BUSINESS & INVESTMENTS

TINKERING WITH ECONOMICS A DANGEROUS PRACTICE IN REHABILITATING COUNTRY

J. HERBERT HODGINS June 1 1924
BUSINESS & INVESTMENTS

TINKERING WITH ECONOMICS A DANGEROUS PRACTICE IN REHABILITATING COUNTRY

J. HERBERT HODGINS June 1 1924

TINKERING WITH ECONOMICS A DANGEROUS PRACTICE IN REHABILITATING COUNTRY

BUSINESS & INVESTMENTS

J. HERBERT HODGINS

THE West’s dominance in the Dominion’s economic rehabilitation has cropped up, again, for debate. The Manitoba Free Press started the argument. It takes the position that the pressing national problems of Canada have, chiefly, to do with the western section. It argues that “what is principally wrong, with Canada, to-day, is that the West is not playing that part in our national economy, which it did when Canada was going ahead, and prospering.”

The Toronto Globe considers “it is open to Eastern people to contend that this exaggerates the importance of the West.” According to the western view, the growth of Ontario and Quebec, in the first decade of this century, was the direct consequence of the rapid development of the West and that to-day Eastern Canada is beginning to feel the effect of the slowing down of western development, “the diminishing almost to a vanishing point of the western Canadian farmers’ purchasing power.”

No one will dispute the amazing progress which Canada registered in the first ten years of this century. It was a period ■of unprecedented development. The increase in population was as great as in the preceding thirty years. There was an extraordinary volume of immigration, and a rapid settlement of the prairies, which brought about the creation of two new provinces. Concurrently, there was remarkable growth in the manufacturing industry in the East, the immediate effects of which were seen in Montreal, Toronto and other eastern industrial centres. Factory products increased in that period from $481,000,000 to nearly $1,166,000,000.

Two Possible Causes

THERE were two possible causes of this ' industrial development, in the opinion of the Toronto Globe, which says: “One was the new Fielding tariff. Conservatives are not inclined to give much credit to the tariff changes. They say that the Fielding tariff was simply a continuation and modification of the N.P. But the N.P. had been in force for eighteen years without producing any such effects. Therefore, if the improvement was not due, or not chiefly due, to the tariff changes, it must have been due to western development.”

In support of its argument that , the western situation dominates the situation for the whole of Canada, the Free Press sets forth:—

“If, by some magician’s wand, the old conditions in the West could be re-established, immigrants pouring in, heavy business demands for outfitting the new arrivals, land cultivation increasing, a brisk demand for building materials, the

industrial and financial East would feel the effects immediately. Nothing like this can be speedily brought about; but the partial recovery is not beyond the range of possibilities, if there is an intelligible application of available means to the desired end. The problem is to make it possible for the man on the land to live like a human being and not like a submerged, half-savage peasant.”

The West’s Main Problems

THE tariff, the banking system, and transportation costs sum up the agrarian problems of the West, at this juncture. According to the Free Press, “The western farmer, together with most of the western business and professional men, has a pretty good idea of what is wrong and how to set about to right it. They know that Western Canada has to sell her products in the world’s markets, and, that, therefore, any artificial increase in the cost of production is simply fatal. Therefore, the burden of the tariff must be made as light as possible and they must be able to secure the co-operation of a modern, flexible system of banking suitable for agricultural purposes. They know that since their products have to cross continents and oceans to reach their markets they have not a chance in the world unless transportation rates by land and sea can be kept down to minimum levels. They know that the present cost of transporting wheat and cattle from the prairie farms to the British markets is one of the major reasons why farming does not pay.”

So much, then, for the presentation of the argument.

Has the Winnipeg paper stopped to consider the actual production record of the Dominion? Analysis of the agricultural revenue—not the industrial revenue, because, admittedly, the industrial revenue of the East is overwhelmingly greater than that of the West—shows some significant comparisons. Federal figures disclose the agricultural income of Canadians to have reached $1,342,123,000, for 1923, compared with $1,389,289,000 for 1922, with $2,109,291,000 for the peak year, 1919, and with $1,881,718,000 for 1918.

Of the Dominion’s $1,342,132,000 income, from all agricultural channels, last year, $722,286,000 had its source in Eastern Canada; $619,846,000 in Western Canada. In other words, the agricultural revenue of the East was $102,440,000 greater than the agricultural revenue of the West. In 1922, the East’s agricultural production had an aggregate value of $155,375,000 greater than that of the West, and, in the phenomenal year of 1919, the East’s production was $401,927,000 above that of the West, in spite of the West’s vast cereal out-turn.

Analysis of the Agricultural Revenue

1918 1919 1922

1923

Prince Ed. Island...

Nova Scotia .......

New Brunswick ...

Quebec..........

Ontario..........

Eastern Canada ...

Manitoba ... .....

Saskatchewan . . . . .

Alberta .......

British Columbia

Western Canada ...

All Canada .......

21.815.000

61.873.000

50.909.000

399.426.000

595.043.000

1,129,066,000

211.753.000

339.179.000

163.872.000 37,848,000

752,652,000

1,881,718,000

$ ■

29.079.000

84.004.000

63.199.000

445.514.000

633.813.000

1,255,609,000

214.248.000

382.001.000

206.125.000 51,308,000

853,682,000

2,109,291,000

16.840.000

50.019.000

44.568.000

266.357.000

394.548.000

772,332,000

119.261.000

331.682.000

125.863.000 40,151,000

616,957,000

1,389,289,000

15.929.000

40.613.000

32.653.000

232.580.000

400.511.000

722.286.000

84.081.000

291.439.000

200.950.000

43.376.000

619,846,000

1,342,132,000

In view of these figures, it will be somewhat open to question, if the East is as immediately dependent upon the West, as the Manitoba Free Press would have it appear. On the other hand, there should be no reason for degeneration into a sectional quarrel; “wrangling of that kind” as the Toronto Globe opines, “will not promote Canadian unity and Canadian progress.”

After all, the West’s problems are the problems of the Dominion.

Agrari n Problems Are International

NO ONE disputes the difficulties, the problems, of the farmers. But the western farmer is not suffering in isolation. The eastern farmer is also embarrassed. And the agrarian problem is by no means national. It is international.

If we cross the Canadian-American border, we find similar agrarian worries and distress. Particularly are the farmers of those states, which border our prairie

provinces, embarrassed, financially. The tenor of their complaint is singularly allied with the complaint from Canadian agrarians. American farmers, apparently, have their own problems of marketing, and their own “need” for more elastic banking. Unlike our western farmers, the farmers of the western states demand protection, the while ours, supposedly, foreswear tariffs.

The Manitoba Free Press asserts that the “West is finding out how to use its political power to do those things which must be done if the country is not . to remain prostrate.”

The United States farmer has already thrust his problems into politics to the extent that it is being freely predicted that “wheat may decide the next election.” The McNary-Haugen bill, for the establishment of a farm export corporation, “a bold and debatable remedy for the economic ills of the wheat grower,” as the New York Herald describes it, is giving the U. S. Congress and the administration at Washington deep concern. This proposed legislation would increase the price of agricultural products by force of law.

It is not difficult to sympathize with the farmer, both here and in the neighboring republic. The farmer finds that the business of agriculture is one of the few businesses that has fully deflated. On the other hand, everything the farmer is compelled to buy is “sky high”; everything the farmer has for sale is at “rock bottom.”

The McNary-Haugen bill has already been reported by the Senate Agricultural Committee; it has the open backing of Secretary of Agriculture Wallace, and the four largest farm organizations in the United States have declared for it. But Secretary Hoover does not favor it, and it is to be noted, upon looking over President Coolidge’s first address to Congress, last December, in which he expressed himself on all important questions before the country, he said:—

“No complicated scheme of relief, no plan for government fixing of prices, no resort to the public treasury will be of any permanent value in establishing agriculture. Simple and direct methods put into, operation by the farmer himself are the only real sources of restoration.”

In short, interference with the inexorable laws of economics can work no permanent benefit to agriculture or to any industry.