Bennett Budget

Squawks from U. S. Senators in Washington greeted last week the budget speech to Canada's House of Commons made by Richard Bedford Bennett, rich & pious Dominion Premier & Finance Minister. At the last election Canadians gave Mr. Bennett a mandate to up their tariffs in Uncle Sam's face. Last week Conservative Bennett upped high, upped quick.

Nothing in the World is quicker than a British budget. In London, in Cape Town, in Canberra or in Ottawa all that the responsible minister has to do is to state that on item of revenue, tax or tariff is changed and it is changed. New revenue rates are automatically effective unless the budget is rejected by Parliament--which almost never happens. Therefore when Hon. Mr. Bennett rose to speak in Ottawa last week he held in his hand the fiscal fate of Canada. Bang--he upped letter postage between Canadian cities from 2-c- to 3-c-! Bang--up went the Canadian basic income tax from 8% to 10%! Bang--the sales tax quadrupled from i% to 4% ! Bang, bang, bang--spectacular is the exercise of a British Finance Minister's power.

"Reprisals?" On the tariff side of Hon. Mr. Bennett's budget speech--and to hear U. S. squawks last week one might have thought there was no other side--the Canadian Premier made courteous pretense that he was not offering "reprisals" to the U. S. Hawley-Smoot Tariff upping (TIME, June 2, 1930). Mr. Bennett said that Canada's depressed "infant industries" and her unemployed workers were uppermost in his mind. By protecting industries he would make jobs. Indeed, two days after his speech Premier Bennett proudly explained just exactly why he raised the tariff on wire netting (from 30% to 35%) and reduced that on steel and iron tubing (from 30% to 7 1/2%). His reasons were first that a group of rich men have promised to open a wire netting plant in Hamilton, Ont. if protected by a high duty; second that another group have promised Premier Bennett to build a factory at Windsor, Ont., and make things in it out of steel and iron tubing, if allowed to import these at reduced duty.

Out of 800 classifications on Canada's tariff list 174 were upped. Also, one embargo was laid. Totally excluded from the Dominion by this embargo are all secondhand automobiles except those brought in by "tourists" or "settlers."

New motor cars have been classified for some time in Canadian tariff acts under three heads. Cars selling for $1,200 or less will continue to pay the old 27 1/2% tariff. But the Bennett Budget ups the tariff on cars selling between $1,200 and $2,100 from 27 1/2% to 30%, ups the tariff on "luxury cars" (above $2,100) to 40%.

In her own plants the Dominion now makes Canadian Fords, General Motors cars, Chryslers, Dodges, Studebakers, Willys-Overlands and Durants.

Tariff Items. Apart from motor cars, the chief U. S. products which will feel most sharply the Bennett Tariff pinch are: coal and coke machinery, leather, building stone, furniture, prepared food and other products delivered in cartons; live hogs, fresh meats, bacons, hams, shoulders; canned or preserved fruits and vegetables, jams and jellies; raisins and numerous fruits including both Florida and California oranges. Hitherto oranges have entered Canada duty free, must now pay the very stiff duty of approximately 1/2% each.

In Washington the Department of Commerce estimated that $200,000,000 worth (roughly one-third) of current U. S. annual exports to Canada will be "affected" by the Bennett Tariffs--unfavorably in almost all cases. Cool-headed guessers at the Department guessed that the net result will be to cut U. S. sales to Canada only 4%. But Democratic senatorial hotheads echoed Virginia's Carter Glass who saw "nations . . . all over the world . . . retaliating against our insurmountable tariff."

Wheat & Coal Bounties. Of direct interest to Canadian farmers and miners, but indirectly of vital interest to U. S. farmers & miners, are two subsidies contained in the Bennett Budget.

Subsidy No. 1 is a Canadian Treasury bounty of 5-c- on each bushel of Canadian export wheat. Thus in selling his wheat abroad the Canadian farmer will have a 5-c- edge over his U. S. competitor. This provision is likely to stir another demand in Congress for the Export Debenture whereunder U. S. wheat growers would get a bounty of 50% of the tariff rate (i. e. 21-c-) for every bushel of wheat they sold outside the country.

Subsidy No. 2 is an elaborate sliding scale of Treasury freight bonuses to Canadian coal producers, the size of the bonus being adjusted to the distance coal must be shipped. Complacently Hon. Mr. Bennett estimated that this subsidy will stimulate the movement of an extra 1,870,000 tons of Canadian coal this year at a cost to the Canadian Treasury of "only" $2,000,000.

Budget Figures. Total Canadian revenue for last year was $356,213,000 according to the Bennett Budget figures--a decrease of $90,000,000.

Total "ordinary" Government expenditures were $394,000,000--an increase of $36,000,000.

Expenditures other than "ordinary" ran the Canadian deficit up to $75,244,973; but this deficit Premier Bennett hopes to wipe out by his taxes, tariffs and certain economics. It was at first understood last week that all Canadian air mail services would be shortly abandoned in the interest of economy. Later the Canadian Postoffice Department announced that only certain air mail services will be abandoned "temporarily," declined to say which.

Periodicals Threatened. Is the Saturday Evening Post educational or religious or scientific? If it is, it will not be affected by a clause in the Bennett Tariff which, under the "general rate," lays a staggering duty of 15-c- per pound on all foreign periodicals in English, except those which are educational or religious or scientific. (The Satevepost costs 10-c- in Canada, often weighs nearly two pounds.) These three excepted classes of periodicals will continue to enter Canada duty free, as all periodicals did until last week, when news of the Bennett Tariff reached Philadelphia, Satevepost officials announced that they will accept no more Canadian subscriptions until the Canadian Government decides whether Satevepost is educational or religious or scientific or not.

In Ottawa local newsdealers took an alarmist view, said that the new tariff on U. S. periodicals would force them to raise prices so much as to decrease their sales drastically. They predicted "dire unemployment" in newsdealer ranks, for readable Canadian magazines are few.

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