June 2, 1921 (13th Parliament, 5th Session)

L LIB

Isaac Ellis Pedlow

Laurier Liberal

Mr. PEDLOW:

I do not think the hon. member for Shelburne and Queen's (Mr. Fielding) overstated the case in regard to the question of the enhanced value of importations for customs purposes. In the

Weekly Bulletin for May 9, last, issued by the Department of Trade and Commerce, the value of the mark, as at May 4, is given at 1.7, and you would require seven times the present value of the mark to equal that 50 per cent, or, in other words, seven times the duty. So that if you import woollen goods, instead of a duty of 35 per cent, you would really pay seven times that or 245 per cent of a duty on merchandise, which is absurd. This law is based on a wrong presumption. I have here a copy of an extract from the Dry Goods Economist, one of the best trade publications in the world. It is dated Saturday, April 30, 1921, and I shall read extracts from an article headed "Foreign Currency Inflation and Commodity Prices." This article says:
The presumption on which this provision rests, presumably, is that prices of merchandise in other countries, as measured in American currency, have declined in proportion to the depreciation in the currency of those countries. In other words, it is argued that while an American exporter can buy a German mark for 1.6'0' cents <he can go into Germany and obtain for it 2,3.8 cents' worth of merchandise- which is the normal exchange value of the mark.
Such a presumption is based on entire ignorance both of economic laws and of the actual facts in the case.
An extreme illustration is the story of the Moscow cabman, who wanted to charge an American traveller the equivalent of $50 in roubles for driving him less than a mile from the railway station to a hotel, but who finally compromised by accepting a package of cigarettes instead of the money.
In the course of his statement the Appraiser pointed out that linens from Germany, for example, have increased in value in marks, over 1914 prices, approximately 2500 to 3!000 per cent, or 58 per cent in United States gold over pre-war prices in United States gold ; that German chinaware selling before the war at 4 marks is now sold in the home market at 60 marks, and that the price of German cutlery has increased about 2500 per cent in marks, or 50 per cent in United IStates gold as compared with pre-war prices in United States gold.
The German mark is now worth approximately one-fifteenth of its pre-war value, the members of the Association are paying for goods which they import from Germany from fifteen to eighteen times the pre-war prices of the same goods. Invoices of cotton hose and ladies' gloves imported from Germany in 1914 and in 19'21 by Marshall Field & Co. show even greater price increases-in German marks as well as in American dollars. Cotton hose have increased 2000 to 3000 and more per cent in German marks and 50 to 100 per cent and more in American dollars; increases in women's gloves run as high as 4000 per cent in German marks and 100 to 300 per cent in American dollars. .
In the face of these facts it is proposed in the anti-dumping section of the Emergency Tariff Bill to value the German mark for customs purposes at five times its present actual value.
On the basis of such a valuation the duty assessed on imported articles would in many instances amount to much more than their total price.
The practical effect of such a measure would be, of course, to stop altogether the importation of goods from those countries. If this is its purpose, if it is really intended as an embargo, it would be better to say so frankly, so that its nature would be clear to the eyes of the country. It is not likely that the country would stand for a commercial boycott against nations whose economic rehabilitation is essential both to our own prosperity and to the prosperity of the world at large.
It is to be hoped that this clause will be dropped from the Bill, for it is in the highest degree stupid and objectionable.
I might just add that this clause has been dropped entirely from the American Bill, owing to the protest which it aroused from both the consumers and the commercial interests of the United States and I would make an appeal to the Government to give the matter more mature consideration before deciding to enforce such a clause. When the provisions of the Bill become effective they will practically prohibit importations * from foreign countries altogether. The member for Brome (Mr. Mc-Master) raised a point, I think a very opportune one, in this connection, and that was as to how these countries in Central Europe are going to obtain the opportunity of rehabilitating themselves. If outside countries cease to do business with those countries, then the position of affairs in Central Europe will be hopeless-I do not think there will be much chance for them to re-establish themselves unless they receive assistance from the outside.
Some time ago the Minister of Finance quoted many authorities in support of his policy as embodied in this Bill. He endeavoured to show that the policy of Germany was to sell all she could. Let me say to the minister that even that be true such a policy is not a crime. I think the Canadian manufacturers would do well to follow the example of Germany and sell all the goods they can both at home and abroad. In fact it would appear to be the policy of the Minister of Trade and Commerce to encourage that idea in the mind of the Canadian manufacturer, and not only that but to assist him in extending his trade in all parts of the world. The Minister of Finance referred to the fact-and it is true [DOT]-that the Germans were able in some respects to undersell the British manufacturer and manufacturers elsewhere. The item of hooks and eyes was cited and it was mentioned that whereas the German manufacturer could produce hooks and eyes for

4!d. per pound, the wire alone in England cost 6d. a pound. There must be something wrong with the British manufacturer or with British workmen when such a thing is possible. From my knowledge of the subject, and from my reading, I have come to the conclusion that the British workman is not living up to the record which he had in past years-I refer to his pre-war record. I think that in a measure he is lying down on the job, and that accounts to a great extent-much more so than the reason assigned by the Minister of Finance -for the great disparity in the cost of production in the two countries. If it is a fact that Germany is selling merchandise the world over for Jess than that merchandise costs, it reminds me of the old woman who kept a stall in the market place in the city of Dublin. This old woman made a specialty of selling socks, and she always maintained that she sold those socks for less than they cost her, which accounted for the large business she did in socks and for her success as a business woman. I transmit that as an idea to the Minister of Finance when he says that Germany is making a success the world over by selling goods at less than the cost of production. In this connection I am reminded of one experience that Germany had on the sugar question many years ago. The Germans decided to pay a bounty on the sugar that was exported from Germany to foreign countries. Of course the effect was to drive the manufacturers of sugar in England out of business. But what happened? The sugar manufacturers in England turned round and bought the German made bounty-fed sugar, manufactured it into candy and sold it in Germany at a lower figure than the Germany manufacturers could produce the same article for. That is the way the thing works out. I will not follow thfe Minister of Finance in the remarks he has made with reference to the cost of living in Germany as compared with the cost of living in Great Britain and other countries. I still insist it would be a wiser method to discard all camouflage and prohibit importations altogether, because that will practically be the ultimate result of this enactment.

Topic:   REVISED EDITION. COMMONS
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