1928-04-13

[Stage Direction]
Fifth report of the select standing committee on miscellaneous private bills.-Mr. Parent.


Hon. ERNEST LAPOINTE (Minister of Justice) moved:: That in accordance with the resolution passed by this house on the twentieth of March, 1928, the special committee to consider the question of the adequacy of the remuneration paid to the judges of the various courts in Canada, and all matters pertaining thereto, consist of the following members: Messieurs Boys, Bell (Hamilton), Bell (St. John-Albert), Cantley. Carmichael, Duff, Fafard, Gershaw, Hay, Ladner, Lapointe, Miss Macphail, Messieurs Sanderson, Thorson and Totzke, with power to send for persons, papers or records, and to report from time to time.


[Stage Direction]
Motion agreed to.

[Stage Direction]
On the orders of the day:
Sir HENRY DRAYTON (West York):: I
desire to ask the Minister of National Revenue (Mr. Euler) whether it is correct that the order in council which enables him to put a fair valuation on fruits and other imports from the United States has been cancelled and, if cancelled, why.


Hon. W. D. EULER (Minister of National Revenue):: It is quite true that the order to
which the hon. member refers has been cancelled by council.


Henry Lumley Drayton: Why?
Mr. L.APOINTE:	That is a large question.


Henry Lumley Drayton: It could not be
answered.



CHICAGO DRAINAGE CANAL

[Stage Direction]
On the orders of the day:
Hon. CHARLES STEWART (Minister of the Interior):: I promised to lay on the table
of the house to-day the papers and communications between the Canadian government and the government of the United States in connection with the Chicago drainage question. That promise was made upon the request of the hon. member for St. Lawrence-St. George (Mr. Cahan). I find, however, that in respect of the two recent dispatches that have passed between the two governments the government at Washington has not yet consented to their being made public. We expect to have that consent within a few days, when I shall bring down the return.



RADIO-CANCELLATION OF LICENSES

[Stage Direction]
On the orders of the day:	,
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Would the Minister of Marine

Customs Act Amendment
and Fisheries (Mr. Cardin) supplement what he said yesterday with regard to the cancellation of certain radio licenses, by stating the reason for the cancellation of the license of Universal Radio of Canada, Limited, which I understand is an independent concern although its equipment has been used by the International Bible Students Association. What reason is there for cancelling the license of this organization?


Hon. P. J. A. CARDIN (Minister of Marine and Fisheries):: The reasons for the canceL
lation of that license were the same as those advanced for the cancellation of the others. I quite realize that this company may be in a somewhat different position. This point has been brought to my attention, and I am considering the facts in regard to that particular case. I will be in a position before very long to give a decision in regard to it.


James Shaver Woodsworth: Would the government afford us an opportunity to discuss this very extraordinary proceeding?


Pierre-Joseph-Arthur Cardin: The house will have full opportunity to discuss all matters in that connection when the estimates of my department come before the house.



CUSTOMS ACT AMENDMENT

[Stage Direction]
The house resumed from April 12 consideration in committee of Bill No. 198, to amend the Customs Act-Mr. Euler-Mr. Johnston in the chair.
On section 1-Vessels found hovering in territorial waters may be boarded and brought into port.
Mr. BENNETT:: Is the minister going to leave the words "bring to" as they are?


William Daum Euler: We had some debate yesterdaj' as to the propriety of those words, which are intended to indicate that a vessel should come to a stop. Yesterday I was rather in agreement with the hon. member for Antigonish-Guysborough (Mr. Duff) with regard to the words "heave to" rather than the words "bring to", but I think we might settle the dispute if we adopt some different words which will be perfectly clear. For that reason I move, seconded by Mr. Lapointe, that the words "bring to" in line thirteen be struck out and that the words "proceed to come to a stop" be substituted therefor. I think that should meet all objections.


Mr. DUFF:: Before the amendment carries, I am afraid the minister does not realize what those words mean. You cannot bring a ship
at sea to a stop without great danger to the passengers, the crew and the cargo, whether it is a sailing ship or a steamer. In the case of a sailing ship the words "heave to" are correct; they mean that the vessel comes into the wind and proceeds gradually. In the case of a steamer the words "slow down" are proper, because if a steamer stopped and got into the trough of the sea, or if the wind were ahead and she went backwards, she might capsize and founder. Consequently I think the amendment is not in accordance with marine rules and usage.


Ernest Lapointe: I would have hesitated to venture an opinion with reference to language of this kind if I had not had the benefit of the views of an officer of my department with regard to the expression "bring to". I am told that the expression "bring to" is defined by Todd and Whall on Seamanship as an order from one ship to another to heave to. that it may be boarded or spoken. Evidently the distinction is that "bring to" is a special expression while "heave to" is a general expression. The Admiralty Manual of Seamanship defines "bring to" as an expression used in bending sails or when a ship is about to anchor, and I am also told that this expression has been used in Dominion legislation for some time past. Still, I have no objection to seconding the amendment of my hon. friend.


William Daum Euler: I took some trouble this morning to get advice with regard to this expression from those who should know. After all it is a small matter, and I do not think there should be any doubt as to what is intended. In answer to my hon. friend from Antigonish-Guysborough I would say that the words "proceed to come to a stop" does not indicate any sudden effort to stop; I think it will answer the requirements of sailing vessels as well as steamers.


William Duff: "Come to a stop" means that eventually the ship will stop, but it is a dangerous thing for any preventive ship belonging to any government to order either a sailing vessel or a steamer to stop in the middle of the ocean. That is a dangerous proceeding, and it is not fair to the owners of ships, because it will endanger the lives of the crews and subject the ships themselves to great hazard.


[Stage Direction]
Amendment agreed to.
Mr. ERNST:: I understand that the
Minister of Justice was to give an opinion with regard to subsection (7); we were so informed last night by the Minister of National Revenue.
Customs Act Amendment


William Daum Euler: I was not trying to bind
mv friend: he can do as he wishes.


Ernest Lapointe: I am sorry I was not
here last night, but I read Hansard this morning and I think my hon. friend has made a slight mistake. It was he who suggested that I should express some view in the matter.


William Gordon Ernst: No, it was the minister.


Ernest Lapointe: It does not matter very
much anyway. I was not here on Tuesday either, but I took the opportunity this morning to read Hansard in order to see what took place on the other two occasions. The view's of my hon. friend are about the same as those set forth in this house in 1923, when as Minister of Marine and Fisheries I introduced some legislation with regard to the north Pacific halibut fisheries. That legislation was designed to put into force the provisions of the treaty with the United States concerning the protection of the halibut fisheries in north Pacific waters. Both in the treaty and in the statute adopted by this house there was a provision which conferred extraterritorial jurisdiction upon the enactment of parliament. I mention the fact that this was in the treaty also because that treaty was ratified by His Majesty the King, and no one either in England or in Canada challenged the right of Canada in that respect, and that statute never has been challenged since. It has been enforced since, giving the right to our officers to seize vessels, even on the high seas, which are engaged in fishing halibut in the prohibited zone during the prohibited season. However, at that time the same objection was raised against that statute, and I am free to admit that my hon. friend can quote authority in support of his con-tent'on. It is a debatable question in some respects; it has been debated, but I believe that the trend of constitutional authority is now rather to the effect that t.he dominions have the same right within their sphere of legislation as the Imperial parliament has within its sphere. This view is specially supported in the case of the award re Cooks' and Stewards' Union. That was a New' Zealand case, in which the court decided that the award of a New Zealand court of arbitration as to wages to be paid on vessels trading between New Zealand and Australia was binding with reference to vessels registered in New' Zealand.
In the well known Canadian case of Cain versus Gilhula, where aliens had been deported under the Canadian legislation with regard to alien labour, for having come to this country

in contravention of our law, those men took proceedings by wray of habeas corpus, and the court of first instance decided that as there was a question of extraterritoriality involved our statute was not constitutional; but the Privy Council decided otherwise, and that Canada may exert extraterritorial powers for the purpose of exercising her sovereign powers as effectively as the Imperial authority.
There have been two cases decided by the Supreme Court of Canada, in re Frederick Gerring and re North, in which vessels had been captured outside the three-mile limit, taken in hot pursuit, and the seizure was declared valid by the supreme court.


William Gordon Ernst: Different circumstances.


Ernest Lapointe: I admit that the circumstances may be a little different, but still the extraterritoriality was admitted in that case. My hon. friend is right as to the point that there is a certain element of doubt attached to the matter, and it is for that reason that in 1920, I believe, the then government submitted to parliament the resolution for the purpose of amending the British North America Act, in order that it should be made clear that any enactment of this parliament within its jurisdiction had the same effect with regard to extraterritorial rights as an enactment of the Imperial parliament. The resolution was adopted by the parliament of Canada in 1920, but I see in the correspondence that there was some difficulty as to the drafting of the resolution or 'rather of the legislation to be introduced in the Imperial parliament. There was an exchange of views between the law officers of the crown in Great Britain and the Department of Justice; and as a result, in 1924. I myself, as Minister of Justice, introduced a new resolution to this parliament with somew'hat different language. It was to the effect that	.
An enactment of the parliament of Canada, if expressed to operate extraterritorially, shall have, and be deemed to have had, that operation. if and in so far as it is a law for or ancillary to the peace, order and good government of Canada.
This resolution was voted by the parliament of Canada, but I may qualify this by saying that tlhe Senate amended it in some slight manner, so as to safeguard the rights of the provinces in that respect. The amendment came to the House of Commons on the last day of the session and was accepted then; but we found afterwards that the language was not exactly what it was intended to be, and that a new resolution would have to be passed by this house to amend it.
The whole question came before the Imperial conference of 1926, not brought there

Customs Act Amendment
by Canada but by other dominions, and it was then decided that this matter should be submitted as well as other matters to a committee of jurists which is to be appointed for the purpose of looking into all those questions. Meanwhile, as it is a very important matter concerning peace, order and good government in Canada, I think this parliament should take the same view as was taken in regard to the halibut fishery treaty, and that it should be made clear that as far as we are concerned we believe that for the peace, order and good government of Canada we should have in that respect the extraterritorial jurisdiction which the legislation of the Imperial parliament has provided with regard to their own affairs.


William Gordon Ernst: Mr. Chairman, I am veiy
much indebted to the minister, as I am sure the house is, for his discussion of the matter, and I can assure him that we are as desirous as hon. gentlemen opposite are to make effective and enforcible the customs laws of this country. Unfortunately I am not familiar with the section in the north Pacific convention to which he refers, and it is impossible without it before me to say whether it is the same as the proposed subsection 7 with which we are now dealing.
A number of the cases cited by the minister are not in point. For instance, the case of the ship North. The infraction in that case was committed within the teritorial jurisdiction of Canada, and what was involved was the right of immediate pursuit, or hot pursuit as it is termed. It seems to me we ought to approach this question frankly. The fact that the fishery decision was not challenged is no answer; that simply means that it has never stood the tect. What I have suggested, and what I suggest again, is that we should be frank in the matter. The Minister of Justice admits that there is doubt, and knowing that there is doubt, knowing that this provision is almost certain to be challenged, that seizures will be made within the twelve-mile limit, and that the question will come before the court and result in expensive litigation, why not go before the Imperial parliament and get legislation which will make it certain?


Ernest Lapointe: My friend has not
noticed my statement in that respect. The Imperial government were quite willing to enact legislation to enforce the will of this parliament in that regard They asked, and we agreed, that the whole matter should come up with regard to the other dominions as well as to Canada. If Canada asks for that amendment, it will be made and agreed to by the Imperial parliament.


William Gordon Ernst: What I am suggesting is
that really the proper procedure would be to ask for it immediately, so that the customs laws can be enforced. There is grave doubt whether this is constitutional. My hon. friend is no doubt aware that Lord Halsbury has expressed the opinion that the colonies, including in that the self-governing dominions, have a jurisdiction which is territorial. What is going to be done in this case is tc create what amounts to a new and distinct criminal offence on the high seas, that is perhaps ten or twelve miles from the shore. The anomaly that will occur will be that you are creating the offence for Canadian vessels at a time when United States or French vessels can come inside and trade with impunity. As the minister is probably aware, the method adopted by the people engaged in this business to-day is to go to the West India island?, load up with a cargo usually consisting of rum, come to some prearranged point off the coast and there sell the cargo in the open sea. The law leaves the onus or responsibility of getting the goods, as they are called, on shore on the little man, not on the man who makes the purchase in the West Indies. The result will be simply that the business will be carried on by vessels other than those of Canadian registry and the section will be of no value.


William Daum Euler: If that be true, will it not be equally true, if we ask for the remedy that the hon. gentleman suggests, namely, that we secure an amendment to the British North America Act? Would that preclude United States vessels or vessels of any other country, from operating within the twelve-mile limit?


William Gordon Ernst: There are two points I want to make. I am suggesting first that this section is not constitutional and, second, even if it is enacted in this form, before you make treaty arrangements with other nations, you will not make any real headway in the suppression of smuggling. The result will be that vessels of Canadian registry will go to foreign ports, become registered there and carry on the business.


William Daum Euler: Is it not true that vessels
of Canadian ownership cannot obtain foreign registry?


William Gordon Ernst: It is very easy to make a
transfer which is only a transfer on paper. That is done every day.


William Daum Euler: This will at least make it
more difficult for them to do that.


William Gordon Ernst: It may. But I suggest that the difficulty will really amount to nothing in the final analysis. I started however on the
Customs Act Amendment

constitutional aspect of this sub-clause. I am suggesting that, as there is this grave doubt, and because, as the Minister of Justice has very frankly admitted, in face of all we have heard about the recent Imperial conference and Canada being a sovereign country, we are not really a sovereign country, we should go to the Imperial parliament and secure the necessary legislation.


Ernest Lapointe: My hon. friend goes too far when he says that I admit that. I said that he was justified in expressing his views in that regard and he is not alone in holding that opinion, but I do not agree with him that this would be unconstitutional. I said that the bulk of authority is on the other side. May I quote one of our constitutional writers on the constitution of Canada, namely, Mr. Lefroy, who says:
Moreover, bearing in mind the fact that, as we shall see, the powers of the Dominion parliament, as also all the provincial legislatures are as plenary and ample within the limits prescribed by the British North America Act as the Imperial parliament in the plenitude of its power possessed and could bestow, and that the expressed intention was to confer upon the Dominion a constitution similar in principle to that of the United Kingdom, it seems beyond question that they must have the same power to bind their own subjects everywhere as the Imperial parliament has to bind British subjects everywhere.
A very distinguished legal gentleman, Sir John W. Salmond, who was Solicitor General of New Zealand, in an article in the Law Quarterly Review for 1917, writes as follows:
There is no rule of substantive constitutional law which prevents a colonial legislature from enacting such extraterritorial prohibitions or authorizations as may be required for the peace, order and good government of the colony.
Even the law officers of the crown in England, when this parliament adopted in 1920 the resolution to which I refer, make this statement in their correspondence with regard to air regulations, because it was on the matter of aviation that parliament was incited to ask that the whole matter should be cleared up because, as the committee will realize, it is very easy for an aviator to cross the boundary line and if parliament has no extraterritorial jurisdiction attached to its legislation, our law could be broken very easily. The law officers felt that the power actually possessed by the Dominion parliament entitled them to make their regulations applicable to Canadian aviators even for offences committed while they were outside of the boundaries of Canada. This question is being discussed in all the dominions. I remember that after the peace treaty, when the territory of Samoa was put under the mandate of New Zealand, New 
Zealand thought that as there was doubt as to her power of extraterritorial jurisdiction, she could not have her laws apply in that territory, and an imperial order in council was adopted for the purpose of giving that right to New Zealand. But General Smuts, who was then premier of South Africa, to which West Africa which had been taken from German}' was given as a mandatory territory, claimed that South Africa as a self-governing dominion had the right of extraterritoriality and no order in council or legislation was passed in order to give that additional right. So I think we are in pretty good company in asserting this right in this case and I am sure there will be no difficulty because the whole matter will be made clear when the judicial committee make a decision in this connection.


William Daum Euler: I cannot pretend to make
any legal argument and I have no intention of doing so, but I should like to set forth what I regard as a reasonable view to take of the situation. The department has been very much troubled by the practice of these rumsmuggling vessels loitering just beyond the three-mile limit and demoralizing the whole coast line in many instances.


Mr. CANTLEY:: They are not loitering
They are very active.


William Daum Euler: We want the power to cope with them just as quickly as possible. We might go to the British parliament and ask for an amendment to the British North America Act as the hon. member has suggested, but that would take time. There is, as the Minister of Justice has conceded, a reasonable doubt as to the constitutionality of what we propose to do, but there is a pretty strong presumption that we are right. If the clause goes through as it stands, we are certainly going to exercise our rights under it. Then we are in a practical position to have the constitutionality or legality of it tested out. The case will be fought out in the courts. If we win, the matter is settled. If we lose, we still have the remedy of going to the British parliament for an amendment to the British North America Act. We should like to have a remedy now. We are dealing with a difficult situation and if we postpone much longer dealing with it, it becomes all the more difficult to apply the remedy. I should also like to say in reply to my hon. friend when he spoke of the danger of our Canadian boats securing United States registry and becoming owned by Americans, that does not seem to me to be so serious a danger because of the fact-and I think I am right in this-that an American-owned vessel cannot legally carry liquor at all.

Customs Act Amendment


William Duff: That is quite right.


William Gordon Ernst: But they do.


William Daum Euler: I hope the committee will
consent to leave the clause as it stands.


Thomas Cantley: I am opposed to this
legislation for half a dozen reasons. In the first place, it is autocratic. In the next place, it will be inefficient, and I should think the minister by this time would have realized that. My hon. friend from Queens-Lunen-burg (Mr. Ernst) referred a moment ago to vessels going under American registry. I do not think they will go under American registry, but under Newfoundland or French registry, and what can the minister do then?


William Daum Euler: That would take some time.


Thomas Cantley: It would take about fifteen minutes, just time enough for them to go down to St. Pierre, which is where the great bulk of this traffic originates, where it all originates so far as spirits are concerned. So far as ram is concerned, the traffic originates in the West Indies. The ships could also register in South America or British Honduras. There is no end of places where they could register.


William Daum Euler: They would have to change
ownership.


Thomas Cantley: I can tell the minister
that they do not have to change ownership, and we have had abundant proof of that in the last two years in this house. That will not get you anywhere.
Then look at the provisions of this bill. Look at subsection 4, for instance. What is the effect of that? It is almost an inducement for his officers to commit murder and be held free of all consequences in doing so. That is a provision entirely uncalled for, and his proposals will be entirely ineffective. I think the minister himself is convinced of that fact, and if he is not, he ought to be. If he lived in the maritime provinces or in any maritime country he would realize what the difficulties are. You cannot stop rum running in that way. There is one simple method of stopping it to which I have referred before in this house several times, and that is by lowering the duty.


William Daum Euler: That will not stop it either.


Thomas Cantley: It would stop 90 per
cent of it.


William Daum Euler: It will not stop it entirely
because smuggling existed before the duty was raised. I am not expressing any opinion whether the duty ought to be cut or not. I am rather in sympathy with what my hon.
friend suggests, but there was smuggling of liquor prior to the time that the duty was raised to 810 a gallon.


Thomas Cantley: I am glad to have the
minister admit that he is in sympathy with my view. I knew that he was. Now why does he not act on that view? What is the use of our attempting to pass in this house legislation that we know we cannot enforce, and which is vicious in principle and contrary to British justice and contrary to all common-sense, because that is what it is. As I said before, you cannot stop smuggling in this way. I would ask the minister how much liquor was smuggled into Canada when the duty on whiskey was $1.80 a gallon? Smuggling was not worth while then, and it would not be done to-morrow under the same conditions, but the difficulty is that to-day on some of the liquor that is coming in the duty is practically 1,000 per cent. How are you going to stop smuggling under those conditions? The hon. member for Queens-Lun-enburg has referred to the modus operandi, how vessels come off the coast and peddle their goods to smaller boats that run them into the shore. The twelve mile limit will not affect these boats at all because they will be there under foreign registry. I am surprised that the Minister of Finance is supporting this legislation. He knows what the situation is, and he is the man who is responsible; there is no question about that, and I appeal to him and to the minister in charge of this bill to use that large stock of common-sense which I know they both possess and do what ought to be done instead of attempting in the way proposed by this bill to stop the smuggling of spirits.


William Duff: I am sure that the reason for the amendment contained in subsection 7 is because the minister feels that extending our territorial waters to the twelve mile limit will have a greater effect in stopping smuggling than when the territorial waters extend only to the three mile limit. That may be quite true. But if it is true, I would like to ask the minister why he has increased the limit from three miles only to twelve miles, because if the twelve mile limit is going to be more effectual than the three mile limit in preventing smuggling, and if this parliament has the power to extend the limit. I respectfully submit that instead of making the limit twelve miles the minister should make it fifty miles, because then the vessels would have to lay off fifty miles from the shore, and if they oa.me within the fifty miles the revenue cutters of the minister would be able to seize them and take them into port and
Customs Act Amendment

tie them up. This is a good subsection if this parliament has the constitutional power to enact it, which I very much doubt. I agree with the hon. member for Queens-Lunenburg that this is an international matter; it is not a matter for the British parliament at all The worst feature of this legislation is that the ships of Great Britain, where they manufacture the whiskey, can load up with whiskey in Scotland and then come across and lay to off the United States and our Canadian coast, while our own ships will have to lay to beyond the twelve mile limit. If the British government was so anxious to stop the smuggling of whiskey into Canada, they should agree not to allow their own vessels to clear from their own ports when they know that they are going to break the laws of Canada. But 'if we have the constitutional right to enact a subsection of this kind, which I very much doubt, then let the minister go the whole way and instead of making the limit twelve miles, make it perhaps fifty miles. I would ask the minister why he fixed upon twelve miles rather than some other figure.


William Daum Euler: I suppose it really springs
from a recommendation based upon the limit which they have along the coast of the United States. I have no constitutional objection to making it fifteen or twenty miles. As a matter of fact, I think it was eighteen miles in the first draft, but we reduced it to twelve to conform, I suppose, with the case I have cited. That is all; there is no other reason. Fifty miles might sound a little unreasonable.


William Duff: The results on the United
States coast have not been very successful, and I think we should go them one better, and if the minister would agree, I would ask him to amend his bill to make the limit twenty-five or fifty miles instead of twelve.


William Daum Euler: I think we had better try the half of it first.


William Duff: I am suggesting fifty.


Thomas Cantley: Why not send your cutters right down to St. Pierre and seize these boats just as soon as they come out of port with a full cargo? That shows the ridiculousness of the position the minister takes.


[Stage Direction]
Section agreed to.
Section 2 agreed to.
On section 3-vessel carrying dutiable or prohibited goods liable to seizure.
William Gordon Ernst: I think this section needs careful examination on the part of the minister. May I point out to him the exact wording of it? By subsection 7 of section 1 we

have in so far as Canadian vessels are concerned extended, prima facie at least, the territorial waters of Canada to twelve miles from the shore. Now section 3 reads:
If upon the examination by any officer of the cargo of any vessel hovering in territorial waters of Canada-
Let us say that she is eleven and three-quarter miles from the shore:
-any dutiable goods or any goods the importation of which into Canada is prohibited are found on board, such vessel .... shall be forfeited.
I quite appreciate why that provision should be made in the case of alcoholic liquors, but in the case of other goods a vesel can scarcely be within the territorial waters of Canada or anywhere else without having some dutiable goods on board. If she has dutiable goods of any character, no matter where they may come from, and she is found in the territorial waters of Canada within the twelve-mile limit-


William Daum Euler: She must be hovering.


William Gordon Ernst: Let us say that she had to
heave to because of stress of weather, the question arises whether or not she is hovering, and she may be seized unjustifiably. Why not limit the clause to alcoholic liquors?


William Daum Euler: I think the preventive forces will have to be given credit for exercising reasonable discretion in these matters. In my opinion we ought not to make the distinction my hon. friend suggests.


Thomas Cantley: I would cite another case to the minister. A yacht is cruising, your officers may term it hovering within the twelve-mile limit; she has an admiralty warrant, which gives her the right to take out of bond liquor and other dutiable goods; she has these goods on board legally-they are not dutiable; a revenue cutter overhauls the yacht, and according to this section she may be seized and condemned. What is to be done in that case?


William Daum Euler: That would not be cargo at
all, but ships' stores.


Thomas Cantley: The section says that if
dutiable or other goods are found on board the vessel ihall be seized and forfeited.


William Duff: I agree with the hon. member for Queens-Lunenburg (Mr. Ernst) that fishing vessels sometimes anchor off the Nova Scotia coast to pursue their peaceful avocation of catching cod and haddock. Under this section the preventive officers may go aboard, demand the ship's papers, and make a search.

Loan oj 8500,000,000


Mr. VENIOT:: That is an extreme case.
Her clearance papers disclose her status, and if she is engaged in that pursuit the preventive officers cannot accuse her of hovering.


[Stage Direction]
Section agreed to.
Sections 4, 5 and 6 agreed to.
On section 7-Export of deer.
Mr. SIMPSON:: What changes are made
in the regulations with respect to the export of deer?


William Daum Euler: Under the present law citizens of Canada are not permitted, for instance, to export deer hides. It very often happens that there is no market for them in Canada but there is in the United States.
Bill reported.



LOAN OF $500,000,000 REDEMPTION OF LOANS AND PURCHASE OF UNMATURED SECURITIES

[Stage Direction]
Hon. J. A. ROBB (Minister of Finance) moved the second reading of Bill No. 35 to authorize the raising, by way of loan, of certain sums of money for the public service.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Johnston in the chair.
Section 1 agreed to.
On section 2-Loan authorized.
Richard Bedford Bennett: My friend the minister will observe that "the governor in council may, in addition to the sums now remaining unborrowed and negotiable of the loans authorized by parliament by any act heretofore passed, raise by way of loan." With respect to those authorizations, in some instances there is no limitation imposed th^t they Shall be used for the redemption of existing securities; whereas this loan is limited to the proceeds being used for that purpose.
1	simply call his attention to this.


Mr. ROBB:: I quite appreciate it. I do not recall the other authorizations under chapter
2	of 1926.


Richard Bedford Bennett: There are seven or eight of them altogether.


James Alexander Robb: The memorandum I have is that with respect to the loans authorized by chapter 11 of the statutes of 1926 there is still a balance of $131,000,000. I am not sure whether it is limited .to renewals or not; 1 imagine it is; but it is quite understood that this is limited to redemptions.


[Stage Direction]
Section agreed to.
On section 3-Charge upon consolidated revenue fund.
Richard Bedford Bennett: The minister has not given us any information as to how he proposes to utilize this money. Conferring upon the governor in council power to borrow half a billion dollars for the purpose of redeeming existing securities is a very large grant of power without any scheme being submitted.
I had occasion a few days ago to draw attention to the course pursued in England. Whenever it is contemplated by legislation there to retire existing securities, it has always been the custom to formulate a plan, and when the house is in committee the Chancellor of the Exchequer expounds at length the principles which govern in connection with the redemption of outstanding securities or the conversion of existing loans. Now this measure contemplates the possibility of conversion; that is clear. It must mean that. It contemplates the possibility of borrowing $500,000,000, let us say, at 4 per cent for the purpose of retiring existing securities, if they were selling at such a rate as would enable the minister to make money thereby. That is clearly what he has in mind. But the minister has formulated no plans, and it is unusual to ask parliament to grant authority to the governor in council to borrow so considerable a sum, under such circumstances, without some statement of the principles that are to govern with respect to redemption or conversion.


James Alexander Robb: My hon. friend is right. I
explained on the resolution that we had no plan worked out, but that representations had been made to us from time to time by financial houses that money was becoming easier and that we could convert these outstanding loans and get a lower rate of interest. I think I also made it clear-and I want to emphasize this to-day-that the government has no intention whatever of trying in any way to compel the holders of these 1933's and 1934's to part with their securities before maturity. But from time to time these bonds are on the market; there is trading in them all the time. The government therefore believe that they can work out a plan which will enable them to take in these securities at a lower rate of interest, thus; saving that revenue to the Canadian people. Representations have been made to us that in future financing we should provide for a sinking fund so that yearly these maturities might be taken care of. The experience of the department is that some sinking funds we now have are somewhat expensive to administer, as my hon. friend (Sir Henry Drayton), who has been in the Finance department, null agree. But there is a method
Loan oj $500,000,000

of providing for serial or instalment bonds so that we may be able to take care of so much every year. That is what we are doing now with small maturities coming on. In presenting the resolution I stated to the house that we hoped to be able, from now until 1033, to take care out of our revenues of the smaller maturities. As respects this large maturity in 1933 and 1934, however, no one will suggest that it can be taken care of without some refinancing. We will try to work out a plan of refinancing which will be profitable to the people, and we shall be placed in the position where we can get these bonds off the market, with their high rate of interest, and thus save money to the people.
I did not intend to make it public, but I do not mind saying right now that of the maturities coming along this fall-I forget the amount, but I believe it is some fifty million dollars odd-we have bought up a portion which we now have in the government vaults. We are picking them up from day to day whenever we have the money, buying them on a basis that will enable the country, instead of the holders of the bonds, to earn around 4 to 41 per cent.


Mr. SPENCER:: I understood the Minister of Finance to say that he did not intend to pay off any of the bonds due in 1933-34?


James Alexander Robb: I did not say any; I said we
could not take care of all.


Henry Elvins Spencer: I understood the minister to say that he did not intend to go out on the market and force it.


James Alexander Robb: That we did not intend?


Henry Elvins Spencer: What I understood the
minister to say was that he did not intend to buy them before they matured.


James Alexander Robb: Not to force them.


Henry Elvins Spencer: I believe that we have
to-day outstanding over $800,000,000 in tax free bonds.


Richard Bedford Bennett: More than that-a couple of billions.


Henry Elvins Spencer: In view of this very large amount outstanding, and considering the fact that the investors, after all is said and done, have since the war received a very nice return over a number of years, I think it would be in the interest of Canada if some scheme could be carried out whereby these bonds could be bought and any other bond issue made taxable.


James Alexander Robb: They always are.


Henry Elvins Spencer: Although most of these
bonds are. I understand, owned by Canadians,

they are owned by very few Canadians, so that the majority of the people are paying for the privilege which this minority enjoy. It would be in the interests of the mass of the people-probably 85 or 90 per cent of the citizens-if these few, this small minority who have received this great benefit for a number of years since the war were paid off so that everybody would come under the ordinary taxation of the country.


James Alexander Robb: The tax-exempt bonds outstanding are: 1931, five per cent; $52,931,600; 1933, five and a half per cent, $416,658,800; 1937, five and a half per cent, $236,299,850.


Richard Bedford Bennett: And 1934?


James Alexander Robb: That is not tax-exempt. Then there is a five per cent issue of $90,166,900. These are the tax-exempts.


Richard Bedford Bennett: 
James Alexander Robb: The quotation to-day on the
1933's is $104.90.


Richard Bedford Bennett: What is it for the 1937's?


James Alexander Robb: They are selling at $110, tax
free.


Richard Bedford Bennett: Obviously to buy those
at.SHO will make it necessary for the minister to sell securities at a lower yield than 41 per cent, say about 4.10 per cent. When you take into consideration other matters in connection with them the minister would have to sell securities at not more than 4J per cent to be able to buy these other securities, so I cannot see how he can make any money if the market continues as it is at present. Two or three years from now, however, when they begin to go down in price due to the fact that they are nearing maturity-because the price is dependent upon the nearness to maturity in some instances-he might be able to make a little money, but that is the only way I can see in the circumstances.


Henry Lumley Drayton: I believe my hon. friend will not make use of this legislation unless the price readies such a point as will ensure an immediate profit to the country in these transactions; I would assume that to be his underlying policy in this matter. I do think, however, that the minister should take very careful cognizance of the suggestion made by my leader in connection with the right of redemption. Personally I think we are in for lower money rates; we have had no difficulty at all in disposing of very large emissions both in Canada and the United States where the right of retirement is given after the lapse of so many years, at $102, $104
or $106, which is the highest I remember in any single emission of really good securities. That, of course, is extremely valuable in case what I expect does come about; that is, if we have a progressively lowering rate of interest so far as governmental securities are concerned.
During the discussion another point has come up; that is, the danger of these maturities accumulating at any one time. I assume that my hon. friend does not consider issuing all these securities at once, or making them all payable at a certain time; I suppose he will issue them in each instance having regard to two things. First he will consider the way to get the best value for the security at the time it is issued, and then he will bear in mind the dates upon which other payments fall due, in order to avoid that lumping of governmental obligations which would naturally depress the market price.
Then my hon. friend said something about a sinking fund, and I think he is really getting around to that idea. I will admit that it does cost something to administer a sinking fund, but I do not think it is going to cost much more to administer it if we make use of the machinery and personnel we already have. Even if we give them a great deal more work to do I do not think it will cost a great deal more, although of course my hon. friend has to consider several things in connection with that proposition. He has mentioned the sinking fund on the one hand, while on the other he appears to lean more to the alternative that we should sell instalment bonds. I desire to point out to my friend that instalment bonds do not command a price anything like as good as the bonds which are issued for a stated period, and I think he would find that as a rule we would save money by looking after our retirements through a sinking fund, even though it cost a little more, rather than by selling securities at the lower rate which these instalment bonds always carry.


James Alexander Robb: I will keep that in mind. Just before the chairman rises I want to point out one fact in connection with the last long term loan, which was made not very long ago. My hon. friend will be glad to know that we then followed the practice which he has emphasized to-day, of putting in a callable clause operating within ten or fifteen years.


Mr. MATTHEWS:: AVas there a callable clause in the railway bonds issued in 1927?


James Alexander Robb: I could not say; I am talking about the government financing. We have adopted this callable clause.
Loan of S500,000,000


Henry Lumley Drayton: We should have that clause in all the bonds, whether for railways or anything else.


James Alexander Robb: I quite agree.


Henry Elvins Spencer: I think this is probably the best time to draw to the attention of the minister the fact that in December last the government borrowed from the banks on treasury bills to the extent of $48,000.000, I think. The minister will correct me if I am wrong.


Robert Charles Matthews: They borrowed $45.000,000.


Henry Elvins Spencer: They borrowed that money at 4 per cent, and I understand that under the Finance Act these same treasury bills can be bought back by the banks, and that they can get Dominion notes upon them at 3J per cent. In other words, the government borrows from the banks at 4 per cent, and the government loans money back to the banks on the same security at 3f per cent. I would like an explanation of this, if the minister would be good enough to give it.


James Alexander Robb: As a matter of fact, under the Finance Act I think the rate was reduced to 3j per cent, but the banks have not availed themselves of that privilege to any great extent. Of course my hon. friend will understand that to keep the finances of the country sound that sort of thing cannot go on indefinitely, although I admit that it can be done to a limited degree.


Henry Elvins Spencer: The minister will admit
that it does seem extraordinary for the government to pay one-quarter per cent more when they borrow on a security than when they lend on the same security to private institutions.


James Alexander Robb: You must allow them something for administering the affairs of the country; you must remember that the banks pay all these interest coupons and cheques all over the country for the government at par.
Sir HENRY" DRAYTON: My hon. friend is right, and yet perhaps he is wrong. It is not quite fair to say that the government borrow7 on the same security used by the banks; they do not. As a rule the government gives its obligation with no further security, and that is first rate security. When the banks come to the Department of Finance for a loan, they do not give their obligations or anything like that; they give securities in other forms. For instance, when we had the stress on the currency at the time we first stopped the operations of the wheat
[Mr. Bnbb.l
pool, we introduced what are known as prime bills. I thought they made a first rate basis for the emission of currency, and events proved that I was correct. The banks either use those bills or they leave with the government its ow7n securities, such as victory bonds and so on, which are held by the banks. So the situation is not exactly the came. My hon. friend from Battle River (Mr. Spencer) has followed this question very carefully, and he will recall the evidence given before the committee on banking and commerce the other day by Mr. Harding, who pointed out that all these emissions of currency, or emissions of credit one way or the other, have to be controlled by something which would make for an immediate and proper return at the right time, in order to do away with any danger of inflation. All these bank transactions are protected and fortified in that way. For example, when we looked after the financing of the wheat crop, all the emissions at that time which were on a 5 per cent basis, all the extra currency, all the issues had to be retired, because it was manifestly in the interests of the banks to retire them as soon as possible.
Now just one other point in connection *with these loans. The treasury report fixes the rate of interest, at least it ought to fix its rate of interest having regard to the then value of money and the then needs of Canadian commerce. My own view is that the latter consideration is greater than the first, but those are the two great considerations one must always have in mind. The rate of interest was then high and I used to be able to get 5 per cent without any trouble. To-day my hon friend was pointing out that at one time there was a very low rate, only 3J per cent. The reason of that woVild appear to be that at that time the banks could borrow at that rate and even less in New York; and it is just as well for us to keep our banks borrowing money here on perfectly good security, prime bills and the like, against which we issue currency, costing us nothing, and under such terms that the currency must in the very near future be redeemed. It is a question of fighting for the business, and that was the situation, I would imagine, at the time that low rate was got. That would have nothing whatever to do with the rate the government was paid because the times or conditions might not have been at all similar. I apprehend that if at that time the government also had been in the market for money it would have got a lower rate. The fact may be that the rate was higher at that particular juncture.

Pensions and National Health


Henry Elvins Spencer: I would like to remind the minister, Mr. Chairman, that if he is anxious to get money at a cheap rate, he would get very large amounts if he would simply increase the rate on post office savings to 3J to 3i per cent. The accounts having a government guarantee behind them, I have not the slightest doubt that a very large amount of money would be put in the savings banks ana the government could make use of these deposits. This seems to have been simply ignored by those in charge up to the present time. Why the rate is kept down to 3 per cent, when the government is paying anywhere from 4 to 51 per cent, I cannot understand.	.


James Alexander Robb: I am ready to listen to my friend's argument, but the government is not paying anything like 5 or Si per cent. We have paid that in the past but are not now.


Henry Elvins Spencer: I mean in the past. There are some bonds outstanding, I take for granted, that are carrying 5J per cent.


James Alexander Robb: Yes.


Henry Elvins Spencer: If the government expects to borrow at 4 per cent, why not give the rank and file who have some savings or want to make savings, the guarantee of the extra one per cent? Why not!


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house resumed, from April 10, consideration in committee of the following proposed resolution-Hon. Mr. King-Mr. Johnston in the chair:
Resolved, that the Department of Health and of Soldiers' Civil Re-establishment be amalgamated in a single department to be called the Department of National Health and Veterans' Welfare, presided over by a minister of the crown; that the powers and duties of the minister be defined; and provision be made for the appointment of a deputy minister, the making of regulations, and the employment of such other officers, clerks, and employees as may be deemed necessary.
The CHAIRMAN:: The minister moves to strike out the words in the second and third lines:
to be called the Department of National Health and Veterans' Welfare.


Mr. LADNER:: Just what is the change
which the minister has made in that matter?


Hon. J. H. KING (Kootenay, Minister of Health):: I have not changed the name but I propose to strike it out. I suggested the other night in committee that we strike out the 58103-128
name, and then on the second reading of the bill we would be ready for suggestions for the name, and then the name would be inserted. Leave it in blank for the present.


Mr. McGIBBON:: May I ask the minister if it is intended to appoint a separate deputy minister?


Mr. KING (Kootenay):: No.


Peter McGibbon: You are going to amalgamate it under the same deputy ministers?


John Warwick King: Yes.


Peter McGibbon: Will the minister tell us just what will be the advantage on the whole?


John Warwick King: I think the whole amalgamation will be advantageous. I stated the other night that the work of re-establishment, for which the department was primarily organized, was largely past; and to-day the work is -confined pretty much to the administration under the Pension Act and to the treatment in our hospitals, and the care of certain unemployable people in our vetcraft shops, and measures of that character.
I have here some statistics, prepared by the department officials, which will bear out my statement. The total expenditure under the department for the year 1926-27-the figures for the past year, 1927-28, are not quite up to date-is shown as $47,774,371.92.
Administration costs	$ 1,447,127 39
or 3.03 %
Pensions	
37,674,163	50Returned soldiers insurance..	.	778,413	07War service gratuities.... 22,968	72Pensions, administration	fund..	319.836	53Interest on funds	
24,804	80

The balance of $7,507,000 would be applicable to medical care and re-establishment. As regards treatment the expenditures are as
follows:
Hospital treatment	$3,314,269	62Limb factory operation	
211,647	40Capital expenditure	
6,412	30Transportation	
130,035	25Funeral expenses	
25,549	99Shelter employment	
358,517	52Employers' liability	compensation. 65,174	80Treatment, stores purchased.. ..	271,334	09Accounts receivable	
175.458	78Pay and allowances	
2,008.844	80Burial of destitute	
10,000	00Total	$6,577,244	55
Under re-establishment the expenditures are as follows:
Unemployment relief	$376,055	35Transportation of blind	
4.950	87Vocational training	
1,353	55Vocational loans	
1,250	14Federal appeal board	
163,416	01Total	$567,025 92
Pensions and National Health

Or 7.29 per cent of the total. I think that covers the information sought the other night and bears out the statement I made that more than ninety per cent of the work of the department to-day is in the nature of treatment or care of the veterans rather than re-e tablishment. This amalgamation was not gone into hurriedly. It was only in May last that, after some months of observation in the department, I suggested to the government that there should be a reorganization or an amalgamation of the department possibly with the Health department. In making that recommendation to the government, in order that we might have confirmation of my opinion, because one who undertakes to reorganize a department of government or to amalgamate one department with another, undertakes a very responsible and rather difficult task. I suggested to the government that an outside authority should be asked to come into the department and make a survey. Mr. Gordon W. Scott, of the firm of P. S. Ross and Sons of Montreal, was asked to make this survey and he spent some two or three months investigating the work of the department. His report has been tabled and it is now in the hands of the members. He confirms my opinion that an amalgamation could be properly made; that economies could be had, and that the administration would thereby be improved. That is why we are bringing down legislation and asking that it be accepted by the house.


Mr. GEARY:: This is a matter in which
some of us are interested and I hope we may be allowed to listen to the discussion.


John Frederick Johnston: I hope we shall have
better order.


John Warwick King: There should
not be much doubt in the minds of the members, because I find on going back over Hansard that this question of amalgamation has been suggested not only from this side of the house but from the other. In Hansard of June 12, 1925, the hon. member for Yale (Mr. Stirling), who apparently had given very considerable study to the affairs of the department, had this to say, as reported on page 4219:
i\ [y criticism is that this department has outlived its usefulness, and that considerable economies could be effected were it abolished.
And so on. His opinion was to some extent confirmed by another hon. member opposite. I refer to the hon. member for Fort William (Mr. Manion). I cannot just place my hands on his reference, but he commended the hon member for Yale for

having given to much study to this department, and for his speech in reference to it. In 1923 the hon. member for South Wellington (Mr. Guthrie) had this to say, as reported on page 3893 of Hansard:
As we are drawing into the fifth or sixth year since the conclusion of actual hostilities, the time is coming for a consolidation of some of the departments of government, and the one which is due first for consolidation is, I think, the Department of Soldiers' Civil Re-establishment.
And he goes on. So the subject is not a new one to the members of the house nor to the members of the government.


Mr. ESLING:: Did the Prime Minister himself not suggest in 1926 that the two departments under discussion should be consolidated with some other department He thought they were running so smoothly there was no necessity for further expenditures in that connection.


John Warwick King: I have not the
reference to the Prime Minister's speech in 1926 or 1927, but there is no doubt that the matter has been considered for some time and I believe a consolidation such as we have undertaken will be advantageous to the service that is being rendered by those departments.
The name of the department seemed to be the chief contention the other night. The government are not wedded to any particular name. What we are desirous of having is a name that will indicate the activities of the two departments. Since the resolution was last in committee several suggestions have been made as to names, and I might cite them:
Department of Pensions and Health.
Department of National Health and Pensions.
Department of National-Health and Veterans.
Department of National Health and Veterans' Services.
Department of National Health and Veterans' Affairs.
The hon. member for Vancouver South (Mr. Ladner) suggested the other night the name "veterans' affairs". I am not wedded to any one name and I am open for suggestions when the bill comes up for second reading. I want merely to have a name that will properly designate the activities of the combined departments.


Mr. CLARK:: I do not think the chief
concern on this side is with the question of the name. We are, however, concerned with the name if the amalgamation is to take place. I think the hon. member for Fort William (Mr. Manion) suggested a name which the minister did not mention to-day. He suggested the department of soldie'

Pensions and National Health
re-establishment and health. Another name that has just occurred to me is the department of soldiers' problems and health. The question is not so much one of re-establish-jnent details as one of problems. There are a number of suggestions that might be considered, for instance, "soldier problems and health".


John Warwick King: May I ask if my
hon. friend prefers the word "soldiers" to "veterans"?


John Arthur Clark: I do, yes, decidedly. I am
not wedded to the word "veteran." These are returned soldier problems, and the phrase that we are most familiar with and which is most commonly used among those who served overseas is returned soldiers. Therefore, I think "soldier problems" would be best adapted to the situation to-day. But the chief concern at the moment is that some concrete evidence be presented as to the increased efficiency that is going to result from this amalgamation. What increased efficiency will there be? If there is to be any, I think the minister will find support from this side of the house. And if there is to be increased efficiency, the next concern is economy. We would like to know what those economies, if any, will be.


John Warwick King: In regard to the
economies to be effected, they will come about in administration, largely through centralising the auditing, registration and accounting sys-st.ems. We know that there will be a very considerable saving there. The units themselves have not been reorganized, but the question is being carefully considered with a view to making economies, and improving the organization of these units where possible. That is a matter that cannot be done hurriedly. It requires the very careful consideration of each individual unit with a view to bringing about an organization that will coordinate in the various functions. I think we can bring about a better condition than has existed.


Peter McGibbon: Like the hon. member
for Yancouver-Burrard, I am not very particular about the name, but I am particular about having an organization with some life in it. There can be only one effect of this amalgamation, and that is the uniting of the soldiers' department to. a department that is a corpse, nothing more or less. If the Department of Health during its seven or eight years of existence had in any respect led us to believe that it ever could do anything I would not object so much, but I have been studying the working of that department now 56103-128J
for some years and I cannot find anything it has done that was not equally well done before.


John Warwick King: That is not fair.


Peter McGibbon: I have read the minister's reports and I have waited patiently year after year when his estimates came down for an explanation from him of what his department had done, but he has always very diligently sought not to tell us. I repeat that the effect of this amalgamation is the wiping out of the soldiers' department by tying it up^ to another department which is no more than a political corpse. What is the reason for doing that? Is it because the Department, of Health has nothing to do? Or is it because there is nothing to be done for the returned soldiers? It must be the one or the other. If there is anything to justify the existence of the Department of Health, it must surely have something to do, and if it has enough to do it should not have a large and important department like the soldiers' department tacked on to it under the same deputy minister, and the same staff I presume, all the way through-a staff, the qualification of which is qualified to deal with soldier problems I doubt very much. The minister himself after presiding over this department for some years admits that he has to go outside of the department and get a chartered accountant to tell him something about it.


John Warwick King: Very wise, too.


Peter McGibbon: The minister ought to
know his department by this time, having been in it for several years.


Mr. RALSTON:: How long?


Peter McGibbon: If hon. members on that side have not anyone who can master it in a few months, I can pick out a dozen over here who could do so.
In the first place, Mr. Chairman, I object to the soldiers' department being wiped out. I am not averse to creating a department that will be wholly concerned with the returned soldiers. You have your land settlement scheme, which the government have very conveniently dropped so far as the soldiers are concerned, but which I think ought to be revived in the interest of this country. Then again, those of us who have been sitting on the pension committee know that there are innumerable problems coming up all the time. Our advice from the officials appearing before that committee is that these problems are going to increase, and at the very moment when they are on the verge of increasing and giving us a lot of difficulty, the whole soldiers' department is to be wiped out.
Pensions and National Health


John Warwick King: No.
Mr. MeGIBBON:	I say it is wiped out.
It is fundamentally changed and absorbed into another department. That is obvious from the very fact that you are putting the soldiers' department under another deputy minister who will be the executive head. The minister is making a mistake, and so far as I am concerned I am going to oppose the change.


Mr. ROSS (Kingston):: This bill might well be called the narcotic bill, because it is intended to put to sleep, if not put out of business, the soldiers' department. Personally I object to an amalgamation which makes the soldiers' department subordinate to any other department. I do not care how many departments you tack on to the soldiers' department, but I object to making it secondary to any other. I have no objection to the deputy minister of health being made the deputy minister of the soldiers' department, because he is a good man with considerable experience, and perhaps there is no one better qualified. Secondly, I object to the name, "national health and soldiers' welfare". That smacks too much of the child welfare movement, and suggests that it is just about of the same importance. The minister has failed to give us any reasons for this amalgamation. Would he tell us, to begin with, of any one section of the Soldiers' Civil Re-establishment Department that is being wiped out? Perhaps the one nearest to it would be the workshops, but if the minister had been in the committee this morning he would have come to the conclusion that there is more necessity for the workshops movement to-day than ever before.


John Warwick King: I am familiar
with that.


Arthur Edward Ross: The minister also
says that there may be changes in the financing and accounting systems. Has the Department of Health any branch that can do that work? Then in connection with the work of re-establishment-


John Warwick King: My hon. friend
is under a misapprehension. I stated very definitely the other night that this section would remain distinct, and operate on the lines along which has hitherto proceeded.


Arthur Edward Ross: Then why not leave it alone? I do not care how many departments you amalgamate with the Soldiers' Civil Re-establishment, but what we do object to is that this important department should be tacked on to the Department of Health. The Soldiers' Civil Re-establishment Depart-
TMr. McGibbon.]
ment is more important than the Department of Health, and if the minister would consider it in that light perhaps there would not be as much objection. What does the minister expect to accomplish in the way of economy and efficiency by wiping out the Department of Soldiers' Civil Re-estaiblishment? I do not care for the report of Mr. Scott or anyone else; we all recognize the fact that changes could be made. Put Mr. Scott in any other department of government and he might well make a similar report. What benefits or economies will be effected by this change?


John Warwick King: My hon. friend was informed a few moments ago that considerable economy had already been effected in the internal organization of the Ottawa branch by centralizing our auditing, registration and accounting systems. That will be evident when my estimates are before the house, for I shall then move for their reduction. The reorganization beyond the central department has not yet been completed. It will be carried out by officers of the department after careful investigation. The suggestion that the organization which has been dealing with the soldiers' affairs will be wiped out is not fair and cannot be attributed to anything that I have said; in fact my remarks have all been to the contrary; and there is very littlle use in trying to create that impression. For many years to come we know there will have to be an organization to deal with the problems to which my hon. friend from Vancouver-Burrard (Mr. Clark) referred. They are soldier problems.
As to the proposed amalgamation, I have quoted authorities from my hon. friends opposite in support of it. Only two or three years ago the then leader of the Conservative party intimated that the department should be done away with, and there have been other suggestions from all sides of the house that it might well be amalgamated with another department. My observations convinced me of the wisdom of this course, and my judgment has since been confirmed by an independent audit.


Arthur Edward Ross: I do not think the minister has added to our information; all he says is that the registration office and another section will be combined. That is no argument for the proposed amalgamation. Two or three years ago I suggested that the department itself might well consolidate two or three of its sections; but I cannot understand why the soldiers' department should be placed under the Health department in order to bring together a couple of sections within the department, itself. I still think that the amalgamation is all right in principle, but I

Pensions and National Health
fail to see any reason for putting the Soldiers' Civil Re-establishment department under the Health department. The minister's idea was that a rose by any other name would smell as sweet. Well, whether you call it a rose, a leek, or any other name, I would remind the minister that something goes along with the name. The mere fact that two or three members who are not returned men made certain suggestions does not necessarily make those suggestions of any greater value than if they proceeded from returned men. I think any returned man will say that the proposed title is destructive of the idea of sympathy which we all entertain for our returned soldiers.


James Layton Ralston: Probably the apprehensions of my hon. friends are due to the fact that they are still discussing the title of the amalgamated department. As I understand, my colleague has already moved an amendment to the resolution whereby the name is to be left over for further consideration.


Peter McGibbon: We are not objecting
to that.


James Layton Ralston: At the same time I feel
sure that he and his friends have that in the back of their heads, if they will permit me to say so. This must be so when it is suggested that the veterans' department is to be wiped out, because the resolution does not so provide.


Peter McGibbon: The minister himself
admitted that it is to be put under the Health department.


James Layton Ralston: I beg my hon. friend's
pardon; nobody has admitted anything of the kind. The resolution provides that there is to be an amalgamation of the two departments. The Department of Health happens to be mentioned first. If the Department of Soldiers' Civil Re-establishment had been mentioned first, I suppose my hon. friend would have claimed that it was swallowing up the Department of Health. As I understand it, the activities of the Health department will carry on, and the activities of the department which was known as the Department of Soldiers' Civil Re-establishment

which perhaps is no longer an accurate title-will also carry on. According to the report submitted to the hon. minister, there will be a saving of administration expenses, and he has already intimated that his estimates will show a reduction. So far as economy is concerned, it seems to me that that ought to satisfy my hon. friends, for the present at least.
The two departments are made into one, but, I repeat, the veterans' department is not
to be wiped out. So far as I am concerned, I am perfectly happy to have the names of the departments reversed, so that the soldier activities should be mentioned first in the title and the health activities second. One or the other must be mentioned first; you cannot mention both in the same breath. I think such a change should at least remove the objection that the soldiers' department will be wiped out. While listening to the discussion it seemed to me that the title Department of Pensions and Health would meet all the objections which have been made on this score. In England the department which administers soldiers' affairs is called the Ministry of Pensions. Someone may say that that does not include treatment. Biit the point is that treatment is only ancillary to pensions. You treat a man in hospital in order that he may be cured of his disability so far as possible and his pension reduced if he gets into a better physical state. Therefore I think the word "pensions" will cover the general activities in regard to ex-service men.
I disagree with my hon. friend from Van-couver-Burrard-with whom I am generally in accord on soldier matters-in suggesting that the word "soldiers" be retained. I do not think the ex-service man wants to be still regarded as a soldier. The department over which I happen to preside has to do with soldier matters, and it seems to me there will be some difficulty in the public mind if you have two departments, both apparently having to do with military affairs. The word " re-establishment " is also equally inappropriate in view of the fact that re-establishment in so far as it refers to land settlement, vocational training and so on, has been largely done away with. Therefore I think the time is come when the department may well be called by the name which best expresses its activities- the Department of Pensions. Whether the title be the Department of Health and Pensions, the Department of National Health and Pensions, or the Department of Pensions and National Health. I do not think makes the least difference. The ex-service man will not be very much concerned with the discussion we are now having as to the title of the amalgamated department; he wants to be assured that his difficulties and problems will be squarely faced; and the minister assures us that will be done. I think hon. gentlemen who have listened to the evidence which has been given before the special committee this session have realized that the officials of the department are alive to the interests of the ex-service men, and are endeavouring to do their duty in that respect. These officials will
Pensions and National Health

be the officials of the pension side of the new department and will proceed to carry on in the same way. Let us get out of our minds the obsession in regard to the name, and realize that we are dealing with a resolution that contemplates the amalgamation of two departments, preserving the activities of both but under one head. After all, it is just the same as it was previously, because my hon. friend has been minister of both departments and there is no difference m administration. It seems to me that we shall be able to think a little more clearly-if I may say this without offence-and get along with the real question in hand if we do not concentrate so much on the name. The important thing is what will be involved in the matters that will come up as a result of the report of the committee.


Leon Johnson Ladner: Will there be two deputies or one?


John Warwick King: One.


James Layton Ralston: Let us disabuse our minds of the idea that the soldiers department will be wiped out. I do not think my hon. friends want to be unfair, nor do they want the country to get any such impression. I believe that if they will read the resolution carefully, and listen to the explanation of the minister, they will offer no objection, because nothing is further from the fact than the thought that the activities now carried on in the interests of the ex-service men will be abandoned or in any way curtailed. I do not want to review the matter to-day; some time I may do so. But the activities of the past four or five years, and the legislation that has been passed in that time, will convince this committee and the country, I think, that there has been a real appreciation of the problems of the soldiers and an endeavour to improve in every possible way by legislation the situation as we have it.


Leon Johnson Ladner: The minister mentioned a short time ago, in connection with the question of names, that my suggestion was. "national health and veterans' affairs". The suggestion which I made at the inception of this discussion was "soldiers' affairs", but the Minister of National Defence has rather convinced me that "soldiers' affairs" would be better replaced by "veterans' affairs", in view of the fact that his department also covers soldier activities in the sense of dealing with men in active service at the present time. I suggest therefore that the name should be the "Department of Veterans' Affairs and National Health". I think that veterans' affairs should come first: it is veterans' matters with which we are dealing, as the Min-
[Mr. Ralston.!
ister of National Defence has pointed out. The question of national health should come second. I agree with the Minister of Health that the word "national" has a place. Some of my colleagues here have considered it wise inasmuch as there are departments of agriculture and of health in the provinces. The only purpose of and advantage in using the word "national" in this connection is that it would be a clear indication to people at large that this was a federal department. Some years ago in Vancouver there was a soldier settlement board and a department of the provincial government-I have forgoten its exact designation-with a similar name, and this made for some confusion.


John Warwick King: Land settlement.


Leon Johnson Ladner: My suggestion is, therefore, that the title should be "Department of Veterans' Affairs and National Health".


Mr. MARCIL:: It has been my experience
in this house over many years that nothing is so pleasant as the announcement that some department will be amalgamated with another, while there is nothing the house dreads so much as the creation of a new department. It is an old standing grievance that we have too many departments, and I have heard many complaints from both political parties on that score, accordingly as they sat to the right or to the left of the Speaker. The argument has been always the same. So far as the soldiers are concerned, they objected strenuously' not long ago to being linked up with the Department of National Defence, on the ground that they were no longer soldiers and wished therefore to be treated as civilians. Now there is something in having a brief name for the departmeni ; a long name is quite unnecessary. It strikes me that if the word " welfare " is going to be retained the title of the department should be simple and brief:	" Department of
National Welfare". I suggest this in view of the fact that the departments of Customs and Excise have been called the Department of National Revenue. If you are going to call it the department of health and veterans, very well; but why add the word "welfare"? If you want to summarize the name, make it as brief as possible and call it the Department of National Welfare.


Sir EUGENE FISET:: Will you please
translate that into French so that we may see what it looks like?


Charles Marcil: It would be "Le departernent du Bien-etre national". There is nothing to be gained by having a long name for

Pensions and National Health
the department. The suggestion of the Minister of National Defence, of "Pensions and Health", might also be recommended on the ground intimated, that the name of a department .should indicate its activities as far as possible.
I think the government should be congratulated on the attempt which is being made to amalgamate our departments so far as this is deemed wise, because the cost of civil government in this country has been increasing at an enormous rate. If hon. members want to get an idea of what government now costs, they should go back to the estimates that used to be presented in this house thirty years ago. That would open their eyes, and I do not think, in the light of the comparison, that they would object to this amalgamation. If dollars are to be saved the country by this amalgamation, efficiency being promoted at the same time, the proposal should receive the support of the house. Economy is particularly necessary in the administration of the affairs of the country at this time owing to the enormous burdens we have to bear and the great problems we have to face.


Peter McGibbon: I am glad to hear one
voice in the wilderness over there preaching economy; it is the first one I have heard this session from that side. In reply to the Minister of National Defence I wish to say this: my objection is not to the name at all; I have tried to make that clear. I object to the soldiers' department being united with the Department of Health in any shape or form.


James Layton Ralston: Would you object to the Department of Health being united to the soldiers' department?


Peter McGibbon: Yes, equally. I claim
there are soldier problems enough in this country to justify retaining the department. You might combine pensions, land settlement and soldier problems, which we are discussing every day in the committee. We were told oniy this morning in the committee that there were 2,000 problems cases before the country to-day, registered, and the opinion was that these did not constitute any large percentage of the total. They did not think for a moment that the cases were all registered.


James Layton Ralston: Those are pension cases.


Peter McGibbon: They are problem cases, including both pensions and other matters. They are problem cases which the department must look after, and everyone knows that they will increase as the days go by. Now
what are you doing? You are taking the deputy minister from the Department of Health and putting him in charge of the whole thing. He is to be the business head, notwithstanding that he has never been associated for a moment with the soldiers' department. Ten years after the war you are taking the head of some department other than that concerned with the soldiers and putting him over the amalgamated department?. Your deputy minister should be one who has been in touch with these problems all along. Surely there are in the present department men who have been in touch right along with these soldier problems, with seven or eight years' experience behind them. Then there is the pensions committee, with all its ramifications; and you have the soldier land settlement board, which could be brought under; it deals with soldier problems.


James Layton Ralston: My hon. friend does not
want any more brought in?


Peter McGibbon: I presume the theory
is that the department has not enough work. If you amalgamate all the soldier activities there will be plenty of work, and I think there is plenty now.


Charles Marcil: Would the veterans like to be linked up with the Department of National Defence as far as pensions are concerned? I think they would strenuously object.


Peter McGibbon: I was not discussing the Department of National Defence.


Charles Marcil: I understood the hon. member to say he wanted all soldier activities under the Department of National Defence.


Peter McGibbon: I was refering to returned soldiers' problems, and I think these problems are going to increase and become more acute as the years go by. There is bound to be some interlocking between the work of these different departments such as the Pension board and the present Department of Soldiers' Civil Re-establishment, and this interlocking will become more apparent in the future. Problems will come up then which we do not face now; disabilities will increase as the men get older, and as I have already said in this house there are a large number of additional diseases breaking out. A regular wave of insanity is sweeping over this country which everyone knows is the result of w'ar service but which cannot be definitely connected up with it. That, is a problem which is bound to become more acute, and I believe there is plenty of work in all the departments dealing with returned soldiers to keep the deputy minister and his staff busy. I do object to
Pensions and National Health

having this work united with the work of the Department of Health; I think it needs a live organization and a deputy minister who has been connected with it for the past ten years.


Mr. POWER:: I had not intended to take
part in the discussion of the principle of this matter, because I do not think it is of very much importance to the returned soldier by what name the department is called. Personally I do not care what they call it so long as they keep on giving the service they have given for the past few years. However, I cannot believe that the hon. member (Mr. McGibbon) really understands the purpose of this bill. He has been telling us that he objects to having the Department of Soldiers' Civil Re-establishment tacked on to the Department of Health.


Peter McGibbon: Or vice versa.


Charles Gavan Power: He does not want the Department of Health to have anything to do with the Department of Soldiers' Civil Reestablishment; but surely he knows that the two departments have been under the one head for eight years or more. The objection of the hon. member, therefore, must be to the deputy, but I am sure he must be aware that the present deputy minister of health, who will be the executive head of the amalgamated departments, is Doctor Amyot, who had a magnificent war record overseas and who among all our physicians who served in France was particularly distinguished. So he is well aware of the problems of the returned soldier. If we should have a returned soldier as deputy minister of this department I submit that he should be a medical man as well, who can look on all these questions from both points of view.


Peter McGibbon: I am not criticizing
Doctor Amyot in the least, but does my hon. friend know the position he occupied overseas?


Charles Gavan Power: I am not quite sure, but I
believe he was either an A.D.M.S. or a D.D.M.S.


Peter McGibbon: He was engaged in
sanitation work.


Charles Gavan Power: I know he had a high executive position. He may have been dealing with sanitation also, but if the hon. member wishes me to do so I will look up his record, or will ask the minister to do so.


Peter McGibbon: Oh, no.


Charles Gavan Power: So the only objection we have had so far is that these two departments are to have the same deputy minister, but

the hon. member must be aware of the fact that all the higher officials of the Department of Soldiers' Civil Re-establishment are to remain in that department.


Peter McGibbon: I do not like to interrupt, but my point is that we should have a deputy who has been conversant with this work for at least the last ten years.


Charles Gavan Power: I have no doubt that the next deputy minister of that department wili be someone who has been conversant with the work for ten years, but at present that position is vacant, and in order to fill it a new man would have to be appointed. In that case a man would have to be taken from the Department of Soldiers' Civil Reestablishment, which doubtless would meet with some objection from hon. members opposite who have constantly criticized that department; or we would have to take an outside man with no experience. If we must take an outside man I see no reason why we should not take a soldier with a distinguished overseas record, who knows something of medical matters as well.
The suggestion has been made by the minister that the bill based upon this resolution should be referred to the committee dealing with pensions and returned soldier problems, and to that suggestion I wish to object most strenuously. I have no desire to exaggerate the amount of work which is before that committee at present, but we have been sitting almost every day since the opening of the session. We have heard innumerable witnesses; the evidence we have heard covers some 800 or 900 pages, which we have to wade through before we can make a report. We have had suggestions and submissions with regard to pensions, and I also happen to have with me a list of the subjects which have been brought before this committee. They are as follows: Pensions; civil service preference; employment of returned soldiers; grave markers; returned soldiers' insurance; last post fund; medical examination and treatment; returned soldiers' advisers; old age pensions; Victoria Cross veterans; housing schemes; indigent veterans; soldier settlement boards; vetcraft shops, and recently the Minister of National Defence referred to this committee a bill dealing with canteen funds.


Peter McGibbon: Does not the hon. member think that is enough work for one department?


Charles Gavan Power: I am quite sure it is enough for one department, but it would not hurt to add the little work which the doctors of this country would give. We have all that work before the committee, and although I

Pensions and National Health
do not wish to make that work appear unduly important lest when the report is brought down someone may say, "Parturiunt montes, nascetur ridiculus mus", I think we have enough work to keep us busy until the end of the session. There is this further point, that hitherto in this house matters relating to returned soldiers such as pensions and so on have been dealt with in an impartial, nonpartisan manner. It has been shown clearly that this question of amalgamation is a matter of government policy; perhaps otherwise there would not be so much opposition to it. If a matter of government policy is brought before this committee it is likely to be opposed or upheld on grounds not unconnected with political partisanship, and I believe it very important that the discussion of matters which relate to the welfare of our returned soldiers should be free from even a suspicion of partisanship. I therefore ask the members of the house not to refer this bill or any question arising out of it to the committee on pensions and returned soldiers problems.


John Arthur Clark: I certainly agree with the
member for Quebec South (Mr. Power) that the committee which is at present sitting is loaded with work; and I should like also at this moment to pay a tribute to the work of the chairman of that committee, who has been there daily and has been indefatigable in his efforts. It struck me when he read the list 'of matters which are being dealt with by that committee that there must be work for at least one department; and it also struck me that perhaps there is nothing so important as the organization of that department. I am not so sure that the committee which is now sitting is not perhaps the best qualified of all the bodies at present functioning to give consideration to the method and manner of organization of this particular department.
As I have said before, and I have said it repeatedly, I am not quibbing over a name; but I want to be convinced that there is going to be some increased efficiency and some real economy. I have not heard anything which would give any indication of that, except the minister's statement that when the estimates comes up he will move for a reduction; but he does not give us any idea of what will be the nature or extent of that measure of economy. The Minister of National Defence said that things would be just as they are-I think I am quoting him correctly-[DOT]


James Layton Ralston: That the same service
will be carried on.


John Arthur Clark: Then I would say if they
are going to be just as they are, the only
thing we are doing here is to change the name; and if that is the only job we have it seems to me we are wasting a lot of time. We might just as well-


James Layton Ralston: Will my hon. friend permit me? When I said that, I called attention to the statement which had been made by the minister with regard to the reduction, and also the report as to the saving in administration expenses.


John Arthur Clark: I mentioned that, and I
say that is the only reason, so far as I can see, which has been given for the change. But there has been no indication as to what those reductions will be, what will be the saving, and what will be the increased efficiency. If they are to be just as they are,
I conceive that the department is going_ to operate with the organization as it exists, and there would be very little advantage except that there will be one deputy minister instead of two; and there has been one minister for the past eight years, as has been indicated. The only change, so far as I can observe, is one deputy minister instead of two. Well, there is some economy, I suppose; but the member for Quebec South has stated there is a tremendous number of problems to be dealt with; and the question is can they be dealt with efficiently by one deputy head? Judging from the amount of work which this committee has before it, I question whether it can be done efficiently. We would like some conclusive evidence that there is to be increased efficiency, something more than a mere change to one deputy head where there were two, and something more than the mere change of name.
So far as the name is concerned, some names have been mentioned to which I do object so much, though I do net consider the name of any great importance. The name the minister suggested is simple and I think applicable, and so far as I am concerned personally I would be prepared to support it. I do not see, however, wrhy he should object to 11 soldier problems" or "soldier reestablishment ". Every man who served is known as a returned soldier and is proud of it; he speaks of himself as a returned soldier and will be known and will speak of himself as such until the day he dies. So that I think the words " returned soldier " will always be in use when we are speaking of the men who served during the great war.


Thomas Cantley: My objection to the explanation given by the minister has been that apparently he is subordinating soldier services to that of health. I submit that the name he announced and the explanation he offered left
Pensions and National Health

that impression upon me and upon others, particularly on this side of the house, and will undoubtedly leave that impression throughout the country. Without criticizing the minister, I would point out that naturally the minister looks at these matters of health as the most, important as between the two departments. All the explanations he has given have rather confirmed me in the idea that the first element in this whole question as it presents itself to his mind is that of what he calls national health. Now, I submit that that is not the important thing. The important thing is to look after our soldiers. The problems in connection with returned soldiers are getting more complex as the years go on. I think all will admit that. I know many cases in my own county which have developed within the last two or three years, and have developed in a way and in numbers and of a character that I fancy was not contemplated by anybody three or four or five years ago. I am sure the Minister of National Defence will agree that that is by far the most important side of what is proposed to be combined under one department. I am afraid that the minister (Mr. King, Kootenay) does not realize that, and is not in full sympathy with that side of the question.


John Warwick King: My hon. friend
should not say that. It is not a fair statement-that I am not in sympathy.


Thomas Cantley: Possibly I did not make myself sufficiently clear. What I wished to point out is this, that I think his first love is with the medical side. I am not at all blaming him for that. Consciously or unconsciously, I think that would be true, and I am not blaming him for it. I may be wrong, but he is a medical man, and I think that is the part of the combined department which would appeal most to him. The last thing I would think of doing would be to do the minister any injustice so far as his view of the matter is concerned. But the main point is that we should make sufficient provision for the disabled soldiers. We do not yet know how many of them there are. Each month and each year develops new difficulties in connection with returned men. The problems are becoming greater, not less, and it will continue to be so for some little time-how long,
I do not know; but the experience of the last four or five years has been such as to support that view. I do not think any satisfactory reason has been given for the amalgamation. We do not take seriously on this side of the house the idea that the consideration of economy is what prompted the change. 
As I said at the outset, the name suggested gives the impression that the soldier problem is the one of least importance, while on the other hand I consider it by far the one of the greatest importance.


Mr. SPEAKMAN:: Mr. Chairman, although not myself a returned soldier, I have been closely associated with their affairs during the past few years, and from my point of view the proposed change may be beneficial in its effects. We have heard a good deal uf criticism as to the cost of administration of the department as compared with the money actually paid to the men themselves. The opinion has been expressed that too great a proportion of the vote has been spent in administrative costs. This change, if carried out properly, will I think reduce that proportion; it will enable us to decrease the appropriation to some extent without affecting adversely the returned men. In other words it will increase the amount spent directly for the benefit of the returned men and decrease the expenditure for administrative purposes. So far I think the change is well warranted and will have beneficial results.
There are one or two dangers to be guarded against. The first is that the department of soldiers' affairs, or whatever it may be called, should be made subordinate or minimized by the amalgamation. It is our opinion in this corner; it is my opinion very strongly that that will be the heaviest and most important end of the work for a long time to come; that the greatest stress will have to be placed upon that work, and that anything which would minimize the importance of that work should be deprecated. But I fail to see that an amalgamation, if properly organized and carried out, would have that effect. If an amalgamation is to take place, I can conceive of no more proper department for the amalgamation than that of Health, because a great deal of the work in connection with soldiers' problems deals with medical examination, or in other words with health. The basis of all the assistance which we are obliged tc give, the basis of all the pensions which are earned is the question of health and physical disability and the question of medical opinion, and if there is one department more than another which could be attached to the department of soldiers' affairs it would rightly be that of Health. I am- not sufficiently well acquainted with the internal economy of the two departments to be able to say what the saving would be; but I believe it might be of such an amount as to be well worthy of consideration, and I am prepared to support the amalgamation as long as it is apparent, through

Pensions and National Health
the bill which will present the details of that amalgamation, that the necessities and problems of the returned men will be kept to the front and will not in any way be ignored or minimized.
As regards the name, I must confess that I am not very much interested except to this extent: once we adopt the principle that the department of soldiers' affairs, or problems, or whatever you like to call it, is the important end of the work, the name should advertise that principle to the country so that there will be, in the minds of the returned men themselves, no misconception as to the amalgamation. That is why I attach importance to the name-not because the name itself will make any difference to the work done, but because of the moral effect of the name upon the men affected. As so many names have been already suggested I am not going to suggest another. Granting those two premises, first, that the soldiers' problems will be kept to the front; that their importance will be recognized; that the growing importance and scope of the problems will be realized; second, that, the organization will be of such a character that that work will come first, and third, if I may add another, that the name decided upon will be one which will give to the country and the returned men the proper impression of the amalgamation which is to be effected, I am prepared to support the amalgamation.


Peter McGibbon: Possibly the minister
can now give us a little information. He tells us that when the estimates come down he is going to ask for a reduction. How much will that be?


John Warwick King: That will be determined by the time the estimates come down.


Peter McGibbon: The minister has stated
that he intends to ask for a reduction.


John Warwick King: The matter is
being gone into very carefully by the departmental officials and I have been advised by them that they will be able to submit to a reduction arising out of the amalgamation.


Peter McGibbon: Surely the minister does not mean to say that he is coming here asking for an amalgamation and he does not know whether the reduction will be ten dollars or ten thousand?


John Warwick King: I do not think
my hon. friend is serious when he suggests that.


Peter McGibbon: I am serious to this
extent, that I think the minister should have some idea of the amount.


John Warwick King: We shall have
some idea.


Peter McGibbon: I am asking what it is.


John Warwick King: I am suggesting
to my hon. friend that there will be a substantial reduction, and I think that is as far as I should be asked to go at this time. The estimates will be before the house very shortly. I have asked for a statement from my officials. That is being prepared and at the proper time it will be given to the house.


Peter McGibbon: It is almost incredible
that a minister of the crown should come before the Hou e of Commons with a resolution of this kind and yet have no information at all except that his officials told him that there would be a substantial reduction. Surely he is not serious. Surely his officials have given him a faint idea within a few thousand or five or ten thousand dollars. If he has no idea, I will let the matter go at that. How many officials are to be let out?


John Warwick King: That has not been decided. It will depend upon the reorganization and the requirements of the department.


Peter McGibbon: What will become of
the Deputy Minister of Health?


John Warwick King: The Deputy Minister of Health will continue to be the Deputy Minister of Health.


Peter McGibbon: What about the Assistant Deputy Minister of Health?


John Warwick King: He will continue
to be the Assistant Deputy Minister of Health.


Peter McGibbon: What about the Assistant Deputy Minister of Soldiers' Civil Reestablishment?


John Warwick King: An appointment has been made to that position in the person of Mr. J. W. McKee.


Peter McGibbon: I assume this economy
the minister is speaking of will come through better organization. That means decreased salaries or the elimination of some officials?


John Warwick King: If they are not
required, yes.


Peter McGibbon: Could the minister give us any idea who would be let out and about what number?


John Warwick King: No.


Peter McGibbon: Then I submit the minister is asking too much from the House of Commons. He comes here and he can tell
Pensions and National Health

us practically nothing. Not a single intelligent answer, I say with all due respect, has he given this afternoon.


Charles Gavan Power: That depends upon the
quality of the question.


Peter McGibbon: I will let the hon. member for Quebec South ask a question and we will see if he will be better off. We have received only one statement from the minister in justification of this resolution and that is that his officials have told him a certain amount of economy will result. We do not know how much it is. We do not know what it is based upon. We do not know whether it is to be secured by letting out returned soldiers from positions which they occupy at present, as has been done by the minister in the last few months. How is he going to carry out this reorganization? I think the minister should answer the question.


Mr. ADSHEAD:: I fully appreciate what the hon. member for Red Deer (Mr. Speak-man) said. He exactly expresses the views of those present in this corner of the house. I would like to ask whether the deputy minister will be a returned soldier who is fully acquainted with the returned soldier problems, because in my opinion such a man should be the dominant figure in this new department.


James Layton Ralston: He will be a returned soldier with a very broad and excellent experience.


Peter McGibbon: Did I not understand the minister to say a while ago that the present deputy minister is going to be the deputy minister of the new department?


James Layton Ralston: That is right.


Peter McGibbon: That is settled?


James Layton Ralston: Yes.
Resolution reported, read the second time and concurred in. Mr. King (Kootenay) thereupon moved for leave to introduce bill No. 205, respecting the Department of Health and of Soldiers' Civil Re-establishment.
Motion agreed to and bill read the first time.



MILITIA PENSION ACT AMENDMENT

[Stage Direction]
Hon. J. L. RALSTON (Minister of National Defence) moved the second reading of bill No. 197, to amend the Militia Pension Act.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Johnston in the chair.
[Mr. McGibbon.}
On section 1-reservations from salary treated as deductions.
Richard Bedford Bennett: If the amounts were different, it could not be said that the dededuction in the one case would be treated as a payment on account of superannuation in the other.


James Layton Ralston: It is 5 per cent in both cases. As I explained to the committee the other day, all that is being done here is to substitute the title of the present Civil Service Superannuation Act for the title of the act which has been in force for so long a time.


[Stage Direction]
Section agreed to.
On section 2-Time served in public service reckoned in term of service.
Richard Bedford Bennett: Any change in that except the title?


James Layton Ralston: No.


[Stage Direction]
Section agreed to.
On section 3-Officers' service in R.C.M.P.
John Arthur Clark: Does this deal with the long standing complaint of the veterans of the Royal Canadian Mounted Police?


James Layton Ralston: It does deal with a few. I do not know about a long standing complaint. There has been a question for a long time as to whether or not time served by an officer in the Royal Canadian Mounted Police as a constable counted towards pension; I think that is what my hon. friend is referring to, and a very distinguished predecessor of mine gave an assurance at one time that it did count. As a matter of fact, the Department of Justice considers that it does not, and this is being introduced for the purpose of making the point clear.


Richard Bedford Bennett: There are certain other matters in connection with the veterans of the mounted police, but I suppose they have to be taken up under the Mounted Police Act. The Minister of Justice is familiar with the circumstances and with the claims that have been set up by the veterans of the mounted police, and now that we are changing this law to make it clear that the time served by an officer as a constable shall count, which I think is a very proper amendment, and was understood to be the basis of their pension by those who thus served, perhaps the Minister of Justice, not because it arises out of this bill, but because it touches a point that sooner or later will have to be dealt with, would indicate whether or not the government has concluded to meet the wishes of the veterans of the mounted police with respect

Militia Pension Act
to pension or otherwise. That is the question to which my hon. friend from Vancouver-Burrard has referred.


Ernest Lapointe: I thought we had met the demands of these veterans to a large extent two years ago. I know that there are still other claims, and they are being considered.


Richard Bedford Bennett: But no action has been determined?


Ernest Lapointe: Not yet.


[Stage Direction]
Section agreed to.
On section 4-In South African constabulary.
James Layton Ralston: The explanation here is that the Department of Justice has ruled that only the time served with the South African constabulary when the party so serving was an officer of the militia shall count towards pension. That is not the case with regard to the non-commissioned officer and man, and we are making the same provision here with regard to the officer.


George Reginald Geary: It was never intended otherwise?


James Layton Ralston: No.


[Stage Direction]
Section agreed to.
On section 5-Gratuity in case of death before pension may be granted.
Richard Bedford Bennett: This is the new section?


James Layton Ralston: Yes. I wanted to ask
the committee to consider an amendment which I am proposing. I explained the other day that this clause is intended to give back to the dependents of an officer who dies before he has completed the full period necessary for pension at least the amount which has been deducted from his pay. At the present time that cannot be done; the money is forfeited. Then a case was mentioned the other day by the hon. member for Prince, and I know of two cases at least, where an officer died having served the full period for pension, but leaving dependents who did not come within the meaning of the act, which defines dependents as the wife and children. The suggestion has been made that in such a case if he had dependents-in this case the officer to whom I particularly refer left dependent sisters-it would be at least fair to pay to the sisters actually being supported by him the amount which he had paid in, not by way of pension but gratuity. Therefore I am suggesting to the committee that section 5 be eliminated, because it provides
only for the case of an officer who served an insufficient time to entitle him to a pension, and that this clause be substituted.
I therefore move that:
5. Section eleven of the said act is amended by adding thereto the following subsections-
"(3) I? an officer dies before a period at which a pension might be granted him, the governor in council may grant to his widow, or, if he leaves no widow, to his children under eighteen years of age at the date of his death a gratuity equal to the amount of the deductions made under subsection one of section ten of this act from such officer's pay during his service.
"(4) If an officer dies leaving no widow or child to whom a gratuity under the provisions of the preceding subsection, or a pension or compassionate allowance under this act would be payable, but who leaves a person or persons who, at the date of this officer's death were wholly or partially dependent on him, the governor in council may grant to such person or persons a gratuity not exceeding the amount of the deductions made under subsection one of section ten of this act from the officer's pay during his service."
(2) This section shall be deemed to have come into force and effect on the thirtieth day of June, nineteen hundred and twenty-three.
That is the date when the pensions' legislation came back to normal. As I explained to the committee the other day, there was a period when a man who had served ten years was entitled to a pension, but on June 30, 1923, we reverted to the normal procedure, and it was thought that that would be a convenient date to make this effective.


Richard Bedford Bennett: Is it done for the purpose of taking in this particular case?


James Layton Ralston: It is made retroactive
for the purpose. There will be one other case at least; that is all the department knows of.


Mr. GARDINER:: This proposal will be
applicable only to officers; it does not include warrant officers ?


James Layton Ralston: It applies to warrant
officers also.
At six o'clock the Speaker resumed the chair and the house took recess.
After Recess
The house resumed at eight o'clock. PRIVATE BILLS



ST. CLAIR TRANSIT COMPANY

[Stage Direction]
Mr. W. T. GOODISON (West Lambton) moved the third reading of Bill No. 23, to incorporate the St. Clair Transit Company.
Mr. WILLIAM IRVINE fWetaskiwin): Before this bill gets its third reading, while
St. Clair Transit Company
[Stage Direction]
I have no special objection to the measure I want to direct the attention of the house to one section in particular which, in my opinion, should not be passed. I refer to section 12. I wish to read that section to the house because it will be observed that it leaves the door wide open to any kind of stock watering which might be desired. I do not believe there is a member of this house who is in favour of the watering of stock, and in my opinion the people of Canada have expressed disapproval generally of this practice. This house certainly should not by its own action make the watering of stock any easier than it is, and for that reason I intend to move an amendment to this section. The section itself reads:
12. The directors may issue as paid-up stock shares of the capital stock of the company in payment of any business, franchises, undertakings, rights, powers, privileges, letters patent, inventions, real estate, stocks, assets and other properties which the company may lawfully acquire, and may, for such considerations allot and hand over such shares to any person or corporation or its shareholders or directors; and any such issue or allotment of stock shall be binding upon the company and such stock shall be not assessable for calls; nor shall the holder thereof be liable in any way thereon; or the company may pay therefor wholly or partly in paid-up shares or wholly or partly in bonds and debentures or as may be agreed upon.
In amendment to that clause I move, seconded by the hon. member for Athabaska (Mr. Kellner):
That the said bill be not now read the third time but that it be referred back to the committee of the whole for the purpose of amending it.
That all the words after the word "directors" in the eighth line of section 12 be struck out and the following substituted therefor:
"but no such issue or allotment of shares as fully or partly paid up shall be valid or binding upon the company.
(a)	Unless before any such issue or allotment of shares shall have been made as fully or partly paid up otherwise than in cash, the company shall have filed in the office of the Secretary of State a contract in writing, duly executed by the parties thereto, setting forth the considerations other than cash for which the company is about to issue and allot such shares as fully or partly paid up; nor
(b)	Unless in each and every case in which the company shall allot or issue shares upon the footing that the whole or some part thereof shall be credited as paid for a consideration other than cash, such consideration shall be received and credited by the company at not more than its then actual cash value;
(c)	And, in case the foregoing provisions of this section are not complied with, the holders of the shares so issued shall be liable to the company and to its creditors to the amount of the par value of the shares held by them respectively.

I leave it to the house to decide whether it is our wish to facilitate the watering of stock by any company.
Hon. CHARLES A. DUNNING (Minister of Railways and Canals): I voted for a similar clause in connection with a previous measure proposed by my hon. friend (Mr. Irvine) who now moves this amendment. I did so on that occasion because of the evident desire of my hon. friend to deal with what is generally regarded as something which should be dealt with, but I disagree with the practicability of subsection (c), having studied it more closely since then. Under the former subsections shares would be issued by the company, some for cash and some for other considerations, and unless there were distinguishing marks on the share certificates issued from time to time, innocent third parties in future years would be unable to tell whether or not the particular shares which they purchased at any time were subject to this perpetual liability of litigation, and I am afraid such a provision as this would make it impossible to finance such a project. I do not see how it could be worked out practically, because this subsection creates for all time the possibility that the holders of some of the shares of this company might be liable for the par value of the shares irrespective of what the market value might be or of what they might have paid for them. If some way could be found to avoid that difficulty ( which I think would lead to litigation and would create that sense of uncertainty which makes the financing of any enterprise very difficult. I am in agreement with the principle which it is sought to establish.
Mr. GARLAND (Bow River):: May I
ask a question? Is not this very clause copied almost verbatim from the English Companies Act?
Mr. BENNETT; Yes.


Mr. DUNNING:: Possibly my hon. friend
is more familiar with its origin that I am. Perhaps the mover of the amendment can tell us.


Mr. IRVINE:: Yes, that is so.


Edward Joseph Garland: The mover of the amendment and the leader of the opposition, who is no mean lawyer, have said that it is so. I would like to ask a further question. Knowing that the minister is in agreement with us as to the advisability of doing away with the watering of the stock as far as may be possible, has he any proposal to submit by which this bill could be amended to meet that desire?

St. Clair Transit Company


Charles Avery Dunning: I am in the unfortunate or perhaps the fortunate position of not being a lawyer. I supported a smiliar amendment on a former occasion; I thought my remarks to-night would be received sympathetically by the hon. gentleman moving the amendment, and that has been the case. My legal friends will correct me if I am wrong, but it does strike me that if the company failed to obey the injunctions contained in subsection (b) the company would be liable to action by anyone for not having done so.


William Irvine: Does not the minister think
that with subsection (c) in this bill the directors of the company would be a little more careful about what was done, knowing that their company would be liable under this subsection?


Charles Avery Dunning: On that, point I have this in mind:	The question as to the fair actual
market value of something for which shares are given as a consideration is always a debatable matter, and by this legislation it continues to be a debatable matter during the whole of the period of the existence of the company while its shares are on the market. Anyone could take the attitude at any time that perhaps ten years earlier more than the fair market value had been issued in shares for a particular consideration, and in that way the affairs of the company would be brought into litigation. For my own part, if I were promoting a bill of this kind I would eliminate a lot of the invention stuff and so on and allow it to be dealt with in accordance with the ordinary company law of the country, because in my judgment that is the proper way to deal with it.


Edward Joseph Garland: In ihe meantime may I ask this question? The minister comes from the old country originally; can he tell us how this section actually works out in practice and whether there is watered stock as a general rule?


Mr. SPEAKER:: This is all irregular; we
are not in the committee stage.


Charles Avery Dunning: Perhaps we had better
get into committee, when I may have a chance to say something further.


Edward Joseph Garland: I know your honour appreciates the situation; we are anxious to secure as much information as possible before this bill goes back into committee. The objections raised by the minister have not been convincing to me. I appreciate the practical difficulty, which may be minor or major, but we do know that this English company law has worked out well in
that country, and I have heard no protests against it. We have lawyers in this house who are acquainted with English law and its practical application, and unless they can produce evidence to show that this section has not operated well in England and has not militated against undue watering of stock, then I am afraid the entire case of the minister falls to the ground. I am in sympathy with the mover of the bill; I have made some investigation of the matter and I really believe the bridge is needed. Apart from that, however, we are faced with this question of the watering of stock, which has become a common practice in all our corporations and which is perhaps particularly common in bridge companies. As far as it may be possible we must protect the public, the stockholders and the interest of the company by avoiding undue and false capitalization. Therefore I intend to invite the mover of the bill to accept this amendment in good spirit and let the bill embody some measure of public protection. That is all that is asked for, and if the mover of the bill is so unwise as to reject it, then I feel that I must vote for the amendment.


Richard Bedford Bennett: The legislation of which this house
is asked to approve is vicious in its character from two standpoints:	First, it creates a
bridge company with rights which interfere with navigation which under treaty is free to the countries on either side of the river in question. In the second place, the measure itself contains terms such as no enlightened parliament in the British Empire or in any state of the American union would pass at this period of progress. It starts first with a company whose shares have no par value, and makes provision that the whole of these shares may be given to the promoters. This amendment is designed to check the provision having to do with the no par value of the stock.
Let us analyse these matters. I say first that it interferes with a river on which navigation rights are granted by treaty, although it is true that this measure is not to become law unless certain conditions are fulfilled. Those conditions involve first of all concurrent legislation by the congress of the United States; they must enact a law which will enable this bridge to be constructed. In the second place, the conditions imposed by the bill, which I do not intend to discuss at length on the third reading, safeguard the public interest to some extent, but place the power in the hands of the governor in council.


Charles A. Stewart: Is my hon. friend through with it from the navigation point of view?
SC. Clair Transit Company


Richard Bedford Bennett: I am just saying that it affects navigation to some extent.


Charles A. Stewart: No structure could affect navigation.


An hon. MEMBER:: The Navigable Waters Act covers it.


Mr. CANNON:: Unless the act is excepted in the bill.


Richard Bedford Bennett: I quite appreciate, for instance, that the Beauharnois canal matter is now being submitted to the cabinet. I have not had a chance to analyse it since, but it is not perfectly clear that the Navigable Waters Act would apply to this structure.


Charles A. Stewart: My hon. friend will agree that no structure could be built over navigable waters without the consent of the governor in council.


Richard Bedford Bennett: Here is a bill which shall come into effect with the consent of the governor in council, provided that the United States authorities give authority to construct the bridge at the other end. I am not certain, and I do not think the Minister of Justice will say he is at all certain, having regard to the way the bill is drawn and the provisions is sets forth, that it does not eliminate the provisions of the general statute. It substitutes for the general statute the governor in council.


Charles A. Stewart: I can hardly take that in. Navigation is paramount.


Richard Bedford Bennett: Navigation is paramount, but my friend the minister overlooks this fact, that parliament has control over navigation; it can impede navigation, and sometimes has done so; and navigation is not paramount unless this parliament keeps it paramount. It may or may not be paramount, depending upon what the attitude of this parliament may be. Leaving that aside for a moment, we will assume that parliament has concluded that the bridge company shall exist? Now what is the result? We have given, as the books say, life and vitality to something, an entity that we hereafter call the bridge company or whatever it may be; it comes into being by act of this parliament; it is clothed with the power that this parliament confers upon it. Leaving out for a moment the question of the power to construct the bridge, let. us say that the view suggested by the Minister of the Interior is sound, that the project is subject to the provisions of the Navigable Waters Act and that there must be the consent of the minister. In this bill the governor in council must consent before it comes into force.

Now come to the next point. It is a toll bridge, is it not? Last week the governor of New York state vetoed all bridge bills dealing with tolls, declaring that the time had come in his country when the state can borrow money so much more cheaply than the individual that if it is desirable to construct bridges over any water on which people shall be charged tolls, that the people should pay the least possible toll; which means that the public should build the bridge and recoup themselves from the tolls. That is the position which the governor took. Is not that a sound principle?
The government must adopt some principle in regard to this. Is it the sound principle that the capitalists of any country shall meet together, form themselves into a syndicate and then take this company's charter, which gives them a living entity called the St. Clair Transit Company, charge tolls to yield back to them the cost of this bridge and interest on their money, with all the promotion expenses incidental to it, with the stock issued under the terms mentioned in the bill; then say that they shall have these powers conferred upon them, and when they get their money back that the bridge shall revert to certain people? If it is in the public interest, that a bridge be built at St. Clair let the people of this country give their collective credit to it, and the country will get the money much cheaper than anybody else can get it. We have had a number of toll bridges in this country, but they have been abolished in most of the provinces because it has been found a most unfair use of the powers of parliament to create them; and I think the last one was brought out in the older provinces. I cannot speak of them all, but I know that has been done.
We have a toll bridge across the Niagara, and there has been a great deal of difficulty in connection with it. Tolls must be fixed in this case by the governor in council. On what basis are they to be fixed? Tolls are to be fixed from time to time by the governor in council and by the railway board so as to yield a return upon the capital invested in the construction of the enterprise. They _ are going to borrow the money to build the bridge, and issue stock for the services rendered in getting the charter. That is the position. Now what, is suggested by the hon. member? When I listened to the amendment being read it sounded familiar, and I have now read it. Subsection (c) is one which becomes operative only in the event of there being non-compliance with the other provisions of the section. In other words sub-paragraph (c) does not become effective unless there has been non-

St. Clair Transit Company
compliance by the company with the provision with respect to capital, namely the filing with the Secretary of State of the agreement showing how the capital was issued and for what services it was emitted from the treasury. That is all. Our Companies Act makes certain requirements with respect to filing prospectuses and contracts with the Secretary of State. You have to file a contract, for instance. You are asked in your prospectus to state what contracts are outstanding or have been issued, and if there is a contract outstanding it is supposed to be filed with the minister. This section is partially copied from the English section, and is somewhat different; it is modified to meet the case. The amendment says:
But no such issue or allotment of shares as fully or partly paid up shall be valid or binding upon the company-
(a)	Unless before any such issue or allotment of shares shall have been made as fully or partly paid up otherwise than in cash, the company shall have filed in the office of the Secretary of State a contract in writing, duly executed by the parties thereto, setting forth the considerations other than cash for which the company is about to issue and allot such shares as fully or partly paid up; nor
(b)	Unless in each and every case in which the company shall allot or issue shares upon the footing that the whole or some part thereof shall be credited as paid for a consideration other than cash, such consideration shall be received and credited by the company at not more than its then actual cash value.
Now in respect to that there is a decision of the Supreme Court of Canada in the case of a company that was promoted in. Ontario, one of the Orchard companies. There are numberless decisions in 'Great Britain from the House of Lords down to a single judge. It is therefore well settled by well determined precedent and a well regulated line of cases, so that there is no difficulty in respect to that.


James Layton Ralston: What is settled? I did not catch that.


Richard Bedford Bennett: What relation the services rendered have to the stock issued has been settled by a series of cases. We had one in the Supreme Court of Canada in which the whole of the capital stock of the company was issued not for services but-


James Layton Ralston: For a boat, a one-man company?


Richard Bedford Bennett: No, not for a boat. It was one of the Orchard cases, and the court said it will not be astute to discover whether the consideration is adequate up to a single dollar, but whether it bears some relation to the capital stock issued for it. The minister will probably bear that case in mind. I sent for Palmer's Company Precedents, but I did 56103-129
not get them in time to turn up the section from which this is taken, because I imagine, with certain changes, this is the form which will be found in Palmer's Company Precedents.


James Layton Ralston: I thought I recognized it too. But is the hon. member sure that paragraph (b) is in the English statutes?


Richard Bedford Bennett: That was my memory
when I read it.


James Layton Ralston: I have Lindley's Company Law here.


Richard Bedford Bennett: My hon. friend will remember that the Companies' Act was amended, but I do not think Lindley's to which he refers deals with the latest amendments to the Companies' Act. The paragraph to which the Minister of Railways takes exception is one that can have no effect at all upon the question now before the house. It is a paragraph that becomes operative only in event of the company failing to discharge their duties. In other words, if they take the chance of issuing shares without fulfilling the agreement called for by the preceding sub-paragraphs, then they run the risk of being liable for the par value of the shares. But in this case the difficulty is that no par value is attached to the shares. That is an unusual feature with respect to the matter. Furthermore, the Minister of Railways was very fearful lest this should result in litigation. Let me point out to him that the courts, rightly or wrongly, decided two generations ago that any man who buys shares in a company must be considered as having read the memorandum and the articles of association. He buys them at his peril and when he buys shares in this enterprise he knows that that paragraph is there. The courts decided that question very early in the history of incorporated companies. There having been fixed upon him the onus of knowing what he is buying, the terms of this section are known to him, and if he buys shares, like a pig-in-a-poke, without knowing what he is buying, the law says that that is his business, because it attributes to him, when he bought the diares, knowledge of the charter and all its terms. That is the position with respect to that.
The matter has nothing more than a general public interest so far as I am concerned but this is a step backwards in the worst sense. No such legislation as this would be passed in these days by any parliament or legislature that I know of. It would be desired by promoters if they could secure it. It has about it all the earmarks of legislation that existed in the United States at least fifty years ago and about which we read so much, except that

SI. Clair Transit Company

it has set no par value for the shares instead of setting a par value of a fixed price per share. It does permit, in its very terms, of the issue of shares for the service of getting this charter through the House of Commons, the expense of preparing the bill and other expenses incidental to the completion of the charter.
The government should have a well-defined policy with respect to this bridge, indeed with respect to all these bridges. The government should have enunciated a policy with respect to all these bridges that cross international waterways. It is neither meet nor proper nor just nor in the public interest of this country that private bills should be introduced and passed through parliament because someone is rather a nice gentleman, you like him, you do not like to vote against him, you have a desire to accommodate him and a desire to support his bill. It is not a pleasant thing to vote against legislation promoted by my hon. friend whose name is on this bill; anyone would like to oblige him by voting in supfport of his bill, and too often the public interest is subordinated to our personal likes or dislikes and the popularity or unpopularity of the person who has the legislation in charge. I have discharged my duty in the matter of directing the attention of the administration to these facts, to the abuses that will follow and to the retrograde character of the legislation, which is at variance with all modem ideas. The time has come for the enunciation and declaration of a policy in regard to bridges crossing international waters instead of leaving such bills in the hands of a private member who, by suggesting that if you and your friends will support my bill, I and my friends will support yours, may be able to get it through the select standing committee and into the House of Commons and then, with the aid of party associations and good friendship, get it through the house. I will vote for the amendment as a protest against legislation of this character and I leave with the government the responsibility of having placed upon the statute books of this country legislation which is more backward in its character and more far-reaching in its effects than any bills of a similar nature to which my attention has been directed in recent times.


James Layton Ralston: Just two points. At first I was
impressed by what was said by the mover of the amendment with regard to this being copied from the English statutes. Is that correct?


William Irvine: The principle, I mean.


James Layton Ralston: My hon. friend is wrong
about that, as I felt sure he was. There is a principle which is contained in a good many of the provincial companies' acts and that principle is that when shares are issued for a consideration other than cash, the contract showing the consideration for those shares shall be filed with the registrar of joint stock companies in order that anyone who buys shares may have an opportunity of going to the registrar's office and seeing just exactly what property the shares represent. In other words it provides publicity in order that a man may see just what he is buying when he buys these shares. That provision was contained in the English Companies Act of 1867 and from that act it was copied into most of the provincial acts. I have just had an opportunity of looking at Palmer's Company Precedents, thirteenth edition, 1927, page 574, and I find that that section was repealed in England and now under section 88 of the act of 1908

A contract and a return have to be filed within one month after the allotment of shares in whole or in part for a consideration other than cash.
That is about the same principle as was contained in the former act. But note this:
In case of default there is no provision that the shares are to be deemed to be allotted on a cash basis. Penalties are, however, imposed in case of default on officers of the company.
That is in case of default in the matter of filing the contract. Now in regard to this proposed amendment, subparagraph (a), to which the Minister of Railways has referred, provides in general terms for the same idea which is contained in provincial legislation, namely, the filing of a contract in order to show what the consideration was for the issue of shares. Subparagraph (b) I cannot find in the English act and I have never seen it before.


Richard Bedford Bennett: Paragraph Ob) or (c) ?


James Layton Ralston: Paragraph (b). Paragraph (b), with all due respect to the Minister of Railways, is the one which, it seems to me, perpetuates the possibility of litigation and makes a pretty serious situation for anybody who buys shares no matter how innocently. It is one thing to insert in an act a provision that the directors shall not issue shares for a consideration other than cash unless they file with the registrar of joint stock companies a contract showing what those shares are issued for, whether for property or service. Then a man can go and buy the shares, and if he finds there is no contract he has a right to assume that the

St. Clair Transit Company
shares are issued for cash and that therefore the cash proceeds will be found in the treasury of the company. But it is quite another thing to say that not only shall there be a contract filed when the shares are issued for other than cash, but that the consideration for those shares shall be received and credited by the company at not more than its actual cash value. By the proposed subparagraph
(c)	if, in a company in which that provision has not been complied with, I buy shares ten years after the company is incorporated, I shall be liable to the company to make up in cash the par value of the shares notwithstanding the fact that I have paid in full for them already to the person from whom I bought them. The effect of it is this. I buy shares in the company from some other individual. The company was incorporated ten years ago. If the liquidator of the company can prove that ten years ago the directors of that company received certain property in consideration of the issue of shares, and that the value of that property was not the full par value of those shares, then I am liable to pay the difference.


Richard Bedford Bennett: The statute of limitations would apply if it was ten years ago.


James Layton Ralston: Then let us say six years, although I do not think the statute of limitations would operate, because the action would accrue against me only from the time I purchased the shares.


Richard Bedford Bennett: The statute would run.


James Layton Ralston: The statute would run
against me from the time the cause of action arises, but I do not think the cause of action arises against me until I become the owner of the shares. So I say that the effect of this would be that six years at least after the company had 'been incorporated and had issued its shares, for property or services which it turns out were not worth the full par value of the shares, and if the company fails, the liquidator of that company could come into the courts and cause me to pay up to the par value of those shares notwithstanding the fact that I had paid par for them to the person from whom I purchased them. That is going a long way in this sort of legislation; it is going further than any provincial act goes, and it seems to me that this house should stop and consider before arbitrarily passing such legislation, and particularly before putting it in the provisions of any particular bill when it is not the general law.
I know nothing about the merits of this particular legislation which is before the house, (but I do believe that we should not pass that sort of legislation without a good deal more consideration than we can give to it on the third reading of this bill.
Mr, IRVINE: Suppose the minister was going to buy shares as he has suggested, would he not be careful first to inquire how those shares had been acquired in the first place?


James Layton Ralston: Certainly I would inquire. If the first part of the section were in force, I would go to the registrar of joint stock companies and there find out that the shares were issued, for instance, for services, perhaps six years before, but does my hon. friend tell me that I could be in a position to make up my mind what the court would decide five years afterwards as to the worth of those services? I would have to go back to the time those shares were issued and decide in my own mind whether the property or services for which they were issued was worth the amount of the shares? That burden should not be put upon any purchaser of shares.


Richard Bedford Bennett: It is on some of them now.


James Layton Ralston: I do not know of any.


Richard Bedford Bennett: Where shares were issued under contracts filed with registrars of companies in the provinces where the old English act was in force, that risk was always present.


James Layton Ralston: My hon. friend is quite wrong about that.


Richard Bedford Bennett: I have had to do it in my province.


James Layton Ralston: The very case my hon. friend cited decided that so long as the contract was filed with the registrar of joint stock companies, and the directors of the company considered in good faith that the property was worth the amount of the shares issued, that decision was conclusive and would not be inquired into. My hon. friend, I think, is under a misapprehension about this. The individual is not required to try for himself any such question in that case. I say that my hon. friend's amendment, Mr. Speaker, goes far beyond anything I know in the English statutes and far beyond anything in the provincial statutes. Further than that, there is no provision even with regard to filing a contract under our Federal Companies Act.


William Irvine: There ought to be.
St. Clair Transit Company


James Layton Ralston: I may agree with my hon. friend. The leader of the opposition is quite right that a prospectus is required to be filed, but there is no provision for the filing of the contract.


Richard Bedford Bennett: One of the questions
asked in the prospectus is, what contracts are there.


James Layton Ralston: I understand that, but
that is very different from saying that the shares shall be taken as issued for a cash consideration. My hon. friend from Wetaski-win raises the real point. It seems to me it would be worth while considering in this house at some time an amendment to the general company law of this Dominion, putting into that law a provision similar to the one they have in the provinces, and I for one will be very ready to consider such a proposition when it is made, but I do not think we should select any particular bill as the one into which to put this special provision, when, after all, it is a matter of general company legislation.


Hon. E. B. RYCKMAN (East Toronto):: 
Hon. J. D. CHAPLIN (Lincoln):: Mr. Speaker, I am not opposed to this bridge in the same way that I am opposed to a bridge on the Niagara frontier. There may be a reason for this bridge; there is none for the other. There is no other bridge where the promoters desire to erect this bridge.


Hewitt Bostock: May I call the attention of hon. members who are yet to speak that there is an amendment before the house, and that they should address themselves to

Militia Pension Act
the merits of the amendment, not to the general principle of the bill? I had intended to bring this to the notice of the hon. gentleman who has just taken his seat (Mr. Ryck-man).


James Dew Chaplin: Mr. Speaker, you have been pretty lenient with some hon. members who have spoken. I will try to keep within the four corners of the amendment.


Hewitt Bostock: I have no doubt that the hon. gentleman will do so.


James Dew Chaplin: In my judgment this is a proper amendment. In addition to the reasons already advanced in its favour, I wish to place before the house other reasons for its adoption. In this bill it is provided that eventually the bridge is to revert to the Dominion or to the province of Ontario. When that happens I do not want it to be encumbered with a lot of watered stock. Of course, members of the government will assure me, as some have already, that they are not behind the bill, but it will be noticed that with one or two exceptions they have all been helping its passage. I contend that the amendment is fair and proper and, to a certain extent at least, will prevent the watering of stock. Will the minister tell me what harm can come to this or to any other company by inserting in the charter a provision that the company must get cash only for its stock?


James Layton Ralston: I have endeavoured to point out that the harm can come to people who purchase shares and are not in a position accurately to judge what a court will decide as to the value of the consideration for which the shares were issued.


William Irvine: Why a court?


James Layton Ralston: Because that is the only way in which the penalty under (c) can be enforced.


James Dew Chaplin: The officers of the company can obviate all trouble in reference to the stock if they issue it for cash only. We want to prevent the giving away of shares in exchange for something that is of no value; that is, the watering of the stock. As I have already pointed out, my particular interest in this bill is that it purports to give something back to the country a little later on.


James Layton Ralston: Did my hon. friend ever yet vote in this house for a bill which provided that shares could be issued only for cash?


James Dew Chaplin: I have no doubt that I
have done so, but I am prepared to say now that I am no longer in favour of this sort of thing, and in the future I shall vote against it, even if I stand alone in my opposition.


Mr. FRANKLIN SMOKE (Brant):: Mr. Speaker, I gather from the remarks of the Minister of National Defence (Mr. Ralston) and other members on the government side that they are quite in sympathy with the idea embodied in the amendment, but do not believe that it is practicable. The main objection of the minister seems to be that some ten years hence the question may be raised and the stockholders at that time may be held liable to the company or its creditors for the value of their holdings not paid in cash. It strikes me that if the minister is so much interested-


Hewitt Bostock: Mr. Smoke moves,
seconded by Mr. Dickie, that the debate be now adjourned.


Lucien Cannon: He has not moved that.


Hewitt Bostock: Does the hon. member
object to the motion for adjournment of the debate?


Lucien Cannon: He did not move any
motion.


Hewitt Bostock: Then the bill will fall to the bottom of the order paper.


Richard Bedford Bennett: It is nine o'clock.


Hewitt Bostock: The hour for private bills is exhausted.	.



MILITIA PENSION ACT AMENDMENT

[Stage Direction]
The house resumed consideration in committee of Bill No. 197, to amend the Militia Pension Act-Mr. Ralston-Mr. Johnston in the chair.
James Layton Ralston: When the committee rose we were considering section 5, and I intimated then that I would move an amendment. I explained the subsection intended to benefit those dependants, other than wives and children, of men who had served their full pensionable period but on account of whose death nothing was payable because they had left neither wife nor child. A suggestion was made that the use of the word "dependant" might be somewhat ambiguous, and I have therefore redrafted the section which I submitted this afternoon.


Richard Bedford Bennett: The word "dependant" does not appear in section 5.


James Layton Ralston: Not as printed, but I read before recess a proposed amendment. The first subsection of that amendment as I gave it then remains; the second subsection I have
Militia Pension Act

redrafted, adding a few words descriptive of "dependant". The redrafted subsection 4 reads:
If an officer dies leaving no widow or child to whom a gratuity under the provisions of the preceding subsection, or a pension or compassionate allowance under this act would be payable, but who leaves a father, mother, brother, sister or child who, at the date of such officer's death was wholly or partially dependent on him for support the governor in council may grant to the person or persons so dependent a gratuity not exceeding in the aggregate the amount of the deductions made under subsection one of section ten of this act from the officer's pay during his services.


Richard Bedford Bennett: Is there not a possible incongruity there? The word "child" is used in the preceding subsection, meaning one under eighteen years of age.


James Layton Ralston: True, the word "child" is used in both subsections. If the child is under eighteen then he or she comes under other sections providing for pensions to children. But there may be a child over eighteen dependent upon the father for support, and in that case he or she comes under the second subsection.


Richard Bedford Bennett: This would apply even to a married daughter.


James Layton Ralston: Yes, if dependent upon the father for support.


Richard Bedford Bennett: I see no reason why the amendment should not pass, inasmuch as it merely permits the governor in council to hand over to certain named persons money which belonged to the officer, which was deducted from his salary or compensation in his lifetime, which he could not get, and which is now made available for those persons. I would point out however that the retroactive feature is an invitation to a request for similar legislation in other cases. It is exceptional and involves a principle which I am sure will be invoked hereafter by others in connection with the mounted police, and under other statutes. Once you concede the right to make this provision effective as from June, 1923, you will certainly be asked to extend the same consideration to others.


Ernest Lapointe: You probably will.


Richard Bedford Bennett: Yes, you probably will. I cannot see on general principles that there is anything wrong with the section except that it has not been customary in this parliament to adopt this retroactive feature. This covers a special case, and one which no doubt is deserving; we are providing that the provision shall be retroactive over a period of five years. But I warn the minister-and I use the word
rMr. Ralston.]
"warn" this time in its proper sense-that many similar applications will come before
parliament. I remember having heard the same question discussed once before in the House of Commons, and the minister of the day thought it was too dangerous a thing to do when dealing with gratuities and pensions; for once you make legislation retroactive in respect of gratuities and pensions-fixing the year 1923, as in this case-there will be someone here next session saying, "I am willing to have you make it 1926". Others will say that 1924 will do. The minister should be able to devise some other method, and I should be glad to co-operate with him to meet the cases he has in mind. That, I think, would be preferable to putting on the statute books an invitation to all and sundry, affected either directly or indirectly, to ask for legislation of a retroactive character. I have in mind particularly a case I mentioned to the Minister of Justice last year in connection with the mounted police. In respect of the widow of an officer an effort was made to pass a measure retroactive for a year, and there was a good deal of discussion about it. I bring this matter to the attention of the minister because T think it is my duty to do so.


James Layton Ralston: I thoroughly agree with
my hon. friend as to the undesirability of passing retroactive legislation, but in this instance it is, I think, amply justified, not by the circumstances of the individual case, but by this fact: Up to the thirtieth of June. 1923, the wife of a soldier could get a pension if that soldier had served for ten years; but on the thirtieth of June of that year that privilege ceased, so that while the woman whose husband had served ten years and died the day before could receive a pension, the widow of the man with similar service who died on the first of July found herself deprived of her allowance. In the event of an officer dying before he attains the pensionable period this provision will enable the widow to receive the amount deducted from his salary. I think therefore that the retroactive feature is justified, not, as I say, because of individual reasons but because it will, if I may use the expression, ease off the sharp break that took place when the new legislation was passed 'n June, 1923.
Section 5 agreed to.
On section 6-Term of service of militiaman.


Arthur Edward Ross: During the course
of the discussion of this bill I inquired of the minister whether he had received any communications. I have one from a member of

Militia Pension Act
the permanent force asking that consideration be extended to some of them who have served continuously, but in another department of the government. I thought that service should go towards their pension in the same way as the service of these reservists would be estimated.	I (have 'too
objection to the first part, but here is a suggestion from one of our own men who since the war has joined the permanent force and has served continuously in some department of the government. He thinks the same favour should be granted to them as is granted to the other people referred to in the present bill.


Richard Bedford Bennett: The point is this: A civil servant joins the permanent force, and my friend suggests that the time during which he was a member of the civil service but not in the militia department should count as part of his service. I think that is not an unreasonable request, having regard to the fact that we are extending this to service in the constabulary, the navy and the air force, as well as to other services. After all, if a man was a civil servant paying into the superannuation fund, it seems to me that that time should count in the new branch of the civil service in which he finds himself.


James Layton Ralston: I think that is dealt with in section 2, although I am bound to say that I speak with some hesitation as to that.


Arthur Edward Ross: I cannot make it
out from this, but they evidently do not consider that it covers their case.


Richard Bedford Bennett: This afternoon I thought that was the very thing we were endeavouring to do in section 2, is that clear?


James Layton Ralston: I thought so also, but
I am bound to say that I did not differentiate between the outside and the inside service. I shall be glad to look into this question.


George Reginald Geary: Under the Civil Service
Superannuation Act the time served will apply towards a pension, but if that civil servant enlisted, even though he became a commissioned officer, he would not come under this section because this is an officers' section.


James Layton Ralston: I will look into that
question.


[Stage Direction]
Section agreed to.
On section 7-Pension to officer or militiaman of His Majesty's Army Reserve who enlisted in permanent force.
James Layton Ralston: I endeavoured to explain
section 7 quite fully the other day; it deals with those cases of reservists who served with
the British army and were afterwards placed on the British army reserve. They then enlisted in the Canadian permanent force and were liable to be sent back to England at the outbreak of the war. Their services were requested by the British authorities, but the Canadian authorities asked that they remain here, and that request was granted. These men are now asking that some provision be made for accepting the time they served under the British colours, with the British army and with the reserve, for pension. Provision is made to add their service in Great Britain to their service in Canada up to the time they were demobilized, and they are given the same pension they would have received ii they had served in England, with the alternative of taking the Canadian pension from the time they started to serve in Canada.


John Arthur Clark: I endorse the principle of
this section, but I cannot understand the words:
An officer or militiaman who, whilst belonging to His Majesty's Army Reserve, enlisted in the permanent force ....
Why should it be "officer or militiaman;" surely it would not be necessary for one of the reservists to be an officer or militiaman when he enlisted in the permanent force?


James Layton Ralston: No, I do not think that is what is meant. An officer or militiaman is defined in the act, as my hon. friend will notice, as follows:
An officer or militiaman means a noncommissioned officer or private of the force.
This section says he is entitled to this option.


John Arthur Clark: My point is that he might
be a reservist but not an officer or militiaman.


James Layton Ralston: I do not think it is intended that he shall be contemporaneously an officer or militiaman and one of His Majesty's army reservists. He becomes an officer or militiaman when he enlists.


[Stage Direction]
Section agreed to.
On section 8-Provision of 1919, c. 61, to apply to certain cases.
James Layton Ralston: This section also I explained previously, quite fully. It provides for those members of the permanent force who served in the war and who were invalided out on account of war disabilities or sickness before July, 1919, when the act came into force which permitted them to retire even though they had only served ten years. It is said that the effect of their war disability was that they were out of the force before that section
Militia Pension Act

came into effect and this provision is to make them come under the provisions of that legislation as though they were members of the force at that time, in order that they may get their pension.


[Stage Direction]
Section agreed to.
On section 9-Application to Royal Canadian Navy.
James Layton Ralston: The other day there was some discussion with regard to deserted wives, and I think this a convenient time to discuss that matter; I promised to consider the question, and I think I have a suggestion which will meet with the approval of the committee. Under the superannuation act the deserted wife of an ex-civil servant gets no gratuity or payment; that payment is made to the husband, but I find that in the Pension Act relating to war disabilities there was an administration section inserted when the act was passed in 1919, which gave the Board of Pension Commissioners quite wide powers in appointing someone to administer a pension. Perhaps hon. gentlemen do not know that the pensions dealt with by this act are also paid by the Board of Pension Commissioners, although they do not decide the right of pay, ment, which is a matter for the governor in council. The Board of Pension Commissioners act as paying agents for the department.


Richard Bedford Bennett: For all military pensions.


James Layton Ralston: Yes; and I am proposing that we insert in this act an administration section, similar to the section to which I have referred.


Richard Bedford Bennett: There was a good deal of trouble in working out that section, as I had occasion to discover at one time.


James Layton Ralston: I have discussed the matter with the chairman of the Board of Pension Commissioners and he assures me that this . section has worked very satisfactorily in connection with disability pensions. In my discussion with the chairman of the Board of Pension Commissioners he assured me that, although they did not ask for any further responsibility than they now have, yet they have found that section to work out very well in that connection with disability pensions, and they would be prepared to take on if desired similar duties in connection with service pensions. I have endeavoured therefore in the section which I propose to make the Board of Pension Commissioners the recommending authority, and to provide that when the Board of Pension Commissioners

recommend, the minister may order the appointment of a person to administer the pension. I have used the same words as in section 16 of the Pension Act except that I have substituted the minister for the board in the operative portion of the section. If the committee will allow me, I will read it now. The provision is:
9. The following section is inserted after section 34:
_ 34a. When the Board of Pension Commissioners o,f_ Canada is of opinion that the pensioner is incapable of expending or is not expending the pension in a proper manner, or that he is not maintaining the members of his family to whom he owes the duty of maintenance, the minister may order that the pension be paid to such person as it may appoint, in order that the money may be expended by such person for the benefit of the pensioner and the members of his family. The expenses connected with such payment, if any, shall be paid by the commission.
This is where my friend the minister of pensions and health will come in and perhaps have to provide the board with a little extra for the purpose of such expenses. I am saying that is the exact section 16 contained in the Disability Pension Act, except that the word "minister" is substituted for "board'".


Richard Bedford Bennett: In one case which came to my attention it was found that it does not pay the minister to pay the money directly to the widow-you observe the way in which it is put. Might it not be better if the board recognized that the money be paid directly to the person thus entitled instead of to the administrators?


James Layton Ralston: I agree with my hon. friend, and if I had been drafting a new section I would have done it that way. It
is really one of their own people who acts as agent in the district where the man happens to be living; he administers the fund and he pays it for the wife and children. It is because we have a practice which is already settled that it seems to me it would be better possibly to adopt this than to attempt to lay down something new.


Arthur Edward Ross: Do I understand that the minister says that the pension is not paid directly to the widow and children in the case of disability pensions?


James Layton Ralston: No. What the Board of Pension Commissioners do is go through the form of appointing someone to administer the pension, but the one they appoint is generally their own respresentative in that district.


Richard Bedford Bennett: This will be a very great step forward. In the case to which the member for Kingston (Mr. Ross) referred the

Forest Reserves and Parks Act
other day, and which I fancy most of the members of this house have had brought to their attention, the pensioner is out of the country and t'he wife is left in destitute circumstances. This will enable the payment to be made under the Pension Act. It is a great improvement on the old condition, and I think it is worthy of being tried out.


Arthur Edward Ross: The minister will find that the cases to which I have referred, while not numerous, are very deserving cases. The amendment, I think, will work out satisfactorily.


James Layton Ralston: I think it will in practice, because I have talked it over quite fully with the Chairman of the Board of Pension Commissioners. I am going to move. Mr. Chairman, that that be inserted as section 34A of the act. My hon. friend will see that part II follows; it should be in the first part and then will be made applicable automatically to parts II and III.


Mr. CHURCH:: Why do you not make it a new section 9?


James Layton Ralston: I will have to make it
section 9 of the act. I will have to renumber them.


Richard Bedford Bennett: Then say " the following section is inserted as "-


James Layton Ralston: As section 34A.


[Stage Direction]
Amendment agreed to.
John Frederick Johnston: Shall part II of section 9 carry?


[Stage Direction]
Section agreed to.
On section 10.
James Layton Ralston: That should be renumbered. The section which you just read previously, introducing part II, should be renumbered as section 10, the section which you have just passed. The next one, on page 5, will be section 11.


[Stage Direction]
Section agreed to.
Title agreed to.
Bill reported.
Hewitt Bostock: When shall the bill be read a third time?


Richard Bedford Bennett: Next sitting cf the house.



DOMINION FOREST RESERVES AND PARKS ACT AMENDMENT

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved the second reading of Bill No. 193, to amend the Dominion Forest Reserves and Parks Act.
Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Johnston in the chair.
On section 1-Withdrawals from forest reserves.
Robert Gardiner: Will the minister give an explanation?


Charles A. Stewart: I might
make an explanation of the whole bill. The bill proposes no additions to the forest reserves. These are withdrawals that have been recommended, after inspection by our officers who do land inspection work, as being lands that were included in the forest reserves and are fit for agricultural settlement. There is one withdrawal in Manitoba, the remainder being in Saskatchewan, and none in Alberta or British Columbia. Application, I may say, has been made to homestead these lands, and we are withdrawing them for the purpose of allowing them to be used for agricultural purposes.


Mr. KENNEDY:: Is it the policy of the department to withdraw from forest reserves lands that are fit for agriculture and apply them as homesteads?


Charles A. Stewart: Yes, with the single exception that sometimes we have applications for lands within the centre of a forest reserve, but my hon. friend will readily understand that it would not be feasible to allow settlement in the centre of a forest reserve, even where there is good agricultural land. Wherever good agricultural land is found on the boundary of a forest reserve, it is the policy of the department to withdraw it from the reserve. These lands are all on the boundaries.


Robert Gardiner: When these lands are withdrawn, what steps are taken in regard to allowing homesteading privileges? Will everyone have the same chance?


Charles A. Stewart: Yes, they are advertised as being open for homesteading.


Robert Gardiner: In that case the returned men will have the preference the same as they do now?


Charles A. Stewart: Yes.


Richard Bedford Bennett: This raises a very serious question, as perhaps the minister knows. After much consideration these lands are put into a forest reserve, and in some instances that has been done by order in council. It has been provided by the statutes of Canada that lands thus placed within a forest reserve by order in council cannot be taken out of that reserve

Forest Reserves and Parks Act
except by statute. That is the present law. The minister says that they have reports covering all these lands, which, except for one group which is in Manitoba, are all in Saskatchewan. Next week the minister is undertaking a great effort in connection with preventing the destruction of forests by fire. The public have been accustomed to these lands being part of a forest reserve, and it is true that a considerable area on the edge of the forest is free from trees and that this constitutes or has constituted a great bulwark against the attack on the forest itself by fire. The planting of homesteads near the forests-and while I was not able to trace them carefully on the maps, some of these come quite close to the forest itself-increases in a marked degree the fire hazard with respect to these areas. If we are sincere in our efforts to protect the forests, if they are of the value that the minister has intimated in connection with next week's campaign, and if we are reciprocating with the people of the United States in our efforts, this statute will at least increase the fire hazard of the forest reserves in Saskatchewan by not less than fifty per cent-and I think that is a conservative estimate-because, as the matter stands now, the fringe of forest in the reserve is protected by a strip of agricultural land. My understanding from the little checking up I was able to do is that these lands do not comprise sections within the reserve; that they all lie on the outskirts, and that they constitute one of the greatest safeguards we have against fire.


Mr. YOUNG (Weyburn):: Are they prairie lands?


Richard Bedford Bennett: They are mixed lands. The hon. member knows that is too large a question to expect me to give an answer that will be of value to him. Some of them are practically prairie lands and some are scrub lands, but there is no habitation upon them.


Edward James Young: My experience
in western Canada is that as habitation increases, the risk of fire decreases.
* Mr. BENNETT: That is true as regards prairie fires, but need I say to the hon. member' for Weyburn that these strips of arable land surrounding a forest reserve are very carefully safeguarded by the fire guardians. They bum them, for instance, at certain seasons of the year so as to protect from fire the forest that lies beyond. I fancy that my hon. friend has seen just what I mean with respect to that. These forest reserves are being.protected by aeroplanes, telephones and fire guards. I noticed particularly that that
[Mr. Bennett. 1
was the case in British Columbia and in some parts of my own province of Alberta They string lines along the trees for the purpose of carrying on telephonic communication, and they have depots from which they are able to make observations with respect to the cause of fires and immediately to take steps to protect the forests from destruction. There is no doubt that this fringe of untreed, arable land, when properly burned for purposes of protection and without habitation, constitutes a great safeguard with respect to the forests. From that standpoint I felt that we should have complete information because the area we are now withdrawing amounts to thirty-two square miles.


Charles A. Stewart: That is out of all the reserves.


Richard Bedford Bennett: Yes. The area involved amounts to thirty-two square miles which, roughly speaking, is about twenty thousand acres. From a settlement standpoint that is not a large area scattered over Saskatchewan and Manitoba in all these reserves. It comprises only a limited number of homesteads. There are only four to the square mile, so that in an area of thirty-two square miles there would be about one hundred and twenty-eight homesteads in all. I am questioning the minister as to whether the benefit that accrues from a mere designation of these lands as agricultural lands for one hundred and twenty-eight homesteads is to be compared with the resultant risk that attaches of the destruction of the forests which we are doing so much to save, especially in the western provinces. I merely put the matter before the minister. I have not any expert evidence to support my point beyond a mere inspection of the map and a determination of the areas, but what we have to face is this: Is it desirable to render subject to fire hazards to a very much greater degree than now exists the forests affected in Saskatchewan, Alberta and Manitoba, for the sake of rendering open for settlement one hundred and twenty-eight quarter sections of land? That is the proposition. I think the minister should give us some information with respect to that question so far as he is able to give it.


Charles A. Stewart: I shall be
very glad to do that, Mr. Chairman. I think my hon. friend is unduly alarmed about the fire hazard, because these eliminations are alongside of the forest reserves. They do not involve a very large area except in one instance, where the most we are taking is twenty-one square miles. We do not increase *h* ire hazard by taking these lands that

Forest Reserves and Parks Act
are fit for agricultural purposes owing to the fact that the forest reserves in many instances, particularly in Manitoba, are settled right up to the boundary of the reserve. That is the case in many of the forest reserves in Saskatchewan. It is not the case in the more northern districts, but we have not yet selected forest reserves in what are strictly the unsettled parts of the country. They will have to be selected later on, and the endeavour will be to select for the forest reserves lands that are unfit for agricultural purposes, and every precaution will be taken to protect them from destruction by fire. I want to relieve my hon. friend's mind of any anxiety that by the elimination of small areas on the fringes of the forest reserves we are increasing the fire hazard.


Richard Bedford Bennett: You are bound to increase the fire hazard.


Charles A. Stewart: No, because these lands are settled right up to the boundary of the reserve, and the taking of a small additional portion of the land for agricultural purposes does not in any degree increase the fire hazard.


Richard Bedford Bennett: It puts the fire that
much nearer the forest.


Charles A. Stewart: But settlement is right up to the boundary of the reserve.


Richard Bedford Bennett: And now you are changing the boundary.


Charles A. Stewart: We are
not changing the boundary. The settlement to-day is up to the reserve in the great-majority of cases, and in some cases unfortunately they get into the reserve.


Richard Bedford Bennett: I know that, and fire
happens by reason of it.


Charles A. Stewart: These small areas that are desirable for agricultural purposes are, I think, much better in the hands of some careful farmer than allowed to lie uncultivated with grass growing to a considerable height, with the risk some day of a prairie fire coming along. That is the menace. Personally, speaking from my own experience, I would much prefer to have the boundary of the reserve in the thickly timbered areas, because then we have a much better chance of preventing the fire from entering from outside.


Richard Bedford Bennett: None of these lands will be offered for sale?


Charles A. Stewart: No, they will all be opened for homesteading.


Richard Bedford Bennett: I trust that the particulars given here have all been carefully checked.


Charles A. Stewart: Yes.


[Stage Direction]
Section agreed to.
Sections 2 to 8 inclusive agreed to.
Bill reported, read the third time and passed.

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Before we proceed to the
next order, Mr. Speaker, the Minister of National Defence has received an important intimation which I think will be of special interest to all -hon. members of this house, and I would ask that he might now have permission to announce it.


James Layton Ralston: We have had so many rumours,
Mr. Speaker, that one almost hesitates to say anything with regard to the intrepid fliers who yesterday morning, started out from Ireland on a transatlantic flight to this continent, but this report which I have received seems to be reasonably official. It reads:
Plane forced down in snowstorm on Greenly island. Reported by Point Amour wireless station. Official. Lighthouse on island and keeper there to take care of fliers.
Upon looking at the map I find that Greenly is in the straits of Belle Isle, and it is rather significant to note that it is just over the Canadian line and in the province of Quebec.


Hewitt Bostock: And not far from Gaspe, either.



LOWER EAR FALLS STORAGE DAM

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved the second reading of Bill No. 195, to facilitate the provision of storage in Lac Seul in the province of Ontario, and to repeal the Lake of the Woods Regulation Act, 1921.
Motion agreed to, bill read the second time, and1 the house went into committee thereon, Mr. Johnston in the chair.
Section 1 agreed to.
[Stage Direction]
Lower Ear Falls Storage Dam
On section 2-Agreement' binding, and governor in council authorized to carry out its provisions.
Richard Bedford Bennett: Is the agreement signed
by the provinces of Ontario and Manitoba?


Charles A. Stewart: Manitoba
is really not a signatory. The federal government signed on behalf of Manitoba, but the province, of course, was in agreement.


Richard Bedford Bennett: I know that in most
things the federal government claims the right to the mines, for instance, minerals, and water-powers of the province, whether Manitoba likes it or not, but in this case it says that the agreement was signed by Premier Bracken.


Charles A. Stewart: That is
correct; I beg my hon. friend's pardon. In this case we all signed.
Section 2 agreed to.
Sections 3 to 5 inclusive agreed to.
Bill reported.



DOMINION LANDS ACT AMENDMENT

[Stage Direction]
Hon. CHARLES STEWART (Minister of the Interior) moved the second reading of Bill No. 199 to amend the Dominion Lands Act.
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. Power in the chair.
On section 1-Entry in southern part of Saskatchewan and Alberta.
Richard Bedford Bennett: What is the effect of
this?


Charles A. Stewart: In 1923 we
amended the Dominion Lands Act giving the right to homestead within what was known as restricted area "A" on all the lands south of township 31 in Saskatchewan and Alberta. We extended the privilege of homesteading to the sons of farmers residing with their fathers on lands under the provisions of the Dominion Lands Act nine miles from the homestead. This privilege is subject to the discretion of the minister. It is found that all who could do so have taken advantage of the amendment, and it is now proposed to extend the privilege to any applicant. At a later date another amendment provided for the granting of a second homestead to an individual living within area "A" south of 31 if he appeared before the proper authority with the recommendation of the minister of agriculture of the provincial government. There

has been considerable agitation to extend this privilege to all those who have proved up and patented their land prior to this year. Of course, the privilege will not be extended to individuals who have homesteaded for the second time; but if they have proved up and are desirous of securing another homestead they will be granted the privilege, a number of homesteaders having sons who are desirous of moving into newer localities. That is the main idea underlying the bill.
Then' we have made a slight change with respect to the sale of school lands.


Richard Bedford Bennett: For what reason?


Charles A. Stewart: Formerly
we had the right to sell, subject to the approval of the provincial governments, land for any project-reservoir, church, cemetery or hospital sites-but in the case of agricultural societies we could only grant leases. Frequently they establish their agricultural grounds on school lands, but their tenure being only leasehold they cannot erect buildings on the site, and they are asking that they be given the privilege to purchase the land in fee, always of course, subject to the approval of the provincial government. Then in section 39 we are amending the act to revert to the old principle of requiring one-tenth of the purchase money to be paid down at the date of sale of school lands, for the reason that many people took advantage of the small initial payment of one-twentieth, failed to pay the balance, and after allowing the land to become so full of weeds as to be a menace to the surrounding district, abandoned their holding. While we are not changing the rate of interest we think we had better revert to the old principle of requiring ,the larger initial payment rather than one-twentieth of the purchase price. These are virtually all the changes proposed in the bill.


Mr. EVANS:: Does this privilege of the
second homestead run all the way across Saskatchewan from east to west down to township 16?


Charles A. Stewart: The amendments proposed here allow anyone to apply for the second homestead. It is not confined
to a limited area, as it was before.


Robert Gardiner: I take it that section one deals solely with area A.


Charles A. Stewart: Yes.


Robert Gardiner: If it is passed in this form there will be no restrictions at all on homesteading in that area?

Dominion Lands Act


Charles A. Stewart: Yes; I
thought I made that clear. Under the provisions of the amendment of 1923, even the farmer's son, to whom the privilege was granted, could not secure a homestead except by consent of the minister. That meant, of course, after inspection by the homestead inspector who reported whether or not, in his opinion, there was reasonable chance of succeeding agriculturally on the land. The same provisions apply.


Robert Gardiner: That is still in existence?


Charles A. Stewart: Yes.


Robert Gardiner: I can quite understand that in some districts it might be advisable to apply this amendment in order that some portions might be more easily homesteaded. But area A, as most hon. members know, is in the dry belt; there is no question about that. This has been a good year in that district, and just at the moment when we get a little rain and harvest a good crop, all the regulations which have been in force in the past are going to be thrown to the winds, with the result that, in my judgment, we shall go through an experience similar to that of the recent past. Homesteading may be restricted to some extent, but not as it is at the present time. I know quite well that there has been a good deal of propaganda in that particular area, more particularly by people in the towns and villages, for the opening up of these lands in order that they may be settled again. The people are desirous of seeing as large a population as possible in the area. Judging from my experience in that area from 1910 or 1911, I should say that it would be in the best interests of the Dominion and of the area itself if we refrained from changing the conditions under which homesteads can be secured. It would be advisable, in view of the fact that probably more than fifty per cent of the people have been forced out of that area to go to other parts of Canada to secure a living, to allow that area to develop gradually and not to be forced. I am afraid that if the minister opens up this area to any considerable extent we shall have a forced growth, due solely to the conditions that have prevailed during the last year in the way of good crops harvested, and in time to come we shall have on our hands the problem which we have tried to solve in the last few years and which we have not yet met. I trust however that if this amendment passes the minister will see to it that there shall be no great extension there at the present time merely on the strength of this year's good crop; otherwise
we shall be again faced with the problem with which we have had to deal in the past. If the federal government opens up this land it is its responsibility to see to it that the land is capable of sustaining a population. In my judgment we have a sufficient population in that particular area. There are many quarter-sections owned by the municipalities, held more or less by mortgage corporations and controlled by the Department of the Interior. In respect of these sections there are certain liens, and it is quite true that legislation was passed last year for the purpose of dealing with them. When this is done it will give the settlers now there an opportunity of obtaining larger holdings at a reasonably low cost so that they may go in for stock and be placed in a more secure position in their efforts to make a living. I should regret to see any action taken which would open up that land indiscriminately for further settlement. I believe it is a dry area, with a wet year once in a while, and when the dry period comes along all the good work done during the more favourable time is undone.


Charles A. Stewart: I am in
hearty accord with my hon. friend in respect of the area. Personally I should prefer to make it a closed area; it would save me a good deal of trouble. But here are some of the difficulties that have to be met. For example, in the constituency of Maple Creek there is a very large ranch. I have had complaints, registered by the former member and the present member as well, to the effect that there is a considerable area of good agricultural land in that ranch, and the farmers who live in the surrounding neighbourhood have had fairly reasonable crops throughout all the years since settlement took place. My hon. friend will remember that at one time he appealed to me to open lands held by ranchers for settlement purposes in his own constituency, south of the Cypress hills. Strange to say, during all these years in this particular locality there has been a fair return for agricultural labour. That is the problem with which I am confronted. If I close the area I shall receive very vigorous and serious protests from a great many settlers, who apparently have been successful during all this time, asking that the lands be eliminated from the ranch and opened for settlement. I went to the trouble of asking the soil expert of the agricultural department of the university of Saskatchewan to go to the district in company with our homestead inspector and make a thorough investigation of the soil. Having in mind the experience of the farmers in the district, I thought this advisable before

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even considering the question of releasing these lands for settlement purposes. And that is what I propose to do in every case before allowing crown lands in that whole southern area to be homesteaded. I shall take the utmost precaution to ensure that wo shall not have a recurrence of the conditions we have just passed through in recent years.


Robert Gardiner: In my previous remarks I indicated explicitly that I was aware that there were certain sections in that area which might make good homestead lands._ In the particular section to which the minister has referred I know the soil and I believe there is good agricultural land there, but at present it is held under lease for ranching purposes. In the first place, I presume it is under a twenty year lease, and I am not aware how long the lease has to run. Is it the purpose of the department to cancel the lease in order that homesteaders may secure the land?


Charles A. Stewart: Where there is undoubtedly good agricultural land.


Robert Gardiner: I suggest to the minister that he is going to multiply' his troubles tenfold rather than get rid of them. If he brought down an amendment embracing the area adjacent to the Cypress hills I could see that he would have no trouble at all, and it would be quite possible for the farmers ho make a good living there. I am satisfied of that, and I can appreciate the situation, but the moment you get outside that area I do not know of any portion within Area A of any great value for agricultural purposes. What the minister is going to do is to get himself in trouble to this extent, that he will have representations made to him to opeD up every quarter-section, provided that someone wants it in that particular area, and he will have to refuse those applications or place himself in the position of putting people on land which cannot sustain a population of any size. I would much rather see the minister confine his operations to that particular district which he has in mind, and if he would do that I should be very glad to support him, because that is good land.


Richard Bedford Bennett: I hope the minister will
not proceed with this legislation. It was my unfortunate duty to have something to do in connection with these areas, and I saw people who had been fairly well to do, able to maintain themselves and their families and buy rather expensive automobiles, actually driven to the verge of starvation in a portion of that area in Alberta.


Edward James Young: What was the
nature of the soil they were on?


Richard Bedford Bennett: I am not a farmer; I
am only saying that it was of such a character that because of lack of moisture they were driven out of the country.


Edward James Young: There are some soils in that district which will grow crops with very little moisture.


Richard Bedford Bennett: I am only dealing with
the actual facts. Have the governments of Alberta and Saskatchewan agreed to this?


Charles A. Stewart: Yes, they
have been consulted in both cases.


Richard Bedford Bennett: And have they agreed?


Charles A. Stewart: This bill has been discussed with both premiers, and they have agreed to it.


Richard Bedford Bennett: That seems incomprehensible to me in view of the statements made in the Alberta legislature, and in view of the fact that it has cost the government of that province thousands of dollars to move out these farmers. They have had to provide food and clothing for a large number of these people, who left in their prairie schooners when they could and abandoned everything to go down to the United States. Now, when we are about to return their resources to these provinces, parliament is asked to sanction something which has brought more condemnation upon a former minister of the interior than any other act of his official life. The hon. member for Acadia (Mr. Gardiner) has put the case very mildly with respect to that territory in the Manyberries district.


Charles A. Stewart: There is no crown land there, except some under lease.


Richard Bedford Bennett: 
Charles A. Stewart: AH these
dire results are well known, by no better than by myself. I happened to be a member of the government of Alberta when this occurred, and I would be the last man in the world to allow settlers on any of the abandoned lands in that territory. I am quite willing now to abandon the idea and let it remain a closed area; I took this action only at the request of people interested, mainly in Saskatchewan. In that province there are same lands to-day held by ranchers and some crown lands surrounded by districts which have been successful through all these dry years, but rather than have a feeling that I was going to allow homesteading in any indiscriminate way, which is not the intention at all, I am quite willing to eliminate this section from the proposed' act. Therefore I would move that we strike out section 1 of the bill.


Robert Gardiner: Instead of moving to eliminate this section of the bill I suggest that the minister allow it to stand and that he bring in some amendment which will give him the right to deal with the land in that particular area east of the Alberta boundary. There is no question that there are some good lands in that district which are capable of sustaining a population, and I think if an amendment is brought in which will give the minister power to allow homesteaders in that particular section it would be better for all concerned. I appreciate the attitude of the minister, and I think it would be better to let this stand as it is with that exception rather than bring back the former conditions.


Mr. GERSHAW:: I am fairly well acquainted with the area under discussion, and I can assure the committee that the hon. member for Acadia and the leader of the opposition have not overdrawn their description of the conditions and hardships which were endured by the settlers in that district. I am particularly well acquainted with Many-berries. It was a prosperous community, and a busy town which was built up there is now almost completely deserted. It is a fact, however, that even in that part of the country a number of farmers have managed to live through all the bad years and are doing fairly well. The provincial governments have had very capable farm instructors living in that district and giving advice to the farmers there. I believe that many of the farmers who have lived there during all the bad years are in a position to continue to make use of that land and to support their families very well. Of course the school districts are disorganized, and the country is almost back into the ranching area, except that the ranchers have not the leases. But another plan might be worked out. A farmer who is there and has experience might do much better to get more land if some system of mixed farming could be carried out. I strongly support the suggestion that the member for Acadia has made.


Charles A. Stewart: For the
purpose of getting on with the bill I would prefer to strike out section 1, Mr. Chairman.


[Stage Direction]
Amendment agreed to.
John Frederick Johnston: Section 2 will now become section 1.


Robert Gardiner: The proposal embodied in this section, now section 1 of the bill, has some merit. I believe that we have in western Canada to-day many people who through no fault of their own have lost their first homesteads and would be very glad in-
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deed to, secure the opportunity to have a second one, and I am sure they would be very successful. However, there are one or two points in regard to this matter that I would like to draw to the attention of the committee. In the first place it is proposed that a person who has received his patent prior to the first day of January, 1928, may secure, at the discretion of the minister, entry for a second homestead. I do not think that provision is as it should be. Many patents have been issued, for instance during 1928, and the moment you give a person who has recently patented his first homestead the opportunity of getting a second, you make that person a speculator. If you put the date back to say 1922, or 1923 or 1924, as the case may be, it would not be so bad, but once you do this you will induce speculation [DOT] in homesteads, and that is not desirable. Then as to the discretion given the minister by this section, I do not think any minister should be placed in that position. It is not fair to him, to the house, or to the country as a whole. A second homestead should be granted to all alike or not at all; and no minister of the crown should have the power to determine whether or not a person is entitled to a second homestead. I cannot conceive of any condition where a person who has once received a patent to his homestead would not be just as entitled to a second as any other person. Such a condition would create a condition of partisanship which I think it is desirable to avoid, and therefore I suggest to the minister that this portion of the section be struck out.
The only large available portion of western Canada for homestead purposes is in the north of the three prairie provinces. At present the attention of the public in Canada, and as a matter of fact of the people of the *world, is directed towards the Peace River district, and quite a population is going in there. People are going in and homesteading 50, 60 or perhaps 100 miles from the railway; in fact I know of cases where they are homesteading 400 miles from the railway. After a time this parliament is going to be called upon to provide transportation facilities for those people, simply because of the fact that we have given the right to homestead that far from transportation facilities. I maintain it is not fair to people going into those areas. People intending to get homesteads are usually led to believe that the moment they go into a certain area and get reasonable developments they are going to receive transportation facilities. We have many cases of that sort in western Canada, and I could

mention thirty or forty places in Alberta which now require transportation facilities. That is a problem which we are up against every day. We find the Canadian National Railway, for instance, criticized because they do not meet that demand, but they cannot begin to meet it for even present day requirements. It seems to me that if we are going to give the privilege of second homesteads to people who have already homesteaded we should place a restriction upon the districts or upon the distance from transportation facilities. Let us thicken up our population to the greatest extent possible. AVe need population in the west even alongside our present railways, and if we give second homesteads we are going to burden ourselves and be in greater need of transportation facilities than we are even now. I think I brought this matter to the attention of the Minister of the Interior some years ago, as to allowing homesteads to be secured at great distances from transportation facilities, but as far as I can see nothing has been done in that regard. We have either to follow some well-considered policy in regard to giving these transportation facilities within a reasonable time, or to restrict the area within which these people may go; otherwise we will have greater trouble in the future than we have had in the past.


Charles A. Stewart: The mere
fact that you are giving a second homestead is not making the difficulty any greater, but new settlers coming in from the outside go into these outlying districts and will settle upon the land. The mere fact that, a few hundred people-because there will not be more than that^-may take advantage of this provision will not make the condition worse than it is at present. My hon. friend says he has mentioned this to me before, and it i3 a matter to which I have given a great deal of consideration. Twenty years ago, before my hon. friend came to Alberta, you could not stop the expansion of settlement; if you did not survey the land the people would go in and squat on it. An instance of that is seen at Fort Vermilion, 300 miles away. The mere fact that you put a boundary on settlement will not stop the expansion of settlement if there is good land to be found in the territory and people are willing to go into those outside districts. I am speaking in the light of actual experience in this matter, but the mere fact that we are giving this privilege to a few hundred of our own people will not make that condition any more serious than it is at present.

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Mr. CAHILL:: I agree with the hon. member who, as I came in, was pointing out that the homesteading area should be restricted. That should have been done twenty-five years ago. The matter of which my hon. friend spoke is only a trifling one. If you do not allow people to take up homesteads in certain districts, if you give them to understand that they cannot get a patent in those districts, then you will not aggravate the conditions that we have had in the west for many years, whereby settlers have taken up homesteads many miles from railway facilities and later come to parliament asking for railway construction. The policy of the various governments for the last twenty-five years has been wrong in that regard. In the first place they encourage settlers to come to Canada and no regard is paid to them after they land in this country. If the settler is a Canadian, no regard is paid as to where he should settle. I know from my experience in the west that many people who came to Saskatchewan never got beyond the city of Saskatoon. They spent all their money in endeavouring to find a homestead in western Canada and they had to fish for themselves in Saskatoon, Regina, Moose Jaw, Calgary, or some other city in the west.
I am not so much opposed to the present measure, but it is tiftie that the government had some policy with regard to land settlement in Canada. Land settlement should be restricted to areas where they have already a railroad or where they will have one in the near future. We have advocates appearing all the time before the railway committee asking for railway construction in different parts of the country. This is a very expensive proposition; we are wasting not only the money of the people but the time of the settlers who are placed thirty, forty, fifty, sixty and in some cases a hundred miles from a railway. The land settlement question in Canada is one .which should have the careful consideration of the department, the government and the house, because we have not now any blocks of land to offer to settlers where they can have any assurance of railway facilities within the near future, unless some section of land is blocked out and offered to the public either free or at a price with the understanding that railway facilities will be provided.
As you go through western Canada you find that railways have been built without any regard whatever to a fixed policy. Homesteaders have taken up land in one place and other people have bought land in others. Lands purchased in districts adjacent to railways are in many cases being held out of use.
I have heard many plans suggested for bringing under cultivation all that land, but I have not yet heard any that I think is feasible. We should not allow future settlement at great distances from railways without first having it understood that the people who go into such districts will be given railway facilities or they will not receive a patent for their lands. The government should take this matter into consideration when they are suggesting a change in the homesteading legislation, because many homesteaders in western Canada have suffered great hardships from the lack of railway and other facilities. We have throughout Canada ample land for every person in this country and for many millions of people who may come here, if a sane policy be adopted with regard to the settlement of that land. Land north of the present settled district, of the present railway facilities, is regarded by the people of Canada as of doubtful value, but the same thing applies to all land that is not settled anywhere. There is good land throughout Canada for many millions of people. In Ontario and Quebec there is ample land to offer as an inducement to incoming settlers and to our own people who are now leaving the country, if you have a proper progressive policy to take care of the prospective settler. We have the land to offer to the incoming settler, but we should offer it to him on the understanding that he will have the facilities when he gets the land, and we should not allow people to go out over the country promiscuously and settle. We should adopt a policy whereby certain sections should be thrown open for homesteading and certain sections sold in order to facilitate the development of the country. The policy of allowing people to settle wherever they like has been a bad policy in the past, and it is a bad policy to-day, and one that should not be encouraged, to assist people in taking up land where there is no assurance that they will have railway facilities in the near future.


Mr. McLEAN (Melfort):: There is a good deal in what the hon. member has said; but if the people had waited for the government to lay out a policy whereby they would be segregated in certain areas, this country would not be producing now six hundred per cent more wheat than it did twenty years ago. That is a record that has not been equalled anywhere else in the world. Men are not all built alike. You cannot make human nature conform to certain modes and regulations that governments may enforce. When the Minister of Agriculture came west from Ontario and found that he had to go forty miles away from a railroad and across a difficult terrain-

Dominion Lands Act


Mr. MOTHERWELL:: Four hundred miles.


Malcolm McLean: Well, forty miles later on, and across country that is difficult for transportation purposes-if he had not been willing to go out that distance from a railroad he would not have secured what he wanted, he would not have been satisfied, and the chances are that, he would have left the country and gone somewhere else. The minister is well known throughout Canada as a pioneer of worth. I should not like to make invidious comparisons, but he is only a sample of many members who come into the House of Commons to-day. Many people have come from the older parts of Canada, from Great Britain, from Europe; they have not been satisfied to go one or ten or twenty miles from a town or a railroad; they have wanted to get away out. The hon. member for Acadia (Mr. Gardiner) must be familiar with the story of the ranchman who, when he could see the smoke of a neighbour, decided to move away because the country was getting too crowded. So long as human nature is what it is, you cannot corral it in any segregated area. If you do not allow people to go out and settle where they like, they will move away. It will be a bad day for Canada if that instinct ever dies out.
If clause 8 of this bill is carried, the change will in my opinion help to remedy some of the weaknesses of previous legislation. The leader of the opposition and the hon. member for Acadia both spoke of lands in the south that should not have been entered as homesteads but that were entered with the result that the people had to move away. The discussion was illuminating to me because, coming from the north, I, along with many more, think the best lands in the western provinces are in the north.


Richard Bedford Bennett: The hon. member for
Medicine Hat, in whose constituency those lands were, gave better evidence on the subject.


Malcolm McLean: I did not hear him so well as I did the other members. I appreciate the discussion because it throws a new light on the matter from my point of view. Some of us in the north have been accustomed to thinking that the good vacant lands are in the north, because we did not know of many good lands elsewhere. There is a weakness that will be remedied by the passing of this legislation. Many settlers in those districts that perhaps should not have been opened, many people who went in there with considerable wealth, as the leader of the opposition has said, find themselves

compelled to move elsewhere. The young people are able to move up into the north country and take up new homesteads, but the father or the guardian or the older brother is not able to move with them. I know of actual Cases of men who homesteaded forty odd years ago and who just missed coming within the second homestead law by a matter of a few months. Their boys have grown up and they have gone into the north. They are looking around for homesteads to take, but the father, at a time when he might well homestead, finds himself compelled to live on his son's farm or with one of his sons because he cannot go out now and buy land.
Among other things, this will enable the family to be kept together. I have not asked for this, and I am not particularly enthusiastic over it, because I believe-I may be wrong- there is not so much good vacant land in the province of Sasckatehewan as many people think. But I do think that our own people, whether in eastern or western Canada, who now find themselves compelled to seek a second homestead should be treated at least as generously as the immigrant. I say this in all kindness, because I was of that class myself, coming in here as an immigrant. Many of our people in western Canada, due to climatic or soil conditions or to lack of ability and experience, Save fallen down and to-day they are anxious to make a new start. Just before I left home a returned soldier from southern Saskatchewan asked me if I would see the Soldier Settlement Board and get permission for him to enter again for a homestead in northern Saskatchewan. He had already had one homestead or had secured a farm from the Soldier Settlement Board and had fallen down in making his payments- probably through no fault of his own, because he was a good worker, but he was in an unfortunate district, and he is now anxious to make an entry in the north country. I am satisfied that this house and the people of Canada would be just as anxious to give that returned soldier a chance to enter on another quarter-section of land free, except for the payment of ten dollars, as they would be to give a quarter-section of land to a man who comes in here from abroad and who can immediately go to the land office and get a quarter-section on payment of ten dollars. Many good settlers in western Canada even to-day are a considerable distance away from the railroad. Until four years ago one of the best districts I know of was .forty miles away from the railroad, yet the farmers there were carrying on and doing pretty well, and the railroad which has since gone into that dis-

Dominion Lands Act
trict is doing all right. I said that these lands were free except for the payment of ten dollars, but of course it is the old story; the government bets a quarter^section of land against ten dollars that the settler cannot stay on it for six months in each of three yeara and carry out his duties. Many of these lands are hard to bring under cultivation, but men who have to make a new start should be given a chance and I hope that the committee will pass this measure.


Frank S. Cahill: I do not want to be understood as objecting to the measure passing or being opposed to a man having a right to a second homestead. I do not know that any hardship would be caused if every farmer in the west who had settled upon a farm and sold1 it had the right to a second homestead, or even a third or a fourth or a fifth, so long as he performed his duties on each one according to the act. I do not know that any harm would be done to the country if he was allowed to take as many homesteads as he could prove up. But some policy should be formulated by the government for the intelligent direction of settlement, so that settlement may take place in districts where there will be facilities in the future. The example of the Minister of Agriculture does not mean anything to-day. He may have located several hundred miles away from a railway, and was able to do it and succeed, but he is one man in a thousand, perhaps in a million. It is not necessary for people to undergo these hardships to-day, if there is intelligent direction of settlement by the department in charge. That is my only objection to the present system. I say that there should be some policy whereby the lands will be laid out for settlement where the settlers can expect facilities, instead of allowing the land to be taken up promiscuously all over the country, and then later on having the settlers coming to Ottawa and asking for railway facilities. But I have no objection whatever to a man taking the second homestead.


Richard Bedford Bennett: I was about to rise to
express the views that were so admirably stated by the hon. member for Acadia. The hon. member for Pontiac has dealt with the matter as one viewing it from the outside, but he stated his opinion, and in my judgment, it is a sound opinion, as to the principles that should govern in considering matters of this kind. We all know what the situation is in the Peace river country. We all know that if there had not been unrestricted homesteading that situation would 56103-130*
not have arisen. The hon. member for Acadia has pointed out that in some instances the settlers are four hundred miles from railway facilities. I had a letter the other day from a returned soldier who had been fortunate enough to get a homestead entry within forty miles of an existing railway, which would be much closer when projected railways were constructed. This is the sequence of events:	First, a long tedious
journey, the staking of a homestead, the paying of the ten dollars, the getting of the certificate, the building of a sod shack, sometimes a wooden shack, depending upon the distance and the facilities and the money the homesteader has; then a crop from a few acres, then more settlers, and then a demand for (a) transportation by roads, highways; (b) railway transportation, and (c) schools. The schools are a charge upon themselves, and the hon. member for Medicine Hat would have been able to tell this house that there are school districts now abandoned in drought areas in which there is not a single ratepayer left, although debentures were sold to eastern investors and others, and efforts are now being made to repay them. That condition actually prevailed in the territory to which the hon. gentleman referred, and in which he spoke of abandoned towns. In these new territories where homesteads are being staked, the settlers get further and further away, and then demands are made in just the order I have indicated. There was a statement made in this house by the Minister of the Interior that the day of free homesteads had long since passed, and that that policy should be abandoned, but that was not done.
I think it is very unfair for this parliament to be dealing with the matter in this way. We are only trustees for these western provinces, and we are now saying that these lands shall be made available for second homesteads when, on every equitable basis, the provincial authorities should really be dealing with them. We are coming very nearly to relinquishment of our trusteeship in passing this legislation. I think the point which the hon. member for Acadia made is most worthy of consideration. Apart from the fact that we should not grant the second homesteads in the way in which they are to be granted, I have lived long enough in western Canada and I have had enough to do as a member of parliament and as a defeated candidate to know just what is meant when you talk of the minister having power to dispose of second homesteads. Human nature is not any different under a Liberal coat or
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under a Conservative coat; I am not now speaking with respect to the virtues of one party or the other, but the truth is that no minister of the interior, and no department like the Department of the Interior as now organized and administered should have it in its hands to say who shall and who shall not have a second homestead. It is unsound. Is it fair, is it just, is it proper, that it should be so? I leave it to this committee to say.


Charles A. Stewart: This was put in by the officers of the department to take the place of the certificate of the provincial authorities. I am quite willing to wipe it out. I am also willing to make the date , twenty-five instead of twenty-eight to meet the abjection of my hon. friend. But what I want to know is this: Does the committee object to the principle of giving a second homestead to people who are already in the country, while continuing the policy of giving homesteads indiscriminately to newcomers to Canada? If it is the attitude of the committee that we should treat our own people in Canada differently from newcomers, and not give them the right to a second homestead, I can withdraw the whole bill and leave the matter as it is now. If the desire of the committee is to deprive the settler who has gone through the hardships of homesteading once-and I am one of them, I know all about the sod shack and the other makeshifts-if it is the desire, I say, to deny that individual who has boys growing up around him the opportunity of selling out his little holding and homesteading in a new district, while we give to newcomers the privilege of securing free land, then I will withdraw the whole thing. On the other hand, if it is desired to give him a second chance, I am willing to wipe out supervision by the minister and make thp period 1925 instead of 1928.


Richard Bedford Bennett: The hon. minister has with great fairness expressed his willingness to amend the legislation. I do not think he himself drafted the section, but nothing could more clearly indicate the attitude of the department of the Interior towards western Canada than that very section.


Charles A. Stewart: That is not quite fair. Let me point out that under the provision for second homesteads to those going north from the dried out area, since 1923 we have had to require the certificate of the provincial government. This amendment is intended simply to provide for the necessary inquiry, not with any intention to be autocratic.
fMr. Bennett.]


Richard Bedford Bennett: I am sorry that I cannot agree with my hon. friend; for I have had experience, and so have the people of western Canada. In no department of the public service has there grown up the same sense of autocracy as in the Department of the Interior. Now the minister says he is perfectly willing that the certificate of the provincial authorities should be required. That is quite fair and proper.


Charles A. Stewart: No, I say
I am willing to wipe out the whole thing.


Richard Bedford Bennett: I will come to that
presently. In that section he will substitute for his discretion the certificate of the provincial authorities?


Charles A. Stewart: My hon.
friend does not quite understand me. The individuals who had the right to a second homestead had to come from area "A" south of 31. Now we are removing that restriction and they may come from all over the province; that is, there is no debarred area.


Richard Bedford Bennett: I know that.


Charles A. Stewart: When the
people came from the restricted area we asked the provincial authorities to give us certificates that they were entitled to second homesteads. The name of the Minister of the Interior has been substituted. I am willing to wipe that out.


Richard Bedford Bennett: I congratulate the minister upon his spirit of fairness; and what is more, I accept very gladly his observation that he is not responsible for the amendment. No one who has spoken so far has denied that there should be second homesteads. But there are two sides to the question. If a settler comes into Alberta from Saskatchewan or Manitoba, having once had a homestead or a pre-emption there, and says, "I want another homestead in this province", he is not the least bit different from the immigrant.


An hon. MEMBER:: Why not?


Richard Bedford Bennett: For the simple and
obvious reason that there is placed on the province the burden and expense of schools, transportation and roads. In the one instance we have added to the population of Canada, in the other we have not. I cannot think that the provincial authorities in their anxiety for population are trying to get it from one another.


Mr. McINTOSH:: There is a certain
amount of overflow that you cannot prevent.

Questions


Richard Bedford Bennett: There are a certain number of pioneers and the other kind mentioned by the minister, speculators, that are never static.


Charles A. Stewart: The member for Acadia (Mr. Gardiner) said so. I absolutely deny that there is any speculation in proving up a homestead.


Richard Bedford Bennett: The hon. member speaks very feelingly in respect to it; but that is not the form of speculation meant. Unlike the minister I never homesteaded, but I have been a fair observer of the settlement of one section of western Canada, and nothing has amazed me more than the number of farms that are not now occupied by the men who homesteaded them.


Charles A. Stewart: Very few.


Richard Bedford Bennett: They stayed long enough to get their preemptions and then moved on. I think it is a very grave question whether the right to a second homestead should be left open in the terms now proposed.


Charles A. Stewart: The preemptor is provided against.


Richard Bedford Bennett: Yes. The committee is aware of the fact that a man is allowed to homestead and then preempt, giving him a total of 420 acres. This amendment prevents the man who has a homestead and a preemption from getting another 160 acres. But while listening to-night my thought has been this:	Is it desirable to leave it open in the
terms of this bill so that lands may be available to any person for a second homestead; or shall we endeavour to meet the very situation that I think should be fairly considered, namely, that of the man who has been driven out of his existing holding and who is desirous of remaining in this country with his family? He gets a second homestead, his boy of 18 gets another, and his boy of 20 gets a third, and he has a very substantial holding around him. That is what the minister desires to do. But is it not advisable to protect that by some form of legislation, rather than leave it open to chance, knowing as we do that in many instances the result will be that those who come from Manitoba or Saskatchewan will at once push into that country for a second homestead?


Charles A. Stewart: Moving
from one province to another?


Richard Bedford Bennett: Yes; and the minister
knows that that is not an imaginary situation.


Mr. BEAUBIEN:: Would not that be a
good thing for Alberta?


Richard Bedford Bennett: Yes; but think of the
loss to Manitoba.


Malcolm McLean: The movement
is the other way now.


Charles A. Stewart: They are
going into northern Manitoba.


Charles-Philippe Beaubien: Suppose a man in Manitoba sold his homestead and decided to take another in Alberta, would you deny him the right to go there?
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Monday, April 16, 1928