1917-02-01

REPORTS.

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Report of the Post Office Department for the fiscal year ended March 31, 1916.-Hon. Mr. Blondin.
Public Accounts for the fiscal year ended March 31, 1916.-Sir Thomas White.

Right Hon.   S@: It has become necessary to appoint a chairman of committees of the whole House, and I need not say that the appointment is an important one, involving the duty of presiding over committees of the whole House, and also of presiding over the House itself in the lalbsence of the Speaker. I have very much pleasure in proposing to the House that Mr. Joseph H. Rainville, member of this House for the electoral district of Chambly-Vercheres, be appointed chairman of committees. Mr. Rainville, who has had experience for the past six years as a member of this House, has, I think, manifested a thorough acquaintance with the rules of the House, having been called on from time to time to discharge temporarily the duties of chairman of committees. He has also the qualities which will enable him to discharge his duties in a manner satisfactory in every way, possessing, as he does, the promptness of decision, impartiality, courtesy and tact that are essential to the position which he will be called upon to fill if my proposal should meet with the acceptance of the House. I therefore beg to move, Mr. Speaker:
That Mr. Joseph H. Rainville, member for the electoral district of Chambly-Vercheres, be appointed Chairman of the Committees of the Whole House.


[Stage Direction]
Motion agreed to.

Sir ROBERT BORDEN:: Mr. Speaker, a telegram has been received from His Excellency the British Ambassador at Washington, which it is proper that I should communicate to the House:-



TELEGRAM FROM BRITISH AMBASSADOR AT WASHINGTON.

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Washington, January 31_ 1917.
Urgent.
German Ambassador has just informed Secretary of State that all pledges as to restriction of submarine warfare have been withdrawn from February 1st.
(Sgd.) Spring Rice.

Robert Laird Borden: A question was asked in the House a few days ago in regard to the commandeering of coal by the Dominion Atlantic Railway. In answer to the hon. gentleman who sought information upon the subject, I stated that it would be taken up by the Board of Railway Commis-

sion-ers, and I am to-day in receipt of a letter, dated yesterday, which is as follows:
January 31, 1917.
Dear Sir Robert Borden,-As the question of commandeering of coal by the Dominion Atlantic railway came to me through you, for your information, I beg to advise that the company makes the following explanations as to the situation.
Your telegram yesterday re coal for Nova Scotia Underwear Company. This coal was taken at Truro. Action made necessary in order to keep traffic moving. On night of 23rd Dominion Atlantic took three cars, one consigned to the Underwear Company and two to F. W. Dimock, local coal dealer, Windsor, who was under contract to supply Underwear Company with one car a week. Railway Company returned one of these cars to Dimock on the 25th and one on the 24th and three will be replaced to-day under arrangement with local coal dealer Wolfville and Mr. Ballantyne, Manager Underwear Company with whom company have been in constant touch. Am advised coal was not taken without first making sure that Underwear Company would be in no way inconvenienced. On account of very heavy demand for munition plants, etc., mines have been unable to meet requirements. Effective February first Railway Company is making heavy reductions its passenger trains in order to save coal and enable it to move overseas traffic. It is purchasing coal from whatever source possible at prohibitive prices in order to keep situation 1rt hand.
The coal shortage is, of course, severe, and our troubles many. On the one hand, train i have to move; but, on the other, factories have to be kept going.
Yours faithfully,
H. L. Drayton,
Chief Commissioner. The Right Honourable the Premier,
Ottawa Ont.



QUESTIONS.

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(Questions answered orally are indicated by an asterisk.)

Mr. OLIVER:: 1.	Is the Royal Northwest Mounted Police force now engaged in enforcing law in the provinces of Saskatchewan and Alberta to be withdrawn from the authority of* the respective Provincial Governments.
2.	If so, at what date is this withdrawal to take place?
3.	Is the force to remain in the provinces?
4.	In what duty is it to be employed?


Robert Laird Borden: I beg to lay on the table of the House the orders in council which are alluded to in this question, and which, I think, will give a full answer to the inquiry made by the hon. gentleman.


REMOVAL OF RAILWAY MATERIAL TO FRANCE.
Mr. GRAHAM:: 1.	What trackage of railway is Canada sending to the Allies?
2.	What is the tonnage?
3.	Are ties included?
4.	From what lines and at what points is this trackage taken?


Mr. COCHRANE:: 1.	Three hundred miles.
2.	Approximately 45,000 gross tons, including fastenings, turnouts, etc.
3.	No.
4.	Prom yards at divisional points on the National Transcontinental railway.


PATENT MEDICINES.
Mr. GAUVREAU:: Will the Minister of Inland Revenue introduce, during this session, a Bill respecting the classification of patent medicines, especially as to abortive drugs and medicines or their equivalent?


Robert Laird Borden: Any necessary announcement in regard to this subject will he made in due course.


MAIL CONTRACT.
Mr. GAUVREAU:: 1.	Who secured the mail contract between Trois Pistoles and St. Jean de Dieu, Temis-couata?
2.	What is the price paid to the present contractor?
3.	How many persons tendered for this contract?
4.	What were the names of tenderers?
5.	What was the amount of their respective tenders?


Mr. BLONDIN:: 1.	Florian Rioux.
2.	Eour hundred and fifteen dollars per annum.
3.	Seven.
4 and 5. Cyrille Rioux, $349; Zephirin Marquis, $373; Florian Rioux, $415; Vallier Lavoie, $500; Thomas Dauteine, $525; Louis de G. Rioux, $550; Leon Rosseau, $590. The contract was awarded to Cyrille Rioux, the lowest tenderer, who refused it. After Zephirin Marquis had notified the department that he would not be able to perform the service if his tender was accepted, the contract was given to the next lowest tenderer, Florian Rioux.	.


EXCHEQUER COURT CASES.
Mr. GAUVREAU:: 1.	Does the Honourable the Minister of Justice allow the Government Solicitor, in the Exchequer Court cases, in the district of Kamouraska, to take a counsel with him for the hearing of the evidence and to defend the Government?
2.	Is it the usual practice of the Department of Justice to appoint two attorneys when very simple cases can be pleaded by only one, at this period when the war expenses are already so heavy?


Mr. DOHERTY:: 1.	There is no such office as that of ' Government Solicitor' in the district of Kamou-raska or elsewhere. The considerations governing the employment of counsel in Kamouraska are the same as in other parts of Canada. Out of nine cases in the district of Kamouraska since 1911 counsel were employed in only two, and these were cases involving considerable amounts and depending upon doubtful questions of law.
2.	No. Counsel are employed only where by reason of the nature of the case it is considered advisable by the Department of Justice to retain counsel.


SEPARATION ALLOWANCE.
Mr. MACDONALD:: What class of persons are entitled to receive separation allowance whose relatives are in Overseas service?


Mr. KEMP:: Under present regulations the classes of persons who are entitled to Separation Allowance as dependents of Officers and men enlisting for overseas service are set out in orders in council:
P. C. 2266, September 4, 1914; P. C. 2553, October 10, 1914; P. C. 2613, November 6, 1915; P. C. 1997, August 23, 1916; P. C. 2246, October 20, 1916; P. C. 2615, October 28, 1916; which have been laid on the table of the House of Commons. The regulations are modelled after the British regulations governing payment of Separation Allowance.


HOME GUARD DUTY.
Mr. BUCHANAN:: 1.	What is the reason that men enlisting for Home Guard duty are not being dealt with, as regards pay and allowances, in the same manner as men originally in the Canadian Expeditionary Force and subsequently transferred to Home service?
2.	Why were the special rates authorized for the Canadian Expeditionary Force not extended to Home Service?
3.	Have representations been made to the Government to have all guards placed on the same basis? [DOT]


Mr. KEMP:: 1. (a) .The only men who have enlisted for Home Guard service are men who are serving in the Active Militia. They receive exactly the same pay as members of the Canadian Expeditionary Force, but they do not receive separation allowance.
(b) Men who originally enlisted in the Canadian Expeditionary Force, and were subsequently transferred to Home Service, were those who after they enlisted for over-

seas service became either temporarily or otherwise medically unfit for overseas service. These men are used on guard duty or on detail work of various kinds necessary in the district. When they become medically fit for overseas service, they proceed overseas. They are subject to the same regulations as the overseas forces.
2.	Separation allowance was not extended to members of active militia units, as these men are used for guard duty in Canada only, and the members of these militia units are largely employed in the locality in which their homes are situated. The members of the Canadian Expeditionary Force who are being employed on guard duty in Canada volunteered their services unreservedly for the defense of the Empire, and in so doing were prepared not only to endure hardships and hazards, but to sacrifice their lives if necessary. They are therefore in most cases removed from their families by great distances, and the wives and mothers of these men, who have given their husbands and sons for the common cause, have suffered the sorrows necessitated by such removal. It is therefore considered that they are entitled to separation allowance.
3.	Yes, representations have been made to the Government to have ail guards placed on the same basis.


GOVERNMENT RAILWAYS-LEVEL CROSSING.
Mr. MACDONALD:: 1.	Is the Railway Department aware of the dangerous nature of the crossing on the Canadian Government Railway north of the Eastern Car Works at Trenton, Pictou County?
2.	If so, is it the intention of the railway to construct a subway to remove the danger?


Mr. COCHRANE:: 1.	The elimination' of the level crossing on the Pictou Harbour Branch, north of the Eastern Car Works at Trenton, Pictou County, has been given consideration.
2.	An item has been placed in this year's estimates for the construction of a subway at this point.


THE RACING FORM.
Mr. McKENZIE:: 1.	Is the Minister of Justice aware as to whether or not the Post Office Department excluded from the mails The Racing Form, published in the United States?
2.	Is the Government aware as to whether or not the said publication is finding its way into Canada through the agency of the express companies ?
3.	Is it the intention of the Minister of Justice to take such steps as may be necessary to

prevent the coming into Canada of the said publication through the agency of the express companies?


Mr. DOHERTY:: With regard to this question, as it stood on the Order Paper up to to-day it was not in the same form as that in which it stands to-day. The answer was prepared to the question as it stood but as it reads to-day it asks whether the Government had information about certain matters. To answer the question as it stands to-day, I should have to get more information and I therefore have to ask that the question be allowed to stand.


Mr. McKENZIE:: The question was reconstructed at the suggestion of Mr. Speaker.


Mr. SPEAKER:: I might explain that the question, as it originally stood, was, in my judgment, objectionable in part; and after a conference with the hon. member for Cape Breton (North) the question was revised so as to read as it now appears on the Order-Paper.


Daniel Duncan McKenzie: The answer that would he given to the former question would be quite acceptable to me if the Minister is prepared to give it.


Edgar Nelson Rhodes: The question stands.


Charles Joseph Doherty: I should like to point out that first of all the question read "Has the Minister of Justice" certain information. This question asks "Has the Govern ment" certain information, and before I can answer that I must make inquiry of every department, to see whether they have information on the subject.


Mr. GRAHAM:: The Minister of Justice is the Government.


Charles Joseph Doherty: It ought to be that way.


BRICK FOR NEW PARLIAMENT BUILDING.
Mr. MURPHY:: 1.	In the construction of the new Parliament Building is it the intention to use brick supplied by the Ontario National Brick Company Limited?
2.	If so, what quantity of the said brick will be supplied and at what price will it be delivered at the works?
3.	Up to January 25, 1917, what was the total quantity of the said bricks delivered at the works?


Mr. ROGERS:: 1, 2 and 3. A contract has been awarded for 5,000,000 common brick,, which is one-half the total estimated quantity required. This contract is not with the Ontario National Brick Company, Lim-22 .
ited, but they will have an opportunity of tendering on the balance, when the same is required.


Mr. MURPHY:: 1.	In the construction of the new Parliament Building is it the intention to use brick supplied by the National Brick Company of Laprairie, Limited?
2.	If so, what quantity of the said brick will be supplied, and at what price will it be delivered at the works?
3.	Up to January 25, 1917, what was the total quantity of the said bricks delivered at the works ?


Mr. ROGERS:: 1.	Yes.
2.	A contract has been executed with the National Brick Company of Laprairie, Limited, under date of September 6, 1916, for the supply of 5,000,000 common brick at $10.50 per thousand, delivered at the site.
3.	4,449,000.


GOVERNMENT RAILWAYS-SAFETY-FIRST INSPECTORS.
Mr. MACDONALD:: 1.	How many safety-first inspectors are there on the Canadian Government railways?
2.	What are their names and salaries, respectively?
3.	Is there a safety-first engineer employed?
4.	If so, who is he, and what is his salary?
Mr. fcoCHRANE:
1.	Three. They also perform duties of first-aid instructors.
2.	W. H. Tout, P. P. Begin, and H. Mitchinson. Salaries, $83.33 per month.
3.	Yes.
4.	J. E. Long; $225 per month.


DORCHESTER PENITENTIARY MEAT SUPPLIES.
Mr. COPP:: 1.	Who has the contract for supplying meat for the Dorchester Penitentiary?
2.	What is being paid per pound for the different kinds of meat supplied under said contract?
3.	When does present contract expire?


Mr. DOHERTY:: 1.	The Harris Abattoir Company.
2.	Beef, $9.60 per 100 lb.; mutton, $10.60 per 100 lb.
3.	March 31, 1917.


ENLISTMENT OF NOEL GAZELLE.
Mr. DELISLE:: 1.	Has the Government been made aware that a minor of fifteen years of age, named Noel Gazelle known as Razel (Number 324853), has joined the Canadian troops, without the consent of his parents?
2.	Under the King's Regulations, is such an enlistment valid?



3.	Did the parents of this boy demand his re. lease ?
4.	If so, has such request been granted by the Department of Militia? If not, why?
5.	To what nationality does soldier Gazelle belong?
6.	Where is he at the present time?
7.	Is it the practice of the Government to enlist minors 1 of fifteen years of age without the consent of their parents?
8.	If so, what are the reasons for so doing?


Mr. KEMP:: 1.	Private Noel Gazelle enlisted in the 57th Overseas Battery on March 8, 1916. On October 14, 1916, a letter was received from Lt.-Col. Armand Lavergne, M.P.P., stating that this soldier enlisted without the consent of his parents, and was only sixteen years of age, and requested that he be returned from England. Lt.-Col. Lavergne was informed that, owing to the statement of age taken under oath at attestation, this soldier was over eighteen years of age, and no further action could be taken. No application was received from this soldier's parents for his discharge until he had been in the forces for over seven months, and was, at the time of application, in England and under Imperial authority.
2.	Under King's Begulations, such an enlistment is valid.
3.	Not until seven months after enlistment.
4.	Request not granted for reasons stated in No. 1.
5.	Gazelle was bom at Levis, Quebec. His father claims to be a Syrian.
6.	Private Gazelle is at present in England or at the front.
7.	The Government does not enlist minors under eighteen years of age without the consent of their parents. Age sworn to on attestation is legally binding.
8.	Answered by No. 7.
dismissals prom the militia.


Mr. DELISLE:: 1.	Did the Department of Militia bring any deserters before the Court of Sessions at Quebec last summer?
2.	If so, how many of such cases brought before the court were dismissed?
3.	Did the Judge recommend that costs for some of the dismissed cases be paid by the Crown?
4.	Has the Government declined to pay said costs?
5.	If so, for what reasons?


Mr. KEMP:: 1.	Yes.
2.	Eight acquittals during whole of 1916.
3.	Yes, in four cases.
4.	Yes.

5.	On the ground that the prosecution was on behalf of the Crown, and no costs are collectable against the Crown as a matter of right. The Crown may, in its discretion, pay costs. It was not considered advisable in these cases that costs should be paid.


ARTHUR STEELE.
Mr. SINCLAIR:: 1.	Was Arthur Steele, of Boylston, preventive officer of the Department of Customs, dismissed?
2.	If so, why, and on what date?
3.	Was there an investigation?
4.	If so, by whom, what was the charge, and who laid the complaint?
5.	What was the salary of said officer?
6.	Who was appointed as his successor, on whose recommendation, and at what salary?


Mr. REID:: 
WAR SUPPLIES-HAY.
[Stage Direction]
v Mr. PROULX:
1 How many tons of hay has the Department of Militia or the War Purchasing Commission purchased during the month of December last, to be delivered at the sheds of the wharf or harbour of Montreal?
2.	What was the price paid per ton?
3.	How many tons were purchased since the first of January, 1917, and what was the price paid per ton?
Mr. BURRELL:: 1, 2 and 3. The hay referred to was not purchased by either the Department of Militia or the War Purchasing Commission, but by the Department of Agriculture acting for the British War Office. It is undesirable in the public interest to give information on such matters at the present time.
UNOPPOSED MOTIONS FOR PAPER*3
Mr. Buchanan.-For a copy of all communications, reports and documents concerning the alleged treatment of Thos. Kelly, a prisoner in the Stony Mountain Penitentiary.
Mr. Sinclair.-For a copy of all letters, petitions and other documents in the possession of the Department of Customs relating to the dismissal of Arthur Steele of Boylston, N.S., a preventive officer of said department.
Mr. Sinclair.-For a copy of all correspondence in the possession of the Department of Public Works bearing date after September, 1911, relating to the expenditure of money voted last session for harbour improvements at Tracadie, in the County of Antigonish, including copies of all letters relating to the

same written by Mr. G. A. R. Rollings to the said Minister of Public Works or to any other member of the Government.
Mr. Sinclair.-For a copy of all correspondence in the possession of the Department of Public Works bearing date after September, 1911, relating to the extension of a breakwater at Breen's Point, in the County of Antigonish.


QUESTION PASSED AS ORDERS FOR RETURN.
[Stage Direction]
Mr. Turriff.-1. What are the names and present rank of all appointees as chief recruiting officers or as district or special recruiting officers, not local or regimental, made since the beginning of the war?
2.	What were the dates of their respective appointments?
3. What were the ages and vocations of respective appointees?
i. What is the name of military organization, if any, in which appointees had previously served?
5.	What was the rank of appointees while serving in any military organization?
6. Have the services of any of these appointees been dispensed with?
7.	If so, what were their names, and on what dates were they retired?


[Stage Direction]
On the Orders of the Day:
Hon. P. E. BLONDIN (Postmaster General) :: Mr. Speaker, I saw yesterday for
the first time, in the Ottawa Evening Journal of Friday last, January 26, a report of the Canadian Press, which I will read:
Montreal, Jan. 26.-Hon. P. E. Blondin, through his lieutenant, Felix Durocher, has issued a reply to an affidavit, which purported to give a report of his remarks at St. Rose during a Dorchester county by-election speech on Wednesday night. The affidavit credited Mr. Blondin with contending that the Allison scandal was of no importance to St. Rose because it is English money that was stolen, while those who desired to escape conscription could do so by crossing the United States border. Mr. Blondin's explanation follows:
The statement which has been sworn to by certain Liberals with regard to my utterances are a distortion of my words. I never by any means intended to convey the meaning which they have attached to my speech. Mr. Cannon had been stating in his speeches that the Conservative party had been grafting from the Canadian treasury in connection with munition contracts.
, In my speech at St. Rose I explained that it was not true that the Allison scandal had to do with Canadian money pointing out that the money^ paid for the shells was the money of the British Government. I did not imply that Allison had done a worthy act, but'simply corrected Mr. Cannon's mis-statement. In regard to. the conscription matter I told the people of St. Rose that I did not believe conscription would be necessary because so many Canadians were eager to go and fight for the cause of liberty and humanity. I added that if any of them were afraid of conscription, if conscription should be passed and they did not want to go to the war, they had a remedy left. They could go across the United States line which is near St. Rose and escape military service.
First of all, as for Mr. Desrochers, I beg to state that he did not act as my secretary or lieutenant, and that during the whole election I had no connection with him whatever. I never spoke to him concerning the matter referred to in the report which I have just read. I never authorized him to make any statement for me, and I never was informed by him or anybody else of the statement reported to have been made by him on my behalf. I have inquired from Mr. Desrochers about the correctness of the statement, and he denies, and authorizes me to deny in this House, the laet part of that report, namely, that part which relates to conscription.
As to the statement itself, to wit, that I advised people to cross the boundary, which I am informed, was freely commented oi\ by the hon. member for Aseiniboia (Mr. Turriff), the hon. member for St. John (Mr. Pugsley), and the hou. member for Westmorland (Mr. Copp), I must say that there is not a single particle of truth in that report. The facts concerning the matter are very plain. I was replying to a speech in which my opponent had strongly endeavoured to show that conscription was coming by means of the National Service cards, which, he said, meant nothing but conscription, and that very soon coercion would be used by the Borden English-Protestant Government against the Catholic French-Canadians, and that very soon armed soldiers would come and force their husbands and sons to go to war.
These are the very notes that are still fresh on the paper on which I wrote them when preparing my answer.


Charles Arthur Gauvreau: Can you isweaT to
that?


Pierre Édouard Blondin: I can swear to it. I can bring into this House the affidavits of a hundred and fifty men worthy of confidence, Which, I am afraid, will make the whole Liberal party blush.
My answer to these arguments was that the National Service cards did not mean anything of the kind and were only an appeal to the patriotism and good-will of every citizen whose duty it was to sign them; that if conscription had to come it would come openly; that this Government could not promise or declare that conscription would never come, as it would be coward-

ice on the part Of the Government to make such a declaration oir promise; that it might have to come; but that for the present there was no question of conscription, and the 'Government did not by the National Service cards intend any coercion of the people, and that the best proof of this v as that the stretch of 4,000 miles of frontier had been left unguarded and open. And this I said in order to dhow the stupidity of the contentions of my opponent. I may add, Mr. Speaker, that any other construction o' my words is purely and simply gross misrepresentation.


Sir WILFRID LAURIER:: I would ask
the hon. gentleman to supplement his explanation- by giving us the name of the Liberal gentleman "Who spoke as he did.


Pierre Édouard Blondin: In Ste. Rose, Mr. D'Anjou, who presented himself as a lawyer from Rimouski, and I can give some of the other names.


Wilfrid Laurier: Who is Mr. Desrochers?


Pierre Édouard Blondin: He is a lawyer of Montreal.
-GRAIN CONGESTION IN THE WEST.
On the Orders of the Day:


Mr. McCOIG:: I draw the attention of
the Government to an article that appeared in one of to-day's papers. It is headed "Congestion of Grain in West becomes serious," and reads:
-Saskatoon, Jan. 30.-Crain congestion in the West has reached a serious condition, in the opinion of J. R. Wilson, superintendent of the Dominion Government elevator here, who declares that unquestionably there is far more grain in the country than anyone had any idea of at harvest time.
With the embargos against inward shipments to Port Arthur, Fort William, Saskatoon and Moosejaw, it is little use for either farmers or Interior elevators to receive cars for there is no place to route them to.
My reason for calling this matter to the attention of the Government is that during the past year there has been a great shortage of feed throughout the province of Ontario, and in many cases hundreds of cattle and hogs have been taken to market before being brought to a fit condition for selling. To-day, there are no doubt hundreds of cattle and hogs that should be retained for feeding purposes that, on account of the shortage of feed, are being slaughtered, and this will greatly affect the meat situation next year. If the Government can remove the embargo and allow

grain to be brought into Ontario, their action will be greatly appreciated by men who are anxious to comply with the Government's request for the greatest possible production in the coming year.


Sir GEORGE FOSTER:: The -despatch
which the hon. gentleman has read contains information most of which I apprehend to be the facts. Part of it is not disagreeable information, as it tells ns that the Northwest, on the ultimate revision of its output, dhows a m-ucth larger yield of grain than we had heretofore thought would have been turned out. That, as far as it goes, is useful and very agreeable information. As regards the car congestion, there is probably not a foot of ground on the North American continent where congestion is not very strong and very pressing, and causing a variety of hardships. The railways have to impose embargos when it is necessary, and I am quite certain they do not put on any embargos when it is not absolutely necessary. If my hon. friend can point out any way by wthioh the car shortage can be diminished in its pressure upon the industries and upon the traffic of the country, we would be very glad to have hi-s suggestions. The railroad companies are doing everything they possibly can. and the Board of Railway Commissioners is using the powers at its command in order to ameliorate the situation as far as possible. But the situation is a pressing one, and we shall simply have to hear what we cannot get rid of by any reasonable means.


Mr. OLIVER:: Is there not a Common Carriers' Act that requires the railway companies to take goods for shipment to destination according to the order of the owner?


George Eulas Foster: My hon. friend the Minister of Railways can answer that better than I can.
Mr, COCHRANE: I do not know whether the Act covers that or not, but I know that both the railway companies and the Board of Railway Commissioners are doing everything in their power to get the freight delivered.



WAR PURCHASING CJOMMISSON.


[Stage Direction]
On the Orders of the Day:
Mr. CARVELL:: Just before the close of the last session an order was passed by this House calling for a return of all purchases made by the War Purchasing Commission.


A few day ago I inquired of the clerk of records and I found that, so far as he knew, this return had not been brought down. I made no remarks about it, as I assumed that we should have the auditor general's report in our hands and that it would cover at least a portion of the information required. Now, we have received the information from the Minister of Finance that that portion of the auditor general's report covering the transactions of the War Purchasing Commission will not be available until after the adjournment. I would like to know if the Minister of Militia cannot have that return brought down, before we adjourn next week?


Albert Edward Kemp: A few days ago there was laid upon the table of the House a report of the War Purchasing Commission in four large volumes. Was my hon. friend aware of that?


Frank Broadstreet Carvell: That is not a compliance with the order of the House which required a statement of the purchases. My hon. friend the Minister of Militia, who was then Acting Minister of Militia, will remember that we discussed the matter on a number of occasions, and that finally the House ordered that the report be given. I think that, an order of the House having been passed, we are entitled to the information.


Albert Edward Kemp: It is certainly correct for the hon. gentleman to say that any order of this House must be honoured. The idea, however, was that, as the report which was being published would contain such a tremendous amount of detail, there would be sufficient information in it to answer my hon. friend's purpose. Moreover, the auditor general's report would be forthcoming, and between the two reports all the information would be given that would be desirable. The report which my hon. friend asked for was one of tremendous detail, and the department was so busy that it seemed almost impossible to get the work out. In view of the report of the IVar Purchasing Commission and the report of the auditor general giving practically all the information asked for in the order of the House, I hope my hon. friend will be willing not'to insist upon the labour being expended that will be necessary to get out the return for which he has asked.


Frank Broadstreet Carvell: I suppose I have no
right to discuss the .matter at this stage, and I do not intend to do so. I ought, however, be allowed to say that I think the minister has not treated the House exactly as he
should, in view of the somewhat extended conversation we had about the matter during the months of April and May last.


Albert Edward Kemp: I may add that I was acting-Minister at the time-for about two months, I think. After that I was not in control of the Department of Militia and Defence, and consequently was unable to follow the matter up in the way my hon. friend thinks it should have been followed up.



WESTERN COAL MINING.

[Stage Direction]
On the Orders of the Day:
Mr. BUCHANAN:: In the papers this morning there is a despatch from Lethbridge concerning the situation with regard to the coal supply. The fear is expressed that unless the trouble between the miners and the operators is immediately settled there will be considerable suffering, because many communities are practically without coal. The Minister of Labour has gone to the West in an effort to bring about a settlement; has the Government had any report from him as to the, progress of the negotiations?


Robert Laird Borden: Telegrams received yesterday and the day before indicate that the men in some of the mines have returned to work. I think the men at the Blairmore mine had not returned to work, but were in session discussing the situation at that particular mine, according to the last report which I have received. I am not aware that we have had any direct report from the Minister of Labour. The reports to which I refer are those which have come to the officials of the Department of Labour from representatives of that department in the districts to which my hon. friend has referred.



HON. DR. BELAND, M.P.

[Stage Direction]
On the Orders of the Day:
Mr. MARCIL:: 
Robert Laird Borden: With respect to this inquiry I 'took the same course as was taken with regard to the inquiry of the hon. member for South Renfrew; (Mr. Graham) I addressed a letter this morning to the Minister of Justice directing his attention to the remarks of my hon. friend and asking him to give the information as soon as possible.


George Perry Graham: This letter-writing is a
fatal gift.



RECRUITING IN QUEBEC.

[Stage Direction]
' On the Orders of the Day:
Charles Marcil: May I ask the Minister
of. Militia to answer a question that I asked him yesterday as to whether the raising of a French-Canadian brigade in the province of Quebec has been authorized?


Albert Edward Kemp: The department ha not authorized the raising of a brigade. The information which my hon. friend as|ks for is being inquired into.



$100,000,000 LOAN FOR PUBLIC SERVICE.

[Stage Direction]
On motion of Sir THOMAS WHITE (Minister of Finance), the House went into Committee to consider the following proposed resolution, Mr. Rainville in the Chair:
That it is expedient to authorize the Governor in Council to raise hy way of loan, in addition to the sums now remaining unhor-rowed and negotiable of the loans authorized by Parliament by any Act heretofore passed, such sum or sums of money, not to exceed in the whole the sum of one hundred million dollars ($100,000,000), as may be required for paying maturing loans and obligations of Canada, carrying on of public works authorized by Parliament and meeting expenditures for general purposes authorized by Parliament.
Sir THOMAS WHITE:: Mr. Chairman,
His Excellency the Governor General has been made acquainted with the substance of this resolution, and has been pleased to commend it to the favourable consideration of the House.


Mr. PUGSLEY:: Is this the time to make known the consent of His Excellency the Governor General-when the resolution is in Committee. That information should be given when the Speaker is in the Chair.


William Thomas White: My hon. friend
is correct. I had intended to make the statement, but the Speaker declared the motion carried before I got upon my feet. I hope that under the circumstances my hon. friend's sense of propriety will not be

too greatly shocked. I appreciate fully the importance of the point that my hon. friend 'has made, but it was through inadvertence that I omitted to make the statement.


William Pugsley: I assure my hon. friend that I did not mention the matter simply for the sake of raising a point of order. He must be aware that informing the Committee of the House has no greater effect than giving the information before an ordinary standing committee. It is desirable that the rule should be adhered to; perhaps my hon. friend might give the information to the House after the Committee rises, so that the matter may appear regularly in the minutes.


William Thomas White: I am not sure
that the statement was not made last night by the Prime Minister. The proper time to give this information is when the motion is made that the House do resolve itself into committee on the day following for the purpose of considering the resolution. My hon. friend will pardon me if I have to correct even him. But I shall be glad to observe propriety in regard to a matter which is of great importance.
The object of this resolution is to replenish the borrowing powers of the Dominion upon general purpose account. It will be necessary for us during the coming year to raise very considerable sums by way of borrowing. Some of that money will be raised in Canada, and possibly some in the United States.


Wilfrid Laurier: Why not all in Canada?


William Thomas White: I will deal with that just in a moment. We have not in mind an immediate loan either in Canada or in the United States, but it will not be long before we shall have to consider the question of a further loan. My right hon. friend has very properly raised the question, why not borrow all the requirements in Canada? It is possible that we may be able to do so. That will depend entirely upon financial conditions prevailing in Canada, and the state of exchange between Canada and the United States, for example, let us assume that exchange as between Canada and the United States is unfavourable to Canada. We are at the present time buying very large amounts of raw material and other commodities from the United States. These enter into our domestic manufactures, and our manufactures

for export. If it should transpire that on account of our large purchases from the United States for that purpose and for other purposes the balance of trade should prove unfavourable to Canada and be not offset otherwise, then if we borrowed in the United States market our'ex-change would be affected advantageously.


Wilfrid Laurier: Would reci procity facilitate exchanges?


William Thomas White: My right hon friend and I have discussed reciprocity before. It is a subject which I should like to discuss with him, but the present does not seem to be an opportune time. However, once or twice since war broke out, exchanges have been unfavourable to Canada. At the present time they are rather favourable to Canada, and on. the whole they have been extraordinarily well maintained. If, during the year, the exchanges should prove unfavourable, it would be our proper policy to borrow in the United States.
Mr. T.EMIEUX: If my hon. friend borrows from the United States will he use the usual channel, through the Bank of Montreal?


William Thomas White: I shall make no pronouncement upon that at the present time because I do not know what I shall do. I think it quite unwise to make any announcement in advance as to what one's course is to be. The object will be to get the best result. The Bank of Montreal has acted as financial agent for the Dominion Government most acceptably for many years. As to what I shall do if I am obliged to borrow in the United States, what course I shall adopt, that is a matter that will have to be determined in the light of prevailing conditions.
There is another contingency under which we might borrow in the United States: that is to say, if the financial condition in Canada was such that it would be a proper course for us to adopt. What I mean is that at the present time Canada has a very large agricultural and industrial production. Prices of commodities and products of all kinds are exceedingly high. That means that there are large demands upon our banking institutions in carrying the large volume of our production and consequently a situation might exist in which the Dominion Government might desire to raise $75,000,000 or $100,000,000, and in which it would not be in the public interest, having regard to
financial stability in Canada, to raise that loan in Canada. It would then be more advantageous to seek the American market. Generally speaking, I should like to make all our loans in Canada. Canada will have a very large debt after the war is over, and it would make very much for national strength and financial stability if the greater amount of Canada's debt should be held by the Canadian people, because the position then would be that Canada, in her collective capacity, in her national capacity, would owe her debt to her own people. That would be a strong situation. It is very desirable we should aim at that, but the amounts which we may have to raise in order to finance our own interests on this side of the Atlantic, and to assist the United Kingdom in making purchases of munitions and supplies in Canada, are so large that I am not clear as to whether the Canadian market will be able to take the entire amount, and that is where judgment will be required as between the Canadian and the American market. I assure my hon. friend that I would much rather borrow in Canada than in the United States, for the reasons I have given.


Mr. A. K. MACLEAN:: I suppose it is inevitable that the Government must borrow during the current year in Canada or the United States, and, as the minister has stated, in all probability the loans will be of such an amount that he will be obliged for one reason or another *to go to the United States.
In connection with loans made since the beginning of the war, on one occasion at least, I expressed in Parliament the regret that the loans had not been of the character of national loans to the extent which I had hoped for. That is, the minister, in selling his securities on the domestic market, did not make as broad an appeal to the people of Canada as I think he should have made. Primarily, of course, the object was attained; he secured the amount of money he, at the moment, desired for Canada. At the present time I notice the minister is encouraging a saving campaign in Canada with a view to increasing our banking reserves and savings so that they will be available for the commerce of the country and the purposes of the Government. The suggestion I would make is this, that the Minister of Finance will have an excellent opportunity of inculcating the value of national saving by asking the people of Canada to invest in the securities oflered by the Government in the

event of their desiring to make a domestic loan. The subscriptions to previous domestic loans and since the beginning of the war have been very satisfactory indeed, and very creditable to Canada. However, I think an investigation of the subscriptions made will show that the money so invested came largely from a class of people who are accustomed to invest in Government and municipal securities and other high grade securities. I suppose that in many instances the subscriptions came from banks and insurance companies who were making a substitution of securities. I have no doubt that the life insurance companies of Canada held very large amounts of United States securities, and that on the occasion of our domestic loans they replace them with our own war issue securities. Of course, that is not objectionable. The suggestion I would like to make, if the minister contemplates an early appeal to the public for'subscriptions for another loan, is that he create some organization which will enable him to get to the people generally in support of that loan. I am sure that every member of Parliament, and every agency in this country is at the service of the minister if he desires to make the campaign as widespread as possible. It is not necessary for me to say to Parliament, or to the Minister of Finance, that it is very much in the interest of Canada at the present time, and for the future, that we engage in the strictest private and national economy, and that we educate our people to save and invest in our Government securities. I think that if the minister, in placing his contemplated loan before the public, were to endeavour to create some organization to carry out the proposal, it would be in the interests of the country and of the Government as well. I would ask the minister if any portion of the loans already authorized have not been exhausted.


William Thomas White: We have a balance, I think, on general purpose borrowing account of about $25,000,000 or $30,000,000. My hon. friend will observe that this borrowing is not for war purposes. I think I explained to my hon. friend last year, and it can do no harm to explain to the House now, that if we are obliged to borrow in the United States, it will facilitate our borrowing to do so on general purposes account rather than on war account. That is the reason why this $100,000,000
4 p.m. Borrowing Bill is to be introduced separately from the general

War Appropriations Bill, to be introduced by my right hon. friend the Prime Minister.


Wilfrid Laurier: Would my
hon. friend explain the reason why he borrows on general purposes account rather than on war purposes account? What is the difference?


William Thomas White: There are two
reasons. Objection might possibly be raised -I hardly think it probable-in the United States to an issue for war purposes. But apart from that, in a neutral market, bonds issued on general purposes account will sell more widely than bonds issued on war account. That would seem to indicate that a part of the community may not be disposed to subscribe for bond issues on war account but might be quite ready to subscribe for bonds issued on general purposes account.


Alexander Kenneth Maclean: I would ask the minister a -question-perhaps he might answer it at this stage-for the general information of Parliament. I think we have advanced to the British Government the sum of $150,000,000 on account of munition contracts. That is in excess of the credit afforded by the Canadian chartered banks. I would like to know what the arrangements are between the Department of Finance and the British Government. Are British Treasury notes deposited with the Canadian Government for such financing, ot has the minister had an open -account up to the present?


William Thomas White: Has my hon. friend concluded his remarks as to a better organization?


Alexander Kenneth Maclean: Yes.


William Thomas White: Well, possibly my hon. friend will permit me to take up that question first. I entirely agree with my hon. friend as to the desirability of having a widespread subscription for the war loans of the Dominion. It is good from a financial standpoint, and it is good from a patriotic standpoint. But I would submit to my hon. friend that that is precisely what we have been doing. The two loans which we have placed before the Canadian people, one for $50,000,000 in November, 1915, and the other for $100,000,000 in September of last year, were both doubly subscribed. I gave a very great deal of personal attention to both of these loans, four or five weeks of hard work in each case. Patriotism creates a favourable atmosphere, but loans will not float themselves without

attention. The utmost care was taken to fix a price which was strictly in accord with market conditions, and which would likely insure the success of the loan." Until this war, no issues of any magnitude had been made in the Dominion, and it takes a very considerable time to educate the great body of the public to subscribe for public loans. There is a certain class in the financial community, as my hon. friend said, and a portion of the investing public, who subscribe freely to bonds and other securities. What we have sought to do is to enlist the interest of the small subscriber, and I think we have been very successful. We allowed in each case two weeks as the period during which subscriptions might he made. We advertised the loans in every paper, daily and weekly, morning and evening, religious and secular, Grit and Tory, in the Dominion of Canada; so that the advertising was of a very extensive character. In addition to that, we enlisted the editorial co-operation of the press, and the press responded, as it always has since the outbreak of the war, and did a great deal indeed to bring the loans to the favourable attention of the Canadian people. In addition to that, as my hon. friend knows, the brokers did magnificent work in connection with both loans, some of them spending almost as much money for advertising as they made in commissions. Besides, they sent their travellers throughout the country, and generally did everything possible to- promote the success of the two issues. In addition, we have an instrument that I myself did not know could be made so powerful to accomplish the object we have in view, namely, some 3,500 branch banks. It is a wonderful system for the purpose of getting in subscriptions. The success of our loans was due in considerable measure to the fact that we have had the branch banks, the brokers and the press working for us in introducing the securities to the attention of the public.
In connection with the first loan, I think there were some 25,000 subscribers, and in the case of the last loan, some 30,000 subscribers. The lowest denomination was placed as low as $100, and there was a very large number of subscriptions for those $100 bonds. In making allotment, we out down the larger subscriptions, because the loans were over-subscribed, alloting in full up to $25,000 only. It is a matter of great gratification to me that in connection with the important subject of allotment in regard to the last loan I heard
absolutely no complaint whatsoever. It seemed to be entirely satisfactory to the community when we allotted fully up to $25,000 and beyond that cut down very substantially the higher subscriptions.
Since the last loan, in order to promote national savings, which I regard as of great importance at the present time both from the economic and patriotic standpoint, we created a short-term issue of three-year war savings certificates. It has been very gratifying to me to find that these certificates have met with a very considerable degree of public appreciation. We are, so to speak, pushing their sale. We are enlisting the co-operation of the press, the clergy, boards of trade and public bodies throughout the country. We are sending out literature to manufacturers and to labour organizations, and are communicating directly with the operatives themselves. In the last week or ten days, since the certificates have been out, something like 5,000 applications have been received, aggregating some $400,000. Of course, we do not expect to obtain very large sums in terms of Dominion finance; they are large sums but not relatively to our requirements, but it is of the greatest importance that the individual citizen should save his money by investing in these certificates. The matter has also, as my hon. friend knows, a patriotic aspect.
My hon. friend asked another question, when he rose the second time-about the British Government. When the war broke out the exchange was very much in favour of Great Britain as against this continent, and the result was that Canada borrowed her war expenditure in Great Britain up to about the spring of 1915. If we had not done that I think we should have lost considerable gold, because the exchanges were greatly against America. We borrowed at first therefore from the Imperial Treasury. As our situation improved we were able to take eare of our own expenditure here. In 1915 the exchange was reversed and became unfavourable to Great Britain. It is very unfavourable now to Great Britain, although not nearly so unfavourable to Great Britain as to other European belligerents. The exchange situation to-day is such that Great Britain can only purchase on this side of the Atlantic if she is able to borrow on this side of the Atlantic. That is really an understatement of the fact, because she must not only borrow in order to buy here and in order to pay for her purchases on this side of the Atlantic,

but she must also borrow for the purpose of sustaining sterling exchange and holding it at the figure of $4.76, which is about the gold export point. That is also of great importance, although this being a technical matter, its importance is not realized by the general public. Our position very much improved by reason of our great production in 1915, by reason of the large prices obtained for produce of all kinds and by reason of our great production of munitions. Canada has been able, out of her own revenue, and by her own borrowing in Canada, to help Great Britain in making her purchases in Canada. That, of course, is of great advantage to Great Britain and also of great advantage to Canada. Generally speaking, the policy which has been adopted is this: We made an arrangement to borrow from Great Britain for our expenditures in Great Britain and on the Continent, that is to say, we do not buy exchange on Great Britain to pay for the maintenance of our troops there or on the Continent, we borrow the amount necessary from the Imperial Government and they borrow from us here part of the amount that they require to pay for their munitions. That runs about $25,000,000 a month in this country. One way of dealing with the accounts would be to offset . one against the other. But Great Britain has been obliged to borrow heavily in New York and she had been obliged to lodge collateral in New York as security for her borrowings. I think it is unfortunate th,.t she has been so obliged, but it is the fact, and it is an object to her to find securities of a high quality which she can deposit as collateral. I went to New York a year ago last fall at the request of the Imperial Treasury to meet Lord Reading and the representatives of the Treasury. I thought that they would be obliged to give collateral later on and I made the proposition at that time that as we owed them, let us say, $100,000,000, and as they required collateral in New York, we should fund our debt of $100,000,000 to them by issuing them our securities for the same period and at the same rate as they had issued theirs in the London market, and that they should use that collateral to borrow against in New York, where our credit is about as high as that of any country in the world. Later that plan turned out to be of great advantage both to Great Britain and to us, as it gave them more than $100,000,000-I will give the figures in a few minutes-of high-class collateral which they put up with other securities against their $250,000,000 loan.

While it gave them collateral to the extent of $100,000,000 or more, it gave us also an advantage in that we funded our floating debt to Great Britain.


Alexander Kenneth Maclean: Did that simply refer to advances on account?


William Thomas White: Advances on account. But it liquidated the open account in respect to these advances. The result is that we funded our debt-I have not the period of the issue precisely in my mind. It was not only an advantage to Canada to make an issue to pay off her indebtedness, but that issue was made without any expense to Canada and at precisely the same *rate of interest as Great Britain had borrowed on the London market on the Imperial credit. We had the further advantage of the exchange situation, which for some time had been favourable to us, and in determining the amount of our indebtedness which should be cancelled over there by the issue of these securities we had regard to the exchange situation which existed between Great Britain and Canada at the time the advances were made. That, I may say, was at the suggestion of the Imperial Treasury, and it was altogether a good arrangement for both them and us. Altogether, we issued, or are about to issue, to the Imperial Treasury about $122,000,000, and to that extent liquidated our indebtedness for ad- . vances made by Great Britain to us in Great Britain.


Alexander Kenneth Maclean: Is this Government the guarantor of the credit afforded by the banks to the British Government?


William Thomas White: No; I will speak of that in a moment. The Dominion Government has made advances to the Imperial Munitions Board at Ottawa of $116,000,000 to date, and we have agreed to advance them a further sum of $34,000,000, for which I have the money provided. That makes a total of $150,000,000 which the Government of Canada will have advanced to the Imperial Government for the purpose of buying munitions and supplies in Canada. We owe the Imperial Government in London about $97,000,000. So there is at present a balance owing us by the Imperial Government of about $18,000,000.


Mr. NESBITT:: Is that $97,000,000 over
and above the $122,000,000 just mentioned?


William Thomas White: Yes. With regard to that $97,000,000, we could either issue out securities, which they could pledge in New York in connection with further loans there,

or we could set it off against this larger sum which they will owe us.
My hon. friend has asked me about the banks. The Dominion Government, as I have stated, has loaned or arranged to loan $150,000,000. We made arrangements with the banks to loan $100,000,000 direct to the Imperial Government. The Dominion Government is not guarantor of those loans, as it was not regarded as necessary that the Imperial credit should be fortified by the Dominion credit.


Alexander Kenneth Maclean: I did not mean
that the guarantee was necessary, but that the hanks might have desired it.


William Thomas White: No. The first
$75,000,000 loan was against the security of British treasury hills, and then there was a further loan of $24,000,000, making a total of $100,000,000. The last $50,000,000 which the Dominion Government advanced to the Imperial Government was borrowed by us from the banks. In that case it was loaned direct to us.


Edward Walter Nesbitt: That Iasi, $50,000,000 borrowed from the banks was in connection with the $100,000,000 war loan recently issued?


William Thomas White: No. We borrowed the amount from the banks and loaned it to the Imperial Government.


Frank Broadstreet Carvell: Can the minister give us any idea of what the debt of the country will be at the end of the present fiscal year? I should like to know what we shall owe in Canada, and what in London.


William Thomas White: I thought some
hon. gentlemen might desire that information, and I have had a memorandum prepared.


Alexander Kenneth Maclean: To what date
does this memorandum go?


William Thomas White: From 1914 to the end of last month. This memorandum shows in round figures that the net national debt to March 31, 1914, was $335,000,000-that is, up to The end of the last fiscal period bef ore the war broke out. The amount of the national debt to March 31, 1915, was $449,000,000; to March 31, 1915, $615,000,000; and to January 31, 1917, $745,000,000.


Frank Broadstreet Carvell: Does that include our
liabilities .to the British Government for munitions and other war supplies? I do not want to press this question if for any reason the minister might think it inadvisable to answer.


William Thomas White: What I have
given is a correct statement of the national debt to January 31, 1917, namely, $745,000,000; that represents the debt so far as ascertained. My hon. friend is aware that Great Britain supplies our troops on the continent with such equipment as they may require at the front, such, as .rations, munitions, and other supplies.


Wilfrid Laurier: Has this liability been liquidated up to date?


William Thomas White: The liability has not been ascertained up to date. Since the last session of Parliament an arrangement has been come to, whereby the British Government will be paid six shillings per day per man for rations, clothing and equipment of every kind whatsoever, munitions, small arms, artillery, etc., supplied to the Canadian forces at the front. In our view, that charge is quite fair and reasonable.


Frank Broadstreet Carvell: That includes rations and clothing? -


William Thomas White: Everything.


Alexander Kenneth Maclean: When was the last settlement made on that basis?


William Thomas White: The adjustment has not yet been made. I am speaking from memory. But I can get the information for my hon. friend, if desired.


Alexander Kenneth Maclean: Would there be any substantial amount due on that account?


William Thomas White: It might be a matter of $50,000,000 or $60,000,000. At all events the arrangement is so fair that the amount in terms of waT finance is not large.


Alexander Kenneth Maclean: It looks very
reasonable.


Frank Broadstreet Carvell: Am I to conclude frpm the statement the minister has just given, that the total debt of Canada up to January 31 will be, roughly speaking, $800,000,000.


William Thomas White: I think that is a fairly accurate estimate.


Edward Walter Nesbitt: I understood the minister to say that the $745,000,000 does not include the open , accounts between the two 'Governments; that is, the British Government owe us $150,000,000, we will say, and we pwe them $97,000,000.


William Thomas White: It is the net debt. I think about $800,000,000 represents the situation.


Edward Walter Nesbitt: That includes the $50,000,000 the minister just spoke of as being due under the new system of adjustment? But the net debt does not include the adjustment of the open accounts5


William Thomas White: I cannot say
definitely as to that, but my opinion is this. They owe us more than we owe them on open account, and I think-I am not positive-that the principle of set-off has been applied, and that $745,000,000 represents the net debt.


Edward Walter Nesbitt: That is, you have charged them with your open -account and credited them with their open account?


William Thomas White: Yes.


Edward Walter Nesbitt: In view of our large revenue, I was rather surprised -to hear the -minister -say that this proposed loan was for ordinary account. Does he not anticipate that the revenue will be large enough -to pay the expenditures on current account? I should -also like to know why the minister thinks that the last war loan would not have been subscribed on a -straight five per cent basis, after paying one-quarter per cent commission to the brokers. The loan was issued at 97j. I have often wondered if it would not have been subscribed and more than subscribed on a -straight five per cent and at par.


William Thomas White: 
Edward Walter Nesbitt: Yes, I understood that.


William Thomas White: A year ago last fall the Imperial Government put out in the United States a five per cent five-year loan at 98, the underwriters taking a considerable portion of it at 96. That loan went down to 95, to 94, to 93. When Canada comes on the market with her securities, she is to a certain extent in competition with those Imperial securities and in competition with that market price. Canada's credit today is better on this continent than Great Britain's credit. We can sell our securities on a lower interest basis than Great Britain can sell her securities in the United States. Of course, Great Britain has offered no securities in Canada. Answering my hon. friend's question specifically:. At the time that we made the loan last fall of $100,000,000, our fifteen year securities, payable in New York, were slightly under par; that is to say, that was the quotation for a- market lot.


Edward Walter Nesbitt: About 99J.


William Thomas White: The five per cent fifteen-year securities which we had issued the previous March were about 991. Now, if I had attempted to sell $100,000,000 to the public at par, of course, I could not have done it. You have to put your securities out at a lower rate than the stock exchange quotation, because you are selling wholesale, and it is of supreme importance that your loan should go to a premium. If your loan goes to a discount, you are not so welcome the next time you come along. There is such a thing as a prudent generosity in connection with loans, especially to your own people, and it is much better to put out a loan at 971 and have it run up a point or a point and a half by reason of over-subscription, than to have it go to a discount a point or a point and a half, because that injures your credit. We have been very successful in regard to our loans, every loan put out in the United States by the Dominion of Canada having gone to a substantial premium. The last loan put out stands just about the issue price, but it did run up to 99 or a little over. The best proof of our financing is the market quotations for our loans after they were issued and subsequently our credit has been im-

proved by our loans, because every time we have made a loan, it has been open to any subscriber to take a small profit if he has so desired. That has been by reason of the heavy over-subscription and the popular demand for the loans.


Edward Walter Nesbitt: I thoroughly understood what the hon minister told us befoi'e, that it is necessary to issue a loan at a price a little lower than the market price. I quite appreciate that in connection with loans issued in the United States or Great Britain. This, however, was a loan to the people, and we are not told how much of that loan was taken up by the people and how much by the loan companies and the banks. The loan companies and the banks, of course, would want to get the security at a price at which they could resell it at a profit; but the ordinary man or woman who bought $1,000 or $2,000, was, so far as my knowledge goes, perfectly satisfied with the five per cent Government loan as he was getting only three per cent from the banks. But the price at which the loan could be sold afterwards would depend entirely on how much of the $100,000,000 was taken up by the loan companies and the banks and how much was taken up by the private investors. That was why I asked the question; it was not because I did not know that it was necessary for the minister to issue loans in the way described by him.


William Thomas White: In the case of a loan as large as $100,000,000, you have to rely on all classes of the community to contribute. The small investors could not subscribe nearly as much as the larger investors. It would take ten thousand $1,000 subscriptions to make $10,000,000. You get subscriptions from the small investor; you get subscriptions from the business man who can subscribe for $25,000 or $30,000; you get them from capitalists who will take $100,000 or $200,000 or even more; you get them from the life insurance companies who will subscribe for large amounts, according to the state of their finances, and you get subscriptions from other companies. The banks took none of the last issue, because my arrangement with them was that the public was to have the first call. My hon. friend has it in mind that if the public would take the loan on a five per cent basis, it should be put out on that basis. That is not quite sound, for this reason, that notwithstanding you are putting out a loan for patriotic purposes, such as the prosecution bf the war, it is always wise to observe the financial or business conditions. The patriotic aspect of it creates a certain atmosphere which is favourable, but your loan must conform with market conditions or, even if immediately successful, it will go to a discount later on. In other words, it must conform with the prevailing financial conditions applicable to that class of security; otherwise, investors will subscribe for it under patriotic impulse, hold it for a little while, and then sell it out and buy something more attractive. I am quite clear that your loan must be such as, in the estimation of the investing public, m.akes it a desirable investment at the time when it is put out.


Edward Walter Nesbitt: In regard to the three per cent certificates which have been issued, what rate do they pay and are they transferable to future loans?


William Thomas White: The three-year
war saving certificates are sold at the rate of $86 for $100 denominations,. $43 for $50 denominations, and $21.50 for $25 denominations. The rate of interest is slightly over 5 per cent.


Edward Walter Nesbitt: They do not bear interest, but are payable at par?


William Thomas White: That is correct.


Edward Mortimer Macdonald: Are they in
debenture form?


William Thomas White: They are really
like debenture stock. They are made out in the name of the party who buys them. He may surrender or transfer them according to the terms of the issue, but he cannot by losing his certificate be deprived of his property in it. One reason why we made them payable to the party purchasing is because most people of slender means have no safety-deposit boxes in wihich to place their securities.


Mr. BLAIN:: Did I correctly understand
the minister to say that in 1914, the national debt was $335,000,000 and that at the close of the present fiscal year it would be about $800,000,000?


William Thomas White: On January 31,
1917.


Richard Blain: What proportion of that increase is due to the war expenditure?


William Thomas White: I cannot answer
that off-hand, but it will be gratifying to my hon. friend to know that during the present fiscal year our revenues have been such as will enable us to pay all our ordin-

ary and all onr capital expenditure, and, I think, pTOibaby 560,000,000 or $70,000,000 on account of the principal of our war expenditure. The first year after the war broke out there was a deficit on account of capital and ordinary account amounting to some $40,000,000 or $50,000,000. That was because out revenues were at once affected by the dislocation of business occasioned by the outbreak of war. Since that time our revenues have been such as to enable us to carry on our ordinary and capital expenditure and to pay a considerable amount on account of the principal of our war indebtedness.


Edward Mortimer Macdonald: What was the cost of the flotation of the last loan?


William Thomas White: I should say
about three-quarters of one per cent, or less.


Edward Mortimer Macdonald: What would be the total amount?


William Thomas White: About $750,000.


Edward Mortimer Macdonald: I noticed in the
Financial Times a discussion of what was said to be a warning by the minister to the investing public of Canada against investing in English securities. A quotation was made from the Toronto News, which spoke in the very strongest terms of the moral obliquity of the man who would venture to do that. The Financial Times rather questioned the right of the Finance Minister to take such a strong stand. Is it a fact that the Finance Minister has intimated, either directly or indirectly, that he does not think it wise for Canadians to take up any of the English loan?


William Thomas White: I have no hesitation in saying that the Canadian investing public should reserve their funds for Dominion loans. In Great Britain no issues are allowed outside of Government issues except with the consent of the Treasury. Great Britain borrows money in the United States, where there is a plethora of money.


Mr. LEMIEUX:: Bolling in gold, they
say.


William Thomas White: Great Britain
uses that money to make purchases in the United States. If the Canadian public buy British securities issued in New York, Canadian money is being used for the purpose of making purchases in the United States. That in itself would not he objectionable if it were not for its possible effect upon our exchanges. International balances, as my hon. friend knows, are settled in gold and

if the Canadian public invested largely in British or French loans made in New York for the purpose of buying goods in the United States, exchange would soon become unfavourable to Canada. Apart from that, when the Dominion Government would make its next war loan in Canada the money which would otherwise have been available to take up those issues would have been spent in the United States. What I have said is subject to this qualification: A considerable portion of the loans which we float in Canada find their way to the United States. If we put out a loan of $100,000,000 in Canada, $15,000,000, $20,000,000, or $25,000,000 of it may be sold in the United States by those who took it. That, of course, would he a set-off against $15,000,000, $20,000,000 or $25,000,000 that might he expended by Canadian people in purchasing securities in New York. As long as exchange is not seriously affected and as long as the loan fund in Canada is not depleted so that our loans are unlikely to he subscribed, no harm will be done. But on account of the large sums that we require for our own war expenditures and to finance Great Britain in her purchase of munitions in Canada, it is exceedingly desirable that the Canadian people should conserve their resources for the purpose of buying our war loans. That is not discriminating against Great Britain. The authorities in Great Britain would he the first to suggest that the Canadian people should not purchase those loans in the United States, because there is abundance of money there to take up those loans, and Great Britain is not in any way disadvantaged. I do not hesitate to say that I view those purchases as inadvisable. Answer might be made to me: If a Canadian buys a security in the American market and is able to sell it later at a profit, is that not a gain? It is a gain to the individual, and, in a sense, to the nation. But there is an overriding consideration, and that is that the money has been diverted from the issues which the Dominion Government may offer to the Canadian public. Although the individual may make a profit, the national power to finance itself is weakened.


Edward Mortimer Macdonald: The minister has talked all around the point. I merely wanted to know whether or not the hon. gentleman intimated to the investing public in Canada that they should not invest in the British War Loan?


William Thomas White: I do not recollect precisely what I said, but I did give an

intimation that I thought it exceedingly desirable that the Canadian investing public should conserve their funds for Dominion war loans and should not buy loans of any government issued in New York, because there is abundance of money in New York to take up those securities. In that I am in entire accord with the Imperial Government. No possible question arises as to' the Imperial Treasury. They do not ask the Canadian people to buy loans which they are issuing in New York for the purpose of purchasing munitions in America, because they know perfectly well that we require to make our own war loans here and to supply money to pay for the munitions which they order here. If a situation arose in which the people of Canada were buying seourities so extensively in the United States as to seriously affect the exchanges, or seriously affect our prospects of floating our loans in Canada, I should have no hesitation in saying that the Dominion Government should put a tax upon any securities so purchased. I must decline to commit myself as to whether we shall take that course or not; it depends on events.


Mr. DEVLIN:: The minister said that our buoyant revenues would fully meet our ordinary expenditure and pay for the interest on some $40,000,000 of war loans. Can the minister inform us now what part of the revenue is formed by the war taxes imposed? That is, the business profits war tax and the stamps and so on?


William Thomas White: I cannot give it accurately. For this the first year the result of the business profits war tax will, I think, exceed $10,000,000. Next year the amount will be much larger, because profits for the past year have been very much greater than they were for 1915. The special tax upon the banks realizes about $1,000,000. As to what the stamp and other taxes realize, I am not prepared to say, because I did not know that this question would arise. Those matters are usually dealt with in the Budget.


Alexander Kenneth Maclean: Does the minister intend to exercise any control over stock exchange operations in order to control our financial strength for domestic loans?


William Thomas White: All these questions have had a good deal of thought on my part. I need not say that they are very difficult questions to deal with. We have a boundary line of 3,600 miles between us and the United States. There are numerous financial transactions across that line every day. In my own opinion, the best way to deal with the situation- is to watch the exchanges. If our Canadian exchange is maintained, then their purchases over here of our securities and commodities are equalling our purchases over there. If the exchange began to run against us, we might have to take drastic measures with regard to the purchase of securities on the other side. But the exchange at present is quite satisfactory. -


George Perry Graham: Has the minister ever taken into consideration the question of the succession duty taxation imposed by the provinces? So far as Ontario is concerned, loans to the Ontario Government or securities sold by the Ontario Government are exempt from succession duty tax. If the provinces could see their way clear to applying the same thing to Dominion domestic loans, I think it would help the flotation of the war loans materially. A great many people buy provincial loans, having that object in view, knowing that whatever they have invested in these securities will not be liable to the succession duties which are fairly large. I know it would probably interfere to a considerable extent with the revenues of the provinces, but this is a time when we are all bending every energy to meet the war conditions, and the expenditure in connection with the war.


William Thomas White: When our first loan was being floated I took up the question privately with the prime ministers of the several provinces, and they were not unanimous as to the advisability of this course. This was not through any lack of desire on their part to be patriotic and to do everything they could to facilitate the prosecution of the war; their objection was rather on this ground, that a province which has to depend for its revenues upon taxation should not make securities free of taxation to a greater extent than is absolutely necessary, because people will take advantage of such a condition and purchase those securities for the express purpose of evading the tax. If you had enough securities of one kind free of succession duty to absorb a considerable demand the province would be deprived of a large amount of its taxes. In England they are careful not to create a large class of securities that would be free of income tax.


Frank Broadstreet Carvell: I think there is a great deal in what the Finance Minister has said.

I would be very sorry, indeed, to see this Government embark on any scheme which would in any way relieve any portion of the community from its due share of taxation. I think the time has come in Canada when every person and every class of, person should be taught that they must pay their share of taxation. I know that along the lines mentioned by the Minister of Finance a number of fairly large loans were issued by the province of New Brunswick in the last year and a half which were made tax-exempt in New Brunswick. The result was that there was an unprecedented rush for those bonds, and while they were on the market I think very few of the war bonds were absorbed. Those provincial bonds were all taken up six or eight months ago, and when the last loan was issued there was a very much more hearty response through the province of New Brunswick than in the previous case. I would suggest to the Finance Minister that he might take some steps to prevent, if possible, the floating of any other loans in Canada excepting war loans. I realize the difficulties.


Wilfrid Laurier: What could
he do?


Frank Broadstreet Carvell: I realize that there are difficulties; I simply want to know whether he could not go into the matter and see if something could not be done. It might be done by a super-tax, or a tax of some kind. From the statement given to us to-day, it seems to me that before this war is over we are going to require all the money we can possibly raise in Canada to enable us to do our share.


Wilfrid Laurier: The minister told us to-day that the public debt of Canada is $745,000,000 at this moment, and that at the end of the fiscal year it will be $800,000,000; and then we will start with this loan of $100,000,000 which we are authorizing. Is it premature to ask my hon. friend how much more he will have to borrow during the next fiscal year, $1917-18? Perhaps he cannot give us the answer to-day.


William Thomas White: I think I can
tell my hon. friend approximately. We may need from $200,000,000 to $250,000,000 for our own war expenditures on this side, and we should borrow considerable sums in addition to that for the purpose of establishing the credits here out of which Great Britain can pay for the munitions which she ie ordering here.


Mr. ROBB:: To come back to the question of investment, if I understood the minister, the Government control the issues of new debentures or stocks that are issued to the public. It occurred to me that it might be a good thing for the Government to at least control some of the mining issues that have been offered and are still being offered to the Canadian public. I have never known a time when more literature came to a man's office, offering attractive prices for mines in a neighbouring province. We know that periodically there runs across this continent a mining boom, and there seems to be one on now. I think it is time for the Government to step in and stop these operators, who, I believe, are 5 p.m. largely people .in the United States, gathering up Canadian money .and selling what is really a hole in the ground. I think it would be well for the minister to look into that -and, if possible, control that sort of investment in our country. There is another feature in connection with this, though perhaps .it does not affect the Department of the Minister of Finance. These people are loading down the Canadian .mails with circular letters that are carried for one cent a letter, whereas the people of Canada are paying three cents a letter to do legitimate business. I think it is time for the Government to step in and control this sort of work.


George Perry Graham: Can the minister state
the rate?


William Thomas White: It is not advisable to state it, and there is no loan immediately in prospect. As things -are, unless conditions radically change, it would be a five per -cent security; but of course I cannot state -at what price it would be issued. The price is never fixed until the time of issue. That is a matter for consideration, -and, if it is sold in the United States, a matter for negotiation.


George Perry Graham: The reason I ask that in conversation not long since with -a party who was speaking of making some investment, it was pointed out to me that the short-term British loan, I think, is paying about six per cent.


William Thomas White: Nobody knows it better than I do.


George Perry Graham: It puts the minister in a difficult position in competition with the British loan if it is issued at six per cent and we issue at only five per cent.


Charles Marcil: Can the minister tell us *v\ hat the oust of the war has been up to date; and whether we have reached the maximum of expenditure for the coming year?


George Perry Graham: I may say that the loan to which I referred is a short-term loan.


William Thomas White: I explained when my hon. friend was out, that we are always in competition with the securities that are issued in the United States; but our credit is really higher on this continent than the credit of Great Britain, and consequently we are able to sell our securities on a lower interest basis than she is.


Alexander Kenneth Maclean: The minister has never been asked for collateral.


William Thomas White: We have never been asked for collateral, and I do not think that we shall be. Nevertheless, my hon. friend (Mr. Graham) is right. We are affected in our issues by the price at which Great Britain issues her securities.
My hon. friend (Mr. Maroil) has asked about the war expenditure. The war expenditure to January 31, 1917, in Canada and Great Britain is about $450,000,000. Then there is the adjusted situation on the Continent; I cannot say how much that will be at the present time.


Charles Marcil: Can the minister give us the probable expenditure for another twelve months?


William Thomas White: I should not like to make an estimate.


Edward Mortimer Macdonald: Are there any securities falling, due this year on which this loan will be dependent?


William Thomas White: There are two short-date loans, aggregating $50,000,000, due in April and May. We have a $25,000,000 loan maturing in New York on August 1, and then we are clear, I think, until past the end of the year. I may say that in our financing we are keeping free of short-date obligations as much as possible.


Charles Marcil: In inviting subscriptions for these loans, has the minister considered the advisability of using the post offices? There are many places where there are no branch banks, and if these notes were offered in small denominations at the var- ' ious post offices throughout the country some money might be raised. It might be
in small sums, but still it would be of value at a time like this.


William Thomas White: They are on sale at post office savings branches.


Wilfrid Laurier: I have not
seen the report of the Minister of Trade and Commerce, but I would ask whether these loan subscriptions have come from the post office savings banks, or whether they have come out of the current business of the country?


William Thomas White: They have come from both sources. I do not think the post office saving deposits have been seriously affected.
Resolution reported.
Sir THOMAS WHITE moved for leave to introduce Bill No. 19 founded on the resolution.
He said: Mr. Speaker, to meet the point of order raised by the hon. member for St. John (Mr. Pugsley), I desire to say, now that you are in the Chair, that the assent of His Excellency the Governor General has been obtained to this Bill.


[Stage Direction]
Motion agreed to, and Bill read the first time.

[Stage Direction]
The House in Committee of Supply, Mr. Rainville in the Chair.
['No, that is a general statement of the purposes of the\n23 J']
Wilfrid Laurier: We will not go into any particular Estimates, but we will give you what you want; we will give you a quarter of the total amount in these Estimates.


George Eulas Foster: They are just the same as the usual Estimates.


Wilfrid Laurier: Yes.


George Eulas Foster: We have usually put through the vote for Civil Government.


Wilfrid Laurier: I have no objection to your putting through the Estimates that you want to put through, but you know there is a rule that on Thursday and Friday the Speaker leaves the Chair without any motion, and the House can only take up such Supply as is to be taken into consideration. If we were to pass all the Estimates to-day, when we begin after the adjournment we could not take up any of the Estimates upon any day, and therefore we cannot consent to that. But if it is understood that the rule will not apply, then we will pass the Estimates.


George Eulas Foster: I think that can easily be understood on both sides of the House.


Wilfrid Laurier: All right; go on.


George Eulas Foster: There is very little that challenges criticism in the Civil Government Estimates.


Wilfrid Laurier: No, but I want it to be understood that when we meet on Friday again it will not be said that these Estimates have been passed, but that we will proceed as if the Estimates had not been passed at all.
On the motion of Sir THOMAS WHITE, it was resolved:
That a sum not exceeding one-quarter of the amount set forth in the Main Estimates be granted to His Majesty on account of certain expenses of the public service for the year ending 31st March, 1918.


Wilfrid Laurier: Yes, we agree to that.


George Eulas Foster: All right; let it go on that basis.


William Thomas White: With reference to Item 321 of the Estimates, I beg to move that the words "Canadian Associated Press be struck out and "Canadian Press, Limited" be substituted. This is for a subsidy for a national wire to the West. The press is very much interested in it.


George Perry Graham: That is different from the Associated Press?


William Thomas White: Yes.


Alexander Kenneth Maclean: Does that vote include capital as well as ordinary expenditure?


William Thomas White: Yes.


Wilfrid Laurier: It is onequarter of the Estimates which have been brought down.
Resolution reported and read the first time.



[Stage Direction]
House in Committee to cpnsider the following proposed Resolutions.-Mr. Rain-ville in the chair.
1.	That it is expedient to provide that a sum not exceeding five hundred million dollars ($500,000,000) be granted to His Majesty towards defraying any expenses that may be incurred by or under the authority of the Governor in Council during the year ending the 31st day of March, 1918, for:-
(a)	The defence and security of Canada;
(b)	The conduct of naval or military operations in and beyond Canada;
(c)	Promoting the continuance of trade, industry and business communications, whether by means of insurance or indemnity against war risk or otherwise ;
(d)	The carrying out of any measures deemed necessary or advisable by the Governor in Council in consequence of the existence of a state of war; and
(e)	Payments made for the said purposes during the fiscal year ending the thirty-first day of March, nineteen hundred and seventeen in excess of the amounts authorized by The War Appropriation Act, 1916.
2.	That the Governor in Council be empowered to raise byway of loan, temporary or otherwise, such sums of money as are required for the purpose of making any payment authorized by any Act founded on these Resolutions.
3.	That the principal raised by way of loan under this Act and the interest thereon shall be chargeable on the Consolidated Revenue Fund.-Sir Robert Borden.
Robert Laird Borden: Mr. Chairman, in connection with this vote I need hardly observe that the expenditure for war purposes has grown to a figure which none of us could have anticipated when war first broke out. The figure which has been placed in the vote now under consideration is $500,000,000. It is hoped, however, that a very large amount out of that sum may be available for the purpose of assisting the British Government in financing payments for munitions produced in this country. The necessity for that was dwelt upon by myself and also by the Minister of Finance in a previous debate.
It is, however, desirable that the committee should be made acquainted with the expenditure, as submitted to me by the Department of Finance, which has been made for war purposes since the beginning of the war, and it might perhaps be convenient that I shpuld give this information in the tabulated form in which it has been submitted to me. The statement shows the amounts that have been, expended by each department of the Government in the several fiscal years, 1914-4915, 1915-1916 and 1916-1917, up to the 29th day of January:-


EXPENDITURE ON
[Stage Direction]
Militia and Defence	
Justice	 ,,
Dominion Police	] .,
Public Works	
External Affairs	
Naval Service	 ,. .. ' ' ,. ..
Post Office	
Railways and Canals	
Indian Affairs	
Governor General's Secretary's Office	
Secretary of State	
Privy Council	
Inland Revenue	
Trade and Commerce	
War Purchasing Commission	
Finance	
Audit Office	
Labour	
Agriculture	
Marine. . . .		
Legislation (Library)	
Interior	
Royal Northwest Mounted Police	
Shell Commission	
Canadian Munition Resources Commission.. National Service Commission	
The appropriation is based, of course, upon the contingency of the war continuing throughout the whole of the coming fiscal year. Further details as to the anticipated expenditure of the various departments are as follows:-
Militia and Defence . . $196,171,000 Ministry of Overseas
Military Forces . .	219,000,000
Naval Service	
Interior	
Railways and Canals	
Finance	
Public Works	
Labour	
Agriculture	
State
[Stage Direction]
The provision which is being made for the Department of Militia and Defence, the principal spending department of the Government for war purposes, is for the following purposes, calculated on the basis of
400,000	troops actually under arms continually :
Separation allowances, rations and subsistence, clothing and necessaries equipment and ' general stores, ammunition, small arms, machine guns, forage remounts, medical services ocean and railway transport engineer service's, civil employees, printing, stationery, telegrams, cables, sundries, including recruiting expenses, pay of censors, customs dues_ funeral expenses, fuel, etc.
Edward Walter Nesbitt: Are the amounts carried out opposite the items?


Robert Laird Borden: No, that is a general statement of the purposes of the
23 J


ACCOUNT OF WAR.
[Stage Direction]
1914-15.