The second year of Union government; its record for 1919, the first year of peace. Address at Port Hope, Ontario, January 16, 1920

Row ell, Newton Wesley

The' second year of Union
Government

F

5086
R68
cop. 2

The Second Year

of
Union Government

ITS RECORD FOR 1919
THE FIRST YEAR OF PEACE

THE HOl ,.N. W. R0WELL

Iteaidfent of the Prfvy Council

J^Wf^jftf, jffl$

- ••' . - ' • •" "' ' **L,''"

The Second Year

of

Union Government

ITS RECORD FOR 1919
THE FIRST YEAR OF PEACE

". . . . I know it is said Union Government is unpopular.
Xo Government could do its duty during the past two
years and be popular with all classes and sections of the
community. If Canada was to do her whole duty during
the war it was essential that obligations and restrictions
should be imposed upon the people in order that the
Nation's energies should be directed to one supreme

effort to achieve victory Union Government was

put into power to do the things which the country needed
to have done, but which no Party Government was willing
to undertake and the question is not whether Union
Government is popular, but whether Union Government

has done right; has served the public interests

And the result is that outside the boundaries of Canada
the name of Canada never stood so high as it does today;
and no country which took part in the war has suffered
so little from the inevitable results which follow war.
Canada has emerged from the war with her credit en-
hanced at home and abroad, and she faces a new year of
peace with brighter prospects and a more assured future
than in any year of Canadian history."

Extract from address of

The lion, N. W. Powell at Port Hope, Ontario.
January 16, 1920.

THE SECOND YEAR

*/
UNION GOVERNMENT1

ITS RECORD FOR 1919
THE FIRST YEAR OF PEACE

THE year 1919 opened with the peoples of Europe exhausted
by war, physically unfit to energetically undertake the gi-
gantic tasks of reconstruction, and without the necessary'
foodstuffs to restore their physical energies or the raw materials
essential to the re-establishment of their industries on a sound
basis. Everywhere there was an earnest longing for an early and
satisfactory peace. On the other hand there was grave appre-
hension in all countries that the spirit of Bolshevism which domin-
ated Russia might spread to the other countries and that the de-
mobilization of the vast armies which had been enlisted and the
millions engaged in war industries wrould produce such conditions
of unemployment and industrial unrest that the year would prove
more difficult and trying to all governments concerned than did
the actual prosecution of the war.

The hopes for an early peace were doomed to disappointment.
This greatly added to the social and industrial unrest in most of
the countries engaged in the war, with the result that Europe has
just closed one of the most trying years in her history, and millions
in central Europe are still suffering indescribable hardships.

Canada, on the other hand, has passed through this critical year
with less of suffering or hardship than was thought possible a year
ago and with a larger measure of -industrial peace and prosperity
than any nation which entered the war in 1914.

In reviewing the work of the past year, it is fitting that we should
recall the tasks which confronted the Government and the people
of Canada at the beginning of the year 1919.

THE TREATY OF PEACE

One of the first duties of the Government was to assist in the
negotiation of a Treaty of Peace which would preserve the fruits of
victory and safeguard the world, so far as practicable, from a
repetition of the horrors and devastation of the war just closed.
The Treaty of Peace which has at last gone into effect is designed
to accomplish these great purposes, and the influential part taken
by the Canadian plenipotentiaries at the Peace Conference is now
well known. Under the Treaty the position and status won for
Canada by the valour of her sons on the field of battle is recognized

1 Mr. Rowell dealt with the work of the Government for the year 1918 in an address delivered
at Bowmanville, Ont.. on December 17, 1918, entitled, "One Year of Union Government — What
Canada's War Administration Accomplished."

In the present address Mr. Rowell deals with the work of the Government in 1919, "The
First Year of Peace."

and accepted, not only by Greal Britain and ihe other states n\ tin
Empire, hut by the other nations of the world. Canada is mon
influential today in the Council* i>f the British Empire than at nn\
period in her history and during the past year she has \von n recog-
nition and place among the oilier nations of the world such as she
never enjoyed before. This is a matter for which every Canadian
has just reason to be proud and grateful.

It is a matter of deep regret that the United States, with which
we are so closely associated, was not a party to the ratification of
the Treaty of Peace on January 10th, and that she was not repre-
sented today at the first meeting of the Council of the League of
Nations. We still earnestly hope that the United States will
ratify the Treaty and will become one of the great leaders in the
League of Nations which she was- so influential in bringing into
being. But even if the United States should not ratify the Treaty
or become a member of the League, the League will stand as the
highest effort of constructive statesmanship to provide a peaceable
method of settling international disputes and of avoiding a repeti-
tion of the horrors and misery occasioned by war. While the
absence of the United States from its Councils will undoubtedly
lessen its moral authority and weaken the force of its decisions, yet
one is convinced that the public opinion of the world is behind the
League, and if men of good will in all nations rally to its support
and create and maintain the public opinion upon which in the last
analysis it must depend for its success, the high hopes which the
woild, shocked by the crimes and losses of this war, entertained
for its future, will not be disappointed. The inauguration of the
League today should mark a new era in international relationships
and in human progress. Canada as one of the charter members
of the League enters the family of Nations to give her voice in
support of the great principles of freedom, justice and ordered lib-
erty, for which so many of her brave sons died.

DEMOBILIZATION AND REPATRIATION

ANOTHER great task which confronted the Government wa-
the withdrawal of our troops from Europe; their transporta-
tion to Canada and their demobilization and re-establish-
ment in civil life. This was a task in which Canada had no previous
experience. It was a larger undertaking than had ever confronted
the men of our race prior to the present war, and, while owing to
conditions our men had to endure many hardships, demobilization
has been accomplished with an expedition and an efficiency unsur-
passed by any other country. I desire here to pay a special tribute
to the work of General Mewburn, Minister of Militia, who has
just retired from the Government, for the magnificent work he and
the officers under him have done in connection with demobilization.
At the date of the signing of the Armistice we had 277,439 men
overseas, of whom no fewer than 43,000 were sick or wounded and
in hospitals in Great Britain and France. All these sick and
wounded, with the exception of between 60 and 70, have been re-
turned to Canada and all our troops, with the exception of about

1,000 who are engaged 'in closing up matters in Great Britain,
have been returnee! and demobilized.

WAR SERVICE GRATUITY

Our soldiers upon demobilization were givea a War Service Grat-
uity proportionate to their length of service overseas as follows:

3 years

2 years and
under 3

1 year and
under 2

Less than
1 year

Married.

$600

$500

$400

$300

Sinele. .

420

350

280

210

The above amounts were paid to those members of the C.E.F.
any part of whose service was overseas. Those members of the
C.E.F. who did not leave Canada received gratuities as follows:

3 years

2 years and
under 3

1 year and
under 2 •

Married

$300

$200

$100

Single

210

140

70

The total amount paid out in War Service Gratuity by the
Canadian Government up to December 13, 1919, was $148,405,-
030.78. It is estimated that about $22,000,000 more will be re-
quired to complete payment to members of the C.E.F. and to
Canadians who served in the Imperial forces, as recommended by the
Special Committee on Soldiers' Civil Re-establishment, making a total
of $170,405,030 paid by Canada on account of War Service Gratuity.

During the year a demand was made upon the Government for
an additional War Service Gratuity to all soldiers of $2,000. This
matter received not only the earnest consideration of the Govern-
ment, but it was thoroughly investigated by a large and repre-
sentative Committee composed of members of both sides of the
House of Commons. Both the Committee and the Government
reached the conclusion that the country would not be justified in
paying an additional cash gratuity. The other recommendations
of the Committee have been carried out or are now receiving the
consideration of the Government.

PENSIONS

For the dependents of those who fell in battle and for those who
are wholly or partially disabled as a result of service overseas,
provision has been made for pensions under a Pension Act passed
at the spring session of last year. The whole question of pensions
was fully and thoroughly investigated by a Committee of the
House of Commons and the Government had the benefit of the
views and suggestions of members from both sides of the House.
The Report of the Pensions Committee was accepted by the Gov-
ernment and legislation to carry it out was enacted. Under this
law the pensions provided were higher than those provided in any
other country up to that time, and are still substantially higher
for widows and dependents than those now in force in any country,
as the following comparative statement, furnished by the Pensions
Board, illustrates:

5

Comparative Scale of Pensions
ANNUAL RATE AWARDED TO WIDOWS OF PRIVATES

Country

Widow
only

Widow and
1 Child

Widow and
2 Children

Widow and
3 Children

Add. for each
Subsequent
Child

*Canada

$

576 00

756.00

876.00

972.00

$

96.00

United Kingdom . .
New Zealand

253.06
379.60

464.01
632.66

558.91
759.19

634,74
885.72

75.92
126.53

Australia

253 . 06

379.60

474.50

537.75

63.26

South Africa

253.06

347.96

432.31

506.12

63.26

**United States

300 00

420 00

510 00

570.00

France

160.00

220.00

280.00

340.00

60.00

Italy .

121.66

121.66

121.66

131.39

9.73

Germany..

96.35

136.74

177.13

217.52

40.39

*The rates for Canada include a bonus for one year to take effect September 1st, 1919.
**No account has been taken of benefits accrued from voluntary insurances.

Comparative Scale of Pensions

ANNUAL RATE AWARDED TO PRIVATES TOTALLY DISABLED
BY WAR SERVICES

Country

Pensioner
Only

Pensioner
and Wife

Pensioner
Wife and
1 Child

Pensioner
Wife and
2 Children

Pensioner
Wife and
3 Children

Add. for
Each Subs.
Child

Allowance
for Help-

lessness

$

$

$

$

$

$

$

'Canada. . .

720.00

900.00

1044.00

1164.00

1260.00

96.00

450.00

United

Kingdom

506.13

632.66

727.56

803.48

879.42

75.92

253.06

JSfew Zea-

land....

506.13

759.20

885.73

1012.26

1138.80

126.53

253.06

Australia. .

379.60

569.40

695.93

790.74

854.01

63.26

126.53

South

Africa. .

379.60

506.13

601 . 12

685.36

759.20

63.26

442.86

**United

States. .

960.00

1080.00

1140.00

1200.00

.

240.00

France.. . .

480.00

480.00

540.00

600.00

660 .'(JO

60.00

....

Italy

243.33

291 99

318.75

345.51

372.27

26.76

Germany. .

From $175.20 to $316.33

according to nature of disablement.

From January 1st. 1919, the pension has been increased from 50% to 100% according to
mature of disablement.

"The rates for Canada include a bonus for one year to take effect September 1st, 1919.
**U.S.A. permanent total disability case receives $100.00 per month for life under new legis-
lation passed in December 1919.

No account has been taken of benefits accrued from voluntary insurance.

Included in the amounts paid by Canada for Pensions, is a war
bonus of 20%. It will be necessary that this matter should come
up for review at the approaching session of Parliament. The total
number of pensions granted up to October 31st last was 82,661,
divided as follows: Disability pensions, 65,214; Dependents, 17,447.

These pensioners have 57,998 children and increased pensions
are granted in respect of these children. Of the pensioners granted
pensions for disability 27,803 are married, and additional pensions

are granted in respect of their wives. The total number therefore
in respect of whom pensions were being paid on October 31st last
was 168,462; this involves an annual charge of over $27,000,000.

SOLDIERS' LAND SETTLEMENT

.

The Government also brought under review during the past
year the question of settlement of soldiers on land. A most im-
portant Bill relating to the matter was passed through the House
at the Spring session. Under this Bill a soldier may receive a loan
up to $7,500 for the purchase of land, livestock, implements and the
erection of buildings. The Soldiers' Land Settlement Board also
loans to settlers on Dominion Lands up to $3,000, and may loan to
settlers who already own land up to $5,500 to discharge incum-
brances on agricultural land and for equipment and improvements.

Every precaution is taken by the Board to ensure that men who
are unsuited for farming should not settle on the farms and that
the men who do take up farming should have a reasonable pros-
pect of making such occupation a success. Up to December 13th,
1919, the last date for which figures are available, 44,278 had made
application for qualification certificates as being eligible to apply
for allowances for agricultural purposes. Of this number 33,496
have been approved and 18,309 loans have been provided amount-
ing to $54,701,858.00.

The work of the Board is carried on in all the Provinces of Canada
and in no country at war has such an extensive Land Settlement
Scheme been carried out, or anything like such great progress been
made, in the settlement of the soldier on the land.

RE-EDUCATION AND RE- TRAINING

In addition to the foregoing, the Government has recognized i t*
responsibility to see that the men, who were disabled from pur-
suing their former occupations as a result of military service, re-
ceive not only free medical and hospital service but re-education
and re- training to fit them for some other useful occupation, and
one of the most important phases of governmental activity during
the past year has been the work of the Department of Soldiers'
Civil Re-Establishment. During the period of re-education and
re-training, the ex-soldier is in receipt of pay and allowances sub-
stantially on the same scale as while serving in the army. This
provision for re-education applies also to all young men who en-
listed under eighteen years of age. The services of these lads,
who were under no compulsion to serve their country, is thus being
recognized. Over 40,000 applications, including both classes,
have already been approved for re-education or re-training; 34,240
applicants have already entered upon their course and nearly
9,000 have already graduated. Parliament voted last session for
the work of the Department of Soldiers' Civil Re-establishment,
approximately $33,000,000. This is quite apart from the sum of
$40,000,000 voted at the autumn session.

EMPLOYMENT OF RETURNED MEN

One of the most important branches of the work of the Depart-
ment of Soldiers' Civil Re-establishment has been assisting in se-
curing employment for returned soldiers. This work is carried on
in co-operation with the Department of Labour. During the past
year the Department of Labour has, in co-operation with the
Provincial Governments, secured the establishment of a system
of Labour Exchanges in all the Provinces of Canada. At the present
time there are 92 of these Labour Exchanges, and representatives
of the Department of Soldiers' Civil Re-establishment work in
co-operation with these Exchanges, and up to December 31st last
over 111,000 positions Jiad been found for returned men; or 86. 7%
of all who applied had been placed in employment.

Moreover, under a law enacted by the present Parliament, the
Civil Service Commission in making appointments to the public
service, gives preference to returned soldiers, provided such appli-
cants possess the minimum qualifications. According to official
figures just compiled, more than 24,000 returned men had been
given positions in the Government service up to December 31st,
1919.

FEDERAL UNEMPLOYMENT FUND

It is recognized that the greatest service the State can render
to a returned soldier is to assist him to secure a position where he
can be absolutely self-reliant and depend upon himself for his own
future. Provision, however, has been made to deal with necessitous
cases of unavoidable unemployment. At the autumn session
Parliament placed at the disposal of the Government the sum of
$40,000,000 to be available, so far as required, for this and the other
phases of re-establishment work set out in the Committee Report.
This money, so far as required, is now to be disbursed by the Pat-'
. riotic Fund, under General Ross as Director, to meet the cases of
absolute need.

It is difficult to compare what Canada has done for her returned
soldiers with that done by other countries, because in no two
countries are the provisions identical; but talcing all together, war
service gratuity, pensions, land settlement, re-education and re-
training, providing employment, and unemployment fund, no nation
at war has equalled Canada in the provisi6ns she has made for the
returned men or the dependents of those who have fallen — and no
soldiers ever deserved better treatment at the hands of their
country.

DEMOBILIZATION OF WAR INDUSTRIES

ANOTHER task which faced the Government at the opening
of the year was to ensure that so far as practicable there
should be no unnecessary unemployment and suffering in
Canada due to the demobilization of our war industries. The
prompt action of the Government in deciding to proceed with
certain important public works, in giving orders to our steel and
other manufacturing plants for necessary rails and equipment for

our railways, and in giving credits to certain European countries
for the purchase of food and articles of Canadian manufacture,
stimulated the whole industrial situation at a critical time, in-
spired confidence in employers and employees and very materially
contributed to the great industrial prosperity which Canada has
enjoyed during the past year.

INDUSTRIAL CONDITIONS AND LABOUR
PROBLEMS

AS already intimated the close of the war was followed by
/-\ grave unrest among the workers in every land. In this un-
rest Canada shared. The workers in Canada, as elsewhere,
had made a magnificent contribution to the success of Canadian
arms, both by their service overseas and their work in Canada, and
they justly demanded that in the new and better day which should
follow the war the conditions under which the worker lives and
toils should be substantially improved. The triumph of Bolshevism
in Russia and propaganda which the Bolsheviki were carrying on
in other countries contributed to this unrest. The Government
was confronted, therefore, as has been the Government of every
country at war, with two great obligations: (1) to secure the estab-
lishment of social justice and better conditions for the industrial
toiler; and (2) to defeat the plans of the Bolshevik agitator who
was working to overthrow constituted authority and substitute
therefor a Soviet form of Government. These questions have
received, at the hands of the Government, the most earnest con-
sideration.

LABOUR CLAUSES OF THE PEACE TREATY

As is now well known, the Canadian plenipotentiaries took an
influential part in the final settlement of the labour clauses of the
Pea^e Treaty. In those clauses are set forth the principles which,
when applied r should result in the establishment 01 a large measure
of social justice and in greatly improving the social and industrial
position of the workers. On the recommendation of the Govern-
ment the Parliament of Canada unanimously approved the Treaty
of Peace containing the labour clauses. The Treaty went into
effect on Saturday last and the Government of Canada will dis-
charge the obligations assumed under this Treaty, both inspirit
and in letter.

THE INDUSTRIAL COMMISSION

In order to obtain as accurate a knowledge as possible of indus-
trial conditions through Canada and of the views of industrial and
labour leaders as to the best methods to improve these conditions,
the Government in the month of April last appointed an Industrial
Commission composed of representatives of employers, employees,
and the public, under Judge Mathers, as Chairman, to investigate
industrial conditions throughout Canada and to recommend such
measures as the Commission deemed to be in the public interest
to improve these conditions.

9
• .. .>..'rVr-*:j ^ ,.^; ,: -- '

INDUSTRIAL CONFERENCE

After this Commission had presented its report, the Government
summoned an Industrial Conference at Ottawa, composed of
chosen representatives of both employers and workers, as well as
representatives of the public and of the Federal and Provincial
Governments to consider the recommendations of the report.
The result of this Conference was a substantial measure of agree-
ment on many important questions affecting industry and the
workers, and on others a frank and clear statement of the respec-
tive positions of the employers and workers. The result of the
work of this Conference was so satisfactory that the Government
hopes that further conferences will prove equally beneficial.
INTERNATIONAL LABOUR CONFERENCE AT WASHINGTON

This Conference was followed in the month of October by the
International Labour Conference at Washington, called under the
terms of the Peace Treaty, at which representatives of forty nations
met together to consider labour conditions and industrial problems.
This Conference reached many very important decisions affecting
labour conditions throughout the world and now that the Peace
Treaty has gone into effect, the Governments concerned will be called
upon to take action with reference to these decisions. The place of
Canada at this Conference is shown by the fact that she was chosen
as one of the twelve nations entitled to nominate a representative
on the Governing Body of the International Labour Organization
and a representative of Canadian labour was chosen as one of the
six labour representatives on this Governing Body.

The part which the Canadian representatives took in settling
labour clauses of the Peace Treaty, the work of the Industrial
Commission, the deliberations of the Industrial Conference, and
finally the work and decisions of the International Labour Con-
ference at Washington, mark the greatest advance in any year of
Canadian history in the promotion of social justice, in the estab-
lishment of better relations between employers and workers and in
bringing nearer the new and better social and industrial order which
should follow the sacrifices of the great war.

MAINTENANCE OF CONSTITUTED AUTHORITY

^TT>HE Government has recognized tjie paramount obligation
to maintain law and order and constituted authority within
the limits of its jurisdiction, and has done so successfully. In

no country of the world are law and order and constituted authority

more respected than in Canada today.

SOCIAL LEGISLATION

THE past year will stand out as the most conspicuous in
our history in the enactment of social legislation for the bene-
fit of the whole people.

HEALTH

The first and most important measure has been the Act Estab-
lishing the Department of Health. The examination* made by the
military medical authorities in connection with the Military

10

technical education throughout Canada. The sum of $10,000,000
has been set apart for this purpose and grants are made only on
condition that the Provinces shall expend an equal amount.

PROHIBITION

At the spring session the Government endeavoured to secure the
passage of a Bill validating the orders-in-council prohibiting the
importation and interprovincial trade in intoxicating liquor during
the war and for the period of one year thereafter. Although the
House of Commons passed this Bill by a large majority, it was
defeated by the action of the Senate and all the efforts of the
Government to secure its adoption were unavailing. At the
autumn session the Government introduced and secured the passage
of two Bills, (1) providing that the importation of liquor into any
Province for beverage purposes should be absolutely prohibited
in case the legislature of such Province asks that a vote should be
taken on the question and the majority of the electors vote in
favour of the prohibition of such importation; and (2) to improve
the provisions for the enforcement of the Act known as the DJ .herty
Act. As the Prime Minister has already said: "It regain d all •'
influence of the Government to secure the adoption of these 'Bills
by both the Houses of Parliament, and they became law because
of the serious and earnest efforts put forth by the Government to
secure their adoption." Under the legislation passed at the last
session of Parliament any Province can absolutely prevent the
importation of liquor into its territory for beverage purposes.

In the Orders-in-Council and in the legislation enacted last
session, the Government has given to Canada the most advanced
temperance legislation in our history.

CIVIL SERVICE REFORM AND ELIMINATION
OF PATRONAGE

ONE of the most important measures of the Government dur-
ing the past year was that relating to Civil Service Reform
and the re-classification of the whole service on the basis of
merit. No more important Act dealing with the Civil Service has
been passed by any Parliament. Today, in the whole Civil Service
of Canada, numbering approximately 55,000, patronage, has been
entirely eliminated, both in appointments and promotions. When
the work is completed it should result, not only in the elimination
of the grave abuses which are inseparably associated with tSie
patronage system, but also in a very substantial increase in efnrienrv
in the service.

The effects of the patronage system and urgent need ft>r ;t re-
organization and re-classification of the public service i- well
illustrated by the Printing Bureau. The report of the Civil ;
Commission on the Printing Bureau showed th,n thcrr \\ <•<•>• •
Bureau over 400 more employees than were required fur the pn ••?«*•"
handling of the work, that many employees were no lonKer tit !<>r
the work in which they were supposed to be engaged, and that the

12

work could be efficiently carried on with an annual saving to the
country of more than half a million dollars. The Government
took action at once upon this report, secured the necessary legis-
lation and the re-organization of the Printing Bureau is now being
carried out. It is not expected that similar reductions can be made
in all the other departments as apparently the Printing Bureau
was more seriously overloaded with unnecessary employees than
the other branches; but the Government has ample evidence to
convince it of the urgency of re-organization in other branches as
well. There was strong .opposition in the House to the passage of
the re-classification Bill, but the Government pressed it through.

Since the Civil Service Commission has commenced to apply
the re-classification to the Service, opposition has developed within
the Service to this re-classification. Undoubtedly in so gigantic
a work mistakes and apparent injustices will occur, but the Act
provides the machinery whereby all these matters may be reviewed
by the Commission, errors corrected and injustices removed.
The Civil Service Commission has reported to the Government
that many of the differences arise out of an effort on the part of the
members of the Service to insist on securing a classification which
would provide a salary much above the value of the work now
being done by these Civil Servants. The Act protects all such in
the enjoyment of their present salaries and in the increases which
under the old Act they would have been entitled to receive. The
new classification will cover new appointments to the Service;
but just as the Government did not yield to opposition in the
House in carrying through this great legislative reform, so the
Government must stand behind the Civil Service Commission in
the application of the legislation adopted by Parliament for the
re-classification of the Service. If the legislation is fairly applied
and once gets into practical operation, it should result, from the
point of view of an efficient Civil Servant, in (1) better pay for the
service rendered; (2) promotion on merit; (3) security of tenure.
To the public it should result in greater efficiency in the Govern-
ment Service and a substantial reduction in public expenditure by
the gradual elimination of unnecessary and inefficient employees.

It may be added that with regard to trained experts, commercial
institutions are able to offer very much higher salaries than the
Government, according to all past precedent, can afford to pay; and
while under the re-classification there is a substantial advance in the
salaries of many of such experts, in view of outside competition, the
Government faces serious difficulty in retaining them in the Service

I

WAR PURCHASING COMMISSION

N 1918 the Government extended the work of the War Pur-
chasing Commission to cover the purchasing for all govern-
mental departments, so as to eliminate patronage and ensure
the best results in the purchase of Government supplies. The work of
the Commission resulted in the elimination of patronage and in
the saving of hundreds of thousands of dollars to the country.

13

In the spring session 01 iasc year the Government introduced a
Bill to create a permanent purchasing commission to carry on
and extend the work of the War Purchasing Commission. Such
opposition, however, developed in the House to this Bill that the
Government was compelled to withdraw it or unduly prolong the
session. As the Prime Minister intimated at the time, the with-
drawal did not indicate any change of policy on the part of the
Government and the Purchasing Commission would be continued
pending further action. This further action must be taken to
make its work permanent.

Union Government is pledged to the elimination of patronage
in the purchase of all Government supplies and so far as I can at
present recall this is the only important pledge made by Union
Government in 1917 which the Government so far has not redeemed.
I hope it may be possible for the Government to redeem this pledge
at an early date.

THE FRANCHISE ACT AND WOMAN SUFFRAGE

AS a result of the legislation of 1918 and 1919 the franchise
J-\ has been extended to women on the same basis as to men,
and women have been given the same right as men to sit in
the House of Commons. These Acts double the electorate and
constitute the largest extension of the franchise made by any
Government in Canadian history. They broaden the basis upon
which democratic government rests and ensure in the future that
Parliament shall be representative, not of half the people, but of
the whole people. The influence of women in the electorate should
elevate the tone of public life and give increased emphasis in the
nation's outlook and policy to those great moral and spiritual
forces which are after all its greatest asset and the surest guarantee
of its strength and stability.

By proclamation issued in August last, the War Times Election
Act ceased to be in force and one of the important tasks now before
Parliament is the enactment of a new franchise law. A general
election cannot be held until such a law is enacted. The Govern-
ment at its last session promised a Speaker's Committee to con-
sider the question of proportional representation, and this question
will undoubtedly require the serious consideration of Parliament.

FINANCE

FIVE years of war have left Canada with a debt of approxim-
ately $2,000,000,000. In order to pay interest upon the
National Debt, to provide for pensions for our soldiers, and
other charges growing out of the war, as well as to maintain the
public services in a reasonable degree of efficiency, Canada must
raise annually in taxes considerably more than double the amount
she was called upon to raise prior to the war. One of the most
important and difficult tasks facing the Government is to raise
the annual Budget and to so distribute this taxation as to ensure that
the burden will fall upon those best able to bear it. The Government
taxation proposals last year were among the most important measures
submitted to Parliament.

14

THE TARIFF

The Union Government might have contended that it was not
called upon to legislate on a controversial question like the tariff,
but in response to a widespread demand that the Government should
take action with respect to the tariff, the Government reduced the
tariff taxation of the country in 1919 by an amount estimated at
$17,000,000. The changes involved the entire repeal of the British
Preferential Tariff War Tax of 5% and a partial repeal of the
Intermediate and General Tariff War Tax of 7J^% imposed under
the Revenue Act of 1915, so that the latter no longer applies to
the following classes: — Foodstuffs, linen and cotton clothing,
woollen clothing, boots and shoes, fur caps and fur clothing, hats,
caps, hoods and bonnets, gloves, mitts, collars and cuffs, hides,
skins, leather, harness and saddlery, agricultural implements,
petroleum, oils, mining machinery and bituminous coal.

The tariff changes provide for a total reduction including the
?M% war duty under the General Tariff from 27J^% to 15% on
certain agricultural implements and from 27 ^£% to 17J/£% on
agricultural machinery. On hay-loaders, potato diggers, fodder
or feed cutters, grain cutters, grain crushers, fanning mills, hay
tedders, farm, road or field rollers, post-hole diggers, snaths and
other agricultural implements, provision was made for a total
reduction to 20% and a similar reduction on farm wagons.

Among other important changes the tariff also provided for
reciprocity with the United States or any other country in the free
entry of wheat, wheat flour and potatoes.

In addition the Government promised a thorough revision of the
tariff after due investigation. While these* tariff changes were not
proposed as a thorough revision of the tariff, no tariff revision,
put into effect within the past twenty years under either Liberal
or Conservative Governments, has involved as extensive or im-
portant tariff reductions on agricultural implements and agricul-
tural machinery.

As the new Finance Minister, Sir Henry Drayton, has already
announced, preparations ars now being made for the investigation
which should precede a thorough revision of the tariff. One of
the most important tasks before the Government of Canada is the
completion of this investigation and the submission to the House
of a revised tariff. That a careful and thorough tariff revision is
necessary in the public interest few will deny, nor will many thought-
ful men deny that in view of our financial obligations, our geo-
graphical position and our political affiliations, we must continue
to raise large sums by tariff taxation; we must maintain industries
essential to our national life and prosperity, but we must not
permit a tariff which may be used to exploit the public for the sole
benefit of its beneficiaries.

INCOME TAX

In order to meet the loss of revenue from reduced taxation
attendant upon this reduction in the tariff, as well as to provide
for the necessary needs of the country, the Income Tax was very

is

substantially increased last year, particularly as regards large in-
comes, where the tax was almost doubled. The present Income
Tax is in all respects equal to the Income Tax in the United States.
It is difficult to compare our income tax with the income tax in
Great Britain where the only income tax levied is by the Imperial
Government, whereas in Canada income taxes may be levied by
the Federal, Provincial and Municipal Governments, and in some
Provinces at least, are levied by all three. Comparing, however,
pur Federal Income Tax alone with that of Great Britain/* our tax
is substantially lower than the British on incomes of less than
$100,000, but the difference between the two steadily diminishes
and at $200,000 they are substantially the same. On incomes
from $200,000 up, the Canadian tax increases much more rapidly
than the British, and at $300,000 exceeds the British. From
$300,000 up, the increase in the Canadian scale over that of the
British becomes even more noticeable. The following comparisons
will illustrate the Canadian and British tax:

Income

Canadian Tax

British Tax

$ 100,000
200,000
300,000
500,000
1,000,000

$ 31,190.00
93,190.00
161,190.00
303,190.00
663,190.00

$ 47,187.50
99,687.50
152,187.50
257,187.50
519,687.50

Not only has there been this great increase in the amount of the
Income Tax, but the Department of Finance is steadily improving
the machinery for its collection and tax evaders are being vigor-
ously prosecuted in the courts.

BUSINESS PROFITS TAX

In addition, the Business Profits Tax, which is said to be the
heaviest business profits taxation imposed in any country at war,
was continued through the year, and the estimated revenue from
this tax this year is $35,000,000. During the present fiscal year,
that is from April 1st, 1919, to date approximately $30,000,000
has been received.

THE VICTORY LOAN OF 1919

The cost of demobilization, of providing credits, and capital
expenditure, had to be met by national borrowings and as you are
aware, the Government during 1919 asked the Canadian people to
subscribe to a further Victory Loan. They responded magnificent-
ly and the total subscriptions received amounted to $673,000,000
from nearly 800,000 persons.

While Canada has a huge financial burden to carry and while
the exchange condition at the present time is very unsatisfactory,
with the possible exception of the United States, no country which has
taken part in the war can face the future with greater confidence
and courage from the financial point of view, but as a Government

16

and people we must economize. Our urgent need is more produo
tion both from factory and farm, and thrift and economy instead
of the present lavish and extravagant expenditure in which so
many are indulging at the present time.

IMMIGRATION AND NATURALIZATION

UNDOUBTEDLY following the war the tide of emigration
will again set in toward the shores of Canada. The Govern-
ment has recognized that the future of our country will in
increasing measure depend upon the character of our citizenship,
and in the new Immigration Act, passed at the spring session, the
Government has taken power to prevent undesirable persons from
entering Canada. Hereafter our settlers in Canada will be selected
with much greater care than in the past.

The Government has also taken power to deport from Canada those
persons whose aim it is to overthrow by force all constituted author-
ity, or who disbelieve in and are opposed to organized Government.

Most important changes were also made in bur Naturalization
Laws last year. Not only does the Government recognize that
greater care should be exercised in the admission of emigrants to
our shores, but that the conditions which surround Naturalization
should be made more strict, and that those who are false to their
new allegiance should forfeit the right to citizenship. Canada does
not desire that her citizens should owe any measure of allegiance
to a foreign country.

TRADE CONDITIONS

DURING the year the Government has been called upon
to take most important action respecting Canadian
trade.

THE CANADIAN TRADE MISSION

More than four years of destructive conflict left the nations of
Europe weak and impoverished and unable to provide for their
own needs. This afforded Canada a splendid opportunity, not
only to aid in the rehabilitation of Europe by providing the nations
there with the articles they so greatly needed, but to develop our
own foreign trade, assist in the employment of our own working
men and help Canada bear the burdens of the war. The Govern-
ment therefore established the Canadian Trade Mission in London
under Mr. Lloyd Harris, and the people of Canada know what
fine service Mr. -Harris rendered, and what large practical benefits
have resulted to Canada through this development of our foreign
trade. The Government also established the Canadian Trade
Commission at Ottawa, under Sir Charles Gordon, as Chairman,
to co-operate with the Trade Mission in London. This body also
has rendered fine service.

THE BOARD OF COMMERCE

In order that profiteering might be investigated and stopped,
and those responsible therefor punished, the Government procured
the establishment of a Board of Commerce and the enactment of

17

the Combines and Fair Prices Act. The activities of the Board
have covered a wide range and it has been subjected to some
criticism by those affected by its actions and decisions. Its general
conclusions, however, must be re-assuring to all thoughtful Can-
adians. In the course of a statement issued in Winnipeg in
December last, the Board states: *

'The Board is pleased to be able to observe as a result of its
preliminary survey of business conditions that despite high prices
undoubtedly prevailing, profiteering, so-called, that is the taking
of unjust profits, is not, in the Board's opinion as common, nor
nearly as common as many have charged or claimed. Business is
in the main sound and honest, and the Board has a confident hope
that business men will be as the Board's right hand in the new
imminent business of tracing and punishing those among them,
who, according to the new business ethics of this era, have dis-
honoured their brethren."

The investigations of the Board of Commerce have shown, as
thoughtful people everywhere already realized, that the present
high cost of living from which so many people are suffering in
Canada — though less in Canada than probably in any other country
— is not due to local conditions or causes peculiar to Canada, but to
the operation of great economic laws, world-wide in their sweep
and from which there is no immediate prospect of escape. The
world is suffering, on the one hand, from serious shortage of the
commodities which the world needs, and, on the other hand, from
an unprecedented inflation of currency, due to the enormous war
expenditures. These two causes combined, both the inevitable
results of the war, have produced the present abnormal conditions.
There is only one way outf and that is in increased production of
the commodities needed and the practice of thrift and economy, so
that from the savings thus effected national obligations may be
discharged and the inflation of the currency thus reduced.

BANKRUPTCY LAW

The year 1919 saw the passage of a Bankruptcy Law at the in-
stance of the Government — a law which the business men of
Canada have been urging for years without success.

PURCHASE OF WHEAT

The virtual collapse of European credit following the financial
exhaustion of the war has changed the whole basis of International
trade. The shortage in European countries of certain essential
food products has compelled those countries to retain control of
the price and distribution of these foodstuffs and consequently
of the purchase of them. This Governmental control in Europe
has rendered it necessary, in order that the Canadian farmer might
market his products, for the Government of Canada to intervene
and assist him in the financing and marketing. It was neces-
sary, therefore, that the Government, during the year, adopt
measures to provide for the marketing of the wheat of the farmers

18

of Canada, and this has been carried out with such a large measure
of success that the farmers of the West, who are chiefly concerned
in the matter, have, through their representative organizations,
expressed their approval of the plan and policy of the Government
and have asked for its continuance so long as Governmental con-
trol in Europe continues. The entire wheat crop produced by the
Canadian farmer has been marketed through Governmental
agencies,

FOREIGN TRADE

Canada never had larger opportunities for increasing her foreign
trade than she has today, but in view of the complete suspension of
international credit, it is necessary, if this trade is to be increased
and placed on a permanent basis, that there should be close co-
operation between those who produce articles for export and our
financiers, and that both should at this time manifest faith, courage,
energy and public spirit in promoting Canada's export trade ; and
that in their efforts they should be assured of the practical sym-
pathy and energetic co-operation of the Government. At the pre-
sent time the development of our export trade will add to the
wealth of our own people, provide employment for our workers,
assist Canada in the discharge of her war obligations, and at the
same time greatly benefit the nations which are in need of our
products.

TRANSPORTATION

RAILWAYS

WE all recognize that transportation is vital to the life and
progress of the nation. The Government during the past
year has been faced with grave transportation problems;
and has grappled with them vigorously and courageously. In the
early part of the year one of the most important railways in Canada,
the Grand Trunk Pacific, notified the Government that owing to
lack of funds at its disposal it could ho longer continue to operate
its line, and scores of towns and villages throughout Canada were
threatened with a complete lack of transportation with consequent
loss and suffering. The Government had to face the question
whether they should continue to vote, millions of dollars of the
people's money to aid privately-owned railways which were unable
to pay their own way, or whether the time had not come when
these roads should be taken over for the benefit of the whole people
and that any further monies expended should be for the benefit
of the people of Canada. The Government decided on this latter
course and also that the whole Government railway system should
be placed under the best possible business management in order
that Government ownership and operation of the national system of
railways should have the best possible opportunity for success.

The Government during the year has passed no fewer than four
measures of great importance touching the railway transportation :
1. The General Railway Act consolidating the Railway Law
of Canada.

19

2. An Act incorporating the Canadian National Railways for
the purpose of handling all Canadian Government Railways
on a business basis.

3. An Act relating to the Grand Trunk Pacific Receivership.

4. An Act for the acquirement and taking over of the Grand
Trunk Railway and its subsidiary companies, including the
Grand Trunk Pacific.

As a result of these measures the Government expects to be in
possession of a railway system 22,000 miles in extent, forming a
great national system of railways owned and operated for the
benefit of the whole people of Canada.

The terms of the agreement between the Government and the
Grand Trunk Railway for the acquirement of the stock of that
Company have now been settled and the Government must pro-
ceed with the arbitration under which this stock is to be acquired
for the people of Canada. The Government will take steps to see
that the case of the Government is so presented before the Arbitra*
tion Board that the rights and interests of the people of Canada
will be absolutely protected and that the people of Canada will
not be called upon to pay more than the stock of the railway is
worth, having regard to all the obligations which the railway is
bound to discharge. When this is accomplished, the further task
remains of consolidating all the Government railway interests
under one management composed of men of the widest experience
and best business ability who shall be responsible for operating
these railways on a business basis wholly free from patronage or
political interference. It is only by pursuing such a course that the
great Government system of railways can be placed in a position
to compete on anything like equal terms with the Canadian Pacific
Railway, and that public ownership of a National system of trans-
portation can be made a success.

SHIPPING

The Government has not limited its activities in connection with
transportation to railways alone, but has also devoted its attention
to the building up of a Canadian Merchant Marine in connection
with the Government system of railways. The' Government has
contracted for no fewer than 60 steel freight ships, ranging in net
weight tonnage from lake size 3,750 tons to 10,50>0 tons, making
a total net tonnage of 359,945.. Twenty-three of these ships are
already in commission and are aiding in providing transportation
for Canadian products of the farm and of the factory. Ten of
these ships are running to the West Indies and South America
opening up new avenues of export trade for Canada, carrying full
cargoes both ways. Before the war a very large portion of this
trade was in the hands of Germany and since the war the United
States has naturally been making strong efforts to capture it.
Splendid opportunities exist for the development of Canadian trade
and the Government Merchant Marine is aiding in the accomplish-
ment of this purpose. Government ships are carrying lumber

20

from British Columbia to England and Australia; others are
running to Newfoundland, Liverpool, Glasgow and London. When
the ships now contracted for are complete, the Canadian Merchant
Marine will be plying to and from the important ports of the world,
developing Canadian trade and giving Canada a Government*
owned and operated transportation system by rail and by water
practically around the world. This system must be extended to
include passenger ships as well as freighters.

HIGHWAYS

Ih order that the farmer may get his products from the farm to
the market town or railway station, it is necessary that he should
have good roads; and the Federal Government, during the past
year, has enacted legislation setting apart $20,000,000 to be expend-
ed under agreements with the Provinces for the development of
good roads in the several Provinces. The Government grant
covers 40% of the actual cost of the road to be constructed and one
of the conditions of these grants is that the Province must expend
the other 60%. Suitable provisions have been made also to ensure
that the road construction shall be high grade and of a permanent
character, and that the road, once constructed, shall be properly
maintained. The programme plans for the work to be undertaken
under the Highways Act in Ontario and Quebec during the next
five years, have been filed with the Government and are up for ap-
proval. With respect to the other Provinces, tentative plans have
been sent in and the matter has been discussed with the Provincial
Highways Departments. It is expected that all these Provinces
will have their plans approved in time for next season's work.

AERIAL NAVIGATION

The war has forced upon our attention the importance of aerial
navigation and the Government has been called upon to give
serious consideration to this problem. Legislation was passed last
year under which an Air Board has been established to regulate and
control aerial navigation in Canada. This Board has framed the
necessary rules and regulations under which aerial navigation shall
be carried on in Canada, and has been giving most careful consider-
ation to the formulation of plans for the development and main-
tenance of aerial navigation in Canada.'

Thus the year has been marked by great constructive measures
dealing with transportation by rail, by road, by sea and by air.

DEFENCE

DURING the past year, the Government has been called upon
to consider measures necessary for the preservation of
internal order and for the re-organization of our defensive
forces consequent upon the termination of the war. Important
measures have been introduced and passed through Parliament
providing: (a) For the enlargement of the jurisdiction and the
permanent establishment of the Mounted Police as a Federal
Police Force, and for the amalgamation of the Dominion Police

21

with the Mounted Police, so that hereafter there will be but one
body of Federal Police throughout Canada, (b) For the re-organ-
ization of the permanent military force of Canada.

The Government has also been giving consideration to the ques-
tion of a naval defence. The naval developments of the war and
the rapid growth of our commerce and merchant marine rendered
this absolutely necessary. A series of conferences have been held
with Admiral Jellicoe who visited Canada on the invitation of the
Government to discuss this important matter. The whole question
is now receiving the earnest attention of the Government.

The place of the Air Service, in any system of defence either
on land or sea has also received the attention of the Government
and plans for a permanent Air Service are now under consideration.

These questions must be dealt with at an early date. Canada
cannot continue to claim the status of a nation within the British
Commonwealth and maintain her own self-respect without being
prepared to assume the obligations inseparably associated with a
national status.

PEACE TREATY AND CANADA'S STATUS

ET me conclude this review of the work of the Government
during the past year by again drawing attention to the
Treaty of Peace, and Canada's relation thereto. The year
has marked a new era in our constitutional development within
the British Commonwealth and in our relations with the other
nations of the world. Owing to the efforts made by the Govern-
ment, Canada secured:

1. Direct representation at the Peace Conference.

2. Membership in the League of Nations.

3. The right of election to the Council of the League and to
the Governing Body of the International Labour Conference.

4. That the Treaty should be executed in respect to Canada by
Canadian plenipotentiaries appointed by His Majesty on the
advice of his Canadian Ministers.

5. That the Treaty should be submitted to the Canadian
Parliament for approval before ratification.

6. That on final ratification of the Treaty by His Majesty
he should act with respect to the Dominion of Canada
on the advice of his Canadian Ministers.

In these efforts Canada had the support of Mr. Lloyd George and
of the other self-governing Dominions and the rights secured for
Canada were secured for the other Dominions as well. 1 1 is now man-
ifest that the session of Parliament called to pass upon the Treaty of
Peace and the new status of Canada as recognized in this Treaty was
one of the most momentous in our history. It marked a great advance
in the democratic control of foreign policy. By approving the League
of Nations and Canada's participation therein it gave parliamentary
sanction to a complete reversal in Canada's traditional attitude
toward foreign affairs. It recognized that Canada could no longer
be a spectator of world events but must be a participant therein
and accept her share of responsibility for world peace.

22

^ The result illustrates the gradual development of the British
Empire into what may now be more truly described as the British
Commonwealth composed of several free, self-governing nations
of equal status, though not yet of equal power, owing allegiance
to a common Sovereign and bound together by a community of
interest and of sentiment which are the sure foundations upon
which the Empire rests. The great task remains of working out
and establishing such methods of consultation and co-operation
between the several nations of the British Commonwealth as will
maintain our essential unity, while fully safeguarding our freedom
and autonomy. This task will be the duty of an Imperial Confer-
ence to be called specially for the purpose.

THE ILLNESS OF THE PRIME MINISTER

ONE cannot close this review without paying a tribute to the
outstanding work of the Prime Minister at the Peace Con-
ference, a work of which we as Canadians should all be
proud. Men, irrespective of Party, deeply regret his present
serious illness due to overwork, and the incessant strain of the
Premiership during these war years and all earnestly hope that the
rest which he is now taking may result in his complete restoration
to health.

CONCLUSION

IN the foregoing statement I have dealt with only the most im-
portant legislative and administrative measures of the past
year. Scores of other measures legislative and administrative,
rendered necessary by the transition of Canada from a war to a
Peace basis have been adopted and put into effect by the Govern-
ment, and in addition, the Government has carried on the ordinary
routine administrative work which is characteristic of times of peace.
That Union Government has made mistakes no one will deny;
that they have found it possible to do everything that they would
have liked to do, no one will claim; but may I ask in what year of
Canadian history has any Government presented or carried through
so many measures of national importance and far-reaching sig-
nificance? Does not the year 1919 represent the high-Water mark
of legislative achievement in Canadian history ? Several of the
most important measures were carried ttirough in face of strenuous
opposition and it was only by the persistent efforts of the Govern-
ment that success was made possible.

I know it is said Union Government is unpopular. No Govern-
ment could do its duty during the past two years and be popular
with all classes and sections of the community. If Canada was to
do her whole duty during the war, it was essential that obligations
and restrictions should be imposed upon the people in order that
the Nation's energies should be directed to one supreme effort to
achieve victory. People do not like obligations or restrictions,
and no Government that imposes them can be popular once the
pressure of war necessity is removed. No Government which car-

23

ries out great reforms that curtail the rights and privileges
hitherto enjoyed by large classes of the community can be con-
tinuously popular. Those who object to obligations imposed or
who resent restrictions on their liberty of action, or who oppose
the curtailment of rights and privileges hitherto enjoyed, are
not likely to be strong advocates of the Government which is
responsible for such legislation. Their hostility is to be expected;
while those who favour the legislation are too often unappreciative
or apathetic and remain silent. While practically all the Orders-
in-Council passed under the War Measures Act have been repealed,
many of those affected by them will still resent their enactment
no matter how important in the national interest the enactment of
these Orders-in-Council may have been. Two or three illustrations
of the legislation of Union Government will clearly indicate what
I mean. No Government could enforce compulsory military
service without provoking hostility and resentment in thousands
of families who were unwilling to let theic sons go to the front.
No Government could abolish Patronage in appointments to the
public service, which affects every constituency from the Atlantic
to the Pacific and deprives thousands of men who have been
political workers of the hope of reward, without incurring strong
hostility from influential elements in every section of the country.
No Government could pass legislation which would deprive men
who were accustomed to having liquor in their homes, of the op-
portunity of securing this liquor, without provoking hostility from
thousands of such men.

In short, Union Government was put into power to do the
things which the country needed to have done, but which no
Party Government was willing to undertake, and the question is
not whether Union Government is popular, but whether Union
Government has done right; has served the public interests. The
fact is that Union Government has dealt with the great national
problems facing Canada from the standpoint of the public need
and the public interest regardless of whether its action would be
popular or unpopular. And the result is that outside the boundaries
of Canada the name of Canada never stood so high as it does today;
and no country which took part in the war has suffered so little from
the inevitable results which follow war. Canada has emerged
from the war with her credit enhanced at home and abroad, and
she faces a new year of peace with brighter prospects and a more
assured future than in any year of Canadian history.

24

PLEASE DO NOT REMON
CARDS OR SLIPS FROM THIS I

UNIVERSITY OF TORONTO LI

Rowell, Newton Wesley
The second year of
Government