Proceedings OF THE • H us~ OF ASSEMBLY OF NLWff)Ut~D AND SPECIAL SESSION. THURSDAY August 16th, 1917. His Excellency having fixed the i1uur at which he proposed to open the pres rent Ses,sion of the· ,Legislature a! three of the clock in the afternoon of this Thursday tl1e )Sixteenth Day of August instant, the members of th· e flouse of As1sembly met in the Assembly Room at a quarter to three may be submitted to you, which will remove · the possibility of the recur­ rence of the difference of opinion be­ t-vreen the two branches of the Legis· lature, which arose at your last meet­ ing.

Proposals will be laid before you to define the relations between your two Houses, in order to secure the un­ divided authority of the House of As- of the clock in the afternoon when sembly over financial matters. l\ir. Speaker to.ok the Chair. At three of the clock a Message from His Excelle , n cy the Governor was delivered by the Ge11tleman Usher of the Black R·od c.ommanding the immediate attendance of Mr. Speaker and the House in the Council Cham­ ber. ...L\ccordingly Mr. . Speak .er and Mr.

Speaker and Gentlemen of the Honourable House of Assembly: In order to provide additional Rev­ enue for the war requirements of the Colony, you will be invited to con· sider a measure for the importation of a tax on business profits .. the 1Iouse attended His Exce ,llency Mr. President and Honourable Gen- the Governor in the Council Chamber G.nd being returned to the Asse ,mbly I:oom Mr.

Speaker informed the IIo uso that when in attendance on Hisr .B.Jxeellency the G·overnor in the Coun­ cil Chamber, His Excellency the C}o"'"v-e:::'nor 11ad been pleased to make a graciou8 8 p·eech to both branches o, f tl1e I.1egislature ·of which for greater accuracy he had obtained a cop . y \'1hicl1 he read · as1 f,ollowrs: ~ll i'. Presi c:ent at1d H onou rabie Gentle· m ~n of the Legislative Counci I: 1\1 r. 3peaf,er and Gentlemen of the H ·)n ou:~able 1-iouse of Assembly: ! ta ve called you together in this -5peci il s(}osion in order that proposals tlemen of the Legislative Council: Mr.

Speaker and Gentlemen of the Honourable House of Assembly: I ·trust, that in the consideration of these important measures, Divine wis­ dom may influence you to results ad­ vantageous to the Colony and its peo­ ple. It was moved by Mr. W. J. Higgins and seconded by Mr. J. F. Downey that an Address ·of Thanks be pres 1ent­ ed to His Excellency the Governor in re.ply to the gracious Spee ,ch witl1 which he had been pleased to open the pres1ent Se,ssion of the Legislature and that a Select Committee be ap- · pointed to draft such Address in •,~,I Reply. ' .-

• • 4 HOUSE OF ASSEMBLY PRO·CEEDINGS. MR. HIGGINS.-Mr. Speaker. I beg to move the appointment of a com­ mittee to draft an address in reply to the speech with which His Excellency has been pleased to open the present session of the Legislature. I think it will be very generally appreciated that this is not an occasion when one making such a motion is called upon to speak at ariy length. Indeed the circumstances under which we meet have but to be borne in mind to have this position realized.

We are living in extraordinary times, when extraor­ dinary measures have to be taken to meet the unusual contingencies which the great world war has forced upon us. Only a couple of months since, on an occasion similar to the present, I referred to the Address from the Throne with which the ses­ sion was then opened as a War Speech; to-day one might · term the address to which we have ju~t listen­ ed as a War Measures Speech.

The Legislature, we are told, is convened in special session to consider meas­ ures made necessary in the light of recent events to ensure the colony's continued participation in the bur­ dens of Empire in accord 1 ance with the declarations made in this House, and by the people throughout the . country ever since that memorable date of which we commemorated the third anniversary only a few days ago. The late lamented Earl Kitch­ ener was the first to sound the note that the needs of the Empire and its Allies to procure victory we,re Men, ~!unitions, and Money.

The period of his reputed prophesy, a war of at least three years, has passed, and the call from his successor who has only real­ ly just 1begun to travel the road to fin,al success is More Men,More Muni­ tions, More Money. O·bedient to the • call of the Mother Country, Newfound- land, the oldest daughter of the Em­ .pire, bas sent the flower of her man· hood, a truly heavy toll has been ex­ acted from amongst our bravest and best, for none but real men could both hear and obey the summons to duty.

And now the country is compelled to turn to the quarter · where her wealth ls concentrated and has to exact more money. To this end we are informed in to-day's Speech that in order to provide additional revenue for the war requirements of the colony this House 'vill be invited to consider a, measure for the imposition of a tax on business profits. The subject is one which has already received con­ Ridera tion in this Chamber, in the pub­ lic press, and amongst the communi­ ty generally; little remains to be ad­ ded.

I understand it is proposed to levy a tax of 20 per cent. on all profits over and above the sum of $3,000; or, put in simpler words, after allowing a business to ha.ve charged up to ft all the ordinary expenses of operation. including the salaries of those in charge, a further allowan~ of $3,000 is made, and from the surplus profits then remaining one dollar out of every five is asl{ed as 1a contribution to meet tl1e n~0d -!?0~ m0ney in these ex­ acting times. It has been argued that because an allowance for interest on capital is not made the proposed tax is d.iscriminatory. But, Mr.

Speaker, is not everything in connection with this war discriminatory? Is it not the basis of the modern method of the conscription of men that it is a Selec­ tive conscription? Some are chosen anc1 compelled to face the duties of active service, whilst others are excus­ ed. Does not the p,rocess ot selection say in words to the son of one man that he must go to 'Yar because he can be spared from the home, whilst it excuses the son of his neighbour . whose presence home may be neces­ riary for t11e maintenance of the fam­ ily? Is it not a penalty imposed upon strong and healthy manhood that l~

' HOUSE OF ASSEMBLY PRO·CEEDlNGS . • rock from whi'ch the elective chamber has never shifted all down through the ages of Parliamentary reform. Rarely has the position been challeng­ ed; never has it been surrendered. In consequence, ho\vever, of a determin­ Pd attempt to invade what the Peo­ ple's Chamber always regarded. its l.ln­ doubted rights it was deemed advis­ able to introduce into the Mother of Parliaments and enact into law what , is l{noV\rn as the Parliament Act of 1911 u~nder which all possible doubt on the point was removed.

Pending the introduction of the proposed legisla­ tion into this House, I have but to say as one who is but a spokesman for the people, whose seat i;n this chamber is hPld because of their pleasure, and whose privilege it is to be resp0nsible to them for my conduct whilst here, that I commend tl1e proposals to the careful consideration of my fellow­ members as only another advance un­ der the democratic institutions which ' regulate our form of Government. I move, Mr. Speaker, for the ap­ pointment of a Committee to. draft an Address in Reply. MR. DOWNEY.-Mr.

Speaker, I am but infrequently called upon to c 1 on­ gratulate myself u.pon meeting a stroke of good fortune, but after li,stening to the rea1ry excellent man­ ner in which my learned friend, the M·over of the Motion . ,for the appoint­ ment of a Select Committee, has1 ad- dressed this Chamber, I cannot think but that, at last, I have struck a sinecure aSI my duty in this matter has been made remarkably easy. The Hon. Member has dealt with the sub­ ject matter of this ti.lotion in such a masterly manner· that it i, s quite un­ ne.cessary for me to refer to it at an.v length.

I agree with the Hon. the Mover that it is most re·grettable that the action of the Upper Chamber has placed upon the Government the , necess ,ity for the convening of this special session, but in ju9tice to the Hon. Members of the 'Legislative Council I feel called upon to say that I am convinced that if m,ore time hat! been afforded that Body to subject the War Tax Profits Bill to the care­ ful analysis that its importance de­ manded, in all .probability the ne.ces 1- • E•ity would not have arisen for the calling of this special sess 1ion. On the other hand, Mr.

Speaker, this Chamber has now w1hat I might designate a sacred duty to perform and which it must on no account shirk. We all know in what esteem the sturdy Bar.ons . and Yeomen of Runnymede are held for the n·oble \vork they did in wringing our prize tl Magna Charta from a reluctant King. We are now up against a somewhat similar state of things and we would be but unworthy Sons of worthy Sires if we, now permit an action, such as the rece int one of the Legislrutive Council, to jeopardise or imperil the glorious ·heritage of indepe ·ndence of any control in matters financial that has come down to u. s1 .

We · are but temporary custodians of this e·special­ ly prized prerogative of the Commons and we mus1t, on no account, fail to transmit this privile .ge u·nimpa.ired to our succes · s·ors. I am as yet, Mr .

Chairman, un­ aware of the features of the me·asure wl1ie11 the Government propos .es to su.bmit to this Honse, but whatever that enactment may be and in what­ so-ever manner it will undertake to preclude the possibility of a recu.z­ rence of th· e present "im1passe" between the two branches of o·ur Legi ,slature and confirms absolutely • to this H·ouse undivided authority over mo·ney matters, it will have my heart7,r support and I do not disguis 1 e the fact that, in my opinion, responsibility fior this legislation does not re1st with this Chamber. •

• HOUSE OF ASSEMBLY PRO·CEEDINGS. 7 I have much plea .sure in s· eico·nding t:1e Motion. The following 1Committee was ap-­ poin1ted :to draft an Addres i s in Reply to the Speech from the Throne, name­ ly: Mr . Higgins, 1Mr. Downey, Mr. rl ickman, Mr. Hal.fyard. Right Hon. Prime Minister gave notice that he would .on tomorrow ask leave to introduce a B. ill . to ma.ke provision witih reisp.ect to the powers of the Legi1slative Council in relation to those of the· House or As1Sembly. The Minister of Finance gave no­ tice of resolutions to Tax Business Profits.

It was moved a.nd ooco·nded that when the· House ri1ses'1.t adjourn until tomorrow at three of tJhe clock in the afternoon. The House then .adjourned accord­ ingly·. FR.TD1 A Y, August 1 7, 191 7. The · H·ouse met at thre · e of the clock in the afternoon, purs :uant to adjourn­ ment. A petiti.on ·was prese :nte· d by Mr. W. J.

Higgins fro1 m ithe International Grenfell Association, whic.h on motion was rea· d 1by the .clerk as follows:­ T·o the· Hon·oura ble the H1ouse of As- sen1ibly o· f Ne:wfoundland: T1he Petition O · f the Inte ·rnational Gr·enfell Ass-0ciation, respectfuflly . sheweth as follo ·ws: 1. u . p to the ye·ar 1913 there ·had been ·carried on by the Royal :National Mission to Deep Sea ~i. shermen, an E;nglish or· g:anization, thr.oug. h its Medical 1Superinte :ndent, W. T. Gren­ fell, Esq., M. D., C. M .G., certain med­ i·cal and social work in La·brador an 1 d in the D-istri.ct .of St. B·arbe, Newfound- land. 2.

About ·that tim· e it was relt by the .Royal N.ational Mission t~at ·they ~ould n1ot adequaitely control and con- • • du,ct fr·om England ·work on this side of the Atantic, and that they wo.u1d prefer to de·vote the· m,selves mainly to the,ir 1re1gular work ·of carin · g for ·fish­ ermen in the N-0rt 1 h 1Sea. It was also felt ·that the numerous su1bs.cri:be·rs1• in North Ameriea should have ·Some

part in the control o· f the w.ork. 3. Your P·etitio .ner, rthe Inte ·rnation­ al 1Grenfell Association was the.refore incorporate .d, and it 1 he e.ntir · e ·control of the above me1ntione , d w. 01rk ·was ·plac­ ed in its hand. 4. The Association at once underr-• took 1the ·Complete ·re.organization of the work and employed .f-0r aib·out four ye·ars a ve·ry expert busines , s . o.rgani 'Z­ er, who placed the ·entire work o·f the As1soeiation on a tho·roughly reg'.ular, orderly a;nd sy.stematic basi :s, as it ds at present. 5.

T1he Associa;tion expend · s in La­ bra·dor and N·orthe ·rn ·Newfoundland · annualy 1 a ,sum of abo ,ut $65,000. .Qf thi1 s $4,000 ls contributed by the Gov­ ernment of IN e'wfo·undland, and $1,1000 by the Grenfell Association of New­ foundland; the Te.maining $60,.0·00 i:s contributed : b. y the Royal National Missian, 1L-0ndvn, the· ·Grenfell Ass.oc­ iatio · n of America, New York; the La­ brador Med:ieal iMissio·n, Ottawa, and the New E:ngland Grenfell Ass·ociation, Bo·ston. T1he Association does n·ot trad · e i1n any way and its income is entf.re,_ ly derived .from voluntary contribu­ tio·ns. 5.

T·he Association is governe·d iby a Boar · d of ten D1recto ·rs, un·der w·hom Dr. W. T. Grenfell serve · s as Me1dical Superin 1tendent. The D1irectors re·ceive no fee or re: w·ard whatsoe ·ver. They # are at pre.sent: SI1 R WI'LLiIAM F. A. AR·CH[B1AL'.D, late 1 S· e1nior Master of the High Court, L-0nd·on, Einglan,d. E1DGA1R B1 0 iGU·E, , E;s,q., ,Solicitor, Lo·n­ don. •

• • HOUSE OF ASSEMBLY PROCEEDINGS. 5 must fill and keep filled the ranks which 11ave to suffer the untold hor~ rors of this awful war, whilst its weak and less roburst brother remains at home? Why, is there not even in Death a discrimination,-involuntar­ ily so if you wlsh,-between two next-door neighbours who,se sons go off as comrades to battle, when one motl;ler gets an oppor­ tunity to welcome her boy b,ack to tl1e family circle, whilst the other has to be content with the vacant chair and a men1orial ca:rid, f,inding c·ons 1 olation 011ly in that they typify the noblest sacrifice 'vhich mortal man can make.

And so. Mr. Speaker, is the positiori.. with regard to \vealth. If there were a discrimination, which I deny, it is a discrimination forced upon wealth by the exiv.encies of the war. This is a time when all previous standards have to be abandoned. Lives, ambi­ tions, peace of mind, freedom of c;peech, wealth,-all go into the melt­ ing pot. War needs have the right of way. Nothing can stand in the way of a vigorous prosecution of the cause to which we are allied, and whether · the toll be upon our manhood, our comfort, or our wealth we cannot mur­ mur.

Some of us would give all we ever hope to possess of this world's goods to call back those nobler than 011rselves whose bodies lie beneath the sl1rapnel-ploughed sod of the bat .. ties fields of France; we are unable to do it. and we must be content. Those others who by reason of their situation in life \vould be the largest contributors under the proposed Pro­ fits Tax mu,st .surely recognize that it is but the penalty of riches to be un· duly levied upon in times like these. The need for money is immediate. Th· e tax, we trust, will be only of the most temporary character.

Money must be got, and the first and natural places from which it is to be obtained are the fountains of wealth. And as nothing in this war can be 'Viewed ex· cept by emergency methods, is it not fair to ask that those who by reason of their large business interests have most at stake on the outcome of this struggle should shoulder an unusually large share of the money which goes to pay the insurance premium for the protection of this country. For that is wh.at the proposed tax represents.

It is a levy on bu.siness people for the upkeep of the forces, which whether on the North Sea, in France, or in the waters surrounding our Island are keeping the hated Hun from our shores. And in that spirit do I ap­ prove of the proposed legislation. An opportunity will be afforded when the bill comes before the House to make more detailed comments upon its prin­ ciples. The address of His Excellen­ cy also intimates that an important step is to be taken in our local parlia­ mentary history by the introduction of proposals to define the relations between this Chamber and the Legis­ lative Council.

What the nature of these proposals will be I can at pres­ ent only assume, but in the light of the reference in the Address that they a:::e designed to prevent a recurrence of the difference of opinion between the two branches which occurred at our last meeting and that they are to secure the undivided authority of this House over financial matters, it is not difficult to imagine in a general way what the proposals will probably be. By the form of government under \Vhich we live, and for which so many of our boys have laid down their lives, it is a fundamental principle that the people must rule.

And as a corollary from that position it mus.t of necessity follow that in financial matters which affect the people, whether in the form of tax,ation or otherwise, absolute and unimpaired control must rest only with this House which is directly re­ sponsible to the people. That is a ,

• • • 8 ' trOtJSE OF ASSEMBLY PROCEEDINGS. D. RAYMOND NOYES, . E;sq., late of Brown Brotl1ers & ·Co., Bankers, New York, now of U. S. Army Av­ iation Corps. WILL ilAJM R. S,TIRLI 1NG, E. s·q., of P· e·a­ .bo·dy, · H,oughteling & ·Co., Bankers, Chicago. C·LAR.EiNCE J. B·LtAI{E, Esq. · , M.- D., of Boston. F 1 R,AN 1 CT· S B. 1SA YRE, Es1q., Assistant to the · President of William's Uni­ versity, U.S. A. SLR HLERBE IRT B. AME1S, .M.P., ·Chair­ man C.anadian Patriotic Fund, Ot- ta,wa. J01SE A. MA 1 CHA1D10, E· s·q., Vice Pre­ sident Ameri ·can Bank Note Co., Ottawa. WiILL,ilAM · C. JOB, E. s· q., Ne· w York. .

RJOBE.RT. WA T: S1 0 IN, St. John's, New­ foundland. 7. The Directors meet at 1 ·2-::tst once a year, usually in Boston, Ne\\­ Y·ork, or 1St. John' .s, as may be .con\ Pn­ ient. ·They are at all tin1e· s kept fully in t•ouch vvith everything that is de;ne by the -copious circulationof ·corres­ pondence, minutes, reports, &·c. 8.

T;he Dire ·ctors regret that the As·sociation h: a. s -Oee1n and is sti1' the . obje ·ct of an extra·ordinary amoiunt of calumy ·and mi,srepresentation, . e.man­ a;ting largely from certain mercantile · firms . ·:an1d pers ·ons tra·di·ng on the La­ br.ad·or ·who fin· d that as a r· e·sult O ' f the social wor· k of .the Asso ·ciatio ·n'· S su1b­ ordinates tjhe pe.ople of that re·gion are not s, o easily ·explo 1ited by commercial interests as forme ·rly.

At your last session there was presented to your Hon.ourable 1Ho·use a petition alleging that the A,sslC}Ciation were . law ,break­ ers and a mena .ce to the· public wel­ fare an· d that the Cus,toms p·rivileges affor ·de· d them ought to be curtailed, an. d ·asking for an e.nq·uiry. 9. T1hes· e Cu,stoms privilege · s a:re given in .consideration of the ,merits and value olf the medical and o·ther worl{ done in these loealities; if thi-s w1ork is of no value to the pu1blie , the privileges ought to be curtaile 1 d; if it is of value, they ought not to be . 10'. .

T.he Association r.espe ·ctfully but ·urgen 1tly points out t~at under the cir.cumsta 1nce1 s the en,quiry, which they wel 1 co1ne and invite, ought not to ·be restri ·cted to the vague allegations of la w~bre· aking made by the petitioner .s, but ought to include the general ques ­ t ~ on of the n1erits :an· d valu. e o· r other­ wise of the Assoiciatio ·n's work.

The re.-0rganization · u·nder the ne· w .manage· m1ent has -vvithi· n the pa.st few months only . b,een .completed; and the Direc­ tors ·urg·entiy ask th·at they •be affor ·d­ ed the opp·ortunity of clearing thei r organiz :ation before the, pt1blic of sus ­ pi,cio1 n an1d (blame, so that they ma:r continue unha .mp.ere· d the benevolent wo·rk they have so re.cently un1dertak­ en. Thiis re,quest was ic.ommunicated. by a letter , to the Government at the ti me of the· presentation of the peti­ tio • n :abo ve-mentione ·d.

Your peti tioner:s therefore l: u::n.b ly pray that th· e .seo·pe of the proposed e·nqui'ry be broad en.ough to include n·ot only the allege , d 1breaches of law, ~.nh' ich the Asso ·ciation denie .s, but the g·eneral question of the .me·rits and value to the public of your petition­ ers' work.

Your petitioner . s ea1nnot be­ lieve that your Honourable · ·House will for . a moment enterta 1in the i·dea o.f a.dmiting the petition of interested bUJsiness parties for an en. q·uiry into the AS'soc1iation's allege · d faults a1nd the curtailment of its privileges while refusing the petition for an enquiry into the 1merits .made by a Boar · d of Diire,ctors, w1ho 'Without pay or re·war1d are unselfishly devoting so much time, ·mon· e· y an1d energy to the pro­ motion of the welfare of the· ,sick a• n· d po·or. An. d your pe· ti.t~ ioners as 1in ·duty . bo·und will ever pray, &1c.

Date · d the 1·5th day of Au~ust, 1917.

• HO'O'SE OF ASSEMBLY PRO·CEE.lJ1~GS. 9 TH:E :INTE1R,NAT·I101NAL GRE1NFE1L1L ASS01CIATION. Per LR. WATS0 1 N, Director. MR.

HIGGIN S.-I would like to add, Mr. 1Speaker, my personal support to this petition, purely upon the gro11nd th·at is eonta 1ine·d in the prayer of the petition, i1n that paragraph which asks that the enquiry be made broad en­ ough to eove.r t,he p·oints that are re-­ ferred to in this pet1ition, not alone be.cause ·of the preisenting of a peti­ tion in this House at its last session, but .because ge1nerally there has been cons 1id·erable discu1ssion of the work of the Asso·ciation; and I think that if the Association is expending some Government funds on that work, that e\ren for that reaso 1n we ought to avail of all opportunities to decide whether or not there is any foundation for the a·ccuisaton of irregularitie ·s; and apart altogethe:· frDm this, as a matter of com,mon jusiti-ce to an organization that. spends here $60,000 a1nnually, practilcall)'~ all of which comes from outside; I think it is in the interests of the ·country and the duty of the Governmenit of the co·un try to take steps to see that under the guise of the a·ceusations that have been made is that the work has not bee1n as phil­ anthropie as migh1t be ordinarily ex­ pected from the ·Character of the men who are conne.cted with it; l think in the light of the fact thait these people hav·e for years past supplie·d large su.ms of m·oney to this work; in the light ·of the voluntary effort at least of those connected with the admi·n­ is1tration work; that the request of the present petitio·n should be grant­ ed and that the enquiry 1be bro1adene·d on the lines suggesited so that the c·ountry a;t large may kno· w the correct positio·n of the Association.

I have very great pleas·ure in supporting the pet:ition. Mr. Higgi,ns on behalf of the Select • . Co1mmittee appointed to draft a Reply to His Excellency's Speech, presented the Report to the Sele-ct Committee as follows: To His Excellency Sir Waf1ter Edwa?d Davidson, K.C.~1.G., Governor and Comry~ander in Chief in and Over • the Island of> Newfoundland and its Depet:ldencies. May it Please Your Excellen·CY: We, the Commons of. Newfoundland in Leislative :Session assemble·d, beg to tha·nk Your Ex·cellency for the Gracious Speech which Your Excel­ lency has addressed to both Houses of the Leg·islature . • W. J.

HIGGI.N 1S, J. F. DOWNEY, A. E. HICKlVIAN, W W. HALFYARD . • Assem1bly Room, August 17th, 1?17 Pursuant to notice and on motion of Hon. the Minister of Finance and Customs the House resolvPd itself in­ to a Com1mittee of t'ht.~ ·vv'ht)1e to con­ sider certai·n Resoluti-0n~ .. det-tling with the question oif the Ta~r.1tion <)f Bt1si­ ness Profits. Mr. Sueaker le.ft the Chair. ~~ l\1i·. Parsons took the Chair of Com- mittee. HON. MINISTER FINAf\JCE AND CUSTCf1S.-Mr. Chairman, in intro~ duci11g these· Resolutions to-day I am placed in a po8ition I think that has been occupi.ed by no other Receiver General.

If you remember, Sir, on July ·26th the same Resolutions that a.re before us today were introduced in and pass ·ed by this H·ouse an,d a Bill v1as brought in to confirm them. That Bill passed this House through all its stages with the unanimous sanction of this House. '"rhat Bill was sent from us to the Upper C.hamber n1early a fo1't11ight ago. It vras taken exception to by that Chamber and we are here ~o-day with the same Resolutions be­ fo:::-e us. Now the Resolutions passed by this IIouse and sent to the Upper I-louse asked for a tax of 20% on pro­ fits a,fter deducting $~,000.

That pro­ poeition after being placed before the Upper House was repudiated. They

10 HOUSE OF .A.SSE BLY PRO·CEEDINGS. came back and told us that· it \vas not $19,400 w-0uld be even a very small in proper forn1 to become law. Well tax when y.ou remember that the now from tl1e opposition given that business has made besides it $78,000, Bill in the Upper !-louse 011e would and I cannot conceive why such an think that \Ve were asking for some- uproar v+1as made by the Upper I-louse thing very unreasonable; but I will over the Bill sent up by us.

Another just ask this Committee this after- conte ntion was that unless an allow- 11on to take the Bill and analyse it. ance is made for interest there will be The Upper fiou~e says "we are satic;- a discrimination, in other words that fied for taxation, but you are doing it the business which works on its own the "'\Vrong \\ray." Well no·W, he1re is capital is placed in a worse position what \Ve are doing: Take ·for ex- t 11ftll the business which borrows from ample a concern capitalized at a mil- the banks.

The reply to that is that lion do1llars makin.g a pro.fit of te,n p·er a concern which works on its own is cent. Ten per cent. on a capital o,f a in the IDU1Ch better P·OSiti1on. A COll1Cern n1illion d·ollnrs means $!100,000.

We stat- doing bt1sin·ess with a million dollar ed i:ri the Bill that $3,000 could be sub- ca1)ital, who is its own banker, is in tracted fron1 the profits and from the tl1e splendid position that it is able balance left the Government would to n1t1l-i:e $60,000 a year more profit. tal{e in taxatio11 20 % . vVell now ten But the~e are ve:ry few businesses per cent.· on one million dollars· is conducted in th1·s country to ... day with- $100,000. Subtract from that $3,000 out receiving a 1 c,comm.odation fro111 and it 'V'ill leave a balance of $97,000. the Ba.nks.

Eve· n the man w1ho has Now take one-fifth of that and you a million dollars has to g-0 d 1 o:wn to the ha,re $19,400; $19,400 appears to me to Bank occasionally and ask for accom- . r·e a ·verJr s1uall tax inde'e'd on a n 1odation and is charg .ed six per cent. business capitalized at one million dol- We are. niot askJing him to pay a tax lars. · Any business capitalized at that on that. We are all,owing him amount in this country to-day is do- to deduct . that as a prop,er ing a turn-o,rer of over six millions. · .ch!lrge against l1is business. I $19,400 in a lump sum looks a, fairly ,think, Mr.

Chairman, when this decent tax, but when you take into bill is considered by the public out­ consideration the volume of business; 'side this H·ouse-when they ha.v1e clone with a capital of a million dol- 1, lgone into. it anid weighed it properly lc::rs \vhat does it amount to.

With a -they will · come to the ·OOn 1 clusion capital of one million, confined to the ,,, .... .-.:hat it is more than reaso,nable ~11,.,,t •t . ' capital alc)nE~, ~nd n·ot t::i,.king in:o ac , ... .;:t,., 1, . 18 more than ea.sy count the fact that it is turned over 1 n the ous.ine.ss man of this country. l1alf a dozen times a year, we are not Gentlemen in the Upp·er House asking for a tax of two per cent. But laughed to scorn the idea ·Of t·he Gov- that was not the great objection of ernment raiising taxes in th:is w.ay, the Upper House.

The great objec- and they .iput forw ·ard their ideas of tion in the 1Jpper House, so we are how it should be done. One ge,ntle- .. l d . t th . h" h m·an said: you wi.Il not get enough l,c, ... , is · o e manner 1n w 1c :we se11t up the Bill. They said that they m.oney under tl1is form of taxa.tfon to were prepared to pay tl1e tax, but that pay for the machinery th.at you will we ml1st amen_·d tl1e ·Bil,l to give the.m have· to put in f.orc,e. Another said Go/ 0 on their capital.

The tax would that this W·as not the right way to do then \vork ou·t like this: Take a capital it; that the proper way would be of one million dollars, paying ten per through the Custom House -to Pllt cent. profit. From that ten per cent. an export ·tax on ~-i~h and ~il a11·l profit they ask to be a.llovv-ed six per otlier produce 1 :~aving thi& colony·. If ce.nt. on their capital. or $.60,000. No·w.

Y·Ou Will go throur~n tl1at debate, Mr. as I have stated ten per cent. on that Chairman, you \vill see that not one capital is $100,000. ,..fhey \Vant to suggestion was made to put a ta}: on subtract $60,000 from tuat and from the rich man. What does it mean the balance of $40,000 we are to take S:ir, if we have to put a tax on ou~ one-fifth or $8,000;

whereas the tax BXJ)Orts? D 1 oes it n·ot me,an that the in the Bill \Ve sent up would be $19,- fisl1ermen, who form 80 OAr cent. of 400. T'hat wo-qld be a ridiculous 011r pro~ucers will have to .pay? The amount to ask from such a large con- 011 l v c cnb'rne ""'"'as1 ole in their eyeis cer11:. I repeat, M1~. Chairman, that the 1a..; that we should come down and • •

HOUSE OF ASSEMBLY PRO·CEEDINGS. 1 r levy a tax on each quintal of fish that is to ·be exported from this country within the next two years, on every gallon of oil, on every seal skin, on every lobster, attd on every salmon. T·hat was the scl1eme suggested by the Upp,er House. Now., in tl1at everit, who is it that pays?

Is it not the fis.hermen of the colony One of the pl'lincipal merchants of the country argued w.ith me t·he othe:r d.ay that it \va.s not the fishermen w;ho would have to p·ay under this arrangement of levying on exports. ·Can anyone conceive of a mer.chant doing b·us1in·ess .putting up such an .argument. If a ris·herman s 1 e1lls a q,urintal of fish to­ d·ay, .he receives $10.00 for it. B·ut suppose that 've proposed to put a tax ·of 50 ce.nts a quintal exp,ort duty on fish, what would the merchant who was going to buy fish to-.morro·w pay the fis.h·erman for it? W·ould he not pay him $9.50 inste·ad of $10.00?

Is it not the fis·herman, then, who \vou.Id have to pay the 50 cents? Now, I a1n prepared, as a me1nber of this House, to levy a tax· up·on the f:ishe.r­ rr1an if th.is \V·ar g.oes on; but I am not p::.·e,pared to le·vy that tax until the man 1.v1~.1 h.as made his thousands out of the fishermen since this \.Var began 1 has .p1aid h1is proper shar~. Ilid we not wit11in the last few mo11ths ap­ point a Board to enqu1re into the higJ1 cost of living wit i1i11 the .oast t\VO years· a,nd what ditl tl1a t Comn1issio11 ~ ' find?

Did th-ey n;ot tell the pub.lie thro·ugh their re,ports in the press, that the very men who are now ffii,ck­ in.g in the· Up,per House about this tax, s·oaked the fisherme11 of this Is­ land to the tune of $4.00 a barrel on flour and $10.00 a barrel on pork; and yet w,hen we as.k these men to pay a small tax on the enor·mous profits made by them, they kick up their heels an·d tell us that w.e a.re. not fit to be leg.islators of thiis Is1land.

Was it not cast 3!t us in the Upper House the other day that this Bill was con­ ~eived in ig11orance? ·I. was present in the Chamb.er when an hon. gentle- . m·an made the statement. · He sai'l that the Bill was conceived in ignor­ ance an·d narr.owminde1dness. I, for one, will throw that back to-day, through this House.

I am prepared • to bear my responsibility for this legislation; and I am pre.pared to go ba,ck to the co1untry w"ith th.at Bill which , was se·nt u.p to them and re- jected, which placed this country in the avll::\vard position of having tu close the Ho.use of Assembly and . ope.n it again '.Xlithin a week. rrhese are the men that we hear so much about; the pat1·iots who are prepare 1d to do so much for thejr c·ountry. They are prepared, if allo\ved, to soak the fishor·:r..cn of this country. That is 11lhat they a,re propare·d to do.

Any legislation that is sent up to them which doesn't touch their o\vn p·oc­ l::e 1.,G is l'lot taken. serio.usly; b·ut t11e '{ery r1:inute \·ve ask tl1em for a fe'w dollars to sup9-0rt our s·oldiers th·at a.re sl1edding their bl,oo·d to-·d.ay in France to keep th.es·e men in the positions in 'vhich they are to-day, tl1ey \\Thine. I don't know how the gen­ tlemen of the Upper House, who saw the pi-cture t11at \Vas pa.inted there the other d1ay, felt. We "-ent U'P from this H 1 ouse at the request of His Excel­ len·~Y. ..:\JI the bills tliait ha.d b·een passecl \11ere assente·d to.

The Profits Bill was n.ot called. It had been re.· jecte1d by the Upper House, who gloat­ ed over their action. ~.\.fter that cere­ mony w.as over, a lady w.as called to tl1e foot 1 0f the throne to receive the honours v:rhich had been won by her dead brother. I don't know how these gentlemen fe,lt at that moment. I know I felt mG·3,n as one v1ho 11ad been as­ sociated with a Le·gislature thiat re­ fused to give this c,ountry, to give to her and her children, and to the children of the soldiers that are across the se1as fig.hting for us, suffic­ ient to ]{eep bo·dy and s,oul together.

T'he mo::--e one thi·nks of tl1e action of .. the Up.per H·ouse in connectin Vlith this Bill, l\1r. C·hairman, the more one is con_vinced that it was one of the worst breaks ever made since Respon­ sible Go··vern·ment was gra:p.te,d to N e\vfoundland. There are oth-- er- reasons, Mr. Chairman, why they should have taken this Bill to their bosoms. Since the ·vrar brol\:e out in 1914, they have not been aslte1d to contribute one ce1J.t rtd­ a ."_t~{):;J.a,.1 to\Vards the upkeep of thl3 Vlar-not ·one cent. ~'.o\\. wha: has h.a.p·p8ned in Canada durins this per­ i-ocl? Vlhat has happe11ed in the 01<1 . Co11ntr1r?

R,ight from August, 1~14, ~ . tl10 wenJthy taxp?~yer has had to pay l111. I-Ie .... e in Newfoundland we \Vent on bo~:·r()\Ving money day after clay and year after year,and the rich man • •

• • • , • 12 HOUSE OF ASSEMBLY PROCEEDINGS. of this Island w1as not aske 1d to pay one cent. This is the first Bill of this Ir.ind to be introduced into this Ho··U·Se sin·ce the w.ar brolre out. And V\Tb"at is the p.osition in connection with this Bill? If we made the meas­ ure retroactiv·e, Vv·ould it not be rea­ sona.ble and fair an:d just and rigl1t? But n,o, 've mere.ly caine in and a.sked th2.,t tl1e rn.erchan ts pay one-fifth of their p!'of,its 01:-er $3,000 for the next t\vo years. No·w, un·der the conditions existing to-clay, Mr.

C11airman, can an.y s·ane man· put f()rvvard the argu­ me.nt that that was unfair or unju.st? Vve ha •.re teen comp 1efled to make h:istory vvithin the last ten days. ~t\.fter tl1is Bill il1ad been reje,cte·d by the u,p­ per House, the L·ergislature im·me·diate­ ly closed. The Premier ha(l to lool{ aro11nd him to see how to make this bill become . law . To malie tl1is Bill· la-vv the Upper House has to pass it, and if it comef!; back from the Upper House again he is in this position that he has got to fill the seats in the Upper House with men who have patriotism enough to pass this Bill.

That is the position, in cold English. But, Sir, this is not the first time that this haiS happened in ·Newfoundland. In 1894, nearly twenty-four years ago, the same thing occurred. I then had the honor of having. a seat in this House, and a Revenue Bill was sent to the Upper House and rejected by the very same stamp of men we have in the Upper House to-day. Mr. Good­ ridge, \vho was then Prime Minister, had to have that House adjourned, ai1d before meeting aigai11 had to have the se.ats vacant in tl1at Hou,se fjJ,le·d in order t 1 0 p1a,ss the Re,re.nue Bill.

Now the motion to destr·oy that Revenue Bill was made for what? For political purp·osie,s alo·ne, lVIr. Ch:1ir,n1an. I do n,ot p1rofess t'.l1at the bill is perfe 1 c:t. Our experience may be the sa,me as ca,na.da'·s, but that is no reason why the bill shot1ld not J)ass. If \V·e find a year henee tha.it tl1is bill doe's not meet t,he r·equirern.ents of th.e C'oLony, . it is o·ur place to come d 1 own and cl1an 1ge it.

Th-is is not ,a bill to re- main ,on the Statute Book for ever; it is only f<if:)r one or tw·o ye1ars, and tl1e m,e:mber1s o! the Up·per Hou'sil ·v1ere no1t fair or just to th,e re.p,resent­ ative1s o.f the people when they s,e,nt it back to us. 1 T1he's·e gen'tlemen are not themselves infallible; they and the-ir kind have made mi,stak1e,s; we have Blaclc Mon.day to re,mind us ·Of that.

I>..Jo,w it .rnus.t go out through New­ foundland and abroad that the Legis­ lature of Newfoundland br~ought in a tax on profits, to rai.se money for the soldiers who have gone out to fight for us, and ·that the Upper House rejected that Bill and sent it 1back without any apology-sent it back to us to tell our constituents that we are not the men to represent them. Now, I don't know any language \Vhich is ,strong enough to express my indignation "\-Vith the Upper House to-day.

If it was ignorance on our part to send that Bill to the Upper H 1 ouse it was impertinence on thei'r part to send it back; and I hope that before this House clo.ses, the measure on the order paper to-day will be pas.sed to keep the·m in their places; and I hope that in future when a l\!Ioney Bill is passed by this Hou,se to meet the requirements of the people of this Colony they will show it more re.spect than they have ,shown tl1is one. The1se resolutJions, as I have stated, Mr.

Chairma,n, are be­ befo.re us in the very same form as brought before us on· July 26, and I think the disposition of this House is to pass these resolutions in the same form now as then. >: •1 ' :;\' ' ~ - .... i= 0 0, F J UST l1C E__.Mr. J\ ~ g • ~ t ~ l ~ [.- i t. ----i (,l;_:1.irmn11, I ''rould like t,o. add a fe,w \,,~crds to those a,lrea·dy given to this Chamber rJy the Minister 1of F'in·a.n1ce, in i11oving the House into Committe·e on these Resoluti,ons.

I w1,s.h to ex- 11ress 1ny f·ullest concurr 1e1n·ce in the re::.n'c.tr1rs vvhich have ·alre 1ady be1en n1ade here by the l\finiister, and also to \'Oice the feelings 1he voice,d in re­ f e1rrii11g to the indignation I fee1l a:t the a.ctio11 of the Legislative c,oun'cil in t11ro·7ling down a M"oney Bil.I whi1ch is an entirely similar bill in eve1ry re­ spect to that now before us in the for1n of the1se Resluti 1 ons.

It ha.s l" ee11 argue 1d, nioit alon,e in that Chamber but outside that Chamber, that "\vhat the· Legislative C1oun1cil has done 171as perfect and in orde 1r; that it \Vas ,p·erfectly legal for tihe L.eg;i.s-, la.tive Council to ta1ke the me,ans they did t·o v1reck that Bill. .Sir, th.e pe.r­ sons \Vith such idea£; as that ought to .J1ave been living ~enturie,s ag,o. The·y were b1orn in th1e wron.g a1ge. .Per­ fectly legal. Yes, Sir, there are thou·­ sands of things p:erfe,ctly le·gal con~ nected with our 'Constitution, w;hi1ch, •

HOU£E OF ASSEMBLY PRO·CEEDINGS. nevertheless, \Vere perfect nons.ense. Perfe.ctly lega1 : Sir, yes it \vould b1e perfectly legal for the King to-morrow to ,discharge every so1dier and s1ail 1 or who ·has v-ol,unte·ere·d, and sell ever'Y shi1p which has been commande.ered from this war. It wo·uld be pe.rfectly legal, yes and perfe·ctly absur·d. It has been contend 1 ed very ably that the reje;ction of a money bill was t1nj.ustifia.ble by a very e.ininent authority in connection with the· legal profession and in connection vvitb, our courts of law.

I re1member the words of Lor1d Janes, a very emin-· ent authority on s11ch matters~ when ~ discussing this"' very· point in• .auch a crisis as this.

He \Vas dealing with the point as to whet 1her it was perfectly Ie,g·aI f·or 'the House of Lords to throw out a Money Bill w.hich had been senit up by the House of Commons, and he pointed out very clearly tli.at it was n·~t a question of legality so much as a question of us.age; a question of conventi·an; a question of \Vhat vVftS the custon1 to be done; and on that usage and that conventio11 ~rl1en it was disputed by the H·ouse of Lords some six ye 1 ars ago, th·e Government went to the country a.nd that usage was then broug.ht in in the form of a Parliament Bill, whic1h Bill made it quite plain that in future no Money Bill could be either ame·nde.d or rejected by the House of Lo1~ds.

Perfeic.tly legal; yes, and pe.rfectly absurd for persons who rep.rese.nt no­ body but themselves to interfere with money bills, and assume powers sole.­ ly vested in the repre,sentative c1han1- ber. What tl1e whole institution.s of tl1e Government have long since re­ cognized, that t11e Re1presentati,re Cltamber has the ft111e·st co·ntrol of money matters, has be.en set at naught. All y-ou ha 'Te to do is to look for one moment at the Governor's spee,ch, with which every s·ession of the Le.gislature is O·pene-d, and His lVIaje::-.;ty's S})8ech 011 the opening of the Englis.h Parliame11t.

In it th-ere is an appeal from the Crown to the House of Assembly or the Ho·use of Commons t·o provide mo11ey for public se:r·vices, and when the session is o,,_ er a.nd the King or the Governor ~ come~ dov;,rn to give his address, it is not the House of ,Lords or the Leg­ islative Cou11cil that are thanked, but the House o Cornmo11s and the Hotlse of Asse,mbly •. 11owing that liS s ge • • recog11izecl both in the opening an1d in tl1e clasing of Legislative Asse·m­ blies.~To\v~ I 2trongly concur in what has been said by the Finance Minister. ,7i_~·o 11rvc bG8n blan1ed for p,assing this i:1~11 in ign0:-~nce, and. -vvhat do -vve find corning 'imme·diately after this charge.

Hardly had the \Vords left the mouth ()f the hon. r1en1ber before he gave a typical display of ignorance ,htm~elf. He did not lin·oz1 what he was doing. A motion vvas macle to rise the Co,m­ mittee.

I1t was pointed out to him that tl1e rising· of the co,:J.nrnittee meant the ::ejectiou of the Bill; b·ut I ,am inf.orrn­ ed in snite of that he was so blind to e\rer.~•th.ing but the i,mp,·ortan,ce of such legiRlation to the fin 1ancial mag- ."'1'lte~ 011 Water Street, that he could not take in whiat ,~vould b·e the effect of rising the Committee without ask­ i.ng it to report progress and ask leave to sit agiain, and it was only af•ter the session vvas over that the member sa .. w what had been done; and t1~0n ,"o state,d vvhat he meant \Vas for r 11.~ Committee to rise in order to con­ sult v.r-·t11 the G·overn·ment and sit again to consider it.

A inore utte::­ display of ig11orance it would D<J ha.rd to find any\vhere, :~specially at Sl1cl1 a time when a oi1arge Jf ignora11ce '{.vas re·ing n1ade ag:.:1i11:-_;t, thit: c1lcilTiber ... 11cl \\rh~n w.as involved t1he p1ower of the I,egislative Cot1nc11 and Le-?isla­ ti·ve i 1e1nbe. "'. The ·very point itself uras a11 utter displ1ay of ignorance \\-~itho11t regard to what the inotion \Va . Even the i11tention was a soc- 011d di~·nJ.av of ig110.ra·nce.

He was go-• ing to rise the Co1nrnittee in ctrder tl'a1t it s,h·:)uld sit again after consid­ e~ ation v1itl1 tre Go,rer11ment in order that somA amen·d·ments S·hnuld b.:: made. Tha,t itself was another dis­ !~ :a~r of ig·nc>rance, because it w.a,s not competent for tl1e Government to . meet these gentle.men an1d agree with them upon some amendments that s.11ould be inade in that chamber, even tl1ough the ame11dments n1ight be ac­ ceptable to the Gove·rnment.

That "l.rould be an infringen1ent of the priv­ ileges of thir- H ')Use 2,nd I personall'Y "rould 'T'-\ry ~~trongl:y re.sent it even tl1ougl1 t e ar iend.ment was sanetion-e<l bv the Ci-overnment representative in that chamber. It is ·not competent fo1 sl1ch a tl~·ng to le done; it is the pri, i eg.e '"'.f ~hi£: Ho 1.:se to deal with "'l."h mat,..Pre, a tl this House alone. . i , ll 9· ts of o bs~rvations ha·ve • •

' • HOUSE OF.ASSEMBLY PROCEEDINGS bee·1 n1ade in t11e way of objections . :tnd dollar·s, while son1e fisherman to LP.is me,asure. To sur11 them all up · • 'lakes t;venty, fifty or one hundred ,~e:;:·y sh..:yrtl)1 they 0111pose any meas-< ~,ollar·s. The fis ·herman mal\:ing the u~~e that has for its object the takin·g~,: small wage is the one taxed, and the of money out of tl1eir own P'O·ckets { .. ·;t'ho sand-dollar persons are exempted.

In si::ite of their statements it meanE \ii;·i~·'..:.1 ·T hat has. been one of the d 1 e:fe,cts of :1')tl1In.g else b·t1t that they do not:-~ the present system of taxation at the ,-vq,·1t to p1ay· this tax.ation, an·d the ' ·Custom House, for there a man is perfectness or otherwise o·f the Bill taxed, whether he can afford it or not. is nothing to them. T:he more perfect Many thousand . s of dollars are be- the Bill the greater would be the op- 'ing paid . into the re·venue now through p-;sition.

One of the objections ag.ainst the Custom House that wou1d not the Bill is that \\"e cannot afford to· h2.ve been paid under ordinary con­ make such ta.x-ation a policy in New- ditions. As the prices have gone uip, foundland because we- a.re a country so 11as the duty, so now, whether the that needs a11 the ca·pital possible fo1 :::-oar man is able to pay it or not, ()J·11er worl{. If this taxation ca.nnof ·:-:. ha \ t?· _t\.Jl this w.hile others in the te '\CCeptable for that reason, how can . · 1n·n1un1ty have been gathe -ring to- any ta,xation be a.cceptable?

Ho\v can '",_9the:r their lat"ge profits and thes13 the Ho11se of Commons vote anything t.1.1 ey ?ontend must be le.ft alone. Sir, fnr the \·var? How ca,n the Can·adian ~ a.gain say I plead guilty of support­ Parliament and the American Parlia- ing Cla·ss Legislation of this nature I i11ent vote an~lthing for the war, or am. in good company. Any prin 1 cip1e ever1 a single cent because it is not of In·com-e taxation is class legislation, a1.l for ecor101mic development? W·hat for the more a man has, the m·ore is this money being llsed for, but to ''rill it be necessary for h.in1 to pay. insl1re econon1ic rights?

And what dif- The rnore he has the higher the rat,e. ference can there be in ta.king the A man with a.n income of $5,000 taxation fron1 this partic.ular source? \VOuld h ave to pay five or six times "\Vhat is tl1e difference between the more than the inan getting $200, not man. on Wa,ter Street saving ten dol- a~one c-0rres·pondingly but in the way lrtrs and the fisherman savin.g ten or a .rate: and that is my reason for dollars. It all goes to the same place, fa~.ror:;n~ 1t .. T~e only objection I have the bank, and it is there lent out into '\VI-th tl11s bill is that it does not g,o l~usiness.

This argument has been far enough, but I h·ope w.hen the Y'lell ans\vered by· the Ilinance Minis- House n1eets aigai:n · it will further ter in that any other form of taxation consider this matter and bring those vvould be acceptable, ·provided they !.hat hav:. escaped from the provis­ c.id not have to pay it. It is quite lens of t,1Js me~1sur,e within the fold. n.lrigl1t to tax other pe·ople, but leave W~ ~re told, Sir, that this is also a llS · alone.

You · 11a ve · only to walk criminal effort on our part, polluted (1o:v·1n Vvater Stre.et or any o·ther street all through, and t?at t~e _worst of­ (_)f tlie to v:.-n t8 see the result of the fence connected with this is the in­ ,_var. Since the war heP'an there l1as tent with which it was formed and lJeen more joy ridi.n~ and otller the intent with which it is being put :J,n111sements than ever before ' and through· The real secret, we are t l1ese 11a ve con1e 011t of the war. The·se told, is. that w~ .are edging for Con­ ne:ip~e are better able to pay now . federation.

Th~t on both sides of this th'.ln t11ey \Vere refo]_'e, and they try House. there 1s a secret a~reement t.o get cut of it by ·Calling this Class to bring . abo~t C~nfederat1on, and L3o·islation. V\Tell. Sir I -must plead Confeder·at1on is going to be brought y ~ . 4- :. • ' ' about because Mr.

So and So of F~ t11lty t-O be1ng in favor of Class Leg- Water Str t d d f i.sl'.lt;on of this ki11d, and it is a mis- ee an so an so rom -r ,_ t 4- ... . somewhere else is going to have to .1."JT1,l~ll8 .,haL .. \J'eVlf0 1 Uildla,nd haS not pay tWO three fO f. th d 11 . 1 ·t 1.. b f. . ·T v ·t· h _ ~ , ur or iv~ ousan ~~ac l ong . e~0re. a ..... a Jon as al dollar1S into the revenue instead of ' \11ays 'been imposeiel through the Cus- spending it in joy riding or other torn . H·n11~e an(l 'i ·rect and income pleasures, and that thi! is going to· taxation has been too long absent. bring about Confederation.

They add "'t, tl1e l)I ~~~~nt ti·: le the taxati'()Il is that there is a secret hand and that ~Jc1rne I!lJJtly· l,y th.oLo least a,ble to hand is wor·king from Ottawa and ?,.:forcl it. One ner"r)n malres twenty, my hon. friend behind me is one of thirty, fi t~ and -0ne µndred tho·us.,, the rin ipal ~q~s:pirators ap.d p:iy • •

• HOUSE OF ASSEMBLY PRO·CEEDING J 15 friend opposite is an "arch conspir­ ator". We and all the rest of us on on both sides are ''dummies''. We dare not take any stand but meekly acquiese in all that goes on. These, Mr. Chairman, are the arguments adduced against this measure. Sir, those who utter ·this kind of state­ ment have reason to know that I cannot be so easily led. But, Sir, it is not Confederation that is troubling these people, it is the fact that they have to pay.

They were quick enough to make their grab1s out of the Gov­ ernment in the past, but they are not so anxious to contribute anything to the Government now. They do not like to part with their dollars. We ~re told that we have not appealed to the people, but we are quite prepared to meet them there any time they like. I have no hesitation is saying that there is not a constituency in the whole of Newfoundland which would return a member who would oppose this Bill or any Bill of a sim­ ilar nature, or support the Legislative Council in throwing out the same.

I will go further and say that they would not get a candidate prep·ar·ed to face a district for them. The days I hope of the old time grabbing ·are gone, and those who have been suc­ cessful must pay, and I for one, am out to see that they do. As the minister has pointed out, at the present time we do not con­ sider this measure to be perfect, ,but we do regard it as a step in the right direction.

It will need :machinery to work it out; and that machinery when it is in working order will be able to be extended to deal with a more perfect and wider measure, and I have no doubt but that when we meet again we will be dealing with a wider measure of income tax, and I expect the wider measure will give rise to a bigger howl than that hea.rd during the past few weeks. Mr. Cashin in dea.ling with the matter has dealt fully with the ques­ tio11 of interest about which so much has been said.

One of the objections r·aised to this measure has been that under this measure no amount was allowed for interest on ·capital. This tax is really an income tax and doe.s not take into consideration capital at all. It is an income tax on busi- ness. Some have stated in the public presis that in this form it is an attack on capital. Now for the life of e I do not ... ee· how this can affect capi­ tal. Capital is untouched. It is not ri ffected under this Bill.

Not only is the capital untouched but profits are to a certain extent allowed to be estimated and when the net profits are estiluated a ft1 ... tt1er allowance of $:1,000 is allowed before the tax ap­ plie3. ai1d then there is taken for war purposes by the Government one dollar in every five. The capital is th us not affected at all. There is only effected one dollar in five after all costs ha vc been allowed for and • $3,000 c Ja profit besides. I wish to endorse wbat has been said by the Finance Minister in re­ lation to this interest matter.

There is no reason why a firm capitalized at $1,000,000 and which does not need to go to the banks should be allowed to retain six per cent. of that money as interest. It has been .said that another firm\ on the same street might be doing the same business on a capital of half a million, bor­ rov1ing at the time half a million from the banl{. ·under the la.w a.s at present contemplated, the firm bor­ rowi11g from the banks. will be al­ lowed its interest charges, while the other wil not.

The position we take is that the firm with the increased capital can better afford to pay the tax; ·and that on the other hand if the other firm does its business through the ba.nks, the money will be in the banks and will pay its tax to the· Governme11t. I repeat, Sir, the bill is one which is easily justified, and I agr·ee with the Finance Min­ ister that it will go through in spite of the objection of certain interests to it. HO . MR. COAKER.-Mr. Speak, r; __ , I "Vi sh to offer a few remarks on the measure now before the Chair. • a11'1. in doi11g so I wish to congratulai-r the IIon.

Minister of Finance and the Hon. \Mi11ister o! Justice on the eloquent and comprehensive ,speeches they have delivered on the matter. I was prese11t in the Upper House during tl1e debate. on the Business Profits Bill and heard the speeche ,. of three or four members; a11d al­ tl1ough I hacl he idea tl1at the measure was going to meet severe opposition d · d i1ot ·mag:ne hat the members

• 16 HOUS'E OF ASSEMBLY P.RO·CEEDINGS. of that House were going .so far as to reject it.

During my recent trip North I had occat:don to notice the very marked di,sapproval of this action by my constituents; and if the H·onour­ able gentlemen who so summarily dealt with that Bill \~ere at the meet· ings I attended and h·eard the com­ ments on their action, they woulc1 realise that the old feeling of antagion­ isn1 which has lain dormantin the • 011tports for the pa·~t- 25 ·years been aroused now like a tiger; , has and the only thing I want to say now is that the people themselve,s should have an opportunity of dealing with that matter thems1elves, face to face with the member.s of t·he Upper House.

There is not the slightest doubt that if the position which has arisen should be readjuste.d at the polls that the 36 members w:ho sup­ port this Bill would be returned with ·overwhelming majoritie:s. Those who op·posed the measure can get their newspapers and their hireling.s to set up· a defence for them, but they w.ill sooner or later realise. that the people are \Vith this Chamber at the back of the Nati·onal Government on this matter and determined to see it ca~rrie·d out.

There are three m,illion dollars in the pockets of the m·e 1 n on Water St. that do not belong to them but should belong to the fishermen of the country. That money represents excesEi pr·ofits that should not have be.en taken out of the 1pockets of the • Ileople. The sum of $5,000,000 has been expended by this country in carrying on our ,share of this war; and the men who have made that $3,000,- 000 in excess profits durin,g the pa.sit two years are the men who 11ow re­ fuse to as.sist the country in tl1is tim~ of need. I k110'\v a firm on Water St.

"\Vho last year made $300,000 net profit; and I also kno'v a .firm on Water Street that last year paid its toreman $5,000 in addition to his ' salary as commissi ·on on sales. In the Upper liouse to-day there is1 a gentle­ men who represents that firm, and the same people must have made $150,000 on pork, beef and flour, over and above their expense,s. W 1h·ere is1 the money to co·me from? There is ' . no tonnage to bring imp·orts to . the C·o11ntry and ·the revenue is falling low.

The ·Country is faced with this expenditure of . $5,000,000 and the men '\ivho have the money say, "We v1ill turn the country up.side down before we will consider of 20% on the dollar." should be arrested and paying a tax These men p·ut in the penitentiary; taken there for treason. They are a disgrace to the country. They dare to stand up in the Upper House and dis.pute the right of this Cham·ber .to pas.s this Legislation at such a time! Where is the money to come from if the m·en who hav·e it re­ fuse1 to part wit1h it?

We did. not pro­ pose to tax them for 1915 and 1916; we ·have allowed them to go free for that period; we are only taking a part of the profits they made. They say tax the fiEihermen ! Oh, yes; cles , s legis­ lation! But they would iput a tax on fisl1, 11erring and oil; impose a tax on tl1e poor man wh·o is· doing his beist to kee.p tl1e country going-the man who has contributed to tneir fortunes and is keep.ing the·m in their grandeur. 'Vl1ere did they get their mone .y? They got it from the people. rthey trad­ ed with. Whom did they trade with? The fishermen of the country.

And if they are able to pay profits to the Government now, it i1s because they 'vere allowed to trade with the 1people of the country. If they ·had not traded vvitl1 the people they would not have r1ad profits to tax; but because they 11ave been allowed. to trade with th·em and mal{e profits it is proper that they should now when the time ·has arisen pay ·some of these profits . back to ~h~ g9-q11try, Dr ~Io;yq ~id that

• HOUSE OF ASSEMBLY PRO·CEEDINGS. one i)assing throug · h our streets would never think that our Empire was wLging a great war and that more money is being spent on ipleasure than ever before. Everyone knows that. I-Iundreds of our boys have gone for­ ward and given the.ir liVies that the ' men "'ho now refuse them this as1sisit­ ance n1ay be protected. If· ·every cent they have, if every inch o.f ground they O"\Vn, v1ere taken from them, they still have their lives and their intelligence and tl1eir experience with which to start over again.

But what about the men i11 Belgium and France who had millions before the war, but because of it are to-day left penniless and with no possibility of retrieving their fortunes; wiith their boys dead or prisoners, and their daughters and younger sons taken into captivity. What have these men suffered? Dollars and cents do not c·over such things as these. We ought to take these .fello\vs and send them to the F~·ont and give them a taste of their own medicine. Have conscription _ . they sa.y. Yes! send forward some poor man's son, some widow's son 1to tl1e front, and let them remain home!

If these men had been noble men, had been grand men, they would have s toad up .and said "we are re·ady to pay." "We believe you are discrimin­ ating, but we pass it by because we love our Empire, our boys, and our country, and we will allow nothing to come between our duty and ,our­ selves." ·But no such thing happ ·ened. They co-ntended that it was narrow­ rrrine(lness on our part, and stated that the Dilll went through without any dis cu 0si on down here. Why we dis­ cu ssed this hours after hours.

It was diBCU3sed more than ever it would have been had there been a strong Oppo3ition in _ this House and it was brour:;ht bef·ore it ordinarily. Do they imag :ne tl1at we bring measures of thi~ ltind bef f)re th country and ask the country to acce ·pt them without giving tl1em due consideration? Is all the wisd 1om· centred in the members of the Uupper House. We kno.,v what we are doing. We have got to go back to the people and answer f·or what we have do,ne; and we are prep ·ared to do so. What did they do? Stand up and criticise it without justification.

The Government has been abused and villified over this measure. It is a pity tl1at the writers of some of th- e articles did not compose homilies on the men wh10 were entrusted with trust .funds. They are going to seek the assistance of the British Govern­ ment! The British Governme ·nt dare not interfere with this Chamber whose • members have been chosen by the people to represent them and speak for them: and this applies all the more p·articularly where a money bill is concerned. HON. MR. CROse.1 E .-Mr.

Speak­ er, I feel that it would ill become me to remain in my place and not say a few words in relation to this matter. I congratulate my friend, the Hon. Minister of Finance upon the way in which he· has explained the Bill and the merchants objections to it. I also congratulate my learned friend, th 1 V Hon. Attorney General, up·on h.is able remarks in relations to the constitu­ tional position, and Mr. Coaker upon the eloquent way in wh.ich he· has dealt with the ·matter from the , sitand­ point of tl1e fishermen.

Before the Bill passes through this Chamber there are a few observations which I would like to make. Befor - e th· e Gov­ er11ment decided to t?-X the merca ,ntile community of this country,. th·ey gave the matter very grave and serious consideration-a great deal more con­ sideration than was given it by th· e gentlemen of the Upper House who threw it out. These gentlemen really did not appreciate what the Govern· me t did in order to formulate a Bill • I

• , 18 HO.USE OF ASS EMBLY PRO·CEEDINGS. which would b·ear som·ewhat evenly that as my learned friend has. said, a.nd not harshly upon the m·erchants it is time to have these gentlemen p·ut of the coun1try. The Gove rnment in their proper places. I am willing, fully realized the difficulti- es in the if necessary, to vote in this Hous , e way of taxing the commercial life of the colony; they appreciated the difficult business which our mer ch.ants had to do a;t diffe ·rent periods of the y·ear. Now, during · a vis iit which I made to the U.pp·er Hou.se last week I heard the H·on. Mr.

Harvey deliv ·er a very good preparecr speech on this Bill; but wh·en you took th· e speech and analys .ed it care fu lly you could not resist coming to the conclusion that the main is.sue with him was not the 6 per cent. which th· e Gov· ernment refused to allow upon · p·rofits , but the fact that he was .going to be taxed and tomorrow for conscription, but I will never vote for conscrip ·tion of men until conscription of wealth is alre ·ady the law of the land. There has. n·ever been so much money made in this country as in the last few years.

Take 1913 and compare the profits for that year with thos · e of 1914. Ma. k· e the same comparison for 1915. You will find that profits were doubled, and the same thing ap·plles to 1916 and will I believe apply to this Y ·ear also. The Government in framing this bill, might 'hav· e made · it retro .active, so that it 'vould a.pply to those y.ears as well as he did not want to pay it.

I wa s the present ye·ar, and if they had done astound 1ed, 11 ru:ay 1Say . .to . s·ee him SO ably backed up in that .positio n by Sir Edgar Bowring, becau .se I have always regarded Sir Edgar Bowring as b· eing one· who was very liberal when it came to a question of pubiic contribution s; we can only suppose that th· e gen tle­ men who oppose . d this Bill in the Upp·er House did so because they h. ad not giv·en it the serious conside ration which it , s1hould have received . Now, Mr . Chairm ·an, my position is similar to that of Mr. 1H,arv·ey and Mr. Bowr­ ing.

I am one ,of those who , I hope, will h.ave to , p:ay tax·es , . and it will be one of the, grea t eist pleasu r·es of my life if I have to pas.Si to t he Receiv .er so, I for one, would have bee. n qt1ite satisfied. I have no son to send to take his place in rth·e def.e,nce of the Empire. I am not .so fortunate in that \Vay as eome, but what I can do I will do cheerfully and willingly to assist in carrying on this 1 war in the· d·efence of the greate ist Empire ever known.

I am willfng to give my mon·ey, and I think these gentieme11 should be will­ ing to give theirs also . ; and I believe that if they had the opportunity back again they would not take · the stand that they took last week. Tax the exports! Tax the tish ! A fine idea for Mr. George Knowling, Mr. John Ander9on and Mr. Milley, so that they General of this colony at the end of would have to pay nothing, and the next February a chesu · e for $20,000, burden \vould fall on the fisher ·man as my 1proportionate share .

Aft, er all, I am allowed rto have my livin . g ex­ pe· n. sies, · I am allowed to 1make ever y reas .onab ·le ch.arge agains t my bu s1in­ ess, and I am .allowed $3,000 clear profit; and then, the Gover ·nm· ent ask. s me for $1.00 out of ever y $5 .00 that I make · Dver and ·abo ve that to assist in carrying on th· e war . And yet th ey t ell us lY.Ir. Chairman, · th , thi~ ta clp,a, l· e isiatioR ~ l · thip.k~ and the workman. Whilst I was, in the Upp.er Hous · e I watched Mr. Ja,s. Ryan. While the discussion was going on h.e was sleeping, but the minute · the I word "profits" was mentioned he was wide awake.

My friend, Mr. Cashin, made refe ,r­ ence to Black Monday, and I want to say to thi.s House and to th· e country tl1at it was a happy day for the coun trr, t that ttm . if ~ young ma. • •

HOUSE OF ASSEMBLY PRO·CEEDINGS. 19 . wante1 financial help in starting a busineE:.s he had ito go with his hat in h·is hand an·d beg for it, with the pro­ bability that it would be refused any- how. How rpuch better are conditions to-day, with the fine · banking instit11- tions that we have in the country! To-da:v a young fellow who wants to finance his business , can go to one of th ese banks and get the money on hi9 own standing. And what is the result? The country is better off, and th· e young business man has a chance to go ahead. This Bill, Mr. Ch ·rman, has my e11- t]re support.

I beli eve tl1at it is the hes t · m easur e that could ·have b8er1 fram ed to meet the necessities that e"'Cist to-·day. It is not a perfect meas­ ure, and there may be tihings in it that would need imp.rovement at time go~R on There has never yet bee· n a ner­ fe.ct bill brought into this House or an.y other, but , J maintain that this bill is the best that can be ·done, and I s1!pport every paragrap1h of it; an.d r hope and tru.st that my

part in 1t ,'i1ilJ be much greater than I anttc.:­ ate, 1Jecaus e if I h~lve to pay $20,')00 to t11e Government under this m 9asl1re I wili ·have $80;0000 left f·or myself. The rich men of the ,country should have to pay the most in a war fend r uch as this. It is they who enjoy all tl1e rri·vi leges, and they sihould be \vii­ iing to pay their just proportion oi the cost, and do their part on ·beh~_ lf of the brave soldiers and sailors v~rho "r ci. n ·~? 'h 1:"" a- l" S to 11' V8 here 1° n snf.:-)L"y'{-L n. 0 v ·--... u .._ , u C,1 L C"t. , _, • H c·nor:~_ 1i 1 1=• J. R.

Bennet.t t<:t.bled cer­ tain in i:~J r1nu ti on . Ho1. t1.e Speaker an11 )llnce·l tl1at tl1e L.:::gj .: lati·ve Council hac! passc l the Cold S orage -gjl1 '''itl; so~11e a111- endrrcents. Th9 Chairman from tl1e Committee reported that they had considered the matt3r to them referred, had passed the Ilesoluti .. ns -vvithout amendment u..,,rl r ' mm d d. that a ill b in trod uced to give effect to the same.

On mot ion this R·ep,ort was receive · d and adopted and the Bill entitled "li.n Act to Levy a Tax on business Pro­ fits,'' was read a first time and by unanimous . consent of the H·ouse was ord·ered to be read a second time ' " presently. · Where ·upon the Bill entitled ''An A~t to Le·vy a Tax on Business Proifits," was read a second time and ordered to be referre · d to a Committee oif the W·hole ·House on to-,morrow. Pursuant to notice and leave grant­ e.d and on motion of Rt.

Hon. the Prime Minister, the Bill to make pro­ vision with resne~t ·to the Pow·ers of - ' the Legislative ·Council in relation to those of the House of Asse.mbly, was introduced and read a first tim: e a11u ordered to be read a second ti.me on to-morrow. Notice of Suspension of Rules was given and the House adjourned until Monday at 3 p.m. ·It was mov·ed and seconded that when the House rises it adjourn until Monday next, August 20th, at thre3 of the -clo·ck in the afterno ·on. • Tl1e I-Iouse then adjourned accord- • ingly. M10NDAY, Augu 1st 20th, 1917.

The .House me't at three of the clock in the afternoon pursuant to adjournment. Pu-.r1suant to order and on motion of Hon. the Minis ter o· f Finance , an'd Custom .s the House resolved i'tself in­ to a Committee 1of th· e W·hole to c1on­ sider th.e Bill eintitled, "An Act to Le'VY a Tax o· n Business Pr-0f,it.s .. " Mr. Speaker left the ·Chair. Mr. . P:arson 1s toog the Chair of Comm,ittee. • H0 1 N. MR. CLI FT.-Mr. Chairman: Befo re thi s measure· passes I should lil\:e to make one or t'\\l~o o bserva .ti1on·s. I11 tl1e first r)lace_. 1Sir , I tlesire to ex­ p! es·.., my r ~ret that he 1 ill nt up , • •

• / • , HOUSE OF AfJBEMBLY PROC EEDINGS. fr"t)rn :this Hou,se in 1its last ses,sio1n, having reference t, o the subject mat­ ter of the measure , now :be,frore us . did not find its way back to ·thi1s C, h,am­ ·ber. We have ilo offiiiei·al re1cord of w,hat happen ,ed to that Bill. All we know in this Hou,se is that that B1ill was sent up and that it ·did not re­ turn.

Fr·oni the1 ne,wspapers' reports of the de·bate that 'took place f.n the other c ,hambe .r, ·we le·arn that that Bill upon its second reading went to Committee with a very narrow ,ma­ ji o·rity, and that the B.ill w,as su.bs. e­ quently committed ,to a 1Co. m·mittee of the Whole, and th1at the JCom,mittee rose without making a re1p·ort. , [ : su· b~ . . mit, Sir, it is unfortu ,nate th:at at a time like this , when our E1mpire not only calls 'fo. r but needs the unite · d e·fforts of the whJo,le ·CO·mmunity , that the two bria· n,ches oif this Legisl ,ature s,hould be at varian·ce over 1sureh ·an important matter. 1T ,hose who are leaders and h1old high . places in the administration of this country's af­ fairs should :be ready to s'acrifice a go1 o· d deal in ord.er to show a goo, d ex­ ample.

This bill ha1 s been describe 'd as being 'unf.air and ·unjust. It h as also been claimed that the 1Bill does not go far eno1ugh, th1at 1 it should reach those 'Whose· incomes ,are de­ rived from f.nve,stm·ents or otherwi 1se outside of busines ,s-as the . w·ord is defined in thi:S' A.ct. · I think so fa. r as · it goes that the :tne, aisur· e whi1ch we are no'w .consiid,ering is very re'ason ­ abie ,and equitable. I grant, howe ·ver , that :perhap 1s it is not as c·omprehens ­ fve ,in its term·s as it migh , t 1be.

I think it ·might : h·ave gone · furthe 1 r and ta.ken in· the income · s 1of rthose who are· not engage · d in bu.s.iness. .I wou ld even .go so far as 1to scfy that it S ·houl d ap.ply to the profe issions, not excep t­ ing tl1e lawyers.

But this 11s the fir·st time in the history '.of this cou,ntr· y th at taxation in the form now prio·posed by this measure has 1been ,put forw1ard, and it has ·bee· n thought well to ,be­ gin in the man·ner provid .ed f:o· r in this Bill When the machinery for the collection of the revenue inte ,nde'd rto be c·oll e.cted under th.is Bill is un der way an d t l1e collecti·o , n is 1n mo tion, I t hin. k I m' ay safely say it will be1 followed by a form of taxation whi ch w·ill cover th· o 1 ~ e who now m·ay ·hav e any g:-ievance or cause of co·mplai nt on acc·ou·nt 10-f the fa.ct that they m ay be ·overlooke , d in this me1asure.

Men, mo ney ·and .muni 1tions will be ne eded as long as the war lasts, a11d although 've ha-v-e made contri1bution 1s 1 u·nder e·ach of thes , e headings. yet 1 I fear we can hardly b·oast th'at we have ·me 1 as­ ur ed up as ful ly as we should t o the proper strength of our capabili tit es in any ·one of these res·pe1cts. Th e man·ufacture of munition ! s. in this ·Col­ o,ny is ·but a very small m· atter~a dro p in the bucket-. but so far as it goes, I understand, it has b· een a ve1ry profi table venture.

But it seems t o me that so far as the men a nd th e m·oney ar· e con.cernecl, they ,can only be 1 0.bt·ai ned by means of le gi·slat ion . It is , a , m1atte 1 r· of some r e'gre t that tl Ur a 'V'cn01-1+ 1 y 1°:.l:lt:'·Oduced by 1e meas ...,, .i ...,;:,, __ (.,_ the Min ister ·Of F'inance met with such ,disfavor in the place I hav e me 1 n­ t ioned.

The Bill, ho,vever, Sir , a bon a fi de effort on the part of 1those who introduced it, and n·ot·withstanding the fa ct that certain newsp ·apers have made some v·ery uncomplimen 1 tar y oomn1ents respecting thi s mo.de of taxation and th e Nati•onal Go·ver·n­ me nt. yet, I submit, Sir, th at 1those who are opposed to thi,s me.asure hav e no t up to the present m'om ent S 'Ug­ ge sted any better means 1 0f providing a similar amo11nt of income.

We in this ·House · of ~~ssem.bly have . sunk all our political differences. , S•ome of us, both on th1is side of the House and on t he other s]de, have made gre·at 'Sac­ rifices in that respect, but we all felt that the occasion ·calle · d for eome

• HOUSE OF ASSEMB LY :PROCEEDlNGS. 21 unite : d effort on 1our part, and with tl1at 'Jbje ,c-t in v·iew \Ve agreed to the f.ormati-0 1 1 of a Nati ·onal Government upon lines .of equ1ality . This be ing so, Sir, I . submit that it would have b· een :: 2as ona ble fo· r us to . expe .ct itha· t the co111 mun ~ ty w1ot1ld h·ave been ready to he lp rathe 1 r than hinder any efforts we are making on bel1alf of the colony for the purp ·ose of playing our

part in t his great confl ic,t. Results are what . we are afte r in this B·ill. Its o.bje ct is to tax profits, and the · O ·bject of t he tax is to raise revenue, revenue tha t is ne. e·ded by the -0olony in order to defray the just and lawful obligat1 on f} wh ich have been created .by reaso n oi c.ur war work, as lay.al citizens of .th e Emp·ire. I regret very much the n ece s­ si ty of this special session, but the mat ter before us is of sufficient imp ort­ ance to justify our action in this resp ec t.

It iE~ . a m·atter of necessity that this mon - ey s·h·ould be fonnd, an· d theref ore a ina tter of necessity that this spe cial E.essi·on should be called. And fur ­ ther , Si:, I submit that it was ·ou: r duty ~.s tlle Commons' House of Ass em bly of this colony, to maintain our r.igh·ts a:1d 011r privileges as members 1 of this Chamber. I· hc..ve said, Sir, that this 'meas ur e l1as bee n t ermed unfair and unj'ust.

I hav e given the m·atter of ·the meth· o· d of tax'.ltio n . whic , h is p,rop()sed by t his Bill a gr eat deal of considerati on, a nd I c.annot fin. d that there is any.thing ei ther unfair or unjust about the meas ­ ure. It is not · a question of ca.pita! inv ested i1 1 busjness that we ar e con­ sid ering. It is a questi ·on en tirel y of levyi ng a tax upon profits, whe)ther these pr·ofits have be·en derived from ca pital su bsc ribe. d by shar eh·olders in a company or by capita l obtai ned by way 1 of loan fro . m a bank. It maitter · s not how the capital is obtai ned .

All this bill proposes is to tax the profits • d· eri ved from t,h.e capital. An· d t:he urnol1nt whi-0h \Ve levy cannot 'be re­ garde d as excesstve · . We f.irs1 t allow a ll ord inary charges against a ·busi­ ness, we allow the living exipenses or salaries of the man.agers., and we al­ low a further sum 1of $3,000·; an· d af­ ter making these allowances we ask for 20 per -cent. of the profits made­ one d·ollar out of every five.

An hon. mem·ber speaking in this ·,Ho·use a few days ago. sa.id 1that he ho·pe· d he would be called upon to contri 'bu.te at least $20,000 to·war.d· s this tax, be­ cause if h· e were it would ·me.an that h e w ould be able to put $80,00· 0 in his ·own pocket.

Now, I have taken the trou ;ble to m:ake . a c· o,mp.arison to s· how; the d.if'feren ice be·twe·en a ieom­ pany carrying ion busine · s· s with its own capital and a ro; m.pany ca·rr,ying on business wj1th its · O ·wn capital and on business partly wiith its ow: n .and partly with 1bo:rrowed .capital, 1 b.ecause i1t has b·een oo:Q te·nde. d ·that a c·ompany carrying on b· u·sines · s with . ii ts own capi ·tal should first o· f all ·be allowed t o de· du~t from its p:riofits 16 per 1cen:t. inter .est upo. n its cap:ital.

N'ow, 1that · m. eth!01 d may suit persons w1ho are: en­ gaged in bu·sine ,ss, 1but it would .not have the desired result. We would not · b· e able .to obta;in the re•quired r evenue if ·the taxation were fixe · d upon that basis. I wil1 s:ho·\V, you, Sir, h1ow it works out.

T· a,ke a co· m!pany h· aving a capital of $1,00·0,00·0, upo· n w1hich it earns we will say, 10 p· e! r cent., and u·p'O· n wh.iich we · allo · w 6 er 1cent. initerest. 'Thait woulc;l :show an earning ,power ·Of $10 1 0,000, an· d the int erest would be $60,00·0, which would I leav · e a profit of $40,000. ~rom that profit of $40,000, de·du:ct 2. 5 per cent. w· h:.ci h w·as ·the am-0unt propo ise· d 1to 1be de·ducte · d .if the interest wer· e 1allo 1wed, which woul · d mean $10,-0·00 and leave a profit of $3·0,000. ·In other w:or· d·s, that company would earn $·60,00'0 for \

• ' ' 22 HOUSE OF ASSEMBLY PRO·CEEDINGS. • interest and $·30,000 as th·e net profits, or 9 per cent. up·on its .capital. Now, take the same company, with t1he same ·Ca.pita!, do-ing the sa.me amount ·of ·busines·s, and making the same pro­ fit of $100,000, and ·dedu·ct the 20 per cent. whi•ch it is proposed to deduct under this Bill, you get an actual net profit of $80;000, or 8 .per cent. Take another co·mpanyt a .company having a capital 1of half a million dollars, antl which b1orrows another half a milli.0)1 for the· pur.pose of .carrying on its ·bus­ iness.

I am a·ssuming, of course, that the borr10 1wing is for the whole yea~-, and I am assuming. too, that the cap­ ital is fully paid 'up in both compa11ies. T'l1is com,pany, t.hen borr ·ows h2lf a million for a whole year, w·hich puts both c-0mpanies on the same basis of a million capital. The second cort1- pany has to pay 6 per cent 011 i,..s .capi,tal, vlhich is $30 ,000, and a like amoun_t 'on the sun1 borrov1ed, n 3.moJy $30;000. w:h'..ch woul 1d leave a pTofit of $40,0 ·00, less 10 pe· r ·cent. for the tax. .or $3.0,000 net profit.

Now then, $30,­ ·000 pro.fit, ad·ded ·to the 6 pe:r cent. al- 110·\ved · upon capital. means a total of $60,000 profit, or 12 ·per cent. on its capital. Take the same c·ompany w'ith the -capital of half a million, and bor­ rowing half a m'illion, ·the result would • be the same so far as th·e interest is ·0on·cerne ·d, b·ut de:du.cting the $30,,000 that is pai1 d to the bank for interest on the mone·y borr 101wed, leaves a pr·o- fit of $70,000.

The tax in ~hat case would ·be $14,000, and ·the total profit vvould' be $56,000, a sum e·qual to 11 per ·cent. on the capital. .So you see, ' the co·mpany trading u·pon its own ' I capital .make · s in one case 9 per cent. a,nd in ano·t:her -case, \v'here 20 pe~ .cent. is deducted, 8 per cent., whilst the· .c10 1mpany ·borro"\ving half a million in ·aiddition to its capital of half a mil­ lion, makes 12 per 1cent. where they allow inte·rest upon the capital and 11 per cent. where n· o i11terest is allowed and the tax of 20 per cent. is imposed. :::\Tov;r at first sig11t it might ·appear, and does apear, that the company trad~ ing up·on its own capital, fully paid up, is not i11 as good a IlOsiti,on as the company that borrows captal.

Well that is s-o, but Sir, it is ·only reason­ able to suppose that if the half mil­ lion ·Company by b·orro\ ving a·nother ·half inilli ·on can make 12 per ce11. and 11 per cent., t11e company \vith one million ·Can, .by ·borroV\ring another mil. Ii on bri11g· out the s·ame results. S·o there i. s really nothing unfair or un­ jus1 t in not allowing interest upon the cap:ta.l. This failure to allow interes~ • on the. capital is the stronge·st argu- 1nent that I .have heard used ag1ains~ this measure.

Other minor arg11ments ha -v~e .been used, but the main argu­ ment vvas that there should .be an al­ lowance for c1apital. I s11bmit, l\1r . 1Chairman, that there should be no such .aJI 1 o·wan.ce at all . 'I'.he company that has to borrov1 its capital . 2 ~ I h1ave shown, is really in a better p·os­ ition, and s· o far as I know, n·o com­ pany itrades only up1on its own cap~tal. Every ·Comp1any trade ·s, not only up.~n its ·own ·capital, !but up-on borrowed cap·ital as \vell. If 1a c·ompany v1ero using only its O·'i\lU c:::tpital, ther, it m 1 ight be said that this company was over-capitalized.

Any C{Jmpany c:arry­ ing on a 11arge 1business must of neces­ sity, at times, borrow from the ba,nk·s or from s.hareholders or some ()ther parties, and if it is tra,ding ,only upon i·ts own captal, and not borro\vng ,at all, then I say that such 1a co1npan3r is over-capitalized, and the sooner it takes step . s t 1 0 reduce the cap1ital, the sooner will it be able to de·clare the dividends s.imilar to those declared by the ·Second ·compa ,ny I h1av·e ment ·!()necl. Fio· r the·se rea.son·s then, Mr.

Chairman, and others, I feel that the measure now ·before the House is a ·very e:qu~t­ able and just me.as,ure, and I shall • • •

\ \ . \ • f HOUSE OF ASSEMB LY PROCEEDINGS. give it my entire supp·ort. ~/JR. ,H1!·CKMAN,-Mr. Chairm1an: Be­ fore the I_)rofits Tax , B 1 ill pa·sses its f~112l stage I 'l{'Olild like to say a few \~i ;J :tl-c s . ~:_1'' i ::."s~, I mus1t con.gratulate the Prime Minis 1ter on bringing in such an ex·cellent bill, an·d on havin g su.c,h great reg·ard f()r the ·busi n e·s· s com­ rnuni ty by not taxing the pr· ofits f.o· r the past three years. .T·he·re· is no dot1b· t tl1at large profits . have bee 1 n a1de since the beginni n g of the war y pe·ople ,in busines.s.

T:his b1ill xe· s cnly . a portion 1of the net pr· o­ f ts~the net profits, or the saving · s o the l:rusiness afte:r everythin 1g has 1 b e1n allowed f·or the c·ondu 1ct 'Of t he t i u_ ~ine£.s, ·such -a· s sialaries and ·all oth er e::q, enses.

T,he 1balan.ce is ne· t profit or g,vings, and out of thi,s, .acc·ordi ng t o e b~ll, the 1 Gove ·rnmen't ask· s one dol l r out of five for the upke e· p, of ai~ an· d the n1aintenance of t h e - ' dent 1s 1of th·ose · kille 1d at the fron · and for the m1aintenan ·ce of th·os vv,ho return matme d for life. 'I"his b~ll was reje·cted fron1 the1 Up­ lJer ouse f•or different re.asons.

T he same ea, s.on wa· s n-0t given by all w· h· O v.oted aga.inst it. ,The, reason g iven b· y ·se\ eral ·of the h·on: o,ra:ble gen tle- 1ne11 v,r s tl11ftt i't was unfair · and u· n­ ju.st? .1::; c.a11se 6 1 p·er .cent. was not al- lo"\VC·d. n the .capital investe 1d in a Now if you will n·ote the - names o those 1"\vh 1 0 took exce ·ption t o the bill n this .gr.ound, y1ou wil l fi n d tl1.at ir1 .re-:y ca,se they are mana ge rs· <:)f, 0r a . connected with, larg e ·con­ cerns w o have a, large am·oun t of n10!1ey i veste · d in bu.siness and that they are lo1olring only to their own personal ji1terests. :t~ 0 1thing ·C1o·uld be 111_ 0 1 e unfair than to al low 6 p er ·cent . on .capital.

The honoriable m emb er fqr Twillingate has eX\p·lai11e. d · why tiiere sh ould be no all ov vance of . 6 per ·ce·nt. for capital, an 1 d a s this is the reas·on ,given by m·any ge ntle men in the ·other Hou·se fior n ot v oting • for t he bill, I ha.ve m1a·de · a compar · ­ i:son w: h ich might ·help to· e1xplain the· m. a: tter to· tho·se, who have not .ha, d tim e, ·or hav· e n·ot take · n the itr:ouble to -figur e it ()Ut. .Tak· e two busine · si s'e's hsre on Water Stre 1e·t-io ·ne concern going alon . g in the u· siual way and es­ ta1blis hed 1a long while, no1t a l'imite · d liab~ lit y com1p·any, but p1robably o·wned by on e individ_ual, and the mana .ger :drawi n g , his living exp· e·nse· s o·ut of tl1e · bu.sine ,ss an· d probably putting / w:hat m· o·ney he make : s, ba,ck into the bus in ess .

Th· e Gover ·nmen · t 1bring 1 s in 1a .bill t 10 itax profi ·ts, an, d in this ·bill 6 ner cent inte ,rest is all1o· w'e· d on ~ . c~p,i tal . .Now thi.s C 'oncern, in valuin , g its a.ssets , 1a11d havin , g d'.ue re:gard all the t i'me to the 6 p·er cent. allowa · n.ce· on the· ·capital will value · all the g·oods <)n_ the shelve · s and ·everything e 1 lse, at th· e h ighest possible figure, and • '\Vhere1as its asse ,ts a,ccording to their own · e·stimation mlght .be, , a. million c olla rs, they m1g,ht n1ot have .half 1 th1at in re·aliza \ble a·ss1ets. \They make say $75,0·00 profit 10'n th,eir busines 1s fior the ye!ar ·after taking 01 u t . all exp1e 1 n1s­ e·s.

W·he n then you le·ave 1 them $6, 0·,- 000 clear, which i.s not tiax.ed at all, a nd th· e 20 ; p1e'r cent. tax ,on the re ... maining $15,000 is $13,0,00-. Now take the oth'er side.

A man comes in here w ith $·50,t)O· O cash and settles d·own to do b. u. sne:ss, and by his ener ·gy, e'n­ t erprize and :hard wor· k .he turn . s ·over hi,s e:apital twenty times, a. n: d wi 1 th th 'e iaocom · m1 0.dation he gets f 1 rom the iba,nk h, e, is enabl 1ed t 10· make 1 the :same profit of $7·5,000 w,hich the oth·er· 1 co,n­ c er· n made. y ,ou m.ak. e 1this m:an pay $14,400 in t:axes, af·te1r allowing him 6 p1er ,cent. on his, ca1p1ital, w'hich is $3,00·0.

Now th. s man, throug,h .hi1s ener ,gy 1and attienti ,on to his busin,e . s. s has ,built it for ,hims · e·lf, and should b·e enc1ouraged, ye· t under · this p· r·ovis­ ion you wio,uld have · him co·ntri 1brute $1'4,400, ·an· d only take $3;00· 0 from the ,other 1man who had ass·ets of a • •

• HOUSE OF ASSEMBLY PRO·CEEDINGS . • million . This million dollar tnan 1~ p:-otected by the sailors in the N<Jrth Sea· ,and ·the soldiers at the Front, a"'J.d y·ou ask. him to pay for that protect1on only $3,000 , while you \Vould make the man wh.o had turned over his ca1p1ital twenty times p.ay $14,400. Now, nothing to my mind would be more unf·a:r t~han that. The only way G per cent. could ·be al1'owed on ca1;­ :ta the way bl1sine~s is conducted in th~s country, : s by P 'll tting an in·~o'!"r1e tax which "\vould take from those in­ dividuals who own the business and · get this $60,000 clear.

This, to n1y mind, Mr. Speiaker, is the onl)'· rea- r.onable \Vay this 6 p·er cent. could lJe jn.clude 1d in. tl1is Bill. In listenjng to the s1peeches from h<Jnour1able gentle­ men ·of the Upper Hous · e one would be led to believe that b1ecause cer­ tain businesses have a capit:::i.l of $500,000 , or $1,000,00 ·0, they do rot have to borro-vv fr·om the Banks.

Th·ose men wh· o h.ave $500,000 capital hn·ve it tied up in vessels and coj traps and debts .and bills re.ceiva:ble, and have to go to the B.ank and get rnore capital and p:ay more interest to tl1e Bank th.an the sm1aller man , and yet they wo1uld lead yo· u to believe that ·they do not borr ·ow from the Banks. < Th.ey so·metimes look for rri1ore than the Bank will give the:m. I am g~ad, Mr. Spea .ker, to be able to contribute to a war measure of this kin·d. It \vjll not i~terfere in any w.ay with my ·bt1siness or my bu.siness metho·ds.

We are aske · d to contri :but· e, <Jne dol­ lar out ·of five and I thinl{ t!hat very· re·:tson.a b le and the more I have to contri :bute, the more I have for n1y . self. Now the p.atriotism we saw ex­ hibited in the .Legislative Council i:S. to my mind sh.am :piatriotism. Any man who claims him·self to be a patri<Jt sh·oul1d not squeal when v~1u tak· e a little from his savings account, 1ftnd ~1 the same patriotism prevailed in the British Isles the Gerrns.n flag -vvould be flying over this Hot1se to­ day, and our populatio11 would be out­ raged ·by the Germans like ~he neo­ p1le of Belgium and Serbia. H 0 N .

M 1 1 N I ST E R M I L I T I A. -- · ~'l ~-. Chairma11: I would like to add. one or two words to \vhat has already • been said with reference to this l:)iJl, and in rising to do so 1 <lesire to say th.at I ·give it my hear«, ~r e.11p­ port. When the Minister of Finaii.c e brought in his Budget he estirr at,e 1 tl1ut ~ve would get $250.000 fr-orn. rrofit tax which is the Profit~' Te:1 ~n the Bill which \Ve have l1nde-r di - · cussion this evening .

Since t!lrJ a - r.ot1r1cement the Legi3lature of Ne,._ foundland, both Up·per and L{'' er Houses have made history, and I m sure that the action of this branci of t .. .!\~ Legislature will go down in .... is­ i c·ry as one that upheld ~, o the ut ost t!ie rights and liberties of the pe ple. ''7hen w·e p·assed the Bill in its pre­ .~ nt form at the last se.ssion i~ v\raR C1.."'ntemplated that opposition · ot1lJ be met with during its p·, :-;;;tge thro .ugh the Up1Per Hot1 se, nu I do not tl1ing that it was e'rer t ul' ght tha.t it \vould ultimatel,r rece1 8 the trea ·ment and fate that it rlid at tr.1.e closing of fhe Ho11se at, the J st S 1 ~s­ sion.

Personally, I regret t t hon­ oura·ble mem,bers of the Le isl(i,tive C·ouncil, in their wisdom, sa fit to take the position they did n r~Eer­ ence to this tax, be·cause I rlrJ not think that there is anything in their contentions that woula. ~ustlfy their a.ct'i-on in the least degree. ] had tl1e opp1ortunity of hearing part f of the de.bate that took vlace while that Bill was before the Committee and tl1e more I hea.rd on the 3ubject of th.at B·ill as it was debated in the lTpp~r Hous ·e, ·the more convinced I ·\"va. that the ·Bill was a, good and proper ·0ne, because there was n0 argt1ment proposed that in any way took from • •

I ' • HOUSE OF ASSEMBLY PRO·CEEDINGS. it its fair and proper chara<3ter One would ask the question first of a11 ' "Why are we imposing this tax? l~()l' \vtat purpose are we raising th.3 mon­ ey that this tax will 1bring? Wl1a t j s the ne·ce.ssity oif ncreasing the Re\'· enue by $250,000 a year under this special tax?'' The answer, Mr.

Chair­ man, is that 'Newfoundland, like all other parts of the British E,mpire, is at W 'ar over in France, and in Scot- land and in other parts of the Em­ pire a large num1ber of men-the young men who have gone abroad to fight the battles of Newfoundla ,nd against ,German aggression, and whilst these men are in foreign land 1s, pro­ te1cting us and our families and our p:-operty, surely they are deser·ving of at least an ordinary d.ay's wage. Surely they are dese .rving ()f tihe con­ sid eratio:n that they would get in the 0 1 rdinary \va1ks of life·.

They are add­ e:l to the Public Serv ·ifce and the J=>l:,til; c Service has t· o p·ay those men for their servi·ces .and the way the P11tli.c Service has always been main­ ta~ned in ths country and in other ·Co·untries on the face of the glo.be is thr·oug·h the taxation of its peo,ple.

Under the present circumstances, the Minister of F'inance lool{ed around to see where there ';vas a desirable place , to get this money to pay these rnen, not alone to pay the men a sal­ ary but to pay their wives and chil­ dren ·of those \Vh· o we::-e sacrificing their lives on b·e1h·alf of us, and ·give the dependents of th·ose me· n who \Vere not in a position to give them sufficie ·nt to maintain tl1eir children and th~ir wives and dependents while they were away, to ·Clotihe the orphan children. That, I s.ubmit, Mr.

Chair­ man, is why that tax is impos ·ed and it is only right th.at those who are making large profits out of the pe·o­ ple of this country and who are en­ joyin , g .great advantages and who have be1en in the enjoyment of these ad- vantages surely th se who make the greatest profits should be the ones to pay taxation to .pay the men who are protecting us. Tl1ey say that they do not object to taxation but only object to the me thod. They say you ha,re dis.crimin !ated against one class in favour of another, that you do not put one business man in the same position as his c·ompetitor 'in trade.

Well, my ans\ver is that we k.now from evidence that has 1been given in other directions that large profits have been made the last two or three years W !hfch profits h. a ve been brought abo.ut through .condi­ tions a:rising out of the war, and that th·ose pr·ofits have been made by me~ who are strong in opposing this Bill. M·any of the men who are opp·osing this Bill have made fabulous sums of money sin.ce the o,utbreak of hos­ tilities and they have not .been called upon to subscribe one dollar an1d they have not suibs,cifi1bed on. e dollar· to • pay the men W !ho are sa>crificing th·eir lives.

They talk of discrimin­ ation. Yes, let us have discrimin­ ation .and I will defend discrimination if ne.cessary to .carry O · n the great '\vork we are .carrying on. Up to the pr'esent when not ·one dollar has been taken from the p·ockets of those \Vho have m,ade large sums of money. Not one dollar h~ve they bee. n asked to subscribe to pay the wives and children of those who have laid down their lives . and to-day we come in and aslc for a paltry on·e-fifth of wl1at they made this present ye.ar, 20 per cent. of their profits for the prese11t year.

We do not mention what has hp,ppened the last two or three years. All that mon,ey that has been made and salted d·own they can keep, but because we ask these gentlemen that for every $1001 taken out of their bus­ inesp . at the end of the prese ,nt year tJhat they should pay $20-the balance • they ,can shove down in their 101!g

, HOUSl:n OF ASSEMBLY PRO-CEEDINGS. po·ckets with the rest that they have put tl1ere t1he last ·c·ouple of years­ they"'" tall{ of discrimination. One can • hardly co.nceive a big 1business man Vlho look f·or\•1ard to the end of the year to takin·g off a Balan·ce Sheet \Vhicl1 will show $50,000 or $100,000 net profit, o;bjecting to being asked to pay one doilar out of every fire, the balance he .can keep for himself.

Under the Bill he .can keep out of his busi 1ness his ordinary expenses for hirnself and family .and all the ex­ penses incurred in his .business and C}:!_arge up · e1;-ery reasonable charge. and after deducting all these h9 hag only got to pay <)ne dollar in every five. "Discrimination" is a word which sl1ould never have bee1n used by 1men 'vho are making money.

If there i~ a million dollars made by th3 b11si­ ness men on Water Street at tb;3 ei1d of the present Y;lear, they v.rill tie aske ·d t·o tand ba.ck $200,000, and if you glance y-our eye over the men on 1;f\Tater St. wl1() are likely to contri­ bute to this tax, you ·can se 3 11tr\v very fe\v of them ¥Till put do\\.rn in their long pockets $800,000 made out of the business of this country. I say, ag·ain, Mr.

ChB.1rman, tha: it is regretta ·ble that those men in the Upper Chamber did not gi·ve r11·ore -C{)llsideration to their action. ~anv o.f ~ them ha ·Fe a·cted in the 1)ast in a most libe·;.'al man.ner and have done a gri:.~at deal of good worl{ in conne·ctio11 \;vith the Patriotic movemer1t a11d jn con- neetion with Patriotic work in this country. ' J\1:r. Spealrer resumed the Chair. The Chairman fron1 the Committee re·ported that they had considered th.e matter to them referred and had pass .. ed the Bill without amendment.

On motion this Report was· received and ad1opted a·nd by unanimous con- sent of the House it -,1a.s ordered that the Bill entitled "An Act to· Levy a Tax on Business 1Profits·," be read a third time presently. Whereupon the Bill .entitled "An Act to Levy a Tax on Business Profits," was read a third time and passed and it was ordered that it be engrossed being entitled as above a·nd that it be sent to the Legislative Council with a message requesting the co·ncurrence of that body in its proQ visions.

Pursuant to order and on motion of Rigbt Hon. the Prime Minister the Bill entitled "An Act to make ·provision 'vith espect to the Powers of the Leglsla.t1ve Council in relation to those of the House of Assembly,'' was· read a second time. RT. HON. PREMIER.-The Bill I prc}~ose for the consideration of the ~-Iot1se, is one rendered necessary by the action of the Legislative Council, in throvling out, in the last session of thC:; Lei~islatt1re, a Bill designed for the purpose of levying a tax on Bus­ i11ess J>rofits. The operative

section of that Bill reacls: "There shall be paid to His Ma­ "jesty by the person owning a11y , "business, to which this Act applies, "a Tax of 20 % of the nett profits in "excess of the sum of $3,000 earned "by st.1ch business during eacl1 of "tl12 accounting periods herei11afte-r "n:entioned; that is the First Dav .. "of January 1917 and the First Day "of January 1918." The Businesses to which this Act were to apply were: all Trades and Business, including the Business ot Transportation <:It. any description~ carried on or partly carried on in N ewf·oundland.

I have already given my opinion on the action of those who ar·e respons­ ible for the defeat of that measure and, after mature thought and con· sideration I see no reason to deviate one 'iota from the conclusion . s then arrived at and I desire to emphasize all that I then said in r·eiation to

/ HOUSE OF ASSEMBLY PRO·CEEDINGS. that transaction. I have / not been able to read the full official debates on the action of the Legislative Council, which took place in relation to the Bill, though I have read the

summary p·ublished by the p·ress as well as the articles that have appear- · ed regarding the same, and the mor·e I h.ave studied the question, the more I am convinced that there is nothing whatever to justify the grounds set forth for the rejection of the Bill. The p·rincipal argument was th.at the Bill discriminated; in other words, that its pr·ovisions were not -alike to all, and a.ffected differently people in similar trades and occupa­ tions.

There is nothing whatever in - tl1 is argument_ The first proposition I desire to lay down is, that there was no discrimin­ ation in the Bill rejected by the Council, in the .sense in which it was claimed by two members of that chamber. In a country like this, the area of taxation is naturally of a limite · d character, as nine-tenths of the people, ninty out of eve·ry hun­ dred, are producers, fishermen, lab·or- • .ers and mechanic.s, and care has to be h.ad not to overburden those who repres-ent the mainspring of ouT wh·ole economic system.

The rest ar·e non-essential, the class that get between the consumer and the produ­ cer, and in framing this mea,sure, and in introducing it, we had to very carefully consider the question of what class or classes could best bear the burden of further ·sp·ecial taxa­ tion, because it is an axiom of taxa­ tion that the burden should fall on those in the community best able to bear it.

The class of people that will be most affected by this Bill is the wel1-to-do class, those who are mak­ ing lar·ge fortunes out of the business of the country, 'vho have been and still are in partner;ship with the labor of the country, and are in a better position to pay that tax than their le.ss fortunate partner, the producer; and it is only just and fair that a portion of their profits 1should be appropr'iated to the benefit of the State. 1I.t has been my privilege during the cb.irty-t\vo years I have been in public life, to _take part fro· m tim e to time in th8 framing of tariffs .for this country, and during these year · s I have seen flour, pork, beef, butterr rr .. olasses, s·ug.ar, ~alt, kerosene oil, tea s.alt, lines, and twines, :pla·ced on the free list; concurrently with this, wines, spirits, cigars, .silks and sat­ ins, j evv-ellery, motor cars and other luxuries have been placed in . a tariff ·as high as one hundred per cent and m.ore bull no one for a mo,ment questf.oned the propriety of the prin­ ciple involved, because it was recog­ nized that tho:3e who had the money should pay for their luxuries.

I never heard it procla.imed that such a policy 'vas discrimination. The man who has the means and capital to carry on this business is not in , the same position as the man who has to go to the bank for accomoda­ tion and borrow money to c.arry on his enterprise. To hamper such a struggling man would be to destroy that healthy competition which is necessary to protect the public from the evils of monopoly. This princi­ ple now called for the fir1st time discrimin . a ti on has found a place in the taxation of England, the "Mother of Par·liamen ts," since the earliest introduction of the Income Tax.

In pre war days no man wh, o was not in receipt of a certain income or wage paid any taxation at all, and the Income Tax of so much in the Pound only applied to the well-to-do classes that were earning a certain salary or possessed a certain income and in prop·ortion to their income so did they pay. That is the very meaning of the words "Income Tax." The poor were entirely exclude · d

ROUSE OF ASSE?vlBLY PROCEEDiNGS. and went untaxed. The middle man, the labouring man· and others on low salaries, or who had low incomes 1 paid nothing. They . wer·e entire .ly excluded from its provisions, and that in a country where it must be , remem 1bered that everything up to · recent times was duty free where clothes and food and other necessar­ ies of life are free of duty-where by reason of this free en try of food and nece .ssaries, the manufactures were cheap and the poor man r·eceived the -benefit of the low p1rices. In addit- ion, he was free from taxat ion.

This is what is now termed ''discr·imina­ tion" by the members ot the J-'egis· lative Council. But there is a larger and more im­ porta .nt principle at stake, which, in itself, must be suffic ·ient to justify the principle involved in this pro­ posed taxation even if it stood alone . . I and there was no other a.rgument in its favor, and that is that those who have wealth in the community at stake shou1d pay the largest propor· tion of the taxation. What class in the Empire would suffer most to-day if Germany won?

Or ·to bring it near­ er home, if this country were invad­ ed to-morrow, and if property and goods were confiscated and destroy­ ed; if the towns were shelled and trade paralyzed, who are the per·sons wl10 would suffer most? Are they not the well-to-do, the property owners, • those who have the largest stake in the country, and derive large in· comes therefrom; and not the p·oor man who has nothing to lose under the circumstances?

In view of this, therefore, the question is narr·owed down to the fact tl1at the money sought to be collected under this Bill is nothing more or less than an Insur·ance Premium on propertyi the payment of which has to be made by the owners of the property. This money that we are see·king to obtain is for the purpose of providing sol- I dier·s and paying their wives and mothers and children while they are away,-defraying the · cost of our participation in the war; in other words, protecting the lives and property of the well-to-do and those who are unable to serve.

We are effecting insurance for them, and it is only fair that they should pay the premium. There are some who think we have not gone far enough, and who are . of the opinion that this measure should "ue retrospective, and should go back and tax the profits made . by our bu3- iness men during the past three years.

This matter has been under consider­ ation, and was very carefully gone in­ to, not alone this year, but during the last three years; but the Government felt that just as long as the colony as a 'vhole could safely bear its cost of the war, it might not be well to burd­ en the trade by imposing or levying a,ny additional special tax. But now that V\Te are called upon to raise more money for the cost of the war, we can no longer withstand the pressure • of the pleas of justification to inaug· urate this tax. .

It is a tax that can hurt no one, because if there are no profits there will be no contribution . . n1ade . If there are profits then there sl1ot11d be a contribution. A man who has a profit of $10 over $3,000 will be called upon to pay $2. The man who makes $100 over $3,000 will be €alled. upon to pay $20, while a firm that earns $100,000 will be called upon for $20,000. Nothing could be more equit· able or more fair.

Another argument put forward by those who oppose this measure is that they did not object to the taxation: that is, that they would be prepared to pay more taxation than this Bill will call upon them to contribute, but object to the manner and form in 'vhich . t~1e bill is drafted. Well, if they are serious in that contention, ,

HOUSE OF ASSEMBLY PRO·CEEDINGS. 29 we shall have no objection to rec~iv­ ing that contributian from them, if. on ascertaining their profits, · under this bill they discover that there ls still more money, other than the act calls upon them to pay-which, in their opinion, ought go to the Re'r. en.ue. And now for the last argument of the members of the Council against this Business Profits Bill, the silliest argument of all and one which only requires to be mentioned to carry on its own face its refutation.

The Coun­ cil proposed that instead of a tax on profits, we should place a tax on fish. rrhis would simply mean that th\? fishermen of the country, already ov­ ertaxed, would have to pay any sum which might be collected under such a tariff.

In other words, if fish is worth $10 a quintal at the present time, artd the Government place a11 export tax of fifty cents a quintal the1'.'eon, the price of fish "''ould i1nme­ diately decline by that amount or an)7 amount which might be fixed as a tax The same would be true of a tax on oil or any other of our fishery products It is argued by some such a tax "roulo be paid by the for·eign consumer, not so. When the

article has reached its present price in the foreign market adding any tax would be certain to be paid on this end. Of course, in of--fering this suggestion, the whole aim and object of the bill was convenient­ ly winked out of sight. The idea of tl1e bill is to tax profits, and not to ·tc:x the producers of the country, and if \VE' are wrung· in our assumption that large profits are being made, the11 vve ~annot expect any contribution. Over and ove again this 11as bee11 clearly and plainly pointed 011t.

It was sucl1 a measure as this tl1e11 that the Legislative Council undertoc>~. to throvv ot1t, ancl the bill which I ntl\ 1 .r vropose for the consideration of tlte . I-louse is a bill almost a verbatim copy of the English ! :..ct, which -vvas intro­ duced into the Imperial Parliament b~r a I""'ibera1 Administration o·nly a few · years ago to deal vvith almost the same issue v1ith 'vhich we are now confronted in this country.

The issue 'vhich has been raised by the J_"'egis­ lative Council in thro\ving out tl1e raxation of Profits Bill is one tha·-. str~l{es at the ve:ry root of our Consti- • l uiion. and the time has arri,red when it must be settled once and for all \vhether the Council 11as the powe:- to interfere with Money B-ills, In .Englancl this question 11as long., since been decided, but the action of the Lords rendered it necessary to " place on the Statute Book in black and white what was for years regu­ la.ted by usage as sound const1tution· al law · The Act which we are now caller1 since been deciaed, but the action provision with . respect to the relati.\re powers of the Legi 1slative Council and the I-louse of Assembly.

The Bill con· sists really of t'vo sections, number one and number two. The other sec­ tions deal merely with the machinery of the bill, and you will notice the se~­ tion which provides tl1at the Act shall not come into operation until it is proclaimed by His Excellency the Gov- .. ernor.

Section 1 says: - " If a lVIoney Bill, having been pas­ " ~; ed lJy the I-Iouse of Assem!lly,and ,·, sent 'to the Legislati·ve Council at "le·ast 1 n1onth before the end of the ~' session , is not passed by the Leg- 1' islative Council without amend· "ment .... ,vitr in n110, mcnth· after it is " sent 1 ~

i) t 1 · that -r:rouse, the Bill "shall , u nlE· t< ~., the House of Assem­ " bly direct 1 o the contr?ry, be p::.--e­ " sented to tl1e Governor and be­ " come an _p r;t of tl1e Legislatu-re on "tl1e assent of the Gover11or being " signified, not"ritl1sta11c ing that the " Legislative Co11nGil have noi con· '

I J HOUSE OF ASSEMBLY PROCEEDINGS. " sented to the Bill"

Section 2 provides:- " ·If ariy P11blic Bill (other than a " a :rv'.Ioney Bill) is passed by the " House of Assembly i11 three sue­ " cessive sessions (-vvhether of the "same General Assembly or not), " and, l1a ving been sent up to thtJ " Legislative Council at least 0118 " month before the end of the ses· " sion, is rejected by the Legisla­ " tive Council in eacl1 of those ses­ " sions, that Bill shall, on its rejec­ " ti on for the third time by the Leg­ " isl a ti~re Council, unless the House "of Assembly direct to the contrary, "be .presenA.ed to the Governor, and " become

an Act of the Legislature " of the Colony on the A3sent of the " the Governor being signified there­ " to: notwithstanding tha~ the " J_.;e.gi.slative Council ha ,-9 not " consented to the Bill: pro- " vided that this pro·vision shall "not tt:lke effect unless t·\-x10 years " have elapsed betv1een the date of " the second reading in the first of " those sessions of the Bill in the "House of Assembly and the date " on which it passes the House of "1~ssembly in the third of those " sessions." "The effect of both these sections is simply this, that aJl Money Bills sent up by the Hou.se of Assembly one month before the end of the session, become law, whether or not they are pa_ssed by the Upper Chamber.

All Public Bills other than Money Bills, if passed in tl1ree successive sessions, become law~ tholJ.gh they may be re­ jected by the Legislative Council.

Tl1is is at present, and has been fo:r some years, tl1e law in England, (11po11 v1hich our Constitution is fram­ ed) and is the outcome of years of Rtruggle bet,11een the two Branches of tlJe Imr:ierial Parliament in the fight for supremac·y by the branch repre· r;enti11g the people. 'It has always been conter1ded by the House of Com· mon1s that all aid.s and supplies are tl1e sole gift of the Common.s, and tl1at it is the t1ndoubted and sole right of the Commons to direct, 1im1t • and appoint in such bills the ends and purposeis of such grants, and such ought not be changed by the House of Lords. 'This is the verbatim language oi the resolutions from time to time passed by the House of Com· mons.

After the action of the Legislative Council in throwing out the Taxation of r;rofits Bill, no · other course is left open to those who are sent here as the representati\res of the people, and \Vho alone have the right to say "\vho are to be taxed and the nature of tha.t taxation. Any other col1rse would ·be a 11iolation of our t:rust and would meet (as it very properly should) with condign punishment from the people.

There have been times, even in m-y own experience, when useful meas· ures have been sent from this Cham· ber to the Upper House and have been mutilated, and, in many case:3, done to deatl1, only to be passed bJ the same Chamber when reintroduced and sent ba~k the following session. There. have been times 'vhen the ver.Y bitterest feelings have existed be­ t\veen the two Chambers, but, for tl1e most part, these occurrences were un· impcrtant nncl did not strilre at the root of the great constitutional prin­ ciples involved in the present strug· gle.

But now that the principles of the exclusive rights of this ChamLer to determine the form or taxation of this country ar·e questioned, no other ren1sdy is left· bt1t tl1e one which is now proposed. The great Commoner, Pitt, yearn ago, laid do,vn the principle that ta.xes are a voluntary grant, the gift of the Commons alone, and the con· currence of the Peers, a.nd the Crown is only n.ecessary to clothe it with the form of law. In the case of the Paper Duties Bill in 1860, the Ifol1se of r~orcls reft1sed its assent to the repeal of tl1e tax. The Co111111011ers, i11 tl1e ¥.~ords ot A quith. ~''rook sv;ift and • •

HOUSE OF ASSEMBLY PRO·CEEDINGS. ,., I J st1n1mary vengeance," and in the fol­ lo\ving year they passed the Bill. From that date to the throwing out . of the Budget, which led to the pres­ ent Legislation, the supreme right of the Commons was ·never questioned. 1'he a,rgument has been used that this Bill was railroaded through-that ~ ·n_1e was not given the Legislative Council to consider it-that it was in­ troduced in the last hours of the Ses­ sion under suspended rules. All these charges I deny. All the time necessary could have been had, and was te11der· ed.

It was well known that the Bill vv-as being introducecl, a,nd had been prjntGd, and had been debated in the Lower I-louse, discussed in the Press and in public places. It had been tl1e la'N of Canada, (with slight variation) for nearly three years, and legisla­ tion almost of a similar character had been in force in England. But even if all these charges were true, I still . tal):e the broad position that this Chamber is under no obligation what­ ever to submit Money Bills to the lTpper House at any particular time of th8 session, or to extend any time for their consideration.

They are merely sent up pro forma, merely for tl1eir formal assent and not to be considere d, nor even debated. In 1786 when Pitt introduced :1. Bill to a,pportion a (1uarter of a million po11nds a year to be taken off the Na­ tional Debt, and when the Bill was sent to the House of Lords, the Peers con1pla~i;. ·.ed that they had no infor­ mation r Bgarding it. Pitt indignantly refused to give the Lords the slight­ est information. He saicl "You ha ,~e nothing to do with it"; a.nd he moved a resolution in ·the terms that the I~oucse of Lords sho11ld have no infor­ mation on the subject.

The same cot1rse has ever bee11 followed l)y thi;) Ji<Jtl~e in dea~ling 'vitl1 tl1e Legislative C·o lf.lCi . Tl1 !Jractit"n ha~) n. v .. r )1 • • to permit tr1em to invade tl1e prero­ gatives of this House by amending inoney bills. All attempts have receiv­ efl a reminder that they had no power to do so. This is not a question of law, but of usage, a.nd it will be foun•J that all the usage and custom is on our o ;vn sirle. I have always been a believer in the utility of a Second Cha.mber.

It is a safety valve, a wise 0.-rag on the wheel of the Lower House, n.nd. in aJl effo!~ts to amend it I have tci !zen the v!e\v tl1at great care and ev­ ery precaution should be exercised ii1. effecting any radical change. But this P~rgurnent does i1ot a.pply to money bills. .Judging from the s11mmary of tl1e is evident that I and my colleagues have incurred the displeas- 11re of some of the gentlemen compris· :ng the party "',vho have thrown out tl1is Bill. I vvelcome that displeasure.

No man in public life in this colony e,rer faithfully served the people and "Nas friendly with tlie class who no'v strike at the vitalis of the Consti­ tution. There is a wide gulf between Labor and Capital, and be ours the \Villing task \Vhilst protecting the on<~, to see that the other is in no way un­ fa.irly· treated.

In the pro,duction of \vea}th, especially in the hazardous callingR in which our people in New· foun_d.land are engaged, there is noth· ir1g more or less than a partnership, with Capital on one side and Labor on the otl1er Both are necessary, and the !\Tewfoundland House of Commons would be only one in name if it created burdens for the people, im­ possible to bea.r, ''rhilst at the same time allo1ving the other partner to go scott free In closing these· remark" I ca11not c1c better than ql1ote the concluding \{.rar(ls !Jf ~,,"r. t~sn.11ith, E11G"lan(l's great C 1 0 r1 .. ~10n' .. iJ.;. : "'trorl\ ct11g a similar •

• • HOUSE OF ASSEMBLY l")RO·CEEDINGS. bill in the I-louse of Commons a few ye( rs ago. " 'fhe Hous e of Lords has deliber­ " n.tcly chosen its ground; they have " opened up a wider and more far­ " reaching issue.

We have not pro­ " voked the challenge, but we welcome " it. \Ve believe that the first prin­ " ciples of Rep·resentative Government " as em bod.ied in our slow an cl ordered u but ev ... er broadening constitutional " development are at stake, and Sir, " we asl-r the I-Iouse of Commons in " this Resolution to-day, as at tl1e " earliest possible moment we shall "ask the c·onstituencies of the coun­ " try, to declare that the organ and " voice of the free people is to be " found in the elected · representatives " of the Nation." HON. MINISTER OF JUSTICE:­ (Mr. Lloyd,) Mr.

Speaker, I wis 1h to make a few observations on this Bill. I do not 1propose to say much as I have already spoken on the other Bill in such a way that my remarks made them apply equally to the Bill under consideration, but I would like · to d~rect the attention of the House to a dispute that arose some forty years ago, between the two Hous ·es ·o,f Parliament of ·Victoria, Australia, that may thro\v some light on this matter. I At that time an Appropriati ·on Bill had been passed by the Lower c;ham ber of Victoria and rejected by the Legit:ilative Council.

Now tl1e Parliament of Victoria \Vas and is in a somewhat different position from our own 'Parliament so far as ti1c 'vorking of the Constitl1tion is con­ cerned. Wth us we 11ave really n· o \Vritte11 Constitution except in so far as we have provided by ot1r own legislative measures or in so far as haEi been .given us by Charter and therefo r <> ur Const itution is very like that of Great Britain.

It is a matto1" !U J 1nl y Or very largely Of Usages anr' conventions and understandings and not a matter of written Statute Law; but in Victoria they have a written Constitutio11 and that written Con­ stitution defines the relation of the t~ro Chambers and defi11es it espiecial­ ly in refer ·ence to mione· y bills and it is to that definition that I wish to d·raw 2.ttention. I wish, particularly, to draw attention to the 56th

section of the Constitution Act of Victoria w.hich provides that "All Bills for app·ropriat­ ing any part of the Revenue of Victoria and for impos-ing any duty, • r ate , tax, rent, return or im1post shall originate in the Assembly" and . now I wish you to notice these words ''and may b 1 e rejected but not altered by the Legislative Council." Now, I wish particularly to draw y·our aittention to that p·art of the written Constitutior1 of Victori . It is laid down in clear terms that the L1egislative Council may reject an Appropriation or Revenue Bill.

Now, the difference between that Legislative body and our own is that we have no provision by statt1te or otherwise , laying down or giving the right by statute to the Legislative Council to reject a Supply Bill or a Revenue Bill, but in spite of the fact that the Victorian Constitutio!l ga-.;re in words the right of rejection: t.he House of Assembly of Victoria disp11ted the right of the Council t , nracti ce such a rejection. See what f' strong- ca1se the Legislative C·olJncj1 had .

Des.pite tb_ e right, as laid down by the :words of the Constitution, the I-louse of Assembly of Victoria dis­ puted their right under the usages · aruJ !)ractices to do what was laid down c1early by statute. Now, I want t.0 quote to you wh·en this dispute was referred to the Secretary of State for the Colonies the words he 11sed in con11ection with it. He said, in his despatch sent from Downing Street on l\1ay 3, 1879-the · Colonial Secr ·etary of tl1Fl t day was a remarkable man, Sir Michael Hick , -Beech, put a Con- ~ . •

I I HOUSE OF ASSEMBLY PROCEEDINGS. 33 servative and a. ,stro ,ng Tory leader and yet th,ese are the wo·rd, s of the strong Tory leader of 1879 and .in spite of the fact that he was dealing with a Constitu 1tion which gave the Up· p.er Cham .ber th· e right t<> r·eject a money Bi11-( Quote.) Now, listen to th 1 ese words (Quote) the Tory Secr-etary of State for the Colonies laid do"Wn in S!Pite of their having th1e r.ight .of reje ·ctio · n "it is their duty to r·efrain from usin 1 g it.'' This matter has been disputed here and "e ar.e attemp 1ting 1to define the position exactly as in the case of the British P·arli 1ament ·some six year.s ago by legislation.

This Tory S1e·creitary of State in the s.ame des· piatch laid it down that the Imperial Gove·rnment did not wish to interfere betwee , n the two H1ouses or with Colonial matters o· r local concern 1but if the Legis:lati ve I Counc.il did not acce ipt the u,nde.r- standi 1ng, th,en the House o· f As.semoly could put in a Bil, l and if it were carried and the people aipproved of it, then the Impe·rial Governme ·nt would be prepared to sa.nctio ·