July 3, 1919 (13th Parliament, 2nd Session)

UNION

William Folger Nickle

Unionist

Mr. W. F. NICKLE (Kingston):

When I came into the House this evening, Mr. Speaker, I must frankly admit, I had no intention of speaking on this matter, but as it has become a sort of free-for-all I should like to express one or two ideas before the Acting Minister of Justice closes the ddbate. In the first place, it seems to me that hon. members are somewhat careless in the way they interchange the expressions "profits" and "prices," and I think it is well we should keep clearly before the country that there is a clear distinction between these terms. I also think that perhaps it would not be unwise if the attention of the House and of the country was directed to the industrial progress, very briefly referred to by the last speaker, that has taken place in Canada during possibly the last twenty-five or thirty years. Prior to that time we had what I might call isolation in manufacturing. There was no place in Ontario of any importance where there was any waterpower that you could not find the small grist mill, which gathered about it other incidental industries. It was the day of small industries and very little machinery,
and most of the labour was by hand. But an industrial centralization took place by which there was the centralization of capital and the centralization of labour incidental to manufacturing. That centralization of capital and labour had a tremendous potential efficiency, due to the fact that highly organized and very delicate and rapid working machinery was introduced for the purpose of decreasing the cost of production. In this country from 1890 on, to be rough in one's dates, there has been a great era of industrial prosperity. Large amounts of capital had been brought into the country by way of borrowing for the purpose of carrying on municipal and other works, we had built two transcontinental railroads, ;to say nothing of the extensions to the third, with the result that we had great prosperity. There are those in this House who will -emember that in the spring of 1913 and from then on until the autumn of 1914 there was a decided industrial reaction, due to_ the fact that there was not the industrial activity that had obtained prior to that date.
By 1913 our two national transcontinental railways had practically reached completion; money was not being spent on them; the people were beginning to say that we were entering a period of bad times-bad times, because as much money was not being put in circulation as had been prior to that time. In August, 1914, the war broke out. At that time supply and demand, so far as the manufacturers of this country went, were pretty evenly balanced. The supply, provided the industries had been worked to the maximum of their capacity, was probably greater than the demand; but keen competition and the fact that each industry had its own customers, made the majority of the industries in this country capable of meeting the demand that was made upon them. [DOT]
When the war broke out, or within a few months following its outbreak, there was a decided slump. Work was slack in this country and there were many who thought that we were closing in on a period of industrial stagnation and severe hard times. In my own riding skilled workers in the steel industry who had up to that time been getting reasonably good wages, found themselves out of employment and were willing to work for labourers' pay because other wages could not be had. But suddenly the whole scene was changed by the demand that was made on Canada for the supply of munitions to meet the wants of the Allies; and the prices of these munitions were not

so much the question as prompt supply, because it was realized that if defeat was to be kept away, munitions had to be supplied in large quantities and promptly. Now, what happened ? All our steel industries within a few months were at the full of their potential efficiency. Steel industries that had been engaged in one type of manufacturing were as promptly as possible changed to another; men who had never worked in the steel industry were suddenly called into demand, with the result that men left other industries to take up the making of munitions. The demand for labour was greater than the supply, with the result that wages increased, and as wages increased prices went up, because a great many men who had been engaged in agricultural pursuits had gone to the war, while others, as I said a moment ago, left those pursuits to enter industry. There were not enough agricultural products to go around; consequently, prices advanced. Then, when the shortage of labour was more acutely felt, competition for labour became keener and there was a steady increase in the wages that were paid. Fifty million men from all parts of the world who had previously been engaged in industry and in agricultural production were taken to the war-not, if the whole truth be told, all at once; they were gradually taken away from productive labour. Canada gave, in the net result, some 500,000 men, but in the early days of the war we had under arms probably
100,000 or 150.000 men, the supply of foodstuffs that should have been kept up gradually became less, owing to the fact that fewer men were engaged in production and the supply available for 'Canada became still less because -the Allies abroad were taking our supplies and our people at home were consuming more than they had previously consumed. It is an economic law that when wages are high and people have spending money, consumption will be great and we have what is commonly called good times. The reason is simple. Money is only a medium of exchange. Those countries that are on a gold standard have practically said that gold, in its relation to the other commodities, bears a fixed ratio; and they have made the dollar the initial value of exchange. "Price" is only the statement in money of the value of an article; "cost" is the value in money of what it takes to produce an article; "profit" is what you can sell an article for in excess of what it costs you. Now, as I said, prices went up. If you ask me why prices went up, I direct
your attention to some figures that appear in the Canada Food Board report. At page 13 the following figures are given: in 1914-15 the total export of foodstuffs from Canada was $187,000,000. In 1915-16 this amount was increased to $332,000,000; in 1916-17 it was increased to $482,000,000 and in 1917-18 it was increased to $710,000,000
Mr. MoMASTER: Has the hon. gentleman the figures before him to show the increase in weight or number of the exports? My feeling is that the increase is rather an increase in the value of the exports than an increase of the exports themselves.

Topic:   SUPPLY.
Subtopic:   BOARD OF COMMERCE ACT, 1919.
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