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


William Folger Nickle



No person would contend that in peace times a profit of less than twenty cents on a barrel of flour was an unreasonable profit. If the aggregate war profit was taken into account, and the profit on the individual transaction was so small that it cannot very well be reduced without turning an aggregate profit into a substantial loss, it was only fair that that initial profit should continue, but the State then should take a very substantial proportion of the large aggregate profit made by these industries. It is unreasonable to argue that, because the potential efficiency of a great organization enables it to make a tremendous profit on small initial transaction profits a most substantial portion of the profits should be left to the industry. In abnormal times it is reasonable to contend that the industry should be allowed to retain reasonable profits on its efforts, but the effort of the people which led to the great aggregate profit being made should be taken into account by the great proportion of that profit being taken for the benefit of the State.
A gentleman interested in the manufacture of munitions informed me that by the cheapening of the process by which a cartridge case was reduced in cost by three cents, his profits were tremendously increased. His profit on the individual transaction was only triflingly increased by the three-cent reduction but it was tremendously increased by the percentage computation. Applying those small initial profits to a tremendous output he made a tremendous profit, a profit beyond all conception when compared with that which he hoped to make when he entered into the contract that gave him such a substantial return.
When you come to consider the high cost of living, there is another factor which is sometimes left out. It is the profit made by the merchants in this country as distinct from the manufacturer. When the war broke out our wholesalers had substantial
stocks on their shelves and the stocks of the retailers were, generally speaking, in a fair state. No sooner had war broken out than there was a steady increase in the value of those stocks and I suppose, so long as human nature is human nature a man will take all the traffic will bear. That is, if an ever-increasing cost makes the wholesaler demand more from the retailer than the amount that the retailer originally paid for the commodities, the retailer who has the goods on his shelves and the wholesaler who also has his shelves well stocked, will endeavour to take from the people all the traflfic will bear. In other words he will ask what he could get for the new goods supposing he had to buy them from the manufacturer or the jobber. That is exactly what took place in this country. The .stocks of the wholesalers were sold at much more than they cost and the stocks of the retailers brought substantial profits to them.
There are some very interesting paragraphs in the fuel controller's report issued this year. The fuel controller was interested in showing that the price of coal had not increased in proportion to the price of other commodities. I have directed the attention of the House to the fact of the tremendous increase there was in the export of natural products of this country, and I should like now to put on record the great increase there was in value of various articles in Canada. For instance, anthracite coal, taking 100 as being the initial price in 1900, went up from a price in 1914 of 140 to a price in 1918 of 195 or thereabouts. Lumber from an initial price of lt)0 in 1900 and, about 180 in 1913 went to 265 in 1918. Leather -a natural product, the production of which could not rapidly be increased because it takes a certain number of years for the animals to reach maturity, went up from 150 in 1914 to 267 in 1918; drugs and chemicals went up from 135 in 1914 to 287 in 1918; animals and meats from 190 in 1914 to 350 in 1918; dairy products from 155 in 1914 to 262 in 1918; grains and fodders from 160 in 1914 to. 317 in 1918; fish from 160 in 1914 to 250 in 1918; miscellaneous groceries from 130 in 1914 to 262 in 1918; woollens from 140 in 1914 to 410 in 1918! Now if you will turn to page 107 of the Fuel Commissioners's Report you will find a very interesting graph prepared by an American lady showing the prices' of commodities in America during the Civil and Franco-Prussian Wars. You will see that during all wars that lasted for any period prices of natural products and other goods inevitably rose in the affected countries.

From 1862 to 1864 during the American War prices there reached an abnormal level; then there was a very rapid slump at the cessation of hostilities, and a steady decline, with one rise, until 1897, when the lowest price was reached. Then there was an increase, practically a steady although a varying increase until 1914, due to the industrial prosperity of the United States and Canada and the entire world.

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