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FIELDING, M.P. MINISTER Oy FINANCE m TBI HOtrSE OF COMMONS TUESDAY, MAT «S 1906 It OTTAWA PRINTED BY S. E. DAWSO\, PRINTr R TO THE KIKG"S MOST EX<:^LEXT UAJSSTY 1906 ^^Hip ■ ; • :i^:\J:X^ ''&<:ym:Ji Zj.i-t!ia=u^:_ 1 >( t 09513554 CANADA BUDGET SPEECH IIRLIVIMI, u\ HON. WILLIAM 8. FIELDIN(i, M.P. MlXISTEh OF FIXANCK IN IKK HOUSE OF COMMONS TlKiHUAY. MAV -i-i 190G OITAWA PRINTED HY f. E. DAWSON. PRIXTKR TO THE KING'S MOST EXCELLENT MAJESTY 1906 Cor, cA^'z^.."?^ CONTENTS vno- FlKal ye*r l»04-l— Revenu* * Expendltur* • Surplus 1 Bouotlci and tb« Burplui * Fltrai year l90S-<— Estlmata of Outturn * Flacal p«rlod, 1»««-T ><> Intercolonial Rallwar— Improvemfnt In Ita flnanclal affalri it Poit Ofllca— Surplus " Trade of 1904-8 " do 1908-« 1* StatUtlci of Canada'* profreM 14 Relation of Expenditure to leoeral progreaj I* The public iebt and debt per capita 17 Public loans ** Treasurr bills -'» Early maturinc loans • • • • sa Deportation of United States coinage 24 Immigration 24 Rerlslon of ths TarlB 25 Present Tariff changes -•» Tariff generally 27 BUDGET SPEECH DELIVBREI) BY HON. WILLIAM S. FIELDING, M.P. MINISTER OF FINANCE IN THE HOUSE OF COMMONS, TUESDAY, MAY 22, 1906 WAYS AND MEANS— THE BUDGET. Hon. W. S. FIELDING (Minister of Finance) rose to move that the House go into committee to consider of the ways and means for raising the supply to be granted to His Majesty. He said: Mr. Speaker, in presenting for the tenth tirae to this House the annual statement of the financial affairs of the Dominion, I am sure that all the hon. members will rejoice with me that we can congratulate ourselves upon the continuance of that remarkable prosperity with which Canada has been blessed by a kind Providence for a very long period of years. In accordance with the custom of the budget speech, I shall find it necessary to refer to the financial affairs of three fiscal periods. First, we have to consider the affairs of the financial year 1904-05, which terminated on the 30th of June last; next we have to consider the affairs of the financial year now current, which will terminate on the 30th of June next; and then we may have to consider very briefly the affairs of the next finan- cial year, or, to be more exact, the next financial period, which, in consequence of our proposed change of the fiscal year, will be a period of nine months, beginning on the first day of July next and ending on the 31st of March of the following year. FISCAL TEAR 1904-6— RBVKNXIB. With regard to the affairs of the last financial year, the accounts have been in possession of the House for a considerable period and do not call for any very extended remarks. In one or two respects the outturn of the year was materially different from my own expectations. The revenue of the year was sub- stantially the same as my anticipation, falling short by only a 5 _^ . few thousand dollars. The customs revenue showed an increase over the previous year of $731,000, and in that year reached a figure more than double what the total customs revenue was only eight years ago. The post oflSce revenue increased to the extent of $473,000. The railway revenue increased by $423,- 000. Against these increases there were several decreases. In the general classification of our services, the excise revenue showed a decrease of $372,000 ; the Dominion lands showed a decrease of $160,000, due chiefly to the falling off in the busi- ness of the Yukon, and in miscellaneous revenue there was a decrease of $592,000. Notwithstanding these decreases, how- ever, taking the whole revenue for the year there was an increase of $512,956.85. This was a fairly satisfactory revenue. The increase was not so large as in former years, when it was going forwards by leaps and bounds, and the increase of each year was counted by millions; but on the whole it was not an un- satisfactory year. It would be correct to state that the year 1904-06, both with respect to its revenue and its trade, was a period of rest, when the coimtry was apparently taking breath and preparing for the larger expansion which was close at hand. FISCAL TEAR 1904-5— EXPENDITURE. So far as the expenditure of the year is concerned, the result was not so satisfactory. There was a considerable increase in the expenditure beyond the amount which I antic '^ted when I made the budget speech. Having regard to thi late date at which the budget speech was made last year, we might naturally have expected that we would approximate more nearly than uslJally to the outturn of the year. As a matter of fact, the fiscal year had closed a few days before the budget speech was delivered ; but the close of the fiscal year and the close of the accounts of the fiscal year are two very different things. In Great Britain the fiscal year closes on the 31st of March, and the accounts close immediately ; all balances lapse, and the new year begins with the appropriations for the year. That is quite possible in a country like Great Britain, with a comparatively small area, a dense population, and means of communica- tions by railway, telegraph and telephone, which are of course beyond the means of communication in a country of such vast extent as the Dominion of Canada. It was therefore necessary to allow a certain period after the close of the fiscal year for the closing of the accounts. As a matter of fact, after the close of the fiaoal year 1904^5 no less than $17,000,000 came into the accounts between that time and the period allowed by the regulations for the closing of the accounts. The payments made between the closiiig of the fiscal year and the closing of the accounts last year were more than the total expenditures of the Dominion for several years immediately following the begin- ning of the union. While, therefore, it mi^t seem, in view of the budget speech having been delivered at so late a date, that we should have come more closely than we did to the out- turn, the fact is t* \t, so far as the revenue is concerned, the results were about as anticipated, while the expenditure, both on consolidated account and on capital account, was considerably larger ; so that the surplus was somewhat less than I had antici- pated, and while we had hoped to close the year with a very moderate increase of the public debt, the close of the year showed an increase of the debt amounting to some $5,000,000. But while the year was a less satisfactory one in that respect than we had hoped for, it was, as I have said, as respects its trade and finances generally, on the whole a satisfactory year, and only suffers by comparison with years preceding it, which were years of marked advance. It is worth remembering that now we are dealing in the budget of Canada with vast sums of money, much larger than those of former years, and it cannot be expected that our estimates will approach very close.y to the actual expenditure. nSCAL TEAR 1904-S-8XniPLUB. The result is that the surplus of the year, instead of being $9,000,000 as I had anticipated, was $7,868,089.81, a surplus in itself very satisfactory, and larger than the average surplus which this government has enjoyed during its term of ofiSce. The question of the surplus is always an interest- ing one, and so I have prepared a statement showing the surplus of each year from the time the present government assumed office down to the present date: Surplu*. Deflctt. I18M-7 $819,98144 1897-S ..t 1.722,712 «3 1898-9 4,887,749 00 1899-1900 8,0M,714 Bl 19C0.1 S.848,333 29 1901-l!! 7,291,398 08 1902-8 14.846,166 17 1908-4 15.066,984 12 1I04-6 7.868,089 81 2 8 Taking the total surjJusea for all these years, with the one deficit, we find that for the nine years there was a net surplus of $64,300,165.85. That would give us an average surplus of $7,144,462.97. BOUNTIES AND THE SURPLUS. A question is sometimes raised in the House and outside with regard to the manner of preparing this statement of surpluses in comparison with the statements in former years. I have pointed out more than once, and need only say briefly now, that the only point of difference between our manner jof preparing this statement and the manner of our predecessors is with rela- tion to the manner in which the bounties on iron and steel and other things are accounted for. In former years they were treated as drawbacks from the customs account. It seemed to us that there could be no drawback where there was no money paid ; we did not like the system and we changed it. We thou^t it wise, as these bounties were considered to be but temporary expedients, that they should be ciiarged to a special account, and 80 they have appeared in this special account ever since. It is not strictly a capital account; these items stand in the same position as a railway subsidy. It is sometimes contended that we should not have done that, and that these ar ' proper charges against the income of the year. I shall not stop to debate whether or not that view is correct, but I put the point as I have done before, clearly before the House, and say that if it be deemed expedient to take that view, if it be considered proper that these bounties should be treated in that way, should have been charged up against the income for the year, then instead of having for the nine years an average surplus of $7,144,000, the result would be that we would say we had an average sur- plus of $6,526,233, and so it will be seen that even if we attached any importance to that criticism which is sometimes offered, in the result of the nine years' operations it does not make any extensive difference in the general statement of the burpluses of that period. FISCAL YEAR 1906-6— ESTIMATE OF OUTTURN. Coming now to the affairs of the fiscal year 1905-06, I esti- mate a revenue of $79,000,000. The revenue for 1904-05 was $71,182,772, so it will appear that I am estimating for an in- crease in revenue of $7,800,000. The estimated experditure for the current year, chargeable to consolidated fund, 1 place for the present at $66,500,000. The expenditure of a similar character last year, 1904-05, was $63,319,682, so it will appear I am estimating for an In- crease in the expenditure chargeable to consolidated fund this year of $3,180,000. I would have you observe, Sir, that I am estimating for an increase of revenue to the extent of $7,800,000 and an increase in expenditure chargeable to consolidated fund of only $3,180,- 000, an estimate which, if realized, will give us a considerablb sum to be made available to assist the capital account. With regard to the probable surplus of the current year, we have an estimated revenue, as I have stated, of $79,000,000 and an estimated consolidated fund expenditii of $66,500,000, and if tliese expectations be realized we shi , close this vdur with a surplus of $12,500,000. This will be one of the largest surplises in the history of Canada. I think I am correct in stating that in only two preceding years, and that in our own time, his such a large surplus been shown on the year's opera- tions. With regard to capital expenditure for the current year, I estimate that it will reach $15,500,000, which is practically the same amount as the expenditure of like character last year, that ©xperaiture being $15,484,000. Having an estimated expenditure then on consolidated fund of $66,500,000 and an estimated expenditure on capital account of $15,500,000, this will make a probable total eiipenditure for the current year of close on $82,000,000. Mr. R. L. BORDElJT. Bounties are included ? Mr. FIELDING. Everything, the bounties are charged in what is called capi^^l and special account. If we take from that the estimated revenue of $79,000,000 and the available sinking funds of $2,200,000, making a total deduction of $81,200,000, we shall have a total addition to our net debt in the current year of !5800,000. I am hopeful that the result will be more favourable; I am hopeful that the expan- sion of trade will be such that the revenue will go somewhat beyond the $79,000,000, and that we may close the year by squaring the account, that our receipts will cover our expendi- tures of all classes, and that we shall add nothing whatever t' the public debt. However, it is well to be in that respect jon- servative, especially P.S my estimates in this way last year were H - 10 aomevhat disappointing, and I prefer to have them on a con- servative basis. From the figures I have given there may be a possible addition to the net debt at the close of the year of about $800,000. FISCAL PERI03 \M-1. Coming to the period of 1906-07, for the nine months, it is difficult to make any general estimate ; we can only draw atten- tion to the figures presented by way of estimates. The main estimates have already been submitted to the House, and they amount on consolidated fund account to $51,694,582.72. There are capital account estimates amounting to $16,342,015, of which $10,000,000 is for the National Transcontinental Rail- way. To this must be added at a later period in the present session supplementary estimates as usual. I am not prepared to state what they will be, but I think I can assure the House they will not be excessive. Mr. FOSTER. About what will they be ? Mr. FIELDING. Something over $2,000,000, I think, for consolidated fund, but the estimates are in course of prepara- tion, and, as my hon. friend (Mr. Foster) knows from his own experience, it is difficult to give more than an approximate state- ment in such a case. And then at or near the close of the fiscal year there is usually submitted a further supplementary esti- mate to wind up the aflfaira of the year. So ttiat in any esti- mate we attempt to make, we shall have to take iii these addi- tional estimates which will have to come down in due course. With regard to our possible revenue for the i ariod of nine months, perhaps the safest w y is to take the revenue for the corresponding period in the current year. Our revenue for the corresponding nine months of the current year (July 1, 1906, to March 31, 19'' 3), amounted to $57,016,662.68. We shall have in the coming fiscal period a revision of our tarifF, and the effect that revision may have on the finances of the year is, as hon. gentlemen understand, difficult indeed to predict. I do not care to say more than that. I do not expect that these tariff changes, which it is hoped will be brought on at the autumn session, will have any disturbing effect on the public revenue, and if business continues good we can at least expect to have as much revenue in the nine months as in the nine months of this year. I should feel hopeful that busineM would increase and we would do better than that. I think it will be n found, if these exoectatiotu are correct, that within that period of nine mouths we shall have a sufficient revenue to meet all our consolidated fund expenditure and leave a material surplus, proportionate probably to the average surplus of recent years, and that that surplus will go to the diminution of vthat would otherwise be an addition to the public debt. I do no^ feel justi- fied, »t present, in going very TuUy into the '^IFairs of 'he future period, but I see no reason why, with a reasonabk expansion of trade, we should not have as prosperou'i a period as we ha re had in recent years for the full period o^:' the twelve months. INTERCOLONIAL RAILWAY- .MPROVBHE IT AFFAIRS. IN ITS FINANCIAI, So much attention hal been given to the affairs of the Inter- colonial Railway — especially the financial affairs of that road — that the House, I am sure, will be pleased to have a statement of the operations of the road for thb expired portion of the present year in comparison with previous years. It is well known — almost too well known — ^by the House that, for several years, the Intercolonial Railway has not had a very favourable balance sheet In 1904, the ro^d showed a deficienc,. of $900,- 000, and in 1905 the Jeficitiicy on the year's operations was $1,725,000. I have here a statement cf the operations of the roed for the ten months eP'-'lng April 30 last, from which I find that the revenue for that period was $6,265,218.14, and the workini! expenses $6,380,923.92, showing a deficiency this year, on the ,en months' operations, of ^115,705.78. I do not know whether my hon. friend the Ministor of Railways (Mr. Emmer son) will be able to keep up that gait until the end of the year, but, if he is able to do so, it will certainly make a great change in the finances of the railway. Let us hope — especially those of us who are from the lower provinces, and interested in the road more, perhaps, than the average of men — ^that my hon. friend, in his anxiety to make a good financial statement, will not overdo the business, and fail to give us the liberal train arrange- ments and reasonable facilities that the people expect from the Intercolonial T POST OFFICE SURPLUS. The Post Office Department is one to which I wish to call attention, and it is one, I am glad to say, whose financial state- ment is of the most gratifying character. The prosperous condi- tions tistablished by the former Postmaster General, Sir William 13 Hnlook, have been continuecl by hia auooessor, the preaent Poat- maiter General (Mr. Ayleiworth), who is likely to be able to make even a more favourable statement than his predecessor. The Post Office surplus for 1904-05 was $490,844.89 — close upon half a million dollars. If the present Postmaster General c,Ub,KT Coming now to the export., a bnmoh of budne«i which to 7TL '1 /,? "!^ " ^*'P" °°" intereeting than the other, 1 tind the following iwralta: The Mine I- Fiaheria* 1. _ Foreiit Animali and their produce. A^Gulture Mannfaotum Muoellaneout .... Total mdaa Coin and Bullion Total export* TOTAL aXPOBn. lOmontbatindiav April ao, 19067 Domeatic. 2*,esa,\m 8,882,788 HW2;68S 5S,08a;3» as,7(»,620 16,811,351 29,6U; Foreign. 168,941,408 1(K<,941,4(» 235,088 14,942 109,097 531,643 %680,63D 3,809,685 1,513,643 7,774,389 673,826 8,448,194 10 monthi ending April 80, 1908. Domettio. 37.490,998 19,168,903 28,587,996 56,64^364 44,102.300 19,748,497 63,142 Foreign. 189,767.167 189,767,167 168.S36 16,633 79,867 583,7&» 4,668,679 8,310,116 616,796 8,437,686 7,803,966 1^640,641 Total exporta, 10 monthi, 1904-6, 1162,389,697. „ '' " 1906-6, 205,397,698. Ouatoma Revenue, 10 month*, 1904-6, •33,747,857. 1905-6, 87,607,464. STATISTICS OF CANADA'S PBOORBSS. I have designed to avoid burdening the present budget speech with any eUborate statistics for several reasons. But I think It 13 desirable to present a few striking facts of ten year periods 1* whwety w« o«n g0t « oomprehenaiTe glimpM of the great pro- gnm Oanada hw nude during tbe pMt few jnn. To that «nd I preaent the following table*: Mm«I1u«o« ■t.tlitie. Illiutnuag preertM of CB«te .i.m mi : Total laporti. m, im,«7o.tM ing loi.Mi.m M- no.wi.Mi M«,«M,417 Total Exports. JJ2 t T7.8M,97» iJ! n.SM.Ml ,,^ UI.IM.IOS 10S,tl«.t7l Total Trad*. jn! •'. ..M00,»87,IM ,„, XM.m,»47 ,2g" ■■" m,ao.*u 47(>.m.»» Dopoolts in Chartarod Banki, J(Hh June. ^ I «1,094.M0 ^ M.080,4»9 ^ l>t,«M.m *«,I71.«4« DlMounta— Charterod Banka. 30th June. 3?l! |1I«,T71.«7» :n! w«,M7.(Ktt ^ m.nr.m *"" 4M,fM M4 Orardue bank debU 3($th June, 1S9B $SSM»«4 Orardne bank debta tOtta June, 1»M .'.' i.ws.ot Notoa of Chartered Banka In Circulation. 31tt October j2/! » 28.8»,8S1 IMS." »*•"«•»• ,!!! 84.871.028 76,890.868 DoBilnion Notei In Circulation, Slat October. JHf I 11.119,488 i»8.":: !?•?!»•»» ,-_ 22,893,289 *^ 61,144.312 MHea of Railway In Operation, 30th June. ?nj *•«>* ""• 20,487 Railway xramc— Tone Carried JJj! ^ return. ^"" 14,669.271 »"• 21824421 »»«• 60.893:987 16 But, Sir, I ihrnild not dUpoM of th«M •tatutioi without mj* ing loinething regarding our revenue and expenditure, and making compariioni in the aame way : Consolldatvd Fvnd R*T*nu«. >•'• tS4.M<.Tll •••• M,TIT.««1 »•*• t IS.»TI.1M >»** 71.m.TH Contolldatcd Fund Expenditure. '•" ♦M.ni.OTt '»»» M.OtT.O«0 '«'» M.1II.0M !»«» MJIMM Total dUburMmenti of all kinda. "" taa,iM.»ie "•» O.ltt.0T7 "'* 4M71.8M '9<* 71,104,111 Xow, these figures show the enormous increase in our public expenditure, and sometimes that is made a subject of criticism more or less friendly, but sometimes adverse. We admit that there has been a great growth in the expenditure of the country, but we think tliat to some extent that expenditure has some- thing to do with the great progress of the country. We do not mean to say that every dollar operates directly in the progress of the country, though indirectly it contributes. But in the main, the )• rge public expenditure made under the administra- tion of the present government has undoubtedly been one of the factors which have assisted in the development of the country, and we are able to point to statistics to show that if the expenditure of the country has increased, it has only been keeping pace with the expansion of our resources. RELATION OF EXPENDITURE TO OENERAL PROORESS. . Let me point out that the total disbursements of all kinds increased from $42,872,338 in 1895 to $78,804,138 in 1905. This represents an increase of $36,931,800 in the period, or about 83J per cent, a very large figure, I frankly admit But during the same period the increases in the following business features were as follows : Par eeot. Total trade.. 109| Conaolidated fund revenue io9| Depoaita in chartered ba*^ im Diacounta to the public by chartered banka 114 Tona carried by railways 136 II with these figures before me, I may fairly claim that, large aa haa been the increase in the public expenditure of Canada, it is an increase which has been necessary in order to assist in the development of the country, and the figures I have been able to ahow as to the expansion of trade, the increase in the banking business, the increase in the railways, all these items prove that the expenditure of the country has not increased beyond a reasonable amount, having regard to its expansion and development. THB rVBIAC DEBT AND DSBT PER CAPITA. The expansion r£ our expenditure and the question of our net debt are always necessarily associated. We think that the rpsults of our policy in that respect are such as ought to commend thenjselves to the House and the country. It in not to l»e expected that in n country like Canada we can dvoid additions to the public debt. On several occasions when it has been my happy privilege to present to tne House the financial statement of the country's affairs, I have felt it my duty to warn the House that in a country like Canada, with such a vast territory, with so much to do, with so many avenues opening for development, it was not to be expe-^ted that our affairs could be carried on without some addition to the public debt And 80 at the present time, even if we had to 8^ 5,107,918 6,162,121 6,216,899 6,272,288 6,328,206 6,384,746 6,441,886 6,499,632 5,667,991 6.000,000 $ 253,074,927 2n8,4!<7.432 261,538,696 263,956,3!t8 266,273,446 266,493,806 268,480,003 271,829,089 261,606,988 XI0,m,71S 266,224,166 $ eta. 60 07 60 61 80 66 80 60 80 80 49 83 49 86 49 96 47 87 46 94 44 37 PUBLIC LOANS. In the matter of public loans this government has been remarkably fortunate. We have seldom had occasion to go upon the public market. Almost all of my predecessors have been obliged — properly obliged — to go somewhat frequently upon the public market for loans. This government has only issued one public loan during the nine years to which I have referred. In 1897 we issued a comparatively small loan of £2,000,000. We made a new record for Canada at that time. Tho psychological moment was chosen happily for the issuing of the loan. We were able to place a two and a half per cent loan on the money market at a price which yielded a very satis- factory result, the cost being 2 Si) interest. It is but fair to say that there has been no moment since then at which we could have repeated that transaction. No other colony has attempted to issue a two and a half per cent loan and Canada herself would not have been able to ha' . done it. We did seem to be exceedingly lucky in selecting the moment at which that amount was placed upon the market. In more recent years the condi- tion of the money market has been less favourable. Many things, chiefly the great wars, iiave had to do with it. The 21 tremendous expansion in industrial life throughout the world has created a demand for capital and the supply of capital has not always been equal to the demand. Of course, money can always be obtained by good borrowers if they are willing to pay enough for it, but in view of the great demand for money for some years past there is a strong disinclination on the part of investors to purchase the higher grade of securities — securi- ties which will only yield two and a half or three per cent. They have so many opportunities of investing their money at higher rates that they are not disposed to buy stocks yielding the lower returns. We have had evidence of that in the unsuc- cessful efforts made by various public bodies to raise money in the old country. As I have said, you can always raise money if ou are willing to pay for it, but the experience of mosr governments and most large public bodies has been that for some years the conditions have bee, unfavourable. Perhaps the most notable example — an exceptional one some may say — was the Russian loan placed recently on the market for a sum of $430,000,000. So unfavourable was the condition of the money market that Russia wos obliged to oflFer terms which practically amounted to within a fraction of six per cent for the money. Of course Russia has suffered a great deal from the Japanese war; her prestige is not what it formerly was, but still Russia is a very great nation and nobody doubts that the securities of Russia will be redeemed in due course. The fact that this great nation has had within tli^ past ftw weeks to pay six per cent for her money is at any rate an indication of th. -fate of the money market. We have been fortunate in not having to go on the pul)lic market. With our abundant re%'enues which are exceedin"- our ordinary expenses, we have been able to provide largely fur our capital account as well as for the ordinary expenses ; we have not only been able to provide for our capital account but we have been able to provide to a considerable extent for the redemption of maturing loans. TREASURY BILLS. We have found it necessary from time to time to issue treasury bills. We believed it was more expedient to issue a short term treasury bill at a possibly higher rate for the moment than to issue permanent stock which would bear the results of the unfavourable oonditinn* of the money marki-t during the whole period of its life; and so we have from time n to time as i:he need might be issued treasury bills which with the aid of our liberal revenues have enabled us to carry on the public a£Fair8. Hitherto, with the exception of the year 1897, we have not gone upon the general money market. Mr. FOST£R. Can my hon. friend give us an idea of the treasury bills that have been issued and their cost? Mr. FIELDING. We have now outstanding an issue of treasury bills of £600,000. These bills were first issued in March, 1906, at a cost of 2i per cent discount, a particularly favourable rate. They were renewed at a later stage for 8| per cent ; they were again renewed for 3^ per cent and they are uow outstanding These are the only treasury bills which are at this moment outstanding. Mr. FOSTER Was the last issue 3^ » Mr. FIELDING. The highest for that issue is 3^. We have had at other times issues which have passed out, and hich bore from time to time r. higher rate; I think we paid at one time as high as 3|. In addition to this £600,000 of a temporary loan in the form of treasury bills we have an over- draft in the bank in London for £400,000. We had an issue of £800,000 of treasury bills maturing and we thought it was not wise to renew them at the moment. We were able to pay off £400,000 of them and the balance remains for the time being as an overdraft. Whether we shall let it remain in that position or whether we shall issue treasury bills is a point to be considered. We are awaiting a favourable opportunity. Mr. FOSTER. What is that costing you now ? Mr. FIELDING. The axTangement we have with the bank is that the overdraft shall bear the Bank of England rate at the time being, whatever it may be. The bank rate recently was 3^ ; it was raised a couple of weeks ago to 4 ; the last report which I read in the newspapers is that they expect easier money within a week or two and that probably the bank rate will bo down again 3^. Whatever the Bank of England rate from time to time may be, that is the rate we pay on our overdraft. Mr. FOSTER. Where is that held ? Mr. FIELDING. It is held in London oy the Bank of Montreal. These are our only temporary loans. At times, of course, our loans have been larger as our needs were, and they have been paid off and other bills issued from time to time just 23 as might seem to be necessary. \7e have, as I say, been very fortunate therefore in not being obliged to go upon the public money market, and I am satisfied that in that course we were wise, inasmuch as any issue we might have made of late of a permanent character would undoubtedly have had to bear au unfavourable rate. We are strongly impressed that it was good policy to issue treasury bills for a short time awaiting a favour- able market so that we might hope to issue our securities at a better rate than would otherwise be obtained. i;arly maturing loans. While in the past we have been fortunate in not requiring to go on the market; while we have been able to meet our needs with the aid of liberal revenues and treasury bills, it is not to be expected that can be continued for an indefinite time. We have now large maturing loans and we have also large obliga- tions, particularly those arising out of the Transcontinental Railway, and as those obligations come upon us it is certainly very desirable we should meet them by the issue of a public loan. When the market is in a more favourable condition for that purpose we shall certainly deem it our duty to issue a public loan in the usual way. I shall give the House a state- ment of what these early maturing loans are, for they are considerable. On the 1st November next the 4 per cent loan of 1876 amounting to £2,500,000 matures, and on the 1st May, 1907, the sum of £2,275,082-14-5 falls due. Thi- latter sum repre- sents the portion of the loan of 1874 that -11 due Ist May, 1904, that was extended. Year by year that date until 1910 arrangements will have to be mad. . meet maturing liabilities. The total maturities to 1910 inclusive are as follows: — November 1. 1906 £2,500,000 "■5' !■ 19" 2,275,082 14 5 AprU 1, 1908 1,500,000 November 1, 1908 4,600.000 June 1. 1909 5,000,000 January 1, 1910 6,443,136 2 9 January 1. 1910 4,000,000 October 1, 1910 1,500,000 £27,718,218 17 2 Since . .le following " -^ns have matured and have been provided i<.. as follows: — October 1, 1903, Intercolonial Rail- way 4 per cent guaranteed loan. £1,500,000 redeemed in ca.^h. 24 October 1, 1903, Intercolonial Railway, 6 per cent unguar- anteed loan, £600,000 redeemed in cash. April 1, 1904, Ruperts Land, 4 per cent guaranteed loan, £300,000 redeemed in cash. May 1, 1904, 4 per cent loan of 1874, £4,000,000. Of this £2,600,000 was extended for three years. November 1, 1905, 4 per cent loan of 1875, £1,000,000 redeemed in c ii. It will therefore be seen that we have been providing for very considerable sums of our maturing liabilities and have been able to redeem them in cash, except in one instance in 'vhich we have carried over h portion of our loan as I have explained. DEPORTATION OF UNITED STATES COINAGE. I mentioned to the House a year ago that I had made an arrangement with the view that there should be a deportation of American silver. It was found that the amount of American silver in circulation in Canada was very large; and possibly as a matter of national pride, possibly in view of the fact that there is a profit on the circulation of silver, many hon. gentle- men thought we should take steps to supply the Canadian coin and displace the American. Towards that end the government made with the banks an arrangement which was somewhat slow in going into operation, and up to the present date the amount of silver sent out of the country is $273,750. That has been practically all replaced by Canadian silver. IMMIGRATION. I have before me certain statistics of the immigration to the Dominion which I shall not burden the House with, but I would like to note, and I am sure the House will share with me in the pleasure of noting, a very interesting fact in connec- tion \vith the immigrants who are now coming to Canada. Not only is immigration for the current year increasing, but it is increasing in a way that will be pleasing to us all as to the source whence these immigrants come. In the ten months of last year the number of immigrants recorded as arriving was 93,309, and in the ten months of the present year the number of immigrants arriving is recorded as 117,585. Therefore as regards the total figures the result is very gratifying^ indeed. But when we come to analyse the details of this year's immi- gration we find that while in the ten months of last year the immigration from continental Europe was 23,037, that immi- gration from continental Europe for the ten months of the present year is almost exactly the same figure or 23,739. The 25 figures are practically the same aa thoae of laat year. There has therefore been no increase apparently in our continental immigration. Turning to the immigration from the '^nited States, we find that whereas last year the number of -ami- grants in the ten months to April 30, 1905, was 31,969, up to April 30 of the current year it had increased to 43,237. I know that some persons not always in (]lanada — and the farther away they are from Canada the more likely they are to take this view — entertain a doubt as to what will be the effect of so many people from the United States coming to our country. I believe I speak the mind of all who have been in the North- west when I say that the people who have come from the United States are among our best settlers to-day. They are people accustomed to our western life, who understand how to manage the farm lands of the country, and as a rule people with a little capital and marked intelligence; and I have such a firm and abiding faith in the all-absorbing power of British soil and British institutions that I have no shadow of doubt whatever that these people will make some of the best Canadians in the country. If we turn to the figures of immigration from the mother country, we find an equally gratifying state of affairs. Last year, in the ten months which I am considering, the immigration from the United Kingdom numbered 43,703; while in the ten months of this year it amounted to 50,609. While, therefore, we are glad to welcome to Canada immigrants from the continent, I am sure we are all tlie more pleased to have so large a percentage o{ those from the mother land and the United States, who speak our language and are familiar with our laws. RBVISIOX OP THE TARIFF. It was announced by the Prime Minister some time ago that the proposed revision of the tariff would not take place during the present session. I very much regret the circumstance which obliged him to make that announcement; but there seemed to be no help for it. We thought after that determination was reached that the House would have a shorter and quieter session. Mr. FOSTER. Was it entirely the sprained ankle ? Mr. FIELDING. If the hon. gentleman can suesest any other reason, what would he say it was? Mr. FOSTER, man's mind. 96 It is hard to get inside of the hon. gentle- Mr. FIELDING. I can tell the hon. gentleman that so far as I am concerned, there is no other reason ; but he has a vivid imagination, and perhaps he can find some reason which ha^ not entered into our own minds at all. PRESENT TARIFF CHANOEg. Wc hnve no changes of a material character to make in the tariflF in consequence of the announcement of the right hon. the Premier. I have, however, one or two small resolutions to present, not for the purpose of making any change, but merely to confirm existing conditions. The first resolution is to extend for the further period of six months the exemption which is already provided for in our tariff as respects the duty on beet sugar machinery. It was represented to us that some factories were in course of construction at the present time or were projected and will go on during this season, and that if we allowed this extension, the industry would get the benefit of it. We therefore propose to extend that exemption to the Slst of December next. There is a similar exemption in the tariff with respect to machinery used for alluvial gold mining. It was inserted particularly for the encouragement of the gold mining industry in the Yukon Territory. We propose to extend the period of that exemption also to the Slst of December next. We also propose a resolution to confirm in the tariff an arrangement which has recently been come to with respect to the re-rolling of steel rails. It was represented to lis some time ago by the Grand Trunk Railway Company that they wished to take up a lot of old rails and send them abroad to be re-rolled, and then bring them back to Canada and lay them on some of their branches, thus much improving the service. They represented that there was no place in Canada where they could get this work done, and they asked us to admit the re-rolled rails free of duty. We were not able to agree to that; but we agreed that if there was no establishment in Canada which could do the work, we would allow the rails to be sent to the United States to be re-rolled, and then brought back to Canada, and in that case we would not levy on them the full duty imposed on new rails, but a duty oil the value of the labour put into the operation of re-rolling the rails in the United States. lu accordance with at that arrangement a refund of duty was allowed to the Grand Trunk Railway Company with respect to a certain quantity of rails which they are importing under these circumstances. We think it desirable, however, that the matter should not be dealt with in that way, but in the form of a tariff resolution, which will provide that in the case of old rails that have been in use, which it is desired to send out of the country for the purpose of being re-rolled, they may be brought back to Canada on payment of a duty of 25 per cent on the value of the labour employed in this work in the United States, provided, however, 'ihat such arrangement shall not continue longer than until the pstablishment in Canada of any factory or mill equipped for the doing of this work ; and when and so soon as it shall appear to the satisfaction of the Governor in Council that such a mill has been built in Canada, then this clause shall cease to operate, and all such rails shall be admitted at the general rate of $7 a ton. The duty of 25 per cent on the value of the labour enter- ing into the work represents about the duty of $7 a ton on new rails, because the price of steel rails to-day is about $28 a ton and the duty is $7 ; so that while duty is specific, it is about equivalent to 25 per cent ad valorem. Therefore we propose at present to allow any railway company who wish to engage in a transaction of that kind to bring in the re-rolled rails under these terms and conditions. TARIFF GENERALLY. With respect to the tariff generally, hon. gentlemen are aware that two of my colleagues and myself, with sometimes some others — the Minister of Trade and Commerce was able to be wth us only occasionally; but the Minister of Customs and the Minister of Inland Revenue, who is now the Minister of Marine and Fisheries, with the assistance of some other ministers in certain parts of the country — have made a very extended tour, and have inquired as far as possible into the desires of the people of all classes in relation to the tariff. In every part of the country the hearings were attended with a great deal of interest. People came from long distances to present their views, and I think they were satisfied with the manner in which they were received. We hope during the recess, if this session does not extend to too great a length, to take up that work, and at the November session, unless there should be delays in the present session to cause a change in that programme, we hope to bring forward a revised tariff — not one i» which will make any gnat changes perhaps, but one which will meet such new conditions as hare arisen; and we hope that we shall hare the same measure of success that we have had m the past, in demising a taril! which will meet the require- menu of all interesU in the country, and that we shall have agam a period of Uriff sUbility under which tne industrieg of Canada will go on and prosper as they have done in the past nine years.