities, with commercial agencies scattered about in the world, the general policy of trade development which the government has taken up, there is bound to be a greater demand for the goods of this country, and as the demand becomes greater, naturally the prices, for the time being at least, will soar a little higher. But I think so far as the increases may be due to causes of that kind, it is an increase which is shared in by the comunity generally, and it is a price which I believe every citizen of the Dominion is prepared to pay as long as he can be assured it has been brought about through such legitimate causes.
There are other causes which might be mentioned, exceptional in their nature, such as the large expenditures in the last few years in connection with war and the preparation for war in different countries. We have had in the last decade three important wars, the Russo-Japanese war, the Spanish-American war, and the South African war. All of these wars have caused a large amount of capital, which might otherwise have gone into productive industry, to be diverted from it. And the expenditures and preparations which different nations have been making in the last few years in the way of preparations for war have also helped to remove from productive uses a certain amount of capital which might otherwise have been productively employed. Of course, one nation doing one thing necessitates a like action on the part of another, and in that way one nation cannot hope to escape part of the general toll which all nations are helping to exact.
That brings me to one other class of causes. The causes which I have mentioned are largely . natural causes operating in accordance with the general run of things throughout the world. There are two classes of causes, closely associated, though somewhat different in kind, which I shall describe as artificial, because they are not absolutely necessary from one point of view although they may be of very great service from another. These causes are the tariff and the combines. The tariff undoubtedly contains the possibility of increasing prices, in this way, that it limits the field of competition over which the sale of goods may take place. _ If by a tariff wall you exclude commodities up to a certain point, naturally the possibility will arise of an increase in the price of some commodities produced in the country within the tariff wall. It does not follow that this will necessarily in the long run be injurious or harmful to any one; the effect of a moderate tariff, may be to so stimulate industry generally that in the long run the people will be better off, having regard to their condition, than they weould be without it. I do not want to argue at the moment the advantages of tariff pro and con, but only to point out that we have on

this side of the Atlantic, so far as the United States and Canada are concerned, prices ranging at a much higher rate than they do in a free trade country like Great Britain, and the difference while not wholly attributable to these causes may be due in part to them, and this is one factor that should be considered. One feature that should also be considered is that where you limit competition from without and manufacture is carried on within by only a limited number of producers, a very strong inducement is nut in the way of the men controlling these industries to unite their forces and to see that they get to themselves as far as they can, the full benefit of any increased price which the tariff may permit. A large number of persons have tue impression that, the tariff in this way has become responsible in part for the formation of these trusts and combines, and a large number of persons feel that what the trusts and combines have done has been to seek to gather within their own group the industries that are protected, and then to take care to see that the full advantage which the tariff gives them goes to themselves as a consequence. What we are seeking to do in this measure is to see that where an advantage comes to an industry through the tariff, the whole of that advantage shall not necessarily accrue only to the persons who are engaged in the manufacture, but that some of it should be reserved for the general public in whose interests, as a whole, the tariff has been framed.
That brings me then to the other phase of this question. I hope I have shown that this legislation, in so far as it relates to prices, is not based on a belief that trusts and combines are the sole causes of the increases in price that have taken place. The most that is urged in that connection is that .trusts and combines may have caused and possibly are one of the causes in some cases for the increase in price, and if that can be shown in any direction, then the government, in view of the general feeling throughout the country, owes it to the community to give some means of finding out whether such a cause actually exists or not and if so of providing the necessary protection to the consumer.
_ Another point I would like to make clear is that trusts and combines may not be infurious, that in some respects they may be profitable. That is a point that has been raised. This legislation is in no way aimed against trusts, combines and mergers as such, hut rather only at the possible wrongful use or abuse of their power, of which certain of these combinations may be guilty. To illustrate the possible advantage of these large combinations of capital, I shall quote an advertisement Mr. KING.
which I find in one of the local papers, relating to what is sometimes spoken of as a combine, the Canada (Cement Company, Limited. I find in the ' Citizen ' of December 11, 1909, the following advertisement:
WHAT IS THE CANADA CEMENT COMPANY, LIMITED?
Then it describes it as:
an amalgamation of eleven of the twenty-three cement plants as follows:-(enumerating them.)
It continues in large letters:
Note the territorial distribution of these plants-from the St. Lawrence to the Kocky Mountains. Obviously in a business where the demand extends from ocean to ocean, there are economies in filling orders from the nearest available plant instead of shipping half across the continent. This explains one purpose of the organization of this company.
Clearly what is stated in the advertisement is absolutely correct. There are obvious economies in filling orders from the nearest plant instead of shipping half across the continent. But the question the country is asking is: Where have we seen of the result of that obvious advantage? That is one of the questions which we hope this legislation will help to answer. In the Ottawa ' Citizen ' of December 14, 1909, other advantages are set out in an advertisement headed:
Useful vs. useless competition.
It says:
But there is a form of competition that, is wasteful, useless and harmful. To illustrate from our 'own business. If each of eleven cement mills maintains selling agencies in every part of Canada and ships its products to the most remote points, the aggregate cost on this score is obviously greater than if there were only one selling organization, and all orders were filled from the nearest mill.
Who pays the cost of excessive competition? Ultimately the consumer must pay it. Eliminating the excessive cost of this wasteful competition will enable business to he done at a reasonable profit with ultimate savings to the consumer through reductions in price.
These are obvious examples of the good which large consolidations of that kind could bring with them, and I think that if the public find they are getting some of the benefits of these obvious and inevitable consequences of large organizations, they will take no exception to them; but they want to feel sure that the machinery exists somewhere whereby they can be assured that they are getting, within reasonable bounds, some of the advantages -which are so inevitable.
The Hamilton ' Times,' referring to the alleged projected merger to be known as the ' Dominion Canners' Association, Limited,' has the following:

In regard to the object of the merger, it is said by the manager of the Canadian Canners' Association, that the purpose is to keep the cost 'of productoin down, by which the consumer would also benefit. One of the reasons of the merger, is, he said, that competition had greatly affected the trade, the race having been for the cheapest product, but not the best. That would be overcome as more advanced methods would be applied and only the best .produced, so that the public would be assured of the quality of what they received.
Similarly, an article in the Toronto ' Globe ' of January 31, referring to the new combine to be known as the Amalgamated Asbestos Corporation, Limited, has the following :
One of the chief aims of the association will he the exploitation of the use of asbestos in fireproof construction.
There is no doubt that these large organizations have opportunities of furthering the business in which they are engaged that would not be open to a smaller concern. They have facilities to get into otheT markets, and if they use those facilities in such a, way that the general public get some benefit out of it, as well as the organization itself, the public antipathy to them should, be greatly lessened.
An article of the Toronto ' Star ' of February 16, referring to the alleged combine of large firms engaged in the fish business on the Atlantic coast, has the following:
The authorized capital of the new company will be $1,000,000, and it will aim to make the fresh fish business of Nova Scotia of national importance. The Bank of Montreal is behind the scheme, aud controls the Atlantic Fisli Company.
Clearly it is the interests of the fish trade on the Atlantic coast to in every way get for its product as large a market as possible. The more the fish business is developed in the maritime provinces, the better it should be, other things being equal, for the people of these provinces, and the more you look into the question of these organizations the greater the reason for belief in the possibility of good to the consumer provided there be some means of effective control.

Topic:   COMBINES INVESTIGATION ACT.
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