Mr. C. E. JOHNSTON (Bow River):
rising to speak to this resolution may I say first that I appreciate the attitude of the Minister of Trade and Commerce (Mr. Euler) in his endeavour to cooperate with all parties in a constructive program. I wish also to commend the leader of the Cooperative Commonwealth Federation party (Mr. Woods-
Cooperative Commonwealth-Mr. Johnston
worth) for his efforts towards the betterment of human society. Whether his views are in accord with our own way of thinking is a different matter, but constructive criticism at all times makes for the good of mankind, which is what we are after. However I do not think a debate on C.C.F.-ism versus Conservatism or Socialism is a very constructive attitude to take in the house. We are all of opinion I am sure that conditions should be rectified, and it is for that purpose that I stand here now to offer a suggestion or two on this question of the socialization of industry. Personally I am, and I think my party are, adverse to the socialization of industry. We see no advantage in that.
Turning to the resolution, it begins by saying:
Whereas, the concentration of economic power in the hands of a comparatively small and irresponsible group has failed to provide security and a decent standard of living for large numbers of our peo-ple;
So far I believe the resolution is quite correct. Through concentration of economic power we have arrived at the disastrous condition that we find ourselves in to-day, and if we concentrate our efforts on that one point I think it would improve our chances of success and be for the betterment of all. Then there is the remaining part:
That, in the opinion of this house, indus- . trial, commercial and financial organizations-
I should like to omit financial organizations for a moment in my argument-
1-and undertakings that are failing to function in the general interest should be taken over by the appropriate public authorities and operated as public services or cooperative enterprises.
That part I do not agree with; I think it is wrong. I admire the courage of the leader of the Cooperative Commonwealth Federation; it takes courage to stand up and express your ideas, whether right or wrong. But we do not agree with the socialization of industry for various reasons. The suggestion conveyed is that industry is at fault. The function of industry is to produce, and I think if we look over our industrial system we find that production is not at fault. I think all hon. members will agree with me when I say that we are producing an abundance of goods; the fault does not lie there. The very fact that in the west we have a large number of cattle which we cannot consume and must ship to the United States to be consumed there shows emphatically that we are not suffering from lack of production of stock in the west; there can be no doubt about that.
Then, we are not suffering from lack of production of coal; we have plenty of it in
the west. We are not suffering for want of many commodities which we produce in western Canada. What we are suffering from is the fact that we cannot exchange those products for articles produced in the east. I believe the greatest concern in connection with industrial control lies in manufacturing; that is one of the industrial matters with which we are most seriously concerned. If we look at the industrial field we find no lack of goods produced; in fact some industries are so well equipped with modern machinery that they have to close down because they cannot get rid of the goods they are producing. Production is efficient, and we cannot say that the fault lies with production. Whatever the fault may be I think it does not lie there. Only a few days ago in this city of Ottawa I was in one of the dairies where they had introduced a new machine which would displace eight men. So we see that by the introduction of modern machinery it is possible to produce much more than we are producing, and therein does not lie the difficulty.
The fault does not lie with our people here in Canada, although many of the unemployed were told last year that they would not work if they were given an opportunity. I beg to differ with that statement, because I believe the majority of people unemployed are not of that calibre; they have endeavoured to their utmost to gain employment. So, if lack of manpower is a factor, then we have no difficulty in that regard. That, however, is not the difficulty. Speaking of unemployment I am reminded that not many days ago a job was advertised over in Hull, and so many people applied for it that it was necessary to call out the police to keep the crowds back. In a short time the job was filled, and such a large crowd had assembled that the police had to be used to keep the people away. Under those conditions you cannot say that the unemployed would not work if they had the opportunity. The fault does not lie there.
I believe, sir, the difficulty with which we are faced to-day is one of distribution. Having heard the Minister of Trade and Commerce, I am convinced that he is sincere in his endeavours to ameliorate these conditions to the best of his ability. That is his problem, and I wish him well in his work. I repeat, however, that the difficulty arises in connection with the distribution of the goods. If the government can devise a way to distribute those goods-and they are going to endeavour to do so
then, to a great extent, they have solved the difficulty. In fact, if they can work out a method whereby they can distribute the goods we produce I believe I may state definitely that they have solved the diffi-
Cooperative Commonwealth-Mr. Johnston
culty. The very fact that we are shipping goods out of Canada when we have hundreds of people in this district suffering from starvation and requiring food and shelter is significant that our difficulty does not lie abroad; it is right here in our own country. That is where we must cultivate our market, before we look to outside markets. Does it not seem ridiculous to attempt to obtain foreign markets for our wheat when there are people in this city who do not consume as much wheat as they could consume?
Only last Saturday a young fellow came to my door, and he was not a 'bum, by any manner of means. He did not have a place to sleep,1 or anything to eat. Thinking he might be one of those whom I had heard described, namely, one of the men who would not work if given the opportunity, I called the mayor of this city and asked him about the case of this young man. He told me that there were several cases like that, cases of young men who were very much in need. He suggested that I telephone the Union Mission and, taking his advice, I telephoned as directed. I learned that the story the young man had told me was true. We arranged to get a bed for him that night, and he told me that he would be only too willing to go out to work. This type of men should be cared for and should not be forced to accept charity, when we have in Canada many men who, while they do not, from the standpoint of either manual or mental labour, earn the money they receive, yet receive large dividends. I am not blaming them for that. I do however blame the system under which that condition of affairs can exist.
The distribution of goods is the one evil with which we have to contend; it is an evil which does not lie with the producers. It is not the fault of the producers that distribution is not effective. The only purpose of a producing plant is to produce goods. If the producers received a fair commission for their work I do not think, as the hon. member for Cochrane (Mr. Bradette) has said, they would begrudge a portion of the profits going to the suffering people. Whether he be a rich or a poor man, if he were at all intelligent he would not endeavour to rob the common people, a procedure which in the long run would not be to his advantage. As the Minister of Trade and Commerce has said, we cannot expect to carry on in a country which is. half slaves and half free men and we must admit, sir, that the unemployed people are practically slaves. I do not know in what other way they could be described.
In that regard, therefore, the minister and I are in full accord when we agree that we cannot carry on a government in this or any other country unless we change that system, and change it right away. I am sure he has a very strenuous task on his hands.
I said a moment ago that the producers were not to blame. I believe it would be safe to say that the producers do not own the goods they produce. That statement may sound a little absurd on the surface, but in the majority of cases the producers are producing goods on borrowed money, and if they cannot sell those goods to consumers they must go bankrupt. I believe that is sufficiently clear, and it is also clear that they do not even own the goods they produce. . They did not intend to own them. They could not eat all the goods they produced; they could not wear all the shoes they produced, and in the final analysis those goods belong to the people; the consumers own them. Unless those consumers are provided with purchasing power-and I do not care in what form you have it-unless they are provided with purchasing power, I cannot see how we shall solve the difficulty. If 'the Minister of Trade and Commerce and the government, or any other body, can put that power into the hands of the people, possibly through public works or through developments in industry, they have solved the difficulty. They have promised the people of Canada at least to some extent to alleviate their distress, and if they can do that they will be going a long way. However they must put that purchasing power into the hands of the people so that they may buy goods from those who produce them for consumption.
Now we come to the question of distribution. I think no one will deny my statement that there are a great many abuses in our system of distribution, and that once we solve some of these abuses of the distributing system in our capitalistic organization or, as the resolution has so aptly put it, "economic power," then we have got to the bottom of our difficulty. The great trouble that I see is lack of a proper demonstration of government control. I believe it would be foolish for the government to go into business, from the standpoint of government business.
Electricity has been mentioned to-day, and that brings to my mind a government-owned electrical power plant in the United States, the Tennessee Valley Power Association, which by efficient management can sell electricity for industrial purposes for eight mills per kilowatt hour. That is getting the rate down to a point at which people can use electricity.
Cooperative Commomvealth-Mr. Johnston
In the west we pay ten cents per kilowatt power; in addition there is a little meter on the wall and when a man comes to read it we are charged $1.50 for that, in addition to a few other charges. Yet this organization in the United States can sell the electricity it produces at eight mills per kilowatt hour for industrial purposes. In the west we have many electrical appliances that we could use if we could only get power more cheaply, but the cost is so high that when we go from one room to another in our homes we have to turn out the light. I know that people down east do not have that problem, and if we were provided with purchasing power so that we could use that electricity for lighting, vacuum cleaners, stoves and engines, we would be using ten times as much as we are to-day. But we cannot use it because we have not the ability in the form of purchasing power.
I am told that in some industrial plants in Montreal which used to employ a great deal of help they have introduced machines for rolling cigarettes, for instance, and that they can roll 700,000 per day. That is quite right. At the same time this displaces hundreds of workers. But the producers are not to be blamed for introducing such a machine; it is something commendable to introduce a new type of machine which will displace labour. That is the purpose of a machine, and the only purpose as I see it. But when such a machine displaces large numbers of people, to whom does the profit which that machine makes belong? Is the producer going to throw those people out on the street and say to them, "I am a millionaire running this factory, and I am making a profit of one million dollars a year. But now I am going to instal a machine that will make my profit two million dollars a year and that will throw out of work hundreds of men." That is a mistake of policy, not a mistake from the producer's standpoint, and the government should be strong enough and willing enough to go to the producer and say: You cannot do that because it is the wrong system. You must take the earning power of that machine and distribute it among those workmen that it displaces. In some way or other producers should be made to compensate their workmen who are thrown out of work as a result of the introduction of these new machines. Can we simply allow these men to be thrown out on the streets and say to them: You are charity-seekers; you are bums? It is no fault of theirs that they are thrown out of employment, and the government has a responsibility towards them. I do not care if the government look after them through public works or through the development of industry, although I would ask:
What is the Use of developing industry further when our industrial plants are now producing more than we can use? We have to sell our goods in foreign markets, while the very commodities we ship out of the country we need right here in Canada. That does not seem like good business to me. The trouble is lack of government control.
Look at the automobile industry, not the producing end of it, because everyone will agree that many more automobiles are produced than can be sold. There is no reason why the factories should not run day and night, if necessary, but at the present time they are producing many more automobiles than we can possibly use. Let us, however, consider that industry in relation to the tariff. We shall never solve our difficulties by a higher or lower tariff for the simple reason that the government does not control tariffs. There again we have lack of government control. In the west last year we paid $1,244 for a master Chevrolet sedan. What do we pay this year? There has been a reduction in the tariff since last year, but we pay $1,244. Since I came to Ottawa I went into the Chevrolet rooms on Sparks street, and I asked the price of the same car in this city. The price is a little lower than in the west, and I asked the agent what the same car cost here last year. He said, "The same price. There was a reduction of from two to fifteen dollars after the new tariff came into effect, but you will remember that last year we raised the price in the fall twenty dollars." There, again, is lack of government control.
I think of that industry at Sherbrooke which the government is investigating, and quite properly so. I do not say that the government should take over that industry, but we saw what happened when the government intervened. The plant had been closed down throwing hundreds out of work, but as soon as the government announced that there was to be an investigation the plant was opened up again. The owners knew that government pressure was going to be applied. But I doubt whether the whole trouble has been removed; that remains to be seen. I hope the government does the right thing, and if upon investigation it is found that conditions need rectifying I hope it will see that they are rectified immediately.
Last year we had what is called the Stevens investigation, which found many abuses existing in the industrial system. Yet the government to my knowledge has done nothing to rectify those abuses. The government, of course, does not need to go into an automobile industry and say how much air shall be
Cooperative Commonwealth-Mr. Johnston
put. into a tire or how many bolts shall be used in an automobile or dictate the proper way of putting a burr on a wheel. That is technical work that technicians are hired for. But it is the business of the government when they find that abuses exist in the tobacco industry, for instance, or in other industries that were investigated by the Stevens commission, which cost the country hundreds of thousands of dollars, to see that those abuses are rectified.
What happened in connection with the tobacco industry shows what will happen when these industrialists know that the government will investigate unfair conditions and act upon the results of that investigation if there is anything found to be wrong in the industry. The hon. member for East Kootenay (Mr. Stevens) on his own initiative went into different industries and pointed out unsatisfactory conditions. The owners of those industries knew there was a latent force behind his warning when he pointed to conditions that should be rectified, and they rectified some of the conditions themselves, but they did not rectify the giving of a bonus of $65,000 to men already in receipt of salaries of $25,000 and $30,000 a year. There again is a wrong principle, a principle that should be corrected.
I repeat: We do not want the government to take over every business in the country, because no government controlled industry will do as well as will a privately controlled industry. A man who puts his own capital into a business is going to see that he gets a good manager, good mechanics and good machinery, and he is going to take proper care of the upkeep of his plant. We have had some experience of government owned business, and we know it is not as efficiently conducted as is privately owned business. Suppose that some of these industrial plants refuse to operate in the most efficient manner. Then it might be necessary for the government to take control of them for a time at least, but only in case of necessity. Some people may say that these industries are not making excess profits. I think the Minister of Trade and Commerce (Mr. Euler) said that they were not making such huge profits; that the industrialists were not all millionaires. That might be very true, but nevertheless we know that in this present century, under our present system, there is a great deal of depression and men are suffering from lack of sufficient food and clothing. No one is satisfied with conditions as they are at present.
Dealing further with this question of profits, I should like to quote from a newspaper article
dated Ottawa, December 20. This article states that the dividends paid by Canadian textile firms totalled 116 per cent. These were profits and I contend that 116 per cent profit is entirely too high. This does not infer that the business is not profitable, just the reverse. It is stated that the highest wages paid by this industry were $15.71. This is the fault of the system; it is not the fault of the producing plant. It might be the fault of the management, and this might be an instance where government control could be applied very efficiently. It is stated also that the profits of six companies were $2,580,000 more than they were in 1929. Here is another instance where government control could be applied most effectively. It has been stated that our plants are not modernly equipped, but I noticed an article the other day headed "Canadian steel marches on." I venture to say that nowhere in the world can you find an industry better equipped than this one. I am told that this industry uses ninety-three per cent of Canadian materials, a fine record.
Prohibit entirely, if you will, goods coming into the country; make your tariff walls as high as you like; this does not bother me. If you want to protect your market, well and good, but do not erect tariff walls to protect the men who are already exploiting the people. When a condition like this is found to exist, it should be rectified. Have your tariff walls to protect your markets, not your financiers. This again is a question of policy. The other day at the Chateau Laurier I listened to a very intelligent speech-excuse me, I should not say "intelligent" as it was the most uneducational speech to which I have ever listened. I think the gentleman who made the speech had an "honourable" before his name, but I do not think it was very honourable of him to refer to the Premier of Alberta in the terms in which he did. I think everyone respects the Premier of Alberta for both his religious and economic beliefs and I do not think it is fair to refer in a derogatory manner to a man who is 3,000 miles away and cannot speak for himself. If he had been there I am sure he would have made the speaker feel like a fool. This man attacked the Premier of Alberta because of his efforts to better the conditions of the people while right beside him sat a gentleman who is about to alter the policy of one of the greatest financial institutions in the Dominion of Canada, The speaker did not say a word about him because he was sitting right beside him. What is sauce for the goose should be sauce for the gander.
I should like to read from a little booklet entitled: Stevens' Booklet or The Book That Bennett Banned-Complete Text of Stevens'
Cooperative Commonwealth-Mr. Johnston
Talk. Our main difficulty lies in the control of policy and not in the control of production. Our problem is the merging of these large distributing and financial corporations. These octopuses have got hold of our distributing system and are choking the very life blood out of us while we sit back and let them do it. One paragraph in this booklet is entitled: Powerful Groups Dictate Price, and reads:
At the same time, by -this process of merging, there have been erected powerfully strong groups which are able to dictate prices to the person who sells, whether it is the farmer selling to a packer or a tomato grower to a canner, or a boot and shoe or clothing manufacturer to a big distributor, with the result that the producer of foods is forced to sell his goods not on the market where merit and value will prevail, but where the price is dictated by the person who buys.
I can say this, I think, with absolute confidence, generally speaking, that because of the domination of certain retail institutions in this country, the price is fixed at the ultimate end, when it goes to the consumer. They say, we want an article that will sell at $16.50 or $40, or $50, or $10 as the ease may be. We want an article that will sell at that price.
That is their start, and when they take overhead, and their overhead has been enormously increased, wages and this, that and the other thing in distribution until they get clear. _
Then they say, "That is what is left for you, Mr. Farmer, or Mr. Manufacturer; do what you can with it."
One of our greatest difficulties is the control of policy. This has nothing to do with manufacturing. Our industries are efficient and if we continue to permit the men who produce to sell all the goods they produce, they will make more profit and be able to sell at a fair price because of their increased turnover. I should like to make one more quotation from this booklet. There is a paragraph entitled A Bull-dozing American Buyer, which reads:
In 1930 they paid 33 cents a pound for this flue-cured tobacco in western Ontario, which was a profitable figure.
In 1931 they brought a man up from the United States called Lea, who had been used to buying tobacco from negroes in the south, and was a typical bull-dozing American buyer. They brought him up and put him in charge of buying in Canada, and in the fall of 1931 they just cut rates that they paid the grower down sharply from 32 cents and 33 cents to 19 cents.
That was a case of interfering with the policy of a company; it had nothing to do with the manufacturing of that product; the policy was changed to take it out of the producer and put it into the hands of the profiteers. That is the wrong attitude to take and I cannot see where we can make any headway unless we get away from such antiquated ideas.
There are many dangers in the nationalization of industry and some of the arguments heard to-day are valuable in that they show a way to avoid these dangers. We want constructive, not destructive criticism. The resolution refers to the concentration of economic power. When administration is consolidated with producing and distributing you have an amalgamation which it will be very difficult to break. Unless the government intends to go into business they will have to be very careful; they may have to take over all these different industries and do the best they can with them. They may have to take them over at a great loss, just as they had to do with the railways, unless precautions are taken against the conservation of these economic powers. When the government takes away the power of an individual to look after his own plant and substitutes someone who is working for a salary and who is not concerned with whether or not the business prospers, then it is looking for trouble. Political pull will also enter into the question, and we all know that such practices are being carried on and probably will be continued as long as we live. When we have distribution, producing and everything else concentrated in the hands of the government, there will be a possibility of all kinds of deception, more so than if it controlled merely the policies of these industries.
The other evening I noticed a newspaper article entitled Term in Prison for Operators of Pepper Pool. We read that two promoters have been sentenced to a year while a third has been given nine months. That is one way of exercising control. There is no use, when you find an offender against a policy, having the judge give him a calling down or something of that sort. You must do something such as they did in France in connection with the Stavisky swindle; they made the swindlers pay back the money that had been stolen. I suggest to the government, so far as controlling policy is concerned, that whenever such revelations are made as were made by the Stevens commission they should say to the guilty parties: You have abused the privileges we have given you and you shall therefore pay back to the public the money that you have unfairly taken from them. And if a year or two in gaol on top of that were added to the punishment, I do not think it would be long before we would have industries producing and distributing in a very efficient manner. That, I believe, is our solution.
Cooperative Commonwealth-Mr. Douglas
Topic: COOPERATIVE COMMONWEALTH
Subtopic: CONCENTRATION OP ECONOMIC POWER-PROPOSED PUBLIC OR COOPERATIVE OPERATION OF UNDERTAKINGS FAILING TO FUNCTION IN THE GENERAL INTEREST