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Ottawa, on Thursday, February 17, 1916. Hon. Sir GKORGK FOSTER (Alinister of Tnule and Coniiiierce) : Mr. StKniker, 1 luive listi'iHMl with a groiit deal of -iitorest to tlie moderate and somewhat careful reviow made liy my linn, friend (Mr. A. K. Mac- lean I of the propo.-ials which were submitted hy the Minister of Finance on Tuesday last. In some tilings that lie has stated, I Ui,'rce with him: as regards others. I wfmld ex- press a mild dissent. There niav even he some points in reference '.o whirii I would he inclined to ;iiake u rather decided and •Mni)lKitic protest, hut that does not take ■ay from my first remark that 1 have preeiated and been interested in his line I thouu'ht as expressed in his remarks on .je liuiluet. In tlie first place, and before goincr fur- ther, 1 tliink I may take it upon myself to nay that, in so far as I can judge, the spirit with which the Canadian people have met the taxation proi)osaU of last year and of this year is in eminent accord with the spirit in which they have sup- ported enlistment with the colour=-.. and the prosecution of the war. Taxation, when- ever it >.'om«\-, is apt to hit someone liarder than anotlier; it is a thing which must poeple would rather not encounter, hut I am convinced that, in so far as ilie prose- cution of this war is concerned, either by tlie active one hundred thousand, or the two hundred thousand, or the ultimate three or four hundred thousand that go to the front, the seven million five hundred 93701—1 thousa.id who rcnuiin at home are pre- pared to cliwrfiiUy pay what is necessary in order that the men at the front may do their work. My lion, friend took up, first, the bal- ance of trade, and he rather belittled the shitcnient that the balance of trade in this country in tlie last two years, and notably in the last year, has been so changed that from a large adverse balance of trade, as shown by the imports and e.cports, we have to-day a largi' and gratifying favour- able balance of trade. It does not depre- ciate that result in the least to cite the in- visible imports and exports, and to en- deavour to detract from the favourable nature of the present balance of trade by declaring that it does not express the true state of the exchanges between Canada and outside countries. These invisible im- p.irts and exports have been factors in these interchanges during every year that we have existed as a country; they have been increasing factors in these inter- changes during the last fifteen or twenty years, and they have been rapidly increas- ing factors owing to causes which we all understand. IJut what we can feel thank- ful for is that, along with the existence of about equal factors of invisible imports and exports, the situation has so far im- proved that we have a favourable balance of the imports and exports as shown by the customs returns, and that we have reversed tlie old situation. Therefore, if there is any ailvantii*.'!' in u favoiiriihle bnlanco ol trail.', tliat ailvant;,'<> ha* accriioil to Caiiaiia diiriiii; tliirt ytar. Mr. GRAHAM. Th .1 'if is tli point Sir (iKOKCK K()STI-.H: .My Imn. tri.n.l (Mr. A. K. .MaoU-.m) mail.' -■ 'ne roinarkit in rrf.Tciicf to liorrouinu'-i in i ui.i.la. I aj, |>r('l..Mii| that 111' f.ivniim tl,,. |„.,i|)I.> of (•».;. »'la and tlie ri'«oiirii'i of ("an.ida tiriiii; calliMl upon to aivo an oi|nitablo amount towanl-* till' pr.'-cnt .xiipp'irt of thi' w;ir. :im.H towards thf dlinitiMtion of tli.it t'rr.it Imi,-- rowi'd sum tlial s!i;i|| rem lin a« .a l.urdrn on our successors: l>ut he s, cms to tliink th.it tlic loan xvliich the Minister nf Finance tool< frmn t)ii' people diirin;; the last few rnonl.'is was not advisalilc for two reasons: in t!ie first phice, l.cc;inse it perh:ips went so far as to diminish tlie resources ,if tlie country which arc required for c:irry;n(.' on our normal and prcsetit curren; IniPi- ness, and in the second placi' he, :,,ise it was not a popular loan, anceived a single .scrip, becaupe the loan woiiM have all ijone into the hands of the smaller invi'stor.s. He will also I ,1 th:it of the .$10(1,000,0(10 that were ultimafelv aceepti'd, »75,00n.(MKl came from the lesser investors and on'v 5;i'i,0iM),0()0 from the banks, the insurance companies, and the larficr investors of accumulated funds. I think the desires of my hon. friend have really been met in that loan, and if not in that loan, they arc met in the provision of the i)roposed le(;islation for the i.s.si.e of debentures, in small sums, in order tliat the person who has one hundred dollars saved out of his e,irnini.'s can put it into the war fund and thus help to carrv on the activities of the war. and, at the same time, make an investment for himself which will bring a fair interest return. The prosecu- tion of this plan with energy and discre- tion, throughout the length and breadth of Canada I regnrd as being an eminently fair way. and I hope it will prove a succe.ssful way, of interesting the people of small sav- ings to take their part in the support of the war an, I .il the same time to mako wi»e provision for ilieir own future. •My hon. friend (Mr. Maclean) then spoke of the tabula! Hin of expenditures. He beli.ves that :is the e.xpen wvre di-tributed. I^t us look at tlie war ..xpenditure for cxanipl-.. The peo- ple of the future will re.ad our pul.lic ,ic- counts. and th-y will hnd under our eiethod of sunimition that in the years :!)I4 ini5 1016--niaybe 1917. we do not know lh,.ni «as a vast increase in expenditure that the expenditure ran up from ten.s of millions of 'iollars to hundreds of millions of .Inllars "laking. in the aggregate, manv hundreds of millions. If there were but one sum- iTiation of expenditure, the men of the future would scarcly know how to r:ite and judge the people of these three or four years in their expenditure of these extri- ordimiry sums. I think it eminentlv fair to have such a summation of e.xrj.jnditures as .sliall sliow that in th-se years a sparsely popuhited country tackled the preblen: of defence of liberty and justice for themselves and for the Empire, and that the interests ol posterity justified the expenditure of these hund- of millions of dollars and the oiiteriiix of that expi'iKliturc ax a oiipit^il vlmrtfp iii-o" •'"■ fouiitry. So fur I nin not (lisposcil to (iiiiirrel with this distrihutioti of t'xpoiiiliturt'i uiiilrr Iffercnt hciidj*. But I will ti'll yoii wIktp t u< nK)th uul the riiBt do corrupt iti ii iliRtiihutioti like that. You ilo not liiiV4' iiiwnys u well-dcfiiu'd linn to (fuidi- you us tn uhut is ordiiiiiry fxpoiuli- turc and what is I'apital expt'iidituri'. ^nd, ill tlu! div<'rsion anil change trombone xido to tlio other that has taken placi in till' history of our country nriny and man;. a linif, you arc Icil into ■■rttt. and tlurc is Krcat temptation to keep the orilinary ex- penditure down hy tran-« cull for muni- tions and supplies; v.hen the blood of the country is flowing from its veins in the strug^'le to preserve its ideals and its liber- ties; uhen those who uii i' home are con- trihuting with gi'tierous hi il'-saeriPce, and without murmur ' i re|>ininc, I .4ay that to me as a nie;oi'er ut' the (iovcrnnient, to you as sup|iorter> of the (lovernment, and to you gentlemen opposite, as a part o'. the great body which represents the people ot this Dominion, the call comes to cut off eve._ unnecess.iry expenditure, to refua" every unnecessary demand. It is our busi- ness to administer the funds of the people with perfect economy and to devote our- selves in so far as human beings are capable of doing it, to the sole purpose of prose- cuting this war to its -uoceasful and final conclusion. At six o'clock, he House took recess. Hou.se resumed at eight o'clock. Six GEORGE FOSTER: Mr. Speaker, oiy hon. friend from Halifax (Mr. A. K. Mac- lean) made some observations by way of criticism in respect to charges made by the different departments to war account. He thought that, in the case of small amounts, that [iractice was " small potatoes " so to sprak, and that in the case of larger amounts it should be charged up to the different departments. What is desirable, '■ seems to mo. if we are going to put war I xpenditure in a column by itself, \~ 'hat we should know our total war expenditure, so that we may realize exactly what the country has to bear on account of it. It is a fair proposition that all amounts ex- peu'J.id, whether by the Militia Department or by any other department, the purpose of which was immediately to cupport and carry on the war, should be charged to t^e war. Otherwise it is unfair to the depart- ment.s. by way of comparison. Cur statis- tics run from Confederation to the present time. We compare administrations, and we also compare, year after year, expendi- tures in the same administration. It would be unfair, I think, if large expenditures are made by the different departments on war account, to have these charged up to the department as ordinary and necessary ■ exiM'iulitiiroH of thf (IppiirtniPtit. It would III' iinfiiir to till' (li'iiiirtiiH'nt. diiriiiK the ttTiii of llii'iti' (<\|ii'tiii iihsolutidy viiluclosii m rt'upect to i'ritKir'h Clovcrn int'Mt which had the heavy burden of the war on it^ shauldcr-. it nhould thereforo Ik! charuel to war account. Thor<'toro. I do not think that my hon. friend's criticisms with reference to the war accounts are maintaiiialile. A(.'ain, if a nuinher of em- ployees of a department eiUi>nt l)ay.-< the salaries, or » i)or- tion of the salarin, of these offic<'r^ while they are ensjaued ni the war, and y '• has to |)Ut other ollicials in their places and pay tnem while the enlisted employees are ahsent. It seems to me that it would not he fair to charL'c these salaries to the ordinary exnenditure of the department, hut that it would he fair to chari.'" them to war ,1. count. He wever. we will i, that go for what it is worth. Then n.y hon. friend found fault with capital expenditures in a t'^ueral way. lie referred to capital expenditures amountins to some millions of doll •■•s this year, which he thought iiiinht "ll he dispensed with, .so that the money I'Uld he saved for the present. He mentionet attack upon patronasie as a practice — I will not call it a principle — in the Dominion of Canada. I ,1111 disposed to be perfectly frank with respect to hoth of these points. I am dis- posed to atrree with my hon. friend in some of his strictures upon both of them, hut his protest would have had far greater weipht with me, and with the House, and with the country, if the practice of himself and his party, when that party were in power, liad accorded with his professions at the present moment. That, however, is not the kind of arsiuinent which slays an opponent entirely, lie niiffht plead what was pleaded by my hon. friend from Assinibcia (Mr. Turriff) with reference to the argument which was offered here the other night as to the 50 cents imposition on flour that was to bonus the miller. My hon. friend from Assiniboia found no fault with that proposal some few years ago; therefore he supported it, and he rather intimated that he supported it then on principle. Now he opposea it eciually of course on principle. Till' s.iiiic roiiiurk iip|ili)>ii to lht» (|ii«ittion (if |iutriiiiiiKo. ( «nii| I vih* (linpoited to be ()f>rfHOfly friiiik >ii both of tluMo pointn. TtiiTi' lire o.\|)c,iilitnr«s ii"W tlnTc have bi-en ox|iriiilitiirc:» from ConftMli-ratioti up whiili Imn' bi I'll p'lt into tlio K^tiiiiat"' pinsiil iiml ( iirri('(i out in the coiitilry, tl were tH'itbi'i' iiiefiil mir I'xpiilifiil. Thorf iit 11(1 (luiibt about thiit; it lui.'t iiicn d' tio under nil iV('rniii(>iit< ; it probalily iri licinK done until- tliin Govirniiii'tit. My opinion IK lliiit until n different un>tliod i-* pur- Kue.l vvitli respect to our exponditure* upnn putilic workn, in thnir iiutliori/.atioii. we "lull! lie ojM'n to tlir.^e trouldes ,tnd to tluit critirimn. My view is that tnory iipplii tion or n pulilic work, or ii pulilie iinpro\ nient, sliouM U" liefore a coMipetent Imurd of elltriHeer.i I business men, afinuld lie reported upon liy tlieni for tbo inform. ition of the Oovertinient, iind that every appli- cation slieiild have to slinw sume (Hu-e of n('Ct'^>erform<>d. eve. ii>ed a member o' Parliament in reality, or ever strensithened a Government in reality. On the contrary it almost always causes the dry rot and disintegration tliat break up government after government and party after party, and I wish now, in the white heat and light of this great contest and strujxgle and the self-sacrifice that we are called upon to make, tliat we mig'i.t speak from the lieart out, and make an agreement in this country between both parties, that hereafter patron- age shall nut bo applied by political parties in the administration of our public services. Now, that is a frank admission. Some may ««y to nie thill I have no rijrht to make it. I premime upon my urey h. ir.j and thirty- foiir years in public life, and 1 make that statement for what if is wortli. I will just apiM'iid to that OIK mgle ^e.'ence, and it ii this; that if therer (Mr. A. K. Mitcl^ean) t!ien Vent on to discuss the IUid)(et which was brouKht down for the raisinn of t/lie n-'cessary revenue" for the prose- cution of the war. Well, my lion, friend criticised, but it strucK ii"» that he was rather lialf-heartest, he aays, it can oaly be justified as a tempnriry expedient. Very i,'ood ; this is onb a femixirary expedient, as I undersland it; t is limited to the autumn of P.)17, or thereaboiit,s. The criticism of Miy hon. frieinl diK's noi tiurt very much. He does not Iwlieve in its being rctro.aclive. 'Veil, that is open to dobat(^, but what we Were after were revenues for th ■ pros(H;ii- tion of the war and what we 'nod to do was to make the getting of these revenues coeval, or contemporary, with the duration of th« wr I'j may l)e that in particular instances mhips will ^e found. You c- iiuot de. .my system of t.->.\ation — I do ih t th-';k you can— at least I have never k.. .wi! of one that was devi8*>d — that would ■• "V [lerfectly and absolutely scientifical- 1,. . 1 do no injustice to any man in the lio.J^ politic. So, there may be details of this which may very well l>e ameliorated when we get into Committee of the Whole.' Another point my hon. friend made was that 7 i>er cent was not a sufficient divi- dend, a sufficient profit, to encourage in- dustrial establishments. The resolution which has been brought down does not con- fine it to 7 per cent. It allows the indus- trial establishment to make eight, nine, t n, twelve, or whatever per cent it can, and it allows it to retain that profit up to seven per cent and then the Government 'hares in the proportion of one out of four over and above that. If 12 per cent is earned by an industrial eoiiipiiiiy ami if it is necessary, or seems to lie. in order to keeji it up, tliat it jliall got " per cent, it gets it.s 7 i)er cent. We tlion take the difference between 7 per cent and 12 per cent and we give llie owner of tliat estal)lishnicnt tliree and tliree-quart<'rs per cent wliile we take one and one-cinarfiT jK'r cent, so tli;il lie can have hi.-i 10 per cent of that indii.strial divi- dend. .My h(in. friend e.\i)laini'd to t! e House tliat he tliout;ht we should liave taken income as tlic liasis of our taxation. There is a great deal to be said in favour of income ta.xation. There is a good deal of trutli in the statement that taxes have to Iko pai^l Miiyway and that, if they are cumu- lative :i< h.'twren the jirovince and the Dominion, the ni:in pays, yon got from him and he do4>s not pay more than he oii;;lit to pay. Tliere is sometliing to l)e saiis be thankful that the critic- isms tiiat liave l>een made by the hon. inemlier for Halifax (Mr. A. K. Maclean) liave Iveen no more damaging or strosiger than they have iM-en. A democratic govern- ment i,~"liound. and is always willing, to confer willi t!ie Oppusition, and take its sug'-'estions ; and, if those suixge-tinns are good, to emliody them in its legislation. It is equally the duty of tin; Opposition to assist the Covernment with its l>est thought i.nd its liesl eoiR'hi-ion, more especially in cas<*s like this, where the cause to lie sustained is -o L'reat. and where the burden of the support of tliat c.iuse is also so heavy. Other gentlemen on both sides of the Housewill have opportunities of speaking on the piirticular matter of my hon. friend's Budget in ("omiiiittee of the Whole, where it will be exhaustively discussed in detail. Therefore. I do not intend to-night to oc- cupy the attention of this House a single moment more alom: that line. 1 am going to ask the House if it will be indulgent enough to listen to ine for a few moments on a suliject that has not been very thoroughly discussed, which possibly has not been very well thought out or received any very great attention, but which is yet so closely interwoven with this great con- test that we are now passing through that, although we do not want to divert the ener- gies of rardanient or of the country from our main purpose of carrying on tlie war successfully, yet as prudent and thoughtful men wt oiisht to be turning over in our minds, and getting ready for when the time eoiiK.'S for action along these i'nes; and that is, with reference to the economic situ- ation, the business situation. I take it that, if we rrad history through from first to last, we shall find very few contests out of wi'iich spring such issues as those which hang upon and are to come out of the all-alisorb- iiig contest in which we are engaged. If that Ije true, it is the duty of Parliaments - ,ind they are undertakim; that duty and it is the duty of this Parliament anil of this cnimtiy. while L'ivinL' all the support in its power to the actual conduct of the war, at the same time to he thinking very deeply, very strongly, and very lioriestly upon the condition of things which we here in Cana- da, and the Empire with us. and the world taken as a whole, will have to face when the war is over ami peace is assured. 1 tako it that our gre.it ami supreme struggle — that which will try us most and tax our best powers - is yet ahead of us, i. yet to be met, and will begin the day our soldiers are called off from war and the tremendous work of re-adjustment commences, in our Kmpire. in this country, with our .Mlies, and with the world. And it is just upon two or three phases of this matter that I am going to ask the House to listen to me; not because I think I shall teach them much, or that li-.ere will be anything new in what I shall say, but to stir up our minds by way of remembrance, that we may not forget these very weighty thiii_'s which are just in front of us, and which we cannot avo 1 facing. In the first plaie. I afhrin that every man of us on each side of this House, and every citizen of this country, has one duty to per- form; it is to put his thinking cap on, to examine into, and to understand those conditions which will confront us wlien this war has ceased; it is equally his duty to be candid and lionest in his utter- ance of o|);nion, and give to the Com- monwealth and to the Government the best that is in him of suggestion and of advice. I listened to the Finance Minister telling us the other day of the pleasant side of the past year's operations; of the large crops— a two year crop in one, thank Heaven for it— that have been gathered, of till- good prices to the farmers for their products, ami for most other products as well. I am thankful, too, that as the war had to fro on and munitions had to be made, it was so brought about that when other manufacturing industries languished we had an opportunity of mak- ing a large portion of the English muni- tions, fc'.icrehy keeping our unemployed at work and payinir them wages, and filling tlie gap whicli would have been an awkward one for us if wi' had not had that substi- tution. I am glad that things have been so nrought about partly in the nature of things and partly by tlie good management of my lion, friend tlic Minister of Finance, that this year we s:!;all have a favourable bal- ance of $200,000,000 as between our imports and exports. I am glad for all these tliing-s: they liave buoyed Canada up; they have kept >is in a position of vantage; they have made it possible for us to say that, in the by and large, no coun- try stands to-day, after the first nineteen months of war, in a better and sounder position than does this country of ours. Now, admitting all that, I am bound to be lionest with myself and to say that we should make a very great mistake if we took all tliis ju.st at its face value, and con- cluded that to-morrow would be as to-day, only mucli more abundant; it would be a great mistake if we put away from us all care, all investigation, all fronting of what will be the real difficulties of the future, and thus when the supreme economic struggle come.-- find ourselves ill prepared, light-heartedly and without thorough ex- amination entering into the greatest con- test in our history, the greatest in the his- tory of tha world. That is what I say to myself, and that is what I tell the people with wliom I -!ome in contact. I wish the whole of Canada would enter upon the same line of investigation; possibly they are doing it; I think they are, more and more. We should be prepar- ing ourselves for the time which is to come. Tlie courage which comes from an inflated and miscliievous optimism is but Dutch courage when you meet in the final struggle the difTiculties you have to front. The courage that tells, and the courage that works out the solu- tion, is the courage which a man has who faces every difficulty, who knows exactly what is ahead of him, and then with firm roaohe and energy braced to its utmo.-t, witli the full power of mind and heart says: Yes, that is vihat 1 have to overcome, and by God's grace and my own steady work I will face it and over- come it. That is the kind of cour.ige which I think tells. I have no love for the pessi- mist: the pessimist cuts right down into the hopes and confidence of the heart, and paralyses e.xertion and effort. I hi've not much more love for the over-optimist; an over-optimism I think may be more injurious to us than a tinge of pessimism. I meet with a great many people who use three common arguments. One man says to me— a friend of mine actually did say it to mo: I have no compunctions or qualms of conscience, no fears at all as to the out-come of this great war in a financial and business and economic way; lot the war go on; let the millions be spent; let the destruction all take place; there will be just as much money in the world at the end of it as there was in the beginning. Why, he says, take your manufacture of cotton and what is the system? Capital seeks out the raw material; gatliers it to- gether; transports it; puts it tlirough the mill; brings it out into the finished pro- duct; sends it away to the customers and gets its pay, and then runs back again to the raw material and keeps up tlie round, dispensing its wages and its benefits to every class of labour concerned. So it is with the woollen industry and with every other great industry, and so it is with the iiKinufaeture of cartridges and cannon. Cartridges and cannon are being made now. Cai)ital seeks out the raw material; brings it up to the state of perfection which is necessary for manufacturing the muni- tion; puts it through that manufacture; carries it out to its completion; sells it to the war administration, and gets its money, and then goes back again hunting out raw material and keeping up the same round. What is the difference between the manu- facture of cartridges and cannon and the manufacture of cottons and woollens? Uo you not see that the money is all kept in tlie world and that it is all kept circula- ting? Why then do you have any qualms as to what is to take place when this war ceases? Well, I have just this to reply: That money is but an infinitesiinal fraction of the wealth of the world, and, in so far as it is money, it is not worth shucks ex- ee])t for what it repro.-ient^. Gold, silver, copper, bank bills, letters of credit, cheques, ;inything that you please, are but the ex- pedients by which the old and clumsy methods of barter have been replaced and by which we have adaptability of ex- i. chance and rapidity of distribution. Tho wealtli, the capital of tlie world, is that whicli iiwni'y rt'iireseiits; it i? wliat is storey tlie use to wliich it i- put, and that is a destructive use, which destroys everytliinu that it .strikes, and not satisfied with material destruction, ilestroys the human actor, mind, liody and spirit. Therefore when munitions of war are characterized ant us ask ourselves the simple question: when war ends, where shall we get that immigration? Not from tho millions oi men who lie buried on the battlefields of the world; not from the other millions of maim- 1. blind, or bruised humanity that are abl. , it may be, to do something, but not to do the work that we require of well- grown and well-found immigrants in a country like ours. We shall not get them from Germany, because it will be many and many a lonir day before the German, comim: from beyond the line of Belgium and Flanders, finds it to his comfort to seek a domicile in the Dominion of Canada. The Hun spirit h:is revealed it-e'.f too fully; the antipathies and hatreds, the lo.ss of sympathy, the outcome of thes^; feel- iuirs of humanity which rebel and revolt :iL':iinst the inhumanity of the Hun, will lie in tlie hearts of our people for this gen- eration and will be taught to our descend- ants for generations to come. Not from that source then can we look for very iniieli inimisration into this country. I need not follow that argument further. Do not let us be deluded by any of these tliiiiL's, but let us put on our thinking caps and study where we can tret the right kind of iininisrration. Let us invite those that we want: and then let i.? improve on the pn-vious chapters of this country's history and train and direct, synqiathize with, and help in their endeavours in the new coun- try, those whom we brin^' from other lands to become cultivators in Canada. The next point I wish to touch is this. I am not sure that we have not taken too re- stricted a view of this great conflict in which we are cngai-'ed. Is it or is it not true that we have been inclined to judge of this con- test by the struggle of armies on land, fleets on the sea, submarines imder water, and Ze|)iielins and aeroplanes rfbove? Is it not possible that we have so regarded these Iihascs of the struggle as to have lost sight of the fact that there is another side to it all? My belief is that there has been and long will be another side to this conflict. The war which broke out in flame and thunder on the first of Augu.st, 1914, was but one symptom of conditions which had long existed and which had long been nur- tured. This contest began forty or fifty years ago when Prussia came out from the Mark of Brandenburg and began to im- pose itself upon the several .states of Ger- many. The preludes were in Prussia's wars against Pentnark and Austria by which she added o her possessions. The first great act was in 1870, in that swift, mar- vellous campaign against France, when she subdued her enemy and took toll in money and territory. Thereafter was carried on tlie systotii of what I may call pe!ip<;fiil penetration which, carefully ile- signed. elabc rately organized and tire- lessly prosecuted with infinite skill and tact, has been Germany's way of pushing forward to i\,c ultimate dominion and hogemony of the world. Let mo make that a little .stronger. (t*^rmany lay contigu- ous ito Belgium, to Hollaiul, and to otlior countries on those seas, a dominating power, scieiiiific, easily mr.ster in chemical research. pushiiisahcad in school, in college, and in university. In these and many other way.s she began to penetrate the ter- ritories which lay nearest to her, and driv- ing her lines faitlier and farther she at length ringed the world with l;er influence. Not until the war broke out did the revela- tion come to the minds of the people of otlier lands. Then, little by little, the eyes of the worM's people opened— and are still opening and are not wide open yet — and they realized the relentless campaign along the line of peaceful iienetration tlia' Germany had waged against mankind wi.,li the in- tention of ultimately doniinuiing the eco- nomic and political situation of the world. That economic war has been going on, and is still going on, and when this war of battalions anil fleets is ended that economic war will still be cnrntinued. When you have finislied with the military part of it you commence with the economic part, which must be proseoited to its fulfilment. Let me give you one or two instances. Germany spread herself into East, West, and Central Africa, along the borders of friendly countries. .And every hour that she so spread herself she was preparing treason and revolt for tliose friendly coun- tries. When the rebellion took place in South Africa, after the outbreak of this war, we found that treason had been hatched, that revolt had been consum- mated by the German authorities in .•\frict. It was found that throughout the Pacific in island after island there were the bases of Germany's operations — the wireless stations of the Germans, the pervasive agencies of the Germans. Theo- logically, scientifically, sociall", politically, financially, every advantage that they could take in this way of peaceful pene- tration they had taken, until their influence ringed the world, strong and sinister. And this has been to them in this great contest of incalculable value as a support and help. Let me give you another instance. In 1914 the British Association for the Advancement of Science held its great world-meeting in Australia. To that meeting four prominent German professors were sent. They came as the accredited dele- gations of great scientific associations, and as such they took part in the proceedings. The association's meetings ended. War broke out. These four men, accredited in that way, made representations to the Aus- traliim Government that they were scien- tists who had come to take part in this ^reat association and ought to b given passports to their homes. That looked reasonable to an unsuspecting people, and the Australians gave them the asked-for lil)erty. Two of them availed themselves of that litKirty and left very quickly. The others wanted to .stay longer and raised some cavil as to the time. Suspicion was engendered ; the baggage and possessions of these two men wore seized and it was found that they were absolutely German spies, that they had then in their posses- sion military maps of all points of strategy and advantage in Australia. Immediately, the Australian authorities sought to appre- hend the two who had left. One got away thrnugh Java, but the other was caught up with by a British cruiser, and when his baggage was examined M was found that he had the complete parapher- nalia of the spying work he had done in Australia. These are two instances which show you the relentless, far-seeing, far- reaching and effective way in which this work of peaceful penetration on economic and political lines was carried on. In thing' commercial and financial they acted similarly, until they acquired ab- normal powers in diffeient countries, and used them for the advancement of their own ends. To-day it is well understood in all the allied countries that this economic warfare will have to be finished as well as the warfare upon land and sea. To-day France is taking action, making investigation, laying plans. What is the first thing that will take place? Old treaties have gone; new treaties and new tariffs will have to be made. In Russia, Italy and Great Britain preparation is being made on the same lines. Do you suppose that Belgium, whose industries have been destroyed by the war, will be disposed to allow German trade to come uninterrupt- 10 edly, iis formerly, into lier country, to com- plete the ruin wliioli the armies of Gernmny have hogun -.vitliin her hounds? No, that will not take place in Heljjium ; nor will it take place in France, in Russia, in any country of the Allies. So that, with the war on land ami sea finished, there coniiuences at once an «-c(>niimic ciinipai!;n to develop within tlic allied powers wiiat is best within them, first, for their own respective coun- tries, then for the Allies in general, then for tlie neutral world; and to protect them- selves atraiiist the economic onslaufjlits of the Germans of the future. .\Iy ne.\t point is this; When the war is finished, we sh;ill S.wc a new world; or, rather, v,e shall face au old world under very f;reat!y clian^'ed conditions. When the recall is .sounded and the armies stop their fighting; when the white-winged dove ot peace poises over the blood-drenched plains of Flanders, ot Europe ami of the world, there will have to be faced a set of con- ditions demanding closest examination and the most earnest tlujught of all tl neoples who have been engaged in tliis . What changes will have been wrought, speaking from a territorial and u national stand- point? If we are victorious, as we intend to be. we shall join in the wori.l's work with one most important element largely eliminated. The Germany of thpt time \> ill not he tlie Germany of 1012. .'! and 1!)14. She will be a Germany chastened and restricted. She will be a Germany without a single possession in the orld outside of her own limits. She will he a Ger- many with no outside posts of observ.ation, no II ; .mI bases, no wireless stations, no -sys- t'em of spies and agencies to =ow sedition, to raise rebellion anil to give information to the country at home. She will be a Germ.any with a navy depleted, witn a commercial tonnage dislocated and dispersed. She will be a Germany separated from business with the whole outside world, having arrayed against her loss of sympathy, positive hatreds and hosti'.e tiiriffs, as potent and as powerful as the guns of the 9 p. in. Allies have been against her material forces by land and by sea. That will make a tremendous differ- ence in the world. In Belgium, in Poland, in the lialkan States, and in all the coun- tries of tlie .\llies. the old treaties will have gone and new arrangements will have to be made. We shall have to face a set of con- ditions absolutely different from those that were encoimiered at the beginning of the war. Hut th.it is not the main change that we shall perceive. Economic conditions will 1)€ vastly altered. Up to March 31 of this ye.ir i:5.!L«M),(i«K),0(K» will have Ihh'u exjvem^ed l)y the Entente Allies in the war. On the part of the Central Powers, £,3,.'$7O,0CM(.0O0, will have been expended. These sums amount to the amazing, incomprehensible total of ,«4;!.(H)0.(lllil.(HlO. W hat does this fact signify to US': Mostly these large sums are in the form of debt which will have to be borne by these n.itions and by the world for gen- erations yet to x'onie. But that is only a small part of this aspect of the war. How many millions of human beings, the best of thf pliysical and mental power of the peo- ples engaged in tills terrible war, have been laid low and abstracted entirely from the producing power of the world? How many millions have been diverted from productive pursuits durim; these two or three ye.ars and deliarrod from adding anything to the wealth of the world or re-enforcing its earn- ings or its savings? What arithmetic is capable of calculating the value of the de- struction of capital and property that has taken place during this war, all of which will have to be replaced? Whether it be in respect of the capital or the working power of the world; whether it be in con- nection with matters educational, moral or spiritual, the extent of the reconstruction that will have to take place almost passes the comprehension of man. It is so vast that we sit down l>eforc it. paralyse,! and con- fused in the attempt to get at its real sigifl- cance. But that is not all. Look a', the wreckage of huni'-nity that must be taken care of: the pensions for soldiers, the hospi- tals for their trep.tment and cure, the homes in which they shall have to be treated and trained. Look at that still greater expense in the private homes of those who have been niaimed and hurt in the war, which though a proud burden— a burden which the ming- ling of heroism and love help.9 to make sup- portable—is no less an economic Imrden. Then there is the rebuilding and rehabili- tation of all that has been de-troyed in the terrible conlagation of war. Last, but by no means least, there is the depleted physi- cal, mora! and mental force of the world which every great war. and this more than any other, inevitably leaves behind it. How many g< .erations will pass before we recover this inestimable loss! These are the conditions which we shall have to face. One man says-. Oh. .as soon ,as peace comes we shall go al>out our busines.ses as usual. Shall we' There is a period of readjustment. 11 ^1 wlifii the warrin? powers eonie to the point whsii th*")- feel tliat it is l>e^^t to stop war and to confer about tlie terms of peace. What happens then':" An armistice is agreed upon. l)Ut an arnii.-Jtice as long as it last^;, is war in all its ex()enditure, except the loss of human life and of shrapnel and shell in the prosecution of active hos- tilities. Tlic whole iMraphernalia. men, mu.'Ktioiis and all the gre.tt train of sub- sidiary services, is yet i . the field, and niu=t l)e kept thee, for no one knows when an armistice may he ended by disaRnn^ment ainon!,'st the i)Owers that are parties to it, and when hostilities may comr'.ence anew. Suppose that the armistice results in ne^'otiations for peace. Then follows a lon^' i>eriod of iieKotiation, a lonj; i>eri(>l of the demobilization of trt ops, of millions of men, of incalculable toi.s of material that have to l>e sathered up from all the war fields of the world. There •' e Hiillions of prisoners in every country engaged in the war to l>e carried ami deposited in the country from whence they came. All these things will take long perioe .-^pttled; the ques- tion of exchanges will have to be met. The long and somewhat tedious process of leading countries, which have made extraordina- y paper issues, liack to tlie zuld basis, with ail the disturbance that takes place meantime, will have to be faced. Summing these certainties up, thought- ful men say that the year which conies with the introduction of conferences for peace will i)ossibly be the most strenuous, the most dangerous, and the most fatal year of the whole period from a business point of view. So, we cannot look for anything less than those burdens, and thoK.e dislocations, and those difficulties • trade. We must make up our minds to face them, and we must frame measures which will enable us to face them. Then there will be the social changes that have taken place. In this war prince and peasant, rich and poor, have fought side by side, have eaten side by side, and have died side by side. Masses and classes have coalesced; naked, virile manhood has been the basis of valuation; old preju- dices and rancours have passed away; old shibboleths of class distinctions have l>een forgotten, and you will have a different world in Great ! itain. and in almost every other country that is engaged in this war, because of changes in social conditiona. Then there will be the settlement of lands, and the readjustment of methods of pro- duction. After the lessons that have been learned in regard to the mobilizatioa of fo-ces, economic and otherwise, it can hardly be expected that when peace comes those lessens will i.ot be turned to advan- tage in the economic field. So we have I'efore us a period of readjustment, of unrest, of dislocation, which we have to fact, and worry ihrough as best we can, and we will face and worry through it all the bettt-r f we have our plans prepared beforehana One last word. I think I have already tired the House too much. Some hon. MEMBERS: No, no. Sir GEORGE FOSTER. We '-we learned two lessons in this war. We ..ve learned the lesson of unpreparedness in military matters. When one begins to think of what the liritish Empire mea's. f what its flag floats over, of what its b( ■-.aaries encircle— one-ou:irter of thr inhabitants of the wcrld, wards without citizenship, dominions which are eciual in citizenship, dependencies spread over the whole universe -one hfu'ins to realize the awful responsi- bility of the trusteeship of the British Govern. ncnt over that immense area, filled with such precious possibilities, and cro-vded with such mighty interest?;. To« day, and for n'ii-tcer months past, Britain ha.s been mourning the fact thai she was unprepared for the defence of those sterling and incalculably vital in'eresto. That lesson of uiipreparednes.. his been learned by every one of the All es. The oi.ly country which did not havt to learn it wi.s Germany herself; she was not guilty of unprcp..iedness, so far as this war is con- cei;ied. She had prepared her weapons and chos,,n her time. Another lesson of incalculable value that has ' ^°n learned it, the lesson of co-ordina- tion and co-operation of all the parts of the British Empire, co-operation and co-ordina- tion on the battlefield, at sea and on land; co-ordination and co-operation the matter of supplies, of raw r. al, and of everything which tended .rds the embarrassment of the enemy, and towards the support of Britain and her Allies. The ordeal of war through which we have passed and are passing has taught us that it is possible for an Empire so vast and stupendous as the British Empire to co-ordinate and co-operate, each part with every other, towards the general good and general t)ent"t. That is a lesson of incalcul- able value, ai.d that lesson will be turned 12 tn account in the economic field, as well as in the fielJ of military and naval exploits. One word, not by way of full description, but simply to keep before our minds what is at present f-'oing on. The first thing that will take place will be a revision of the treaties and tariffs which govern trade. The old treaties have passed away with the war. The treaty of Frankfort, concluded after the Kraiico-Gernian war, bound France, in some respects, hand and foot to German connnerce and German trade. In 1869 the imports of Great Britain into France were 47 per cent of the total imports. The Frankfort treaty intervem-d, and in lOli the imports of Great Britain into F ance had dwindled to 13 per cent. The commercial treaties and commercial metliods of Germany uon their way into Au.-tria, into Rii.^sia, into Italy, and into the Balkans, and pressed upon every co-terminon-i country. That condition has passt d away. The slate is clean, anil the Allies, which have minjiled their blood in the contest to defeat the Hun in his att4Mnpt to usurp the i)lace of dominator and master of the world, will he disposed to niiito tlu'ir economic forces in order to protect their own peoples. And tlie last and least source .jf supply for Mianufaetured Koods, and the last and least i)omt of destination for our raw inati-Tials — I am not a i)roi)het. hut I take it upon myself to hazard tie- c>.njecfure-will be Germany until the German people have renounced their mad, wild dream of the superman, of the sui)crstate. of the super- race, which lias been their ideal and their delusion tlirout;h this war. The British Empire. I think, will get itself together Australia woke up early after the war l)i ike out, and. in its enditures, public or private, to im- prove the i)roduction of the country both in iiuality and in iiiiantity, to invite and direct immigratinn on sound and discrimin- ating principles, and to reinforce efliciency in production by technical education anil thus combine as far as possible the factory and the laboratory. Canada herself has learned something from this wir. Canada to-day is a self- reliant country many degrees higher than when this war commenced. Some- how or other, since we have put our shoulders under the Empire's burdens, we have developed greater confidence and greater strength. The sacrifices that we have made have melted out many of our parochial trivialities and unimportant dif- ferences, our minds work in an atmosphere of wider and broader problems of Empir*' pos- sibilities in which Canada shall share as a part of the Empire, within it and of it. To-day the lesson of the struggle and of its sacrifice is finding its way into, and im- printing itself upon, every Canadian heart, and making of us a more self-reliant and 'opolute 7)eople. What we have done is an earnest of what we may do. But the thing that we especially need to do now in this country is to throw old shibboleths aside, forget— many of us— the theories and prejudices of our earlier davs. face conditions as they are in this country, and work together, both parties and all the people, for a sane ajid .systematic mobiliza- tion of the best products and the best forces of Canada which in the future shall give us 13 prosperity, development, peace, and happi- ness. I am glad, Sir, to-night that Canada stands high and proud in the galaxy of nations and dependencies that make up the British Empire. Sacrifices have been made and burdens taken up for liberty, for justice, and for the best ideals of the world. Here- after Canadians will not let fall sc lightly and unthink:r>tion that our sol- diers have made foj !::< at the front, worthy of the reputation that our i ^ther8, our sisters and our daughters have made for U.S here at the home base ot operations, and worthy of the place that we have aspired to take as one of the potent, virile forces in the progress and development of ihe world. .1 , . t- Ml trm