1932-02-25

[Stage Direction]
Mr. G. R. GEARY (South Toronto) presented the first report of the special committee appointed to inquire into certain charges made by the Hon. G. N. Gordon,
K.C., as follows:
Your committee recommend that 500 copies in English and 250 copies in French of proceedings and evidence which may be taken be printed, as required, and that standing order 64 be suspended in relation thereto.
All of which is respectfully submitted.
Mr. GEARY moved that the report be concurred in.
Right Hon. \V. L. MACKENZIE KING (Leader of the Opposition):	May I say with
respect to this motion for the printing in English and French of five hundred copies of the proceedings of the committee which is investigating certain allegations made by the Hon. Mr. Gordon, that I think it is a waste of public money to print the proceedings of this committee. What useful purpose is going to be served by it? The Prime Minister wishes to have certain facts brought out and no doubt a statement by Mr. Gordon in reference thereto. This will be brought out in committee and the committee can make its report, but surely it is simply throwing away the
Privilege-Mr. Gott
[Stage Direction]
money of the people, which it is difficult enough to raise through taxation these days, to spend it on the recording and printing of the evidence of a committee functioning for the purpose for which this committee is functioning. I submit again that this matter should never have been brought into parliament at all, and I believe the less there is of record concerning it the better it will be for the Prime Minister and all concerned. I protest against the printing.
Motion agreed to, on division.

[Stage Direction]
Mr. ECCLES J. GOTT (South Essex): Mr. Speaker, on a question of privilege-
Some hon. MEMBERS:: Order.


Mr. GOTT:: On a question of privilege, or
parliamentary procedure, or order, I want to draw to the attention of the house an item that appears in yesterday's Hansard at page 502 under the name of Mr. Hepburn, in answer to a remark that I made. My remark was:
Will the perforated member permit me to ask him a question?
The hon. member for West Elgin (Mr. Hepburn) appears in Hansard to have said, although he did not utter this remark yesterday, as I have verified from the Debates office:
Had I an extended waistline like the hon. gentleman I would want to be perforated even more.
I would like to know, Mr. Speaker, if an hon. member of this house can insert in Hansard any remark he likes in order to make his constituency think that he is a very wise member of this House of Commons. This is a matter that should be decided to-day. I do not think that any member should be permitted to interject into the records of this house any silly statement like that.


Mr. HEPBURN:: I might say that I did make the statement. It was heard by members on this side of the house, and Hansard asked me to say just what was said, owing to the fact that there was a disturbance at the time and my remark was not caught by the Hansard reporter.


Eccles James Gott: I stated, Mr. Speaker, that the remark was not reported by Hansard.


Mr. SPEAKER:: It will be inquired into.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk).

Mr. MARCIL:: Has the government considered the urgency of proceeding with the work of removing level crossings at Matapedia, Quebec, and will any action be taken this year?


Mr. MANION:: May I point out that this
is a question which must be decided by the Board of Railway Commissioners and the railway concerned. It is not a matter that is in the hands of the government. I do not feel that it is the duty of the government to decide this question at all.


ROYAL CANADIAN MOUNTED POLICE-COAL
Mr. GARLAND (Bow River):: 1.	Is the contract for coal supply of the Royal Canadian Mounted Police at Gleichen, Alberta, let by tender?
2.	If so, who was the successful tenderer during each of the past five years?
3.	What was the price of the tender in each case?
4.	Was this the lowest price offered?
5.	How many firms tendered for the period 1931-32?
6.	Who was the successful tenderer?
7.	What was the price per ton of the successful tenderer?


Mr. GUTHRIE:: 1.	Yes.
2.	1927, Crown Lumber Company Ltd., Gleichen, Alta.; 1928, Crown Lumber Company Ltd., Gleichen, Alta.; 1929, R. S. McQueen, Gleichen, Alta.; 1930, The Crown Lumber Co. Ltd., Gleichen, Alta.; 1931, The Crown Lumber Co. Ltd., Gleichen, Alta.
3.	1927. $7.35 per ton; 1928, $7.50 per ton; 1929, $7.20 per ton; 1930, $7.20 per ton; 1931, $6.40 per ton.
4.	1927, yes; 1928, both competitors quoted same price; 1929, yes; 1930, all firms quoted same price; 1931, both competitors quoted same price.
5.	Two firms.
6.	The Crown Lumber Co., Ltd., Gleichen, Alta.
7.	$6.40 per ton delivered.


NATURAL RESOURCES TRANSFER-LEGAL EXPENSES
Mr. BEAUBIEN:: [DOT]
What sum or sums were paid by the government to any lawyer or lawyers acting for it in connection with the settlement of the transfer of the natural resources to the province of Manitoba?


Mr. CAHAN:: Smart and Biggar, Ottawa, $1,280.84; A. R. McMaster, Montreal, $6,651.80.

Questions


UNITED STATES MAGAZINES PRINTED IN CANADA
Mr. GARLAND (Bow River):: 1.	How many magazines formerly printed and published in the United States are now being printed in Canada?
2.	What are the names of said magazines?
3.	What is the estimated loss or gain in revenue on this item since the customs duty took place?


Charles Hazlitt Cahan: 1	and 2. No magazines as defined by the governor in council, but 47 fiction publications: Ace High, Aces, Action Stories, Adventure, All Story, Argosy, Ballyhoo, Battle Aces, Battle Stories, Blue Book, Clues, College Life, Complete Detective Novel Magazine, Complete Stories, Cowboy Stories, Detective Fiction, Detective Story, Dime Detective Magazine, Dream World, Family Journal, Far East, Fight Stories, Film Fun, Lariat Story, Love Story, Master Detective, Railroad Man's Magazine, Ranch Romances, Rangeland Love Story, Short Story, Sport Story, Sweetheart Stories, Thrilling Detective Tales, Triple X, True Confessions, True Detective, True Experience, True Romances, True Story Magazine, War Aces, War Birds, West, Western Rangers, Western Romances, Western Story, Wild West Stories and Complete Novel Magazine, Wings.
3.	a-Estimated gain in postal revenue, September, 1931, to December, 1C31, inclusive, $17,500 on these fiction publications; b-import duties collected September 1, 1931, to January 31, 1932: under Tariff Item 184-b, $203,342.17; under Tariff Item 184-d, $3,464.55; sales tax and excise tax figures not available.


STURGEON PALLS, ONT., CUSTOMS OFFICER
Mr. HURTUBISE:: 1.	Who was customs officer at Sturgeon Falls (Nipissing), Ontario, before the year 1932?
2.	Has he been dismissed from his functions?
3.	If so, what were the reasons for his dismissal?
4.	Has a successor been appointed?
5.	If so, on whose recommendation was he appointed?


Mr. RYCKMAN:: 1.	Mr. Tancrede Dumouehelle.
2	and 3. No, he tendered his resignation.
4.	Yes.
5.	He was appointed by the Civil Service Commission.


MR. ARTHUR MORIN
Mr. HURTUBISE:: 1.	Was Mr. Arthur Morin, employed in the health department, Grosse-Ile, county of Mont-magny, Quebec, dismissed from his duties?
2.	If so, why?
3.	Was an inquiry held?
4.	If so, by whom?
5.	Was a report made by the commissioners appointed to make the inquiry?
6.	If so, did the government act on that report?


Mr. MacLAREN:: 1.	Yes.
2.	Engaged in political activity while in exercise of his duties.
3.	No, on the written statement of the federal member, he was dismissed by order in council.
4.	Answered by number three.
5.	Answered by number three.
6.	Answered by number three.


SALES OF REVENUE STAMPS
Mr. VENIOT:: 1.	What revenue was received from sale of revenue stamps for fiscal year ending March 31, 1931?
2.	What revenue was received from sale of revenue stamps from June 1, 1930, to January 31, 1931?


Mr. RYCKMAN:: 1.	$6,156,313.20.
2.	$4,147,199.


ST. OMER, BONAVENTURE COUNTY, LIGHTHOUSE
Mr. MARCIL:: 1.	Has the lighthouse at St. Omer, county of Bonaventure, been transferred from the mainland to the end of the wharf at that place?
2.	Who did the work, at what price and were tenders called for?


Mr. DURANLEAU:: 1.	No. The light was moved to the outer end of the wharf as recently extended.
2.	Lightkeeper Jean Arsenault. $150. Tenders were not called for.


ST. OMER, BONAVENTURE COUNTY-PROTECTION WORKS
Mr. MARCIL:: 1.	Has the municipality of St. Omer, Quebec, applied for a grant for repairing and extending protection work in that municipality, along the Perron boulevard, from St. Omer wharf westward to the property of Omer Arsenault?
2.	If so, has this application been granted and who has been placed in charge of the work?


Mr. GORDON:: 1.	Under the Unemployment and Farm Relief Act, 1931, St. Omer parish, county of Bonaventure, P.Q., applied for a grant for a breakwater to protect road.
2.	Y'es. The work being carried out by the municipal authorities.
Questions


UNEMPLOYMENT RELIEF IN PRINCE EDWARD ISLAND
Mr. MacLEAN:: 1.	What amount of money was given to the province of Prince Edward Island under the Unemployment and Farm Relief Act in 1931?
2.	Has the full amount to be given to Prince Edward Island been paid over to the provincial government ?
3.	If so, on what date was it paid?
4.	What amount was agreed to be paid to each of the incorporated towns throughout the province?
5.	Have all the incorporated towns within the province who undertook work under this grant been paid their proportion of same by the local government?
6.	Has the province of Prince Edward Island made application to the federal government for money for direct relief purposes?
7.	If so, what amount has been granted?


Mr. GORDON:: 1.	The sum of $125,000 was allotted to Prince Edward Island as Dominion contribution to municipal and provincial expenditures for public works and undertakings
2.	No.
3.	Answered by No. 2.
4.	The Dominion is contributing $7,375 to the cost of public works being carried out in the city of Charlottetown, and $3,750 to works in Summerland.
5.	No information.
6.	The agreement between the Dominion government and the province of Prince Edward Island under the Unemployment and Farm Relief Act, 1931, provides that the Dominion shall pay to the province for remittance to any municipality 33J per cent of the expenditures of the municipalities for direct relief where suitable work cannot be provided for the unemployed, and 50 per cent of direct relief disbursed by the province in territory where no municipality exists. No recommendations have been made by the province of Prince Edward Island in regard to the granting of direct relief. The federal government is paying direct relief accounts on the above basis as certified by the province in accordance with the agreement.
7.	Direct relief paid by the Dominion to date is as follows: Queens County, $552,12; Prince County, $290; Kings County, $243.


MR. JOSEPH BERUBE
Mr. POULIOT:: 1.	When was Mr. Jos. Berube of Cacouna dismissed as Indian agent?
2.	At whose request?
3.	For what reason?
4.	Has he been replaced?

5.	If so: (a) is it temporary or permanent; (b) by whom; (c) when; (d) on whose recommendation; (e) were there many applicants for said position; (f) if so, who were they?


Mr. MURPHY:: 1.	From January 1, 1932.
2.	By order in council on the report of a commissioner appointed under the Inquiries Act.
3.	Political partisanship during the last federal election campaign.
4.	Yes.
5.	(a) Temporary; (b) Mr. Alexis Michaud, Cacouna, Que.; (c) February 1, 1932; (d) The direction of the superintendent general; (e) The Civil Service Commission has advertised the position for permanent appointment but has not yet reported to the department.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. GARLAND (Bow River):: 1.	What contracts were let to the Canadian Import Company of Montreal, for the coal requirements of any and all departments of the government during the years 1925, 1926, 1927, 1928, 1929. 1930 and 1931?
2.	Has the Canadian Import Company or the St. Lawrence Stevedoring Company a lease of the Bickerdike pier from the Montreal harbour commission ?
(a) If so, what are the terms of the lease?
3.	Have the Canadian Import Company and the St. Lawrence Stevedoring Company a lease from the Quebec harbour commission?
(a) If so, what are the terms of the lease?
4.	Who are the owners of the Canadian Import Company?
5.	Who are the owmers of the St. Lawrence Stevedoring Company?



PAYMENTS TO GAZETTE PRINTING COMPANY, MONTREAL

Mr. GARLAND (Bow River):: ^ 1. What amounts have been paid to the Gazette Printing Company of Montreal during the years 1925, 1926, 1927, 1928, 1929, 1930 and 1931?
2.	For what have these payments been made?
3.	What is the name or the names of the owner or owners of the Gazette Printing Company?



PENSIONERS' RELIEF-RATES

Mr. SPENCER:: 1.	What are the rates of pensioners' relief when unemployed, and under what conditions can pensioners receive relief for both married or unmarried men?
2.	Is there any special rate governing those pensioners who are living apart from their families, and should these men and their families benefit by the pensioners' unemployment relief?

Civil Service Commission
3.	Is the pensioner living apart from his family for whatever cause rated as a single man when seeking unemployment relief?
4.	Has the Department of Pensions and National Health through the Board of Pension Commissioners the right to deprive any pensioner of any part, or all of his pension and relief when unemployed, because he may be living apart from his family?



CIVIL SERVICE-EMPLOYEES OVER AGE OP SIXTY-FIVE

Mr. SPENCER:: 1.	What is the total number of civil service
employees over 65 years of age in the civil service?	.
2.	What is the total amount of salaries paid to civil servants who have attained the age of 65 or over?
3.	What is the total number of temporary employees at present employed as civil servants?
4.	What is the total amount of salaries paid to civil servants temporarily employed?



SEED GRAIN ADVANCES

[Stage Direction]
On the orders of the day:
Hon. W. R. MOTHERWELL (Melville):: May I ask of the minister the following question:	Are seed grain liens being taken on all
resultant crops from seed grain advanced in Saskatchewan? Are such advances due and repayable by the farmers by August 15 of this year?


Hon. ROBERT WEIR (Minister of Agriculture) :: I regret that I am not in a position to give the details of the arrangements that are being made by the Saskatchewan government in supplying this seed grain.



CIVIL SERVICE COMMISSION


[Stage Direction]
On the order to resume from Tuesday, February 9, the debate on the motion of Mr. McGibbon:
That, in the opinion of this house, all outside appointments should be taken away from the Civil Service Commission and made upon the recommendation of the minister.
Mr. McGIBBON:: In view of the fact that
the government have promised to send this matter to a committee I wish to withdraw the resolution.


Pierre Édouard Blondin: Has the hon. member the permission of the house to withdraw the motion?


Mr. MACKENZIE KING:: May I ask, Mr. Speaker, if the motion is withdrawn, will it then be possible to send the motion to a committee which is not yet appointed?


Pierre Édouard Blondin: I understood the hon.
member to express a wish to withdraw the motion.


William Lyon Mackenzie King: That is quite
correct, but I understood him to say-it is his own business, of course-that it was going to be sent to a committee, and I do not see how it can be sent to a committee which is not yet formed and that at a time when the motion is no longer on the order paper.


Pierre Édouard Blondin: Has the hon. member
the permission of the house to withdraw the motion?
Motion withdrawn.


Mr. WOODSWORTH:: I cannot quite
understand that proceeding, Mr. Speaker. As I understand it, the hon. member wishes to withdraw his resolution. There has been no consent of the house to that, and certainly this house has not passed a motion that this shall go to a committee.


Mr. LAPOINTE:: No, the motion has been withdrawn.


Pierre Édouard Blondin: There is no motion before the house that the resolution go to a committee at all. As far as the house is concerned it has consented to the withdrawing of the motion, and that is the end of it.


James Shaver Woodsworth: But in asking leave to withdraw, the hon. member for Muskoka-Ontario (Mr. McGibbon) said that the understanding was that it was to go to a committee.


Pierre Édouard Blondin: He was entirely mistaken.


William Lyon Mackenzie King: That is what I was pointing out.


James Shaver Woodsworth: I could not catch
it.



STABILIZATION OF CURRENCY


[Stage Direction]
The house resumed from Monday, February 15, consideration of the motion of Mr. MacLean and the amendment thereto of Mr. Irvine.
Mr. H. E. SPENCER (Battle River):: The resolution placed before this house by the hon. member for Prince (Mr. MacLean) reads as follows:
That, in the opinion of this house, if the empire is to become an economic unit, the stabilization of currency within the empire is very important and should be one of the first questions for consideration on the agenda of the Imperial conference at its meeting in July next.
Stabilization oj Currency

Later in the debate the hon. member for Wetaskiwin (Mr. Irvine) moved the following amendment:
That the motion be amended by striking out all the words after the word "that" in the first line and substituting therefor the following:
in the opinion of this house the Canadian representatives at the coming Imperial economic conference should move for the stabilization of the currency of all British countries to be on a basis other than gold.
Continuing this debate, Mr. Speaker, I wish first of all to congratulate the hon. member for Prince (Mr. MacLean) upon bringing before this house one of the most important subjects it has been our lot to consider. The matter of currency and credit is very closely linked with the trade, commerce, welfare and the happiness of the people of any country. I am only sorry that we have not heard a single word in support of the resolution he proposed to the house from any other member of the group to which he belongs.
I wish however to congratulate the right hon. leader of the opposition (Mr. Mackenzie King) who in his speech in the debate on the address in reply to the speech from the throne criticized the government by stating that in the speech from the throne no mention had been made of the subject of currency and credit. He drew attention to the importance of this subject and wondered whether in view of the crisis we are going through the government of the day was quite satisfied with the present situation and whether our present condition could not in some degree be traced to the unsound state of currency and credit. In making that reference however the right hon. gentleman travelled a long way from the stand he took only a year ago when I had the privilege of moving a subamendment on behalf of the group to which I have the honour to belong, to the off ecu that we should go off the gold basis, so far as holding gold behind our currency was concerned. At that particular time the right hon. gentleman criticized me severely for making such a suggestion. Since that time however much water has passed under the bridge; Great Britain and many other countries have gone off the gold basis and, the subject being now more popular, it is of course in order for anyone who wishes to climb upon the proverbial band wagon.
When the Minister of Finance (Mr. Rhodes) decided to take part in this debate, naturally we anticipated something of a constructive nature from him, particularly because of his great ability and because of the important portfolio for which he is responsible. I was therefore very much surprised when, in the
rMr. Spencer.]
short time he spoke, he treated the subject rather lightly and did his best to criticize the efforts of the hon. member who brought the resolution before the house. Continuing the debate, an amendment was moved by the hon. member for Wetaskiwin (Mr. Irvine) upon which I should like to congratulate him, and which, if accepted will, in my view, add weight to the motion. I should like also to congratulate the hon. member upon the very able manner in which he presented his argument to the house. We know that for many years he has given this subject a great deal of thought and from time to time has placed his views before this house. I do not think however that he has ever made a more able speech and one more to the point than he made the other day.
I should like to remind the house of a statement by C. E. Neill, who before his death was vice-president of the Royal Bank, to which reference was made by the hon. member for Mackenzie (Mr. Campbell) and which reads as follows:
If the central banks of all the countries on a gold basis should deliberately adopt a common policy they could within a certain time lag. raise or lower the price level almost at will.
I entirely agree with that statement. Unfortunately, however, countries do not pull together in this regard and prices are not regulated because we have not international cooperative effort. In this connection may I refer to a very able address given by Right Hon. Reginald McKenna, president of the Midland Bank of Great Britain who, speaking to the shareholders of that bank is reported in the Manchester Guardian of January 30. as follows:
We must have a managed gold standard by an international agreement or we must definitely abandon gold and rely on a managed standard of credit and currency without any metallic basis at all.
Further, he stated:
The time has gone by for the child-like belief that as long as a country is on a gold standard all is well.
And, further:
The world crisis is due in part to the inefficient "working of our monetary machinery.
Making a study of this subject I come to the conclusion that we face an inevitable collapse of our financial structure so long as we try to tie ourselves to a gold basis. I remember that in the year 1923, when the Bank Act was under revision, and before that time when an investigation was being made into the basis of credit, its function, control, and relation to trade, one

Stabilization of Currency
of the witnesses placed before the committee a graph in the shape of an inverted pyramid showing the position of the Canadian monetary system, and indicating very cleverly the way that the monetary system was, supposedly, built on a small basis of gold. It showed, as it would show to-day if a similar figure were drawn, that we have only a small basis of gold in Canada, and that on top of that there is an amount of currency nearly three times the amount of gold, and payable in gold

and I say "and payable in gold" because although private bank currency is not payable in gold it is payable in dominion notes, which are payable in gold. Therefore we might make the blanket statement that all the notes used are payable in gold. On top of that we have bank deposits aggregating to-day about two billion dollars. Then, above that, we have bonds which, in round figures, aggregate approximately $2,300,000,000, all of which are supposed to be payable in gold. It is manifest that all those notes and securities could not possibly be redeemed in gold. Indeed, if we required redemption in gold, that is, if we applied the gold basis strictly, there would not be a solvent bank in this country. Of course, the gold basis is perfectly all right when it is not called upon to function; in other words, it is a matter of imagination, and the sooner we realize that the better for all concerned. That this is so, I need only remind the house that whenever there is a world crisis, whenever we are in a state of war, whenever trade is particularly bad-as it is to-day-then we promptly go off the gold basis; the government passes an order in council or secures legislation declaring that paper currency may be redeemed in other than gold.
It is interesting to realize that our monetary system is made up largely of three things: coin, currency, and credit. Coin tG-day, we use to the extent of about $31,000,000; currency varies anywhere from $300,000,000 to $400,000,000; as to the balance, according to the statement made by Sir Edmund Walker in 1923, no less than 96 per cent of our monetary transactions are carried on by the checking system. The amount of money therefore can be increased or decreased entirely at the wish of those who have the control of credit. At this point I should like to bring to my aid a statement by the Right Hon. Reginald McKenna, He asks the question:
How can the supply of money be increased?
This is his answer;
The amount of money in existence varies only with the action of the banks in increasing or
diminishing deposits. We know how this is effected. Every bank loan creates a deposit, and every repayment of a bank loan destroys one.
I know some hon. gentlemen will contend that that is a reversal of the process that takes place; some of them still think that our loans are all created from savings deposits.
I should like to remind them, however, that if that were the fact the more loans you made from pre-existing deposits, the smaller amount of savings deposits you would have. But instead of that, a study of the bank returns will show that the more loans made the greater the amount of the deposits; the more loans cancelled, the smaller the amount of deposits will be. In his book on the Elements of Banking, Mr. H. D. Macleod writes:
The essential and distinctive feature of a "bank" and a "banker" is to issue credit payable on demand, and this credit may be put into circulation .... and serve as money.
The manner of creating money was brought to our attention most pointedly during the late war. At that time we needed a great deal more goods to carry on our part in the great conflict. This involved a larger supply of money, and this supply was secured through the issue of bonds. This action would have had no effect at all on prices so long as on the one hand we put more money into circulation and on the other hand we created an extra quantity of goods; or if after creating these goods we had destroyed them, and had also cancelled the additional amount of money put into circulation; in either case prices would have remained stationary. But instead of that, while we destroyed a great quantity of goods in the theatre of war, 94 per cent of the new money was left in circulation. Therefore we had a larger amount of money in circulation in proportion to the quantity of goods on hand. Naturally this had the effect of increasing prices. Again and again large sums of new money were put into circulation, and each time the same thing occurred-most of the new goods being destroyed while the greater part of the new money was kept in circulation. Consequently at the end of the war we found we had to pay very high prices for everything.
Now, it had taken a number of years to inflate the currency in that way, and the only fair thing would have been to deflate this currency-if deflation was necessary-over a number of years equal to the period during which inflation had taken place. Instead, a drastic deflation was brought about. I might say that a gradual inflation is always a good thing for the producers, for it is always to their benefit to produce for a rising market; on
Stabilization of Currency

the other hand, the investors, particularly bondholders, lose to a certain extent, because they do not get any more interest on their bonds to compensate for the higher cost of living. But deflation is always a very bad thing for producers-and they compose the major part of our population-because they do not want to produce for a falling market; by contrast, however, the investors are correspondingly benefited, because their revenue is not diminished and they have the advantage of the lowered cost of living.
Now, what happened after the war? Let me again quote Mr. McKenna. He points out that in Great Britain'-and the same thing occurred here:
A policy of deflation could only end in the strangulation of business and widespread unemployment. Such a policy had already received public official sanction. Unhappily, employment decreased month by month as this policy was enforced.
On the same point I diesire to cite Mr. J. M. Keynes as follows:
Deflation . . . involves a transference of wealth from the rest of the community to the rentier class and -to all holders of titles of money. In particular it involves a transference from all borrowers ... to lenders.
At this point I should like to pay a well-deserved compliment to Mr. Keynes on the remarkable fulfilment of the prophecy he made in 1919. It will be remembered that in an advisory capacity to the British delegates, he took an active part during the negotiations which resulted in the treaty of Versailles. Then he resigned and wrote a book entitled The Economic Consequences of the Peace, from which I take this passage:
The war has ended with everyone owing everyone else immense sums of money. Germany owes a large sum to the Allies; the Allies owe a large sum to Great Britain; and Great Britain owes a large sum to the United States.
The holders of war loan in every country are owed a large sum by the state; and the state in its turn is owed a large sum by these and other taxpayers.
The whole position is misleading, artificial, and vexatious. We shall never be able to move again unless we can free our limbs of these paper shackles. A general bonfire is such a necessity that unless we can make of it an orderly and good-tempered affair in which no serious injustice is done to anyone, it will, when it comes at last, grow into a conflagration that may destroy much else as well.
In his very interesting book entitled The Story of Canada's War Finance, Sir Thomas White gives us most interesting details of what was done during that period. I should like to give two small quotations from that book. The first is from page 17, where the author says:

In a word, we paid the cost of our military operations by our production during the war.
I often wonder how our returned soldiers felt, coming back from the war, knowing a statement such as this had been made and knowing it to be true, yet having to do their share to pay for the war all over again. Then on page 59 Sir Thomas White said:
The burden of the debt created is passed on to future generations as a legacy and reminder of the waste of war.
I take it, Mr. Speaker, that there is no need for gold at all behind internal currency, and I was very pleased to read Mr. McKenna's speech in the Manchester Guardian, to which I have already referred. He supports this and many other contentions made from this corner of the house during the last ten years. I should like to refer also to another very able man. Sir Basil Blanchet, a director of the Bank of England, who spoke to the Canadian Club of Ottawa only about a year ago. At that time he said there was absolutely no need for gold behind internal currency, that it should be limited only by legislation and that there should be no limitation until there was an ample supply to meet the requirements of the public for a medium of exchange in the transferring of goods and services from one to another. As I said before, gold never has stood up in a crisis; it never will, and the sooner we get rid of it as a pure make-believe the better for all concerned.
No doubt there is value to gold in settling international balances, but the gold we have at present cost us a lot of money, and we are making nothing out of it. We might as well take that gold and use it as it is needed to pay our debts, and in that way we would save a great deal of the interest we have to pay at present. With the amount of gold we have on hand this would make a very considerable saving in our interest charges, for I want to remind the house that last year we paid no less than $124,000,000 in interest on our national debt.
I might quote various other authorities in support of the stand I have taken; I should like to mention Major C. H. Douglas, of London, England; Professor Soddy of Oxford university, Professor Irving Fisher of Columbia university, and many others who have given this matter a great deal of thought.
To-day we are going through a period of contraction of credit. No one, no matter what may be his business, but has had a great deal of difficulty in getting credit for the last couple of years, irrespective of security. What does contraction of credit mean? First it means a crash in prices, then a collapse of

Stabilization of Cunency
trade and following that, inevitably, a great increase in unemployment. The only silver lining I can see in the cloud at present is that this crisis is man made, and therefore it can be man mended. I do not believe humanity is going to be so insane as to let this crisis reach such a pitch that chaos will rule supreme; I believe some remedy will be found which will prevent the present rapid drift towards a chaotic condition in the world. If I were to make one sugegstion- and I could make many-it would be that the government form what might be termed a finance statistical bureau, whose first duty would be to keep very close tab on price levels and to recommend to the government and to the banks, since those are the two agencies through which credit or currency is issued at the present time, when to contract or when to expand credit, because it is the total quantity of money available to be spent that determines price levels.
In the speech from the throne we were told that world conditions are beyond the control of the Canadian people. That may be so, but our share of world control is not beyond the reach of the Canadian people and, as part of the world, it is up to us through whatever government may be in power to put forward some remedy to try to rectify the situation which faces us to-day. If we cannot make an international agreement we can make the next best thing, an agreement between all the British countries, and at the Imperial conference to be held here next July Canada will have an opportunity to bring forward such a resolution as we are considering to-day, together with the amendment which has been suggested, for consideration by the best brains attending that conference, in order to seek some means whereby the present serious drift will be checked and conditions brought back to normalcy.
In studying this question I have often thought how we have become turned around in so many things. For instance, when all is said and done, money should be nothing more or less than a medium of exchange for goods or services as between man and man. Instead of that, and instead of making money a slave to humanity as it should be, humanity certainly has become a slave to money, or to finance and those who control it.
In conclusion, Mr. Speaker, I should like to direct the attention of the house to some of the practical disadvantages to Canada of the erratic system under which we allow ourselves to be controlled. For instance, we find that it is possible for Australia to dump wheat into Vancouver in competition with the farmers 41761-33
of the prairie provinces, who as we all know are producing wheat to-day at a great loss. That is an extraordinary situation, and it has been brought about largely because of the difference between the currencies of the two countries. I know of one association which sends cattle to Great Britain, and which has lost no less than $19,000 for the same reason. It is because of these reasons that I sincerely hope the house and the government will give very sympathetic consideration to the motion and amendment now before us, so that when the Imperial conference meets in Ottawa in July of this year these matters will be brought forward in the hope that something worth while may be done.


Hon. H. H. STEVENS (Minister of Trade and Commerce):: Mr. Speaker, the tremendous importance of the subject which is included within the ambit of the resolution and the amendment warrants, I think, the most careful consideration of the house, and so far as I am concerned I am anxious to give to it the closest study. I think I can say on behalf of the government that it is intensely interested in and impressed with the importance of the subject. Before giving expression to the few thoughts I have on the subject generally, I should like to offer an amendment to the amendment, 'because possibly it will place this question in a somewhat better light. The resolution itself was a little innocuous and was very general. I was rather sorry that the hon. member who introduced it (Mr. MacLean) did not enlighten the house as to just what he meant, what he wished or what he hoped for, and consequently I am not able to interpret correctly what he did have in his mind. The amendment is one to which we have no great objection except in one particular, and that is that it is more or less a contradiction. It asks of the economic conference that an effort be made towards the stabilization of the currencies of the British countries, but in the last clause it puts an absolute estoppel upon the gold basis-it must be on a basis other than gold. In other words, the amendment asks the house to request the Imperial conference to study the question but it ties the hands of the conference, so far as Canada is concerned if parliament adopts this resolution as it stands, in regard to the inclusion of gold as a basis for money under any consideration. I have therefore an amendment to move to the amendment, and I offer it not in any spirit of criticism of the efforts of my hon. friends opposite but rather to

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bring the question into a form that would be more acceptable. I beg to move in amendment to the amendment:
That all the words after the word "conference" be struck out and the following substituted therefor:
"Should initiate and support measures for the stabilization of the currencies of all British countries in such manner as to facilitate trade between the component parts of the empire and to promote economic unity therein."
As thus amended, the resolution would read:
That, in the opinion of this house, the Canadian representatives at the coming Imperial economic conference should initiate and support measures for the stabilization of the currencies of all British countries in such manner as to facilitate trade between the component parts of the empire and to promote economic unity therein.
I wish to preface by one or two general observations a necessarily 'brief study of the question of currencies, money and so forth. I believe that if we are to give this matter intelligent consideration we ought to keep in mind certain major factors, certain conditions that exist, whether we like it or not, and endeavour to study the problem from an impartial standpoint and in the light of all these factors. I do not presume for a moment that in the brief time at my disposal I shall be able to present to the house all the factors, but I Shall hope to present some of the factors that enter into this very important subject.
In the first place, I would point out that our difficulties to-day are not of a domestic origin; they are largely of international origin. In saying this I am not for a moment seeking to relieve the government of the day of any responsibility; I am not seeking to evade the responsibility, shall I say, for coping with conditions within Canada. But I do wish to face the cold facts, and I say that the most serious difficulty that we have in this country in regard to commodity prices-whether it be lumber, fish, iron, lead, silver, zinc, copper and so on, any or all of these things-the difficulty arising from low commodity prices, is due to international or worldwide factors which must be faced and dealt with before we can hope for any definite change in conditions. Again, I would emphasize the fact that these conditions cannot be changed by any purely Canadian effort; it will require the effort not only of Canada and of the countries within the British Empire, but the efforts of the countries of the world before we can hope to overcome the present difficulties.
May I in passing point out certain facts. It will be recalled, for instance, that during the past few years, that is to say, prior to a year and a half ago-the period following the war 
and up to that time

Great Britain has made an heroic effort to assist in the financing of the affairs of the countries of Europe. And particularly is this so in regard to Germany. Recognizing that it was absolutely essential that Germany should be given the wherewithal to function economically before she could be expected to pay reparations, Britain rendered assistance to that country heroically, to the degree of jeopardizing her own interests. As a matter of fact, when these loans to Germany and other countries became frozen it resulted in the collapse of the gold standard in England. That was the extent to which Great Britain went. The result of all this was, as I say, that Britain went off the gold standard. Moreover, Great Britain in the meantime found her exports decreasing and her imports increasing to such an extent that it became impossible for her as a country to carry on. Another thing that happened to the mother country was this. As a direct result of her efforts to assist Germany and other countries in Europe there was a flight of capital from Great Britain. In France, for instance, they realized that the British policy was one which would endanger the financial stability of the country and they withdrew their deposits from London. The result of that was, among other things, to force Great Britain off the gold standard. Another very considerable factor in this worldwide financial collapse was the tremendous amount of loans made by the United States in South America and other parts of the world. Perhaps the South American loans were the most disastrous. Many of these loans have been virtually repudiated, involving hundreds of millions of dollars. If they have not been repudiated legally they have simply been allowed to go by the board so far as paying either interest or principal is concerned. The result has been that the United States in turn has lost tremendous sums of money abroad. Then add to that the well known and oft cited fact of the burden of debt which is resting on the necks of the people the world over, nationally, internationally and individually.
I sometimes think that the present day condition, taking the world picture of debt, is very similar to the condition which obtained, if I recall my history correctly, in the little republic when Solon took charge. I recall that one of the first acts on his part was to release the people from debt. So burdensome and terrific had become the debt of the people that many natural born citizens of that country had mortgaged their bodies, their lives, to other people as a security for debt. So

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burdensome had the situation become that when he took office he decided that the first step was to wipe out those debts.
I do not cite that historic illustration for the purpose of saying simply, as many do, that the only thing to do now is to wipe out debts. It is not as simple as that. I could enlarge on this theme more fully, but I intend only to state one thing just as a sort of reminder that it is not as simple as it may appear, and that is this: The debts of many people to-day are represented on the other hand, by the savings of people equally deserving. For instance, the savings of estates which are the support of widows and orphans, and so forth, invested through trust and loan companies constitute the debts of people who are the mortgagors and the borrowers. It is not enough to say that debts should be wiped out; one must follow the thing through and recognize the injustices which might be done by a sweeping reform of that character. Nevertheless the fact remains that international debts are resting and bearing so heavily upon the people of the world as to constitute a problem which must be faced and for which we must find some relief or remedy.
I should like to discuss briefly the questions of currency and money as I think it is desirable to have some understanding of the elementary principles which underlie these terms. We use them very often quite thoughtlessly and glibly and fail to realize the important elements involved. From time immemorial the activities of man have been vitally influenced by money in some form or another. I hear certain economists-if I may so term them-say: Let us have barter, let us exchange some of the goods we have here for goods elsewhere. Or they say: After all, trade is nothing but barter. These loose utterances leave the impression that there is nothing involved but the exchange of wheat for silk, or something of that character. Trade is much more complex than that. As I say, from time immemorial money has been an important element in the exchange of goods and from the most exhaustive study I have been able to give to the question I believe it is useless to think of returning to the old system of barter unless we desire to revert to the old standards which obtained when barter was the sole process in the exchange of goods. Money has become a standard or measure of value. At this point may I emphasize this fact: One thing above all else is essential in money, and that is confidence.


Edward Joseph Garland: Will the
minister advise the house what gentleman prominent in economic circles to-day has suggested the restoration of the barter system?


Henry Herbert Stevens: If my hon. friend had
followed me closely he would have understood my meaning. I was endeavouring to be courteous. I said, "there are those whom -and I hesitated-"I might dignify as economists." As a matter of fact, they are not economists but I did not wish to be personal in the matter. Let us put it this way: There are individuals who presume to speak as economists who have given utterance to these views. My hon. friend evidently feels and believes that they are not economists who make such suggestions.


Edward Joseph Garland: The whole thought is unthinkable.


Henry Herbert Stevens: I agree with that, too, so there is no point of difference between us. As I was saying, there is one thing above all else essential in money, and that is confidence. In other words it is quite useless for Canada, for instance, to have a certain type of money which might be quite satisfactory to us and sufficient to handle our internal business, if China, Great Britain, South America, South Africa or any other country would not accept it at its face value as money. The whole secret of the success of the use of money in the settlement for the interchange of goods is that there be confidence in the money used. I should like that point to be kept very clearly in mind.
Another point is this: Money in itself does not increase. There is, I think, a very widespread and false belief that money loaned out and bearing interest increases because of the fact that it bears interest. Money does not increase, the payment of that interest comes from some other source as the result of the production of goods of some kind by the people who pay the interest. In other words, money does not increase or accumulate except by the addition to it of interest which represents, in turn, production by the debtor.
The suggestion is made sometimes that commodities can be used as money or that money should be based upon commodities. I shall have more to say about this in a moment, but at this point I should like to say that from time immemorial, as far back in history as we can read, gold and silver have been largely the bases of money. Only recently I read a very interesting book dealing with the monetary system of China, which goes back to 1200 B.C. I was tremendously impressed with the fact that throughout the
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centuries and millenniums that great country has been using money, chiefly in the form of silver it is true, but case after case is disclosed in that historic record where gold played a very important part. Only a few years ago a very definite effort was made to introduce a gold standard in China. I merely mention this in order to emphasize the fact that gold and silver have served humanity in a most valuable way and in a most important manner in the form of money.
I should like to give expression to a thought which may find response in the hearts of some but which may be considered to be heresy by others. This thought is:	Money
loaned for other than productive purposes constitutes a drain upon production, capital and the interest thereon double the burden upon production.


Some hon. MEMBERS:: Hear, hear.


Henry Herbert Stevens: 
Henry Elvins Spencer: The hon. member has
asked the question, what would his cheque be worth in certain foreign countries? I would ask him how much more recognition would be given to a dominion note, let alone the note of a private bank, in the same countries.


Henry Herbert Stevens: A Dominion of Canada
note could be presented in Buenos Aires tomorrow morning and would receive immediate recognition and be accepted by the banking institutions of that country. It is true that reference would be made to the daily rate of exchange between the two countries, but a dominion note would be accepted without question by any reputable banking institution in any part of the world.


Mr. VALLANCE:: At a price.


Henry Herbert Stevens: As I was saying, it was not until 1791 that bank cheques were introduced, and unquestionably they became a part of the currency of the realm, a secondary part. Undoubtedly they facilitate the movement of goods and the extension of industry and commerce. It should always be borne in mind that bills of exchange, drafts, cheques and so on are a most valuable adjunct-shall I say?-or support to a universal currency, but the usefulness and universality of this class of currency is limited by two considerations, the house upon which it is drawn, and the drawer of the instrument, whatever it may be. Of course, I admit this, that the Bank of Montreal, for instance, drawing a cheque on itself, would have that cheque accepted in almost any centre in the world, but a cheque drawn by myself on the Bank of Montreal would be perfectly useless outside the limited sphere in which I am personally known.
Another point I wish to make is this, that gold in so far as it is attached to currency, is undoubtedly very, very valuable for two things: One is the settlement of international accounts, whether for trade or for debts or whatever it may be, and the other as a background or basis of security for internal currency.
For a moment let me refer to this question of the sufficiency or otherwise of gold. There is no difference of opinion among the most outstanding economists of the world as to the insufficiency of the supply of gold to-day. The generally accepted view is that the shortage at the present time amounts to approximately
8100,000,000 per year, and that by 1941, unless there is a very rapid development in the production of gold, such as through some abnormal discoveries, such as the California gold rush or the Australian or Yukon gold rush,
with that exception, the shortage by 1941 it is calculated will amount to as high as $300,000,000 per year for the necessities of international trade.


Mr. BROWN:: Would it not be possible by international agreement to have the value of gold fixed so that the present limited amount of gold would as equally well take care of a larger amount of trade in the settlement of international balances?


Henry Herbert Stevens: I do not think so. I would rather not digress into a lengthy explanation to give my views on that point. Briefly, I would not agree to that being the case.
The production of gold now amounts to about S400,000,000 per annum. Roughly speaking, about half of this goes to arts and industries for various uses and in various forms. The other half goes into the currency. I am giving just rough figures. As I said a moment ago, it is estimated that the extension of trade generally throughout the world calls for an increasing use of gold as a basis of currency, and it is generally accepted that there is a shortage of about S100,090,000 for that purpose.
Another point I wish to emphasize is this. The gold system that we hear referred to is not a system which has been deliberately designed and put into operation. I think we make a tremendous mistake in discussing questions pertaining to economics in this house and elsewhere, when we refer to the gold system or the capitalist system as if it were something that had been taken and put into a finished form, something which could be removed and replaced by some plan or system without interfering with or to any great extent disturbing the forces of the nation.
The gold system has grown into the warp and woof of the financial, commercial and industrial life of the countries where it is being used. Unquestionably a departure from it, a correction or disturbance of it, whatever character those changes may take, must and will affect all the various units interested in the country where such a change is made. By that I am not for one moment suggesting that we should simply sit down and do nothing about the gold standard system-not at all. Recognizing, however, that there is an insufficiency of gold to uphold the system as it is operated to-day, and at the same time do justice to internal and international trade, we cannot say that by merely wiping out such a standard and replacing it by a paper system we will correct the evil complained of.
I find I must hasten on, because I wish to cover considerable-
51S
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Henry Elvins Spencer: Would the minister say
a few words concerning managed currency?


Henry Herbert Stevens: I shall come to that; I
am now speaking of paper currency. There are those who argue that all that is necessary is to issue a currency bearing the mark of a nation and bearing on it the statement, "This is a dollar bill, and is backed by the general credit of the nation." That may be a somewhat extreme view. At this point may I refer to, and compliment the hon. member for Wetaskiwin (Mr. Irvine) upon his speech delivered a few nights ago. In my view it was, by long odds, the most informative speech delivered in this discussion this session. He did, however, refer to the investigation made by the banldng and commerce committee of 1923 and complained, at least to some degree, of the attitude of some hon. members on that occasion who opposed certain proposals, and to which group I belonged. One of those proposals was that we should turn on the printing presses, turn out two billion five hundred thousand dollars worth of dominion notes and pay off the bonded indebtedness of Canada, thus eliminating the necessity for paying interest. That was one of the suggestions to which at that time I took very sharp objection. I wish to point out now that simply by turning on the printing presses and producing currency we will not get money which will be of value in internal or international trade, because such money will then be accepted only upon the value placed upon it by those to whom it is offered in exchange for goods. Hon. members will recall that when Germany, Austria, Poland and other countries in Europe during the years following the war turned on their printing presses and issued great quantities of paper currency, the result was a race between the receiver of such currency and the person who parted with the goods as to who could reach the bank first, or could first get rid of the currency in exchange for other goods. So accelerating was this round of effort that the printing presses could not turn the money out fast enough. The result was commercial and industrial collapse.
Already I have dealt briefly with the matter of cheques and bills of exchange. Some argue that the only currency required would be bills of exchange which represent commodities. At this time I should like to refer to this angle of the question. It is quite true that a warehouse receipt for 100,000 bushels of wheat is a very valuable instrument and one which can be used in exchange for something else. For the sake of simplicity we will bring the number of bushels down to 1,000 so that it will TMr. Stevens.]
be within the ken of most of us. We will suppose that a man holds a warehouse receipt for 1,000 bushels of wheat which, we will say, is worth $1 a bushel. He has $1,000 in hand. However, he wants to pay $100 on his grocery bill and other bills which have been accumulating; he wishes to buy a plough; he wishes to buy clothing and food for use in his house. Probably there are a dozen things he wants to do. Our present procedure is to deposit the warehouse receipt in the bank and, through the agency of currency which is accepted by everybody at a fairly well stabilized value, that man goes out and buys the things he requires, and pays his debts. So that while we may admit that a bill of exchange representing commodities is, unquestionably, a useful piece of paper as currency, it is not a piece of paper which can be used with facility, or a medium through which trade can be facilitated throughout the world. Furthermore, we may suppose that a man who acquires a piece of this paper does not want to spend it all at once. Wishing to have it last for a period of six months he must be in a position to turn it into something with which, at will, he can buy other commodities. Again arises the absolute necessity of a currency universally accepted and one which can be used at will for purposes of replacement.
Of course it is highly desirable that there should be a degree of constancy in currency. The currency that a farmer, for instance, would receive for his wheat in the autumn which might be worth only half its value in the spring would certainly be a bad piece of currency. It is true that under the unusual and abnormal deflation of the past two years, that is precisely what has happened. A person, for instance, who put a mortgage on his farm two years ago when wheat was, we will say, $1.50 a bushel, received, we will suppose, about $1,500 in the currency of the time, and spent it for some purpose. To-day however he is asked to pay back that debt, and there will be required, roughly speaking, about 4,500 bushels of wheat to pay back a sum equal to the value of 1,500 bushels two or three years ago. Obviously something is radically wrong, and it is that defect we are trying to correct. What is required is a currency which will remain reasonably stable, a currency which will be universally acceptable and one which, as I said a minute ago, will not fluctuate from day to day or from month to month. Yet, those who advocate paper currency, are, I think, inviting the most fickle and most uncertain type of currency.
I should like to deal further with that point, but I must hasten on. Reference has been

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made to a managed currency. In this respect I wish to say that from my observations, which during the past few years have been fairly intense, I have not yet heard a really clear definition of what is meant by "managed currency." Nearly everyone who speaks upon the subject uses more or less vague terms, and there is no precise definition of what is meant by managed currency. It would seem that one has one meaning, and another another. I have in my hand the Macmillan report from which I wish to read a brief extract concerning this particular subject. Discussing the question of managed currency I find the following:
It may be asked whether the aim of central bank policy should not be to return to the more automatic working of the gold standard of prewar days.
The central bank policy is, invariably, connected with managed currency. The general suggestion was that central banks should be erected in each of the major countries of the world-in fact, in all countries through whose offices the management or control of currency should be manipulated or performed. I repeat the extract from the report:
It may be asked whether the aim of central bank policy should not be to return to the more automatic working of the gold standard of prewar days.
I read that for one purpose only at the moment. Even this committee which leans strongly to a managed currency indicates that it is necessary to have a scheme that will work automatically. And that is really the main complaint that I have against any scheme of managed currency that is at present offered. The report continues:
. . . Both the Federal Reserve Bank of New York and the Bank of England have developed very considerably the "open market" system which has been found in certain respects extremely effective. It is in itself, however, the antithesis of an automatic system. Thus, we believe, all central banks are faced with the necessity of a greater "management" of their currency systems, involving inevitably greater responsibilities and also a more urgent need of cooperation.
Then they state the obstacle facing central banks, one of which I mow cite:
In this task of management the central banks are faced with possible divergences between the interests of their own country and those of the world outside.
That is the very point to which I wish to draw particular attention. A managed currency presupposes certain things. One is this, that a central bank organization, or a central financial organization, within a country which is enabled to control all banking therein will
be empowered so to control the loans that are made and the interest that is charged as to manipulate the currency in circulation up or down in order to maintain a balance between the currency in circulation and the requirements of trade for currency. That, roughly speaking, is what they are called upon to do.
But here is the fatal weakness, to my mind, in a managed currency within a country. It is necessary for the group of individuals who control that central bank or central financial authority to foresee what the needs may be one, two, three months hence, because these things cannot in their very nature be put into operation overnight; the effects of what is done to-day in the loaning or putting into circulation of money cannot possibly be known until a few weeks or a few months hence, and so it is necessary for the banks, or the controlling factor in this matter, to have a prescience that will enable them to see into the future what the possible effects of their action to-day may be.
Lett us look at what happened in the United States. The United States have what is called a managed currency. The Federal Reserve Bank system, through their open market operations and the raising and lowering of interest charges, are able to control the movement of currency in or out. What happened in 1929 when the stock boom was-Shall I say?-on the flood, when it was becoming alarming? They raised the interest on loans to brokers to 10 per cent, then to 15 per cent, and, if my memory does not fail me, to as 'high as 25 per cent. And yet, this did not correct the situation, it did not prevent the crash, it did not prevent hundreds of millions, yes, billions of dollars flowing into the wildest orgy of speculation the world has ever seen.
I am told my time is about up. I Should like a few more minutes on this point, Mr. Speaker.


Some hon. MEMBERS:: Go on.


Henry Herbert Stevens: I have said, I think,
sufficient on the difficulties of a managed currency internally. Then come to this: multiplied by the prejudices and the needs of forty or fifty countries, one can visualize the difficulty. For instance, a managed currency that would take in the United States, Great Britain, Germany, France and Italy would require, in the first place, that the central control factor in each of those countries was able to foresee the effect on currency of loans or of rates of interest within their own territory, plus being able to agree with the central authorities of each of the other coun-
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tries as to what should be done to-day for what may happen three months hence. My own opinion is, and I have seen nothing to change it, that a managed currency presents the gravest of difficulties in its working out. If it does not work almost to perfection, then the object for which it is brought into exisfc-ence is defeated; for if there is a variation in the value of the currencies, then the very difficulty we are confronted with, the exchange difficulty, is present in just the same manner as it is to-day.
There is a fourth suggestion-a currency with a metallic basis composed of silver and gold. As I intimated a moment ago, one of the difficulties in connection with the gold standard, in which I think all the leading authorities are in agreement, is that there is insufficient gold in the world properly to sustain the gold standard and facilitate trade; that is, in its present form of use. Now, one of the reasons for that is that it is possible either for individuals or for countries to hoard gold. Gold is so valuable and of such small compass in proportion to value that it can be easily hoarded. It is a matter of history that countries, for instance, India and China, absorb tremendous quantities of gold. No one knows where it goes; it is simply absorbed and passes out of circulation and out of use; it is lost so far as the world and the services of industry and commerce are concerned. That is well known. It is hoarded because of its high value in comparison to other commodities. But, it is argued by some, if you had as the basis of your currency silver and gold, it would not be possible to corner or to hoard it; therefore you would create a currency the quantity of which would be automatically controlled by the general production of these two metals, that there would be no incentive to hoarding, and thus there would be a wide and general distribution. I am not going into a detailed analysis of the argument any further than to summarize my remarks in this way:	When we
enter into a study of currency questions I think it is advisable to keep in mind the need of a currency in which there is universal confidence, and that all the factors should be given most careful study and consideration. In offering this amendment we are inviting the house simply to pass on to the Imperial economic conference authority for the Canadian delegates at that conference to initiate and support measures that will bring about a careful and exhaustive study of this very important question.


Mr. IRVINE:: I should like to ask a
question.


William Lyon Mackenzie King: I think I was on my feet first, Mr. Speaker.


Pierre Édouard Blondin: The right hon. leader of
the opposition has the floor.


William Lyon Mackenzie King: I should like to ask a question also. This is a very important amendment and one which I must say I wish had been preceded by some notice, because I feel that the subject is too important to attempt to discuss on the spur of the moment. In order that I may be quite sure as to his meaning, I should like to ask the minister what significance he attaches to the words "economic unity"? Do they imply the conception of the empire as an economic unit or have they some other significance?


Henry Herbert Stevens: It means precisely what
it says, that is, to promote the economic unity of the empire as far as that is possible by a currency which will be stabilized throughout the empire. In other words, the two points must be taken together. We desire to facilitate the movement of trade within the empire, not to the exclusion of trade with other countries, but because we are meeting as representatives of that group of nations for the purpose of stimulating trade within the empire and thus promoting the economic unity of the empire.


William Lyon Mackenzie King: Do I understand the minister to attach a significance to the words "economic unity" other than we would attach to the word "unity" in general, or to "prosperity" or to some other word of the kind? Has he in mind, for example, the creation of an economic unit out of the empire?


Henry Herbert Stevens: I would say this, that if
as a result of the deliberations of the conference there was developed a currency which would so extend trade within the empire that the empire should become as a matter of fact a powerful economic unit, it might be taken in that sense, but the question of attaining that ultimate objective is not in contemplation at the moment.


William Lyon Mackenzie King: Has it any
relation to the general subject of tariffs, for example? Does that aspect come into the mind of the minister?


Henry Herbert Stevens: No, I was thinking solely of currencies in the movement of trade.


William Lyon Mackenzie King: Then may I
ask my hon. friend another question:	He
speaks of initiating and supporting measures for the stabilization of currency. Has my hon.

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friend, or have the government, considered any measure that will have that effect, and could the minister indicate to the house the kind of measure which would be initiated or proposed by the government?


Henry Herbert Stevens: The conference meets in
July, and a careful study is being made of that and many other subjects with the idea of having them ready for presentation when the conference meets.


William Lyon Mackenzie King: Is my hon.
friend in a position to tell us at present, while we are discussing this matter, what the measure would be which the government might propose, or what any one measure might be?


Henry Herbert Stevens: I think I have already
answered my right hon. friend, and I may add that we are not in committee and I am not. in a position to answer every question that comes up.


William Lyon Mackenzie King: My purpose in asking these questions, as I think my hon. 'riend will recognize, is that I am anxious to cooperate with him and with the government as far as possible in any matter that has to do with the forthcoming Imperial economic conference. The conference is one of the most important gatherings which this country will have, and indeed which the empire will have, for possibly many days, and it is desirable that there should be some measure of unanimity, if that is at all possible, between all parties in this parliament with respect to the measures that are to come before the conference.
I have just said, in regard to the amendment moved by the minister, that it involves important questions of policy affecting matters that are to come before the conference. Up to the present time all the Prime Minister has told us is that we are not to be favoured even with so much as an agenda. This is the first intimation we have had that the question of the stabilization of currency, or that any currency matters, would be discussed at the conference.


Henry Herbert Stevens: No, no; my right hon.
friend is quite unjust in that statement, and also in his reference a moment ago to the unexpected way in which this matter was brought up. His own supporter introduced this motion a week or ten days ago; it was discussed during one whole sitting and it came on to-day in the regular order. There was no attempt unexpectedly to present the matter. Further, may I say to my right hon. friend that the original motion moved by his
own supporter, presumably with the consent and approval of his party, contained these words:
... if the empire is to become an economic unit . . .
Those words were more extreme, I might say, than the modified form in which I have placed it. I cannot understand my right hon. friend.


William Lyon Mackenzie King: My hon. friend refers to the motion introduced by a member on this side of the house, but the amendment strikes out that motion altogether, or the substantive part of it.


Henry Herbert Stevens: My right hon. friend is unjust to me again. There was an amendment moved by the hon. member for Wetas-kiwin (Mr. Irvine) and this is an amendment to that amendment. My right hon. friend is entirely unjust.


William Lyon Mackenzie King: This goes back to the original motion. The hon. member for Wetaskiwin (Mr. Irvine) has moved an amen-ment to the original motion which does not leave the motion as it was presented to the house. However, we need not wrangle oyer a question of words or of form. My point is this: To-day the government is asking this house to give it instructions to initiate and support measures at the forthcoming economic conference which will have to do with the stabilization of currency within the British Empire, the promotion of trade and of economic unity therein. As I have said, that is a very large question indeed, and before this house should be asked to vote on any direction to the government as to what it is to do at the economic, conference, we should be put in possession of the particular measure or measures which are to be initiated and supported by the government.
I submit, Mr. Speaker, that the tendency of hon. gentlemen opposite is to ask parliament for a blank cheque or authority to be given the ministry in altogether too many directions. That was the policy of the government with respect to the all-important question of unemployment; we were asked to give a blank cheque and allow the ministry to dio as they pleased with it. We have seen wh'at the effect has been of giving the ministry a blank cheque to deal with unemployment. The situation has not been remedied; it has been made worse. Now they ask us to give them blanket authority to deal with the question of currencies at the forthcoming economic conference. For my part I am quite prepared to allow the ministry authority to support
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measures which have 'been brought into this house in the first instance and approved by this house, but I am not prepared to give the ministry authority to initiate and support measures of which this house has no knowledge in advance. In my judgment to do that is to surrender altogether any judgment in the matter of wha/t may be beet.


Henry Herbert Stevens: But this subject was introduced by a supporter of my right hon. friend.


William Lyon Mackenzie King: I am speaking now with regard to the speech made and amendment moved by my hon. friend this afternoon. If there is one thing above another in connection with his address on which I might congratulate him it is the very manifest way in which he disclosed the fact that of all subjects, this question of currency is one of the most intricate and complicated. Having done that, I submit that 'before he asks parliament to authorize the ministry to initiate and support any measures respecting currencies, he should ,be in a position to state to parliament what that measure is so that we may pass upon it. Let the minister bring in a measure which he believes will have that effect, and let us debate it. We may find out that it will serve the end in view; on the other hand we may find out that it will be far from serving that end. My objection to the amendment proposed by the minister, in particular, is that it requests blanket authority to the ministry to propose any measure with the result that parliament will then be put in -the position that it has authorized the ministry to take the step it has.
I should like to point out another possibility; the minister may say this is not the intention of his resolution, but in considering resolutions we must be very careful as to their intent as expressed. The resolution states not only that the ministry shall initiate measures but that it shall support measures for the sta'blization of currency. If this method is to be followed, measures possibly will be brought before the conference having to do with the stabilization of currency which are expressive of the view's of India, of Australia, of New Zealand, of South Africa, of the Irish Free State, or of Newfoundland. Is this parliament to instruct the ministry in advance that they are to support any measures simply because they are labelled measures to assist in -the stabilization of currencies? The resolution as it reads is an instruction to the ministry at the forthcoming Imperial economic conference to support measures that have stabilization in view. Well, who is to determine whether a measure brought before the conference is or 'is not a proper one? I

say that an instruction of that kind is altogether too wide and too general. It would be a very serious mistake. I do not think it is a method which would commend itself to -any of the governments that might be present at the forthcoming economic conference.
The minister, in concluding his speech, gave a rather different interpretation of the meaning of the amendment from that which it bears on its face. He said that it was asking simply that a careful study should be made of the question by the conference. Had he so worded his resolution I would have been prepared to support it most cordially, but such is not the wording or the meaning. I think that is the form in which a motion of this kind should be framed. I believe that among the different subjects to be dealt with at the approaching conference should be this important question of the stabilization of currency, and in my opinion it will require as much thought and attention as can be given to it by those who may be present. But the part of the conference should be in the nature of a study. The conference itself could, as a result of such study, if it so desired, make recommendations to be submitted later on to the various parliaments of the British empire for adoption as they might, see fit. May I say to my hon. friend that, having attended two imperial conferences, I may presume to know something of the procedure that is followed at these gatherings; and in this I think I shall have the support of my hon. friend the Minister of Justice (Mr. Guthrie), who holds a similar point of view for I have heard him present it in this house time and again. He has said over and over again-and	I support this	view-that
a conference is essentially what is implied by the term:	It is a bringing together of
groups from different parts of the empire to consider and discuss certain questions. But in no sense is a conference a cabinet or imperial council; in no sense is it a body to lay down policies for the empire. It is a body to consider, and consider very carefully, what it will be best to recommend to the respective governments represented at the conference. If we are authorizing the ministry to initiate and to support certain measures at the conference we are to all intents and purposes placing the ministry in the position where, when the conference meets, they will have to assert that they have instructions from this parliament to press forward a certain measure and ask that it be adopted by the conference. In my opinion, it is not wise that the ministry should be placed in such a position.

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Speaking at this moment in illustration of the point I am making, may I say to my right hon. friend (Mr. Bennett) that if tomorrow we on this side should ask the government to follow a certain course with respect to the tariff or any other matter that might come before the conference, I am sure he would reply immediately, albeit it is not the course he himself has followed, that it is not the business of the government, before going into the conference, to be too definitely committed to any policy or obliged to present a particular point of view-that the government must be perfectly free when it is in the conference to consider all aspects of a situation as they may be presented from different sides.
I believe my hon. friend (Mr. Stevens) has drawn his amendment with the best of intentions. but I have no doubt that on reflection he will agree that it is open to the interpretation which I have just put upon it-namely, an authorization of the ministry to initiate measures of which this parliament has no knowledge whatever, and to press those measures at the conference as representing the views which the Canadian people, through their parliament, have instructed the ministry to put forward. The proposal, as we have it,-is also in the nature of an obligation upon the ministry to support other measures that may have that particular end in view, although we do not know what they are. And in the third place it introduces, in rather ambiguous terms, a reference to economic unity, which may be all very well provided that this house is agreed upon the significance and the meaning of the term, but which might prove to be the very opposite should there be at the conference any misunderstanding as to just what is implied. My hon. friend says that there appeared in the original motion the words, "if the empire is to become an economic unit." When I saw the original resolution and read those words in it, I asked the hon. member on this side of the house (Mr. MacLean) what they meant, and he told me they were purely hypothetical or parenthetical and did not commit anyone to anything. I said to him, with regard to the phrase, an economic unit, that the government had put forward some idea of the kind, and that if they had anything of that sort in view this phrase would be the feature of the resolution which the government would seek to have control the whole.


Henry Herbert Stevens: Was that made clearthat it was parenthetical?


William Lyon Mackenzie King: Yes, it was,
because when the hon. member for Prince began to debate the resolution he said that
he would like to withdraw the clause. It was the Prime Minister himself who objected; he would not allow it to be withdrawn.


Robert James Manion: So long as it meant
nothing we were going to go on with it.


William Lyon Mackenzie King: I am sure my hon. friend would be able to go on with anything that means nothing. My understanding of the expression, "the empire as an economic unit," is this. Those who support the economic unit idea hold to the theory that the empire is to become an isolated economic unit, that it should be so organized that it will be possible for the different parts of the empire to trade only or almost exclusively within the empire. They believe that this economic isolation will be 'brought about by a system of tariffs around the whole, which will be so high as to render impossible trade of any extent with the rest of the world. Those -of us who sit on this side are wholly opposed to making of the empire an economic unit in that sense, and I submit that we should not be called upon to support a resolution that lends countenance of support to the theory in that sense of an economic union or unit. As regards anything that will make for unity of the empire, anything that will promote the prosperity of the empire, we on this side are as heartily in accord as are hon. gentlemen opposite. We all want to see the empire united and prosperous, but our view as to how that unity and that prosperity can best be achieved diifers diametrically from that of hon. gentlemen opposite.
If my hon. friend presses his amendment in the form in which it now stands, I am afraid I shall have to oppose it, and I hope he will understand quite clearly my reason for so doing. Speaking generally, apart altogether from his resolution, I do not think that this house should be asked to authorize the government to initiate or support any measure of which the house has no knowledge whatever, and I might add of which the government itself at this time has no knowledge. Furthermore. it should not be asked to instruct the ministry to support measures at the economic conference merely because they relate to a particular subject. I am heartily in accord with the whole idea of currency questions being studied at the conference, and any substantial contributions which can be made by the Canadian ministry towards that end will be something which I am sure will be appreciated not only in this country but in all parts of the empire.


William Irvine: I am not sure whether I have the right now to
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ask the minister a question, but I wanted to ask him this question before he sat down. I will put the question and he need not answer it if he does not desire. I understood him to say that I had advocated during the investigation of 1924, I think it was, that Canada should pay her national debt by employing the printing presses. Does the minister mean that I advocated that? If so, I should like to know on what page of the evidence it is to be found because I do not recall even thinking of such a thing.


Henry Herbert Stevens: I said it was advocated, without referring at all to my hon. friend.


William Irvine: I was never that foolish, openly anyway; I might have been foolish enough to think it inwardly but never foolish enough to utter it. I have not before me a copy of the amendment which the minister has moved, but as I was able to understand it from his reading it, I do not see why the house should not give it the fullest possible support. When I drafted the amendment which I moved to the original motion I was told by -the hon. member for Red Deer (Mr. Speakman) that it would be open to the very objection which the minister has raised. I realized that it would 'be open bo that objection but I moved it nevertheless because I could not conceive how there -could be any stabilization of our currency on a gold basis except by putting a -fewer number of grains of gold into the pound sterling or the dollar. There may be some other method of remaining on the gold basis, but if there is I have never heard of it.
The minister said that some of us or some of those who think they are economists have said that they regard trade as being barter and that we should go back to the barter system.
I never thought of shipping a carload or shipload of eggs across -the Atlantic in return for a cargo of automobiles. I never thought of trading in that crude way, but it just happens that I have before me an excellent pamphlet published by H. Mitchell, M.A., professor of political economy a-t McMaster university. It is entitled The Money Crisis and in his interpretation of money he states:
Our money economy is really no more than a refined state of barter.
Apparently there are sorn-e real economists who hold that view. They d'o not contend that we ex-change goods for goods directly but they say that money itself -is a means by which barter is made possible in our highly complicated society.
Before I sit down I should like to refer to the remarks just made by the right hon. the
[Mr. Irvine.l
leader of the opposition (M-r. Mackenzie King). May I say very frankly and sincerely that his re-marks came to me as the most discouraging thing I have heard in -this house sin-ce I first -became a member. Personally, I have been looking to him for great things during -this session, I have been expecting the opposition to bring forward real, constructive suggestions for the remedying of the real danger which exists, not only to Canada but to modern civilization. This question of currency is recognized by the statesmen of all countries as being the most urgent to be considered, -but the leader of the opposition has not one single constructive thought -to offer. He endeavours to make his opposition as effective as possible in trying to prevent the consideration of this matter at the Imperial conference. He asks for a definite and complete statement of the exact thing which is going to be put up to the conference. As I understand him, he contends that a notice of motion should have been given to a question of such importance. The motion to which the amendment has been moved has been on the order paper for many dajTS, it was introduced by a member of the Liberal 'party -and ample opportunity was afforded every hon. member to acquaint himself with the subject -matter and to be prepared to deal intelligently with it. I suggest to the leader of the opposition that with a question of this importance confronting -the -public mind, and in the face of economic conditions which exist in the world to-day, he should have spent his time last summer studying this matter and should have come to this house with a real policy and given real leadership in the carrying into effect of that policy.
Mr. POL-LIOT:	Is the hon. member suggesting that the leader of the opposition resign in his favour?


William Irvine: I cannot hear what my hon. friend is saying-


An hon. MEMBER:: You are not missing anything.


William Irvine: -but if it is anything like his usual remarks, it does not matter whether or not I hear him. The right hon. gentleman says that he is willing to support the measure if it means merely that it will be talked about at the Imperial conference, but if there is to be action, no sir-no support for action. We have not as much time as the right hon. gentleman imagines we have to deal with this matter. The people of Canada are looking to the Imperial conference for definite action; the people of the British commonwealth of nations expect great things from this confer-

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ence. I will go as far as to say that if great things are not accomplished, it will be a bad thing for Canada and the rest of the British nations. In my opinion this is the most important thing upon which the government has touched this session and yet the Liberal party, supposed to be making a bid for the support of the people at the next election, claiming to be able to lead us out of this terrible morass in which we find ourselves, raises opposition to the only living issue which has been presented on the floor of this house this session. It is a most discouraging thing to any hon. member who expects parliament to stand for something worth while.
In regard to economic unity, the right hon. gentleman says: If you are going to advocate economic unity, why not wait until you have an interpretation of economic unity to which the house will agree? In eleven years I have never seen this house agree to anything, and if before we can do anything we have to wait for an interpretation of economic unity which will meet with the agreement of this house, we are going to wait a long long time before we have economic unity in this or any other country.
I congratulate the minister on bringing this amendment forward. We are not expecting that a question of this importance will be settled completely and absolutely at one conference, but we do want some action. Are we to have to wait until this house comes to an unanimous opinion upon some policy not yet proposed? What will our farmers in the west say to the leader of the opposition? They want to sell their products in England next month, but they cannot do it because the currency is so unstable, and the exchange so adverse. They want action, and the Imperial conference affords the only opportunity for such action to be taken. I think it is the duty of every hon. member of this house who wants immediate action on a question of this importance to support this resolution.


Right Hon. R. B. BENNETT (Prime Minister) :: Mr. Speaker, the matter of the stabilization of the currency of the empire is undoubtedly one of very great importance. Few things have done more injury, using the word in a broad sense, than the action taken in Great Britain in going off the gold standard. As a matter of fact, it wrecked the financial structure of practically every country in the world except two, and the loss sustained by Canada and by other parts of the empire was very, very great.
The question of empire currency is not new. It has been discussed at every succeeding imperial conference, but no action has ever been taken nor have any definite results followed. During or prior to the war my attention was directed to the possibility of providing for a pound containing gold to the value of five dollars with the hope that a pound or pax, or whatever name might be given to it, might have circulation in every part of the empire at that value. That had nothing whatever to do with paper money nor has it anything to do with the matter that is now being considered by this house, namely, that direction be given to the government that there be placed for consideration before the economic conference to be held in this city the question of a stabilized currency. The right hon. gentleman I am quite certain was not serious in suggesting that it was possible in February to prepare and submit to this house an agenda for a conference that is to meet in July. Neither would the right hon. gentleman I think, if pressed, and asked to look back on past conferences, say that it had ever been the practice nor could it be the practice to lay before the House of Commons the details of proposals that would be made to the. conference.
The question now before the house as expressed in the subamendment of the Minister of Trade and Commerce (Mr. Stevens) is virtually that the question of the stabilization of, empire currency be brought to the attention of the conference.


William Lyon Mackenzie King: That is different-


Mr. MACKENZIE (Vancouver):: We are
all agreed on that.


Richard Bedford Bennett: Or that if the question is placed on the agenda by some other country it shall receive the support of those who represent this country at that conference.


Ian Alistair Mackenzie: We differ there.


Richard Bedford Bennett: I am unable to understand the language of the amendment if it means other than that. Let us look at what transpired. The hon. member for Prince (Mr. MacLean) introduced the resolution. He read copiously from essays and statements and speeches and reports of eminent men, and he indicated clearly that he had not the least knowledge in the world of the subject matter of the resolution. I am not saying that offensively. That is a matter of fact that will be found by reading the record. The hon. member for Wetaskiwin (Mr. Irvine) introduced an amendment and made a speech which indicated that he had profoundly studied the
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matter, but at the end he used words which indicated that his views as to a sound currency were not in accord with those which I believe are held by a majority of the members of this house. Having in mind the very circumstance to which the right hon. gentleman has alluded, the Minister of Trade and Commerce has indicated as clearly as it is possible to indicate anything that there are great difficulties in the way of a stabilized currency. By a stabilized currency it is not, of course, meant that you are going to give a like value to every form of currency or that you are going to have the like terminology for every form of currency, but that you are going to endeavour to establish a stabilized currency in order that the very difficulties to which the hon. member for Prince referred, namely, the great fluctuations in exchange values, should be avoided. I think this house will agree that it is highly desirable that the ends sought should be attained, if possible, by this conference.
I agree entirely with what has been said by the right hon. gentleman that a conference has no legislative power; it has no executive power. It has merely the power to recommend to the respective governments that action along certain lines should be taken, and that has been the case since these conferences were commenced. Their conclusions were not in any sense binding, and no one knows that better than the right hon. gentleman opposite. He knows that as a very condition of these conferences being held, those principles were asserted, and this house is not bound by anything that may take place at a conference until this house has seen fit to agree to what is recommended. When the right hon. gentleman came back from the Imperial conference which he attended in 1926 I think he will be the first to say that nothing had been placed on the records of this house that indicated that the proposals that were there considered were to be considered. There is nothing upon the records of Hansard or the Journals of this house that indicated that the great questions that were then discussed were to be discussed.


William Lyon Mackenzie King: Oh yes.


Richard Bedford Bennett: Not in the sense that
they were discussed.


William Lyon Mackenzie King: There was an agenda.


Richard Bedford Bennett: But the agenda broadened out in its reach and scope in the discussions that took place.


Ian Alistair Mackenzie: There
were resolutions-


Richard Bedford Bennett: Of course, I am aware
of that. Then came the question of the action to be taken. This house was not bound until this house had expressed its approval, and it will be recalled that a debate ensued; a debate always has ensued, Mr. Speaker, on matters of that kind. There is no legislative power in the conference. It cannot bind the members of this house nor the Dominion government, nor can the members who for the time being represent the country at that conference. The prime ministers of some of the great dominions in the commonwealth have from time to time contended that it was rather unsound that only one party should be represented at the conferences, that rather the government of the day should be assisted by the leader of the opposition and that there should be a representation of parliament, rather than of the government, to speak for the country at the conference. But that view has not obtained, and it is not likely to obtain.


William Lyon Mackenzie King: Hear, hear.


Richard Bedford Bennett: I am glad that the right hon. gentleman thinks that a sound view. He has always expressed that view, as did his predecessor in office. The principle upon which opposition has been made to that view is this, that the government of the day must assume responsibility for what is done at the conference. When it comes back to parliament and asks parliament's approval with respect to any particular item of business that may have been transacted at the conference or of any conclusions embodied in the form of legislation, the government must assume sole responsibility for its action, and risk its life upon the result if it pledges its position as a government in asking the support of the house to those proposals. That view, I say, the right hon. gentleman has consistently maintained, and that is the view which many other members of various parliaments represented at imperial conferences have from time to time maintained. I am bound to say I used to think that at imperial conferences it would be much better if all parties in the state could be represented. But in discussions that I have had since responsibility has fallen to my lot it has appeared that there might be difficulties to which the right hon. gentleman has in times past referred. Whatever there may be of value in it from an academic viewpoint, as a practical matter it need not now be discussed, for the government will accept responsibility. The government cannot bind Canada to any line of action beyond agreeing to submit to parliament, its own parliament, any questions upon which deliberations have taken

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place and conclusions have been reached. That was so, for instance, with respect to matters that were considered in 1930. That was so in connection with the Merchant Shipping Act. The Merchant Shipping Act is highly technical legislation. It was discussed in the 1926 conference. It was discussed in 1929 by a group of experts, and certain conclusions were formulated. It was again discussed in 1930, and certain approvals were given. But Canada could not be bound until such time as this parliament enacted legislation based and founded upon the conclusions which had been arrived at at the conference,-or, variations from them, if this house did not desire to approve.
This resolution, as it stands, asks the House of Commons-directs, if you will; I will use as strong a term as that-directs that Canada's representatives at the next Imperial economic conference to meet in this city shall place upon the agenda paper, or shall initiate discussions dealing with the stabilization of empire currency.


William Lyon Mackenzie King: If the amendment is redrafted I am content to support it in those terms, but I cannot in other terms.


Richard Bedford Bennett: I shall proceed a step
farther. The statement is also made that if the initiation comes from some other quarter, not that Canada will be bound by what some other quarter suggests, but that the Canadian delegation shall support not the identical measure, but any measure which deals with the stabilization of empire currency-if initiated, for instance, by India, South Africa, or it matters not where. That does not however for a moment imply that we will support those views. But the very fact that the subject is thrown into the melting pot for discussion involves the fact that there will be a free expression of views by men from various parts of this empire as to the possibilities of stabilization of empire currency. It is in that sense that the Minister of Trade and Commerce has presented this matter to the consideration of the house.
This is a question dealing with currency and trade. What we are endeavouring to promote by every means in our power is that on one-quarter of the world's surface, including as it does many countries and a quarter of the world's population, we should, if possible, have a stabilized currency or a medium of expressing values for trade and exchange and, in the words of the right hon. gentleman, "trade being exchange," that these media, if you will, should have values not necessarily in the same terms, but that they
should have stable values for the purpose of facilitating the transaction of business and the advancement of trade. That is the position. The language of the amendment to the amendment, which I have not before me, but which I saw before it was moved by my colleague, endeavours to express that view.
It is gratifying indeed to find the right hon. gentleman expressing a desire to cooperate with the government in the success of the conference. I venture to say-and I hope he will not take my comment as being unduly unkind-that his remarks present a marked contrast with observations he made publicly elsewhere, in which the very fact that a conference would be held at all was called in doubt, when he was wondering if there ever would be one. The very name of the conference must indicate its character. It is to be an economic conference to deal with trade and currency, currency and trade, the development of them, the stabilizing, if possible, of our currency, a medium of exchange, or expressions of exchange values between the various parts of the empire- all these matters will be discussed. Whatever complaints may hereafter be made, whatever criticisms may be urged, and however doubtful the right hon. gentleman may have been in times past as to our ability to succeed in having a conference at all, we ought at least, it seems to me, to be entitled to some credit for having succeeded in our efforts. Whatever the conference may bring about, at least we have succeeded in our effort to secure one, and have had it definitely decided that such conference will be held in the capital city of Canada, where, most hon. members will recall, the second conference was held. The colonial conference of 1887 was succeeded by the conference of 1894 which met in the parliament buildings in this city. Those who are curious to see the matters then discussed, who are interested in the development of ideas, and realize that after all, a long time is required to make progress in any particular line of action, would do well, if they have some time at their disposal, to take from yonder library the records of that conference. They will find that there may be and, we hope will be, a realization in 1932 of the hopes, aspirations and views which found expression by the statesmen of the empire in 1894.


Mr. SPEAKMAN:: As I understand the
Prime Minister's general interpretation of the term "stabilization of currency within the empire," it would mean a stabilization of exchange values as between the different currencies used in the various parts of the
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empire. Might not the interpretation be made-and certainly this has been the hope of many of us-that the question of the stabilization of price levels should be included as part of the question of stabilization of currency-as, indeed, a most important part?


Richard Bedford Bennett: The view is generally
expressed that one might follow the other. I think however there is a body of opinion questioning that, as the hon. member, who reads so much, will readily understand. If once we arrive at an agreement for the stabilization of exchange values I should think the matter to which he has alluded would not be as difficult as it has been under fluctuating exchange values.


Ian Alistair Mackenzie: Mr. Speaker, I have only a few very brief observations to make in this debate. It was my intention to enter upon a detailed analysis of the various factors brought into question by the motion of the hon. member for Prince (Mr. MacLean), the amendment moved by the hon. member for Wetaskiwin (Mr. Irvine) and the subamendment now moved by the Minister of Trade and Commerce (Mr. Stevens). First, however, I should like to congratulate the Prime Minister (Mr. Bennett) upon the, generally speaking, reasonable tone of the address he has just delivered. I wish also to offer to my hon. friend from Wetaskiwin the observation that, despite his obviously superior academic qualifications, there are some of us in the Liberal party who for years have given careful study and thought to the question of currency, and have advocated, as widely as he has, proper reforms in the Canadian currency system. Personally, having played some part in the publication of Liberal policies and theories, I repudiate the animadversions of the hon. member for Wetaskiwin.
I wish also to extend to the Minister of Trade and Commerce my personal felicitations upon his exhaustive and comprehensive analysis of the monetary situation. I think when he took his seat he received as much applause from the benches of the Liberal party as from his own side of the house. It is very encouraging to-day to find in the Canadian House of Commons a minister of the crown who has such a complete knowledge of the most intricate problems which concern us in Canada. Not speaking for the opposition, but only in a personal capacity, I wish it were possible at the coming Imperial economic conference for Canadians, regardless of their party affiliations, and leaving out of their discussions matters of tariff, to concentrate in more than a national manner upon the question of

currency reform. Because a significant feature about the Macmillan report to which reference was made a few nights ago and by the Minister of Trade and Commerce this afternoon, is that there is no mention in this brilliant report, presented to parliament by one of the most outstanding committees which ever functioned in the United Kingdom, of the possibility of an empire currency. Subsequent to the report of the Maomillan committee there was formed and established in the old kingdom a committee of the Federation of British industries and the Empire Economic Union. In paragraph 50 of the report of that committee there is a distinct recommendation in regard to the stabilization of empire currency. As the right hon. Prime Minister has just intimated, in previous conferences the question of currency reform was submitted by each dominion, and New Zealand brought it forward at the economic conference of 1923. I am convinced that the greatest danger facing Canada to-day is not the throbbing problem of unemployment, it is the imminent destruction of our social and economic system unless we wake up.
As far as I see the situation-and I am not speaking at all in a partisan sense

the remedies are twofold. In the first place, there are national remedies which can be applied by whatever government happens to be in offioe; in the second place, there are international remedies. And I am convinced that we cannot solve our weighty national problems except by international thought, international study and international discussion. That is the reason why the Macmillan committee has based all its observations in regard to monetary reform, not on the empire unit, but on the world.
I am exceedingly pleased to know that the question of currency will be discussed at the economic conference next July. I think that all parties in this house are united on that idea. Unfortunately we are divided on the phraseology of the motion and the amendment. Personally I am conscientiously opposed to the motion, and with my limited study of economic questions I am opposed to the amendment of the learned member for Wetaskiwin (Mr. Irvine). I am also opposed -but only as to phraseology-to the amendment so ably moved by the hon. Minister of Trade and Commerce and which now becomes a matter of government policy. We who are adhering to Liberal principles and to certain tariff doctrines are not forgetful that the phrase "economic unity," although it sounds glorious, has a sinister origin. I want to keep this discussion entirely non-partisan, but it

Stabilization of Currency
must not be forgotten that that was the slogan used by our good friend Lord Beaver-brook when he was proclaiming his gospel of empire free trade. If my hon. friend the Minister of Trade and Commerce had used any one of these phrases "economic prosperity," "economic well being," "economic welfare," I am confident that every member in this house would be 100 per cent behind him. I suggest that if unity in Canada and in this house is worth while we can very well agree upon the language used by my right hon. friend the Prime Minister when he said that the amendment moved by the Minister of Trade and Commerce means only that instructions be given to the government to submit the question of a stabilized currency to the next Imperial economic conference. I think every single member, regardless of his political affiliations, will support the right hon. gentleman in that interpretation. It would be a wonderful gesture if this house could send a united (resolution instructing the administration to submit to the approaching conference the subject of currency reform, and this unanimity could be brought about by changing the phraseology of the amendment moved by the hon. Minister of Trade and Commerce. I trust the necessary steps may be taken to this end, for I am firmly convinced that currency reform is one of the greatest problems confronting not only Canada but the whole civilized world at the present time.


Mr. G. G. COOTE (Macleod):: Stabilization oj Currency


Richard Bedford Bennett: I am sure the hon. gentleman realizes that the sale of securities in foreign countries, and their application for gold in exchange for the purchase price, was what brought about that immediate result.


George Gibson Coote: Yes, and because of the gold standard they were entitled to do that. Any debtor country in the world to-day may be forced into a similar condition at any time foreign investors take the notion, and for that reason I am emphatically opposed to the idea of stabilizing Canada's currency on gold again. It should not be done. I have before me a copy of the Financial Post of September 26, 1931, the leading financial paper in Canada and a very orthodox paper, which says:
Sterling drop far-reaching in its effect. British manufacturer gains temporarily in Canada market.
Then there is also a splendid article on the foreign money ring and the world crisis. I have not time to read it, but I commend it to every hon. member of the house.


Richard Bedford Bennett: Whose opinion was that?


George Gibson Coote: This is the opinion of Mr. J. B. McLean.


Richard Bedford Bennett: Was it not written by someone else?


George Gibson Coote: This article carries at its head the name of J. B. McLean. It says:
The Foreign Money Ring and the World Crisis
The present financial flurry is merely another incident, in the progress of the international money ring.
The story of this super-banking system has been covered from time to time. . . .
In effect, it has been shown that a group of Austrian-German-Duteh-Greek-born financiers years ago settled in England, then the world's financial centre, among a people rich in character, in good records and great wealth. These foreigners proceeded to exploit and debauch that country-its commerce, its banking, its industries and its public men and public servants.
And so on. I do not want to take time to read all this, but somewhere near the end of the article it states that the forced departure of Britain from the gold standard may be

the final act of that money ring which was described. Then I have a copy of the front page of the Financial Times for September 25, 1931. It says:
Departure from gold basis may prove real boon. Basic industries and tourist business should benefit from dollar discount.
Another column bears the heading:
Dollar discount should be great newsprint help.
If there is any industry in Canada, other than agriculture, that seems to need a little help it would appear to be the newsprint industry. I could fill several pages of Hansard with quotations from the press to prove that the departure of Britain from the gold standard was a boon to industry and, to a certain extent, improved the employment situation in that country. If Canada had been wise enough to abandon the gold standard a year ago Canada would have benefited very substantially in the same way. Apparently the policy being pursued by Canada at present is to keep our dollar as near parity with the United States dollar as possible, but perhaps before proceeding to elaborate that point I might say that Canada has not abandoned the gold standard because the government wished to abandon it; she has abandoned it in fact, if not legally, because she had not the gold to meet the demands of foreign investors.


Mr. YOUNG:: If my hon. friend objects
to stabilizing Canadian currency again on the gold basis, on what basis would he stabilize it?


George Gibson Coote: I will come to that right
away, for the benefit of my hon. friend. Rather than give him my own ideas I should like to quote a man who should be regarded as an authority. I refer to Doctor J. P. Day, associate professor of economics at McGill university, who is reported as saying:
A country which abandons the gold standard will find its exchanges fluctuating, but it is at least relieved from worrying about an adverse balance of indebtedness, since the fluctuations of the exchange will look after that.
I should like to commend that to the attention of the Prime Minister, who thinks one of the great problems of this country is to balance our trade. Then Professor Day says:
The first immediate necessity is therefore to restore stability to the foreign exchanges. Does this mean a return to the gold standard? I should not like to say this is a totally impossible event, but I agree with a writer in the Economist who says it would be a nightmare if the treasury and the Bank of England had closed their minds to any other idea.

Stabilization oj Currency
Probably it would be a nightmare for us also if the Prime Minister closed his mind to any other idea.
For, after all a return to the gold standard would only leave the world where we were a year ago, still faced with a crushing burden of indebtedness and a price level that afforded no prospect of rising. Furthermore, it is very doubtful even if Britain could return to the old parity rate, whether other countries, and especially debtor countries, could.
Then he refers to a suggestion made by Professor Leacock that the pound should be stabilized on gold but that the number of grains of gold in the pound be reduced. I will not read that. Then Professor Day says:
What I should infinitely prefer to see is a sterling block of countries formed. The British monetary authorities would do all in their power-which they are probably trying to do but finding political faction extraordinarily hampering-to keep sterling at a steady purchasing power at home. Other countries renouncing gold would also keep their monetary units at a stable purchasing power and if these efforts were successful, the foreign exchanges would be stable too.
I think that is the only thing necessary, stable price levels in different countries; then the rate of exchange between those countries will remain fairly stable.


Richard Bedford Bennett: Would the hon. gentleman permit me to ask him a question without annoyance? Surely he will admit that obligations payable in gold must thus be paid?


George Gibson Coote: I am not suggesting any
change in that at all. This writer says:
No foreign exchange rates would fluctuate except those of countries on the gold standard and these need not if they like to disregard gold and manage their currencies with a similar aim. Thus the whole world would be aiming directly at the stabilization of the purchasing power of monetary units instead of indirectly as it formerly did when the effort was to keep all currencies with a similar aim.
That is a much better principle on which currency should be stabilized than the gold standard, and I think a return to the gold standard is absolutely impossible unless it is done by reducing the number of grains of gold to the pound, as has been suggested by Professor Leacock and many others. That was only a suggestion; I do not want to commit Professor Leacock to that principle, but that is one way in which it might be done.
There is a splendid article in the Toronto Saturday Night of October 17, 1931, by Professor T. E. Gregory, of the London School of Economics, who says in effect that the gold standard exercised such pressure on the price levels as to imperil the standard itself. Finally it did break the gold standard and
made it impossible for the countries of the world to operate under it. It became impossible for England 'to stay on that standard, and when England abandoned it nearly all other countries followed suit. To-day only a minority of the so-called civilized countries maintain a pretence of being on a gold standard. Of the countries that are on the gold standard I believe the United States is the only one that is really living up to the standard, that is, paying out gold on demand. Even France, who holds such a large share of the world's gold, will not pay out gold on demand except in the form of $8,000 bars, and of course the ordinary person cannot pre-[DOT] sent legal tender to the extent of $8,000 in demand for gold. So that the Bank of France is relieved of the necessity of paying gold to private individuals. Recently, according to an article in the Financial Post, United States $20 gold coins have been selling in Paris for $24. Frenchmen anxious to secure gold coins for hoarding must now pay a premium of 20 per cent to get that gold, even in a so-called gold standard country.
Some of the newer economists are coming more and more to the belief that currencies can and should be stabilized without reference to gold, and I am very pleased to note that Dr. D. M. Marvin, economist of the Royal bank, in a speech delivered recently before the Canadian Club of Toronto, suggested that possibility. According to the report:
He saw the high price of credit in countries on the gold standard as the major cause of the depression and suggested trade would swing upwards when credit was obtainable at more reasonable levels.
He goes on to suggest that the currencies of different countries in the world might be stabilized, practically in the way proposed in the remarks of Professor Day which I have already read to the house. The following observations are significant:
Those countries no longer on a gold basis have means of controlling their own price level, although the machinery for doing so is not perfect and outside of Great Britain and Sweden there seems to be no great number of economists and banking authorities who have given consideration to this phase of the subject. Generally, the attitude of the governments, the press and the public is that a misfortune has overtaken the country which will be overcome at the earliest possible moment. They overlook the advantages which have accrued to them by reason of the premium on gold and fail to realize that they can afford to seek the old parities of exchange with the gold countries only after deflation has been arrested and reversed and the price level of the gold countries brought up to a level with their own. . . . It would seem that the monetary loss to one class, mainly government bodies, will be somewhat more than offset by the gain of another
Stabilization of Currency


Henry Elvins Spencer: I
should like to take the opportunity which the subamendment gives me to say a few words with reference to the very able speech of the Minister of Trade and Commerce (Mr. Stevens). First of all I wish to congratulate him very heartily upon the splendid speech he made to the house this afternoon. There are one or two remarks of his to which I wish to refer, and if the rules of the house do not permit the minister to reply on this occasion I hope that he will do so at the next opportunity when the subject comes up, which I hope will be this session.
If I heard him correctly, he stated "That money itself is not increased". I would ask him to define what he terms money. Does he include in money not merely coin but currency and credit or anything that functions as money? If he includes all those three, and if I am correctly citing his statement that money itself is not increased, I cannot understand how he comes to his conclusion, when every time we make a new issue of coins at the mint we are certainly increasing the quantity of money, and every time the banks take avantage of their power of note issue currency is certainly increased. Currency is increased every time the banks use the Finance Act provisions which enable them to bring various securities to the treasury board and to get dominion notes. Also in time of war, as in 1914, when our circulating medium was increased by about two billion dollars, surely money was increased. In this connection I would refer to a statement made by Sir Thomas White in his book, War-time Finance, in which he said that Canada surprised not only herself but the whole world when her people subscribed twice as much money as all the money in Canada to various war loans, and then had amply sufficient in addition to carry on a growing business. I would like the Minister of Trade and Commerce to be kind enough to answer those questions when he rises the next time this subject is under debate.
Secondly, he referred to a managed currency. I would ask him if by that he meant currency and credit, because currency itself is a very small part of our monetary medium.
Stabilization oj Currency

Thirdly, he referred to someone in the banking and commerce committee of 1923 advocating the very free issue and printing of paper money. I would remind the house that no one in this corner during the last ten years to my knowledge has ever for a moment suggested using the printing machines for issuing money without any check whatever. We have always been very, very careful to guard against such a policy.
Before I sit down I wish to refer briefly to a remark that was made by the hon. member for Vancouver Centre (Mr. Mackenzie) this afternoon. He informed the house that the Liberal party had for some time past been giving a great deal of study to this monetary question. I am fully aware that the hon. member himself has been giving some study to it, but except for a few words that he uttered on a previous occasion I had never heard a speech made on this subject by any member of the party to my right until the hon. member for Prince (Mr. MacLean) spoke the other evening. But if it is true that the party to my right is making a serious study of the money question, I wish to say most sincerely that it is one of the best pieces of news that we have had for a long time, and anything that I and those sitting around me can do to cooperate with them in studying this all-important subject we shall be only too glad to do at any time and place.


Pierre Édouard Blondin: Is the house ready for
the question?


William Lyon Mackenzie King: Before the
question is put, has the minister given any consideration to a modification of the words of his amendment in order to have them accord with the interpretation given to the amendment by the Prime Minister? What becomes of record is the resolution as it stands, which is quite different from the meaning being read into it. As it stands, in the language employed by the minister, for reasons I have already given, it is not in a form which we on this side of the house could support.


Henry Herbert Stevens: I am quite sure that the
house and the country will accept the explanation and the interpretation placed upon it by the Prime Minister, and I cannot see any object in making a change in the language.
Amendment to the amendment (Mr. Stevens) agreed to, on division.
Amendment (Mr. Irvine) as amended agreed to.
Motion (Mr. MacLean) as amended agreed to.



BANK ACT AMENDMENT


[Stage Direction]
Mr. H. E. SPENCER (Battle River; moved the second reading of Bill No. 16, to amend the Bank Act.
Pierre Édouard Blondin: Is it the pleasure of the house to adopt the motion?


Richard Bedford Bennett: No.


Henry Elvins Spencer: 
Richard Bedford Bennett: Mr. Speaker, owing to the indisposition of the Minister of Finance (Mr. Rhodes), lam, for the moment, content to take his place rather than to ask the hon. member to let his bill stand. During recent years, having regard to the decisions of the courts, I think there have been relatively few violations of the provisions of the Bank Act, as compared with conditions prior to the first decision of the courts as to the legality of charging more than 7 per cent. I agree wholly with what the hon. member has said, that laws placed upon the
statute books should be observed whether by corporations or by individuals. They are intended for both and should be respected equally by each; as to that I think there can be no doubt.
There are, however, reasons given by the chartered banks why in some communities they have, as a matter of contract, charged more than 7 per cent; they said if they did not do so they would have had to close their branches. May I add that they have given lists of communities in which that fact is true. Whether or not those reasons would satisfy the hon. member and his friends as to the soundness of the position which has been taken, I am not prepared to say. All I can say is that last year, as he has very properly pointed out, the penalties were out of all proportion to the offences. To-night if I were going to criticize any particular section of this bill-and I do not purpose to discuss it at length-I would say that to make a violation of the act an indictable offence would involve the provinces in very large expenditures of public moneys for prosecutions and, in most instances, I should fancy there would be difficulty in securing convictions. A summary conviction would probably be sufficient to meet all the purposes the hon. member has in mind. Without in any sense committing myself to the principle that he suggests, but agreeing wholly with him that any law placed upon the statute books should be observed, I suggest to him that if he will, without committing hon. members to the principle of the bill, let the house give it its second reading, it can be referred to the committee on banking and commerce, where an opportunity will be afforded to those who are interested to express their views and fully present the case which they may make as to the undesirability of enacting a clause such as suggested so long as banks are asked to be maintained in very small communities where the cost of maintenance is far beyond the profits derived from their operation. If the hon. gentleman is prepared to adopt my suggestion, I would certainly commend that course to the house.


Henry Elvins Spencer: Mr. Speaker, I shall be
very glad indeed to acquiesce in the wishes of the Prime Minister.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the select standing committee on banking and commerce.

[Stage Direction]
Mr. A. U. G. BURY (East Edmonton) moved the second reading of Bill No. 17 to amend the Marriage and Divorce Act.
Marriage and Divorce Act
Some hon. MEMBERS:: Explain.


Mr. BURY:: Mr. Speaker, I do not think
there is much that I can add to the explanation I gave the house when asking leave to introduce the bill. The amendments are of a very simple nature. The marriage law as it now stands provides that a man may marry his deceased wife's sister or the daughter of a sister . of his deceased wife, but does not provide that he may marry the daughter of a brother of his deceased wife. The first amendment is for the purpose of making it legal for a man to marry the daughter of a brother of his deceased wife, as he may now marry the daughter of a sister of a deceased wife. The second amendment is analogous to that in reference to the woman. By the marriage law of Canada a woman can marry now a brother of her deceased husband, or the son of a brother of her deceased husband, but cannot marry the son of a sister of her deceased husband. The second amendment is for the purpose of remedying this anomaly.


[Stage Direction]
Motion agreed to, bill read the second time, considered in committee and reported.


[Stage Direction]
The house resumed from Tuesday, February 23, consideration of the motion of Mr. Gagnon for the second reading of Bill No. 14, to amend the Civil Service Act, and the amendment thereto of Mr. Heaps.
Mr. W. W. KENNEDY (Winnipeg South Centre):: I wish very briefly to further discuss certain details of this bill. When speaking to the bill the other day the hon. member for Bow River (Mt. Garland) drew the attention of the house to the fact that if it were enacted it would have the effect of destroying what is ordinarily known as the preference under the Civil Service Act to those who served in His Majesty's forces overseas during the war. If there be any doubt as to the force of the point raised by the hon. member, reference to the act itself will make the position very plain. Section 26 of the Civil Service Act provides:
Competitive examinations shall be held by the commission to establish lists of persons eligible for appointment.
Section 29 contains this provision:
Immediately after each examination a list of ;he successful competitors in the case of a competitive examination, and of successful candidates in order of merit in other examinations, shall be made out and published in the Canada Gazette.

2. The commission shall prepare and maintain a special list of persons in receipt of pensions by reason of their services in the war who
(a)	have from causes attributable to such service lost capacity for physical exertion to an extent which makes them unfit efficiently to pursue the avocations which they were pursuing before the war;
(b)	have not been successfully reestablished in some other avocation; and
(c)	desire to be placed on such list.
There provision is made for a special list on which shall be placed those in receipt of pensions who have qualified at competitive examinations. Section 29 provides further by subsection 4:
In all examinations for entrance into the civil service the persons named on such special list who are found to possess the necessary qualifications shall be named, in the order of merit, on the list of successful candidates above all other candidates; and all other persons who have been on active service overseas on the military forces or who have served on the high seas in a seagoing ship of war in the naval forces of His Majesty, or of any of the allies of His Majesty, during the war, who have left such service with an honourable record or who have been honourably discharged,, or when any persons who have served as aforesaid have died owing to such service, the widows of such persons, and who, in either case, obtain sufficient marks to pass such examinations, shall, irrespective of the marks they have obtained, be named in the order of merit, on the list of successful candidates next after any candidates who are on the special list mentioned in subsection two of this section and above all other candidates.
This bill provides that section 63 be added, as follows:
The outside service shall be excluded from the operation of the act, and the governor in council may make such regulations as are deemed advisable, prescribing how such positions are to be dealt with.
It is obvious that the only preference with respect to those who served overseas, so far as appointments to the civil service are concerned, is created by virtue of and under the provisions of the Civil Service Act. Therefore if all outside appointments be removed from the operation of the Civil Service Act, certainly the provisions of that act will no longer apply thereto.
In fairness to tlhe hon. member for Dorchester (Mr. Gagnon), who introduced the bill, I wish to state to the house that I have had the privilege of talking over the matter with him. He informs me, and certainly I am convinced, that it was never in his mind that the proposed amendments to the Civil Service Act should destroy that preference. But in addition to being generously endowed by nature with a keen mind, the hon. member has the further advantage of a training in law and a mature experience, so I think no

Civil Service Act-Mr. Kennedy (Winnipeg)
argument is necessary to convince him-and I assume it will not be necessary bo convince other hon. members of this house-that we must take the bill as we find it. It is true that the bill itself makes no reference to the removal of such preference, but in connection with the removal of outside appointments from the Civil Service Act it makes no reservation in relation to the preference at present enjoyed. Therefore, whatever may have been the intention, we must face the facts as they are, and if the bill were passed in its present form it would have the effect of destroying that- preference.
It is not my purpose to-night to enter into any discussion or argument as to whether or not such preferences should have been granted. That question is not before the house. But the effect being as I have indicated, for that reason alone I cannot support the bill. It is true that the measure contains a provision that with respect to apointments to the outside service the governor in council may make such regulations as are deemed advisable, yet the bill itself contains no reference to what those regulations may be, so I cannot give it my support.
That is only one feature of the bill, though it is an important feature. In their general application, however, other provisions of the bill are much wider. They refer to all appointments to the outside service, that is to say, to all appointments outside the city of Ottawa and its immediate environs. It means that with respect to all outside appointments we are going back to the patronage system. Was it not an advance when the Civil Service Act was introduced? I am indebted to the hon. member for Bow River (Mr. Garland), who has placed on Hansard extracts from the speeches of distinguished members of this house relative thereto. The fact that they are there makes it unnecessary for me to repeat or refer to them in detail, but the general feeling was that in the interests of the public service it was advisable that so far as possible we should do away with the old system of patronage.
Were those men wrong? I am aware of the fact that in the administration of the act the Civil Service Commission cannot be held blameless, in view of certain recent investigations and exposures. But because that is so is it desirable that we do away with the whole operation of the act? Surely it is a question of the proper administration of the act, and not a question of doing away with the principle on which it is based. If in their administration of the aot the present Civil Service Commission have allowed considerations other than merit to enter into the question of appointments; if they have allowed considerations other than merit to enter into the question of promotions, the fact remains that whether it be necessary to perform a minor or a major operation in connection with the commission, this is a matter of disciplining that body. I understand that a committee of this house is to be appointed to consider the whole matter of the administration of the Civil Service Act by the commission; I understand from my hon. friend from Dorchester that it will be proposed that this bill be not pressed but that it be referred to a committee, so I am quite content that the matter should be disposed of in that way. I think it is desirable in the interest of the public service and of the administration of the Civil Service Act that the whole matter of its administration be thoroughly and diligently investigated by a committee of this house.
To take from under the operation of the act all appointments to the civil service of Canada outside of Ottawa is to my mind unthinkable. Instances have been given of appointments made under the Civil Service Commission as it operates to-day which have not been creditable, but to my mind those reflections have not been upon the principle but rather upon the administration of the act.
I have heard it urged that hon. members know best who should be appointed from their constituencies. The other evening in discussing this bill I had occasion during the few minutes at my disposal to make reference to that phase of the matter. Frankly, I am not apprehensive to any great degree on that ground so far as original appointments are concerned, but assuming that original appointments, even if left in the hands of individual members, are made on merit, what about the uncertainty of the service if the principle of patronage is to apply? Take a young man in private industry. He enters the service of a firm with high hopes, willing to give of the best that is in him, expecting-what?-that by diligence, by industry and by the application of such abilities as he possesses he will get advancement. But once you introduce again into the civil service of Canada the principle that appointments shall be made on the strength of party service, there follows as day follows night this fact, that when there is a change of government those who owe their appointments to their party loyalty and party service will in many cases stand in danger of losing those appointments. The same principle would apply to either party; unfortunately it is too true. And with what result?

Civil Sendee Act-Mr. Aheam
The class of applicants you will get for positions in the service will deteriorate. What young man, ambitious and desirous of advancing himself in life, would wish to join the service knowing quite well that after probably eight or ten, or at the most twelve or fifteen years, he is going to face, to put it mildly, the possibility of being removed from the service? Apart from the deterioration in the class of applicants who would enter the service, consider the situation of public servants working under such conditions, with the apprehension always ahead of them that some day diligence, industry and ability will avail them nothing but that instead, by virtue of the patronage principle, they may be cast out.
To my mind, apart altogether from the first observations I made in regard to the question of preference to returned men, it would be a mistake to pass the bill. I heartily endorse, however, the suggestion that a committee be appointed, that the whole question of the administration of the act be investigated and that helpful suggestions looking to its improvement be there fully considered.


Mr. T. F. AHEARN (Ottawa):: I wish to make some very' brief remarks respecting the bill now before the house. The hon. member for Bow River (Mr. Garland) and the hon. member for Winnipeg South Centre (Mr. Kennedy) have left me very little to say because I find myself in almost complete agreement with both. I cannot regard this bill as anything but a very long step towards a return to the patronage system, and in my opinion the patronage system is as dead and as much discredited to-day as when it was abolished and the merit system, under the Civil Service Commission, substituted for it.' I do not believe that any case has been made out against the merit system. If there is any serious criticism it is directed against the Civil Service Commission and its methods; but those who believe in the merit system have no fear that a committee of this house, taking evidence in the fullest manner, can fail to point out a way to administer the merit system to the complete satisfaction of the people of this country.
I strongly believe that it is the will of the great majority of the Canadian people that entrance into the civil service of Canada shall be open to any Canadian who possesses the qualifications necessary for the position that he or she aspires to, and that adherence to any political party shall not be a consideration.
I believe that this is the great point insisted upon by the majority of Canadians, and that most hon. members on returning to their

constituencies will find that this feeling is just as strong to-day as it ever was.
I think I am safe in saying that those who are in the civil service stand almost as a unit in opposition to the provisions of this bill-The merit system, to those who have got into the civil service, stands as a guard against favouritism and influence, which I believe would endanger them if the patronage system were restored. Civil servants giving faithful and honest service would lose all feeling of safety, security and fair play.
A man may be a good and efficient party worker but at the same time be utterly unsuited to some position in the civil service which he may aspire to. Yet, frankly, I feel that hon. members would find it difficult to resist pressure from party organizations to recommend that type of man under certain circumstances. My own opinion is that patronage is a snare and a delusion so far as any member of parliament is concerned. You recommend one man for a position and immediately you incur the hostility of ten or twelve others; and you find yourself, so far as your own party is concerned, in greater difficulty than if you had done nothing at all. For that reason, looking at it from the point of view of practical politics, I do not think there is anything to be said for patronage.
I hope and expect that this bill now before the house will be defeated, and if that occurs the committee proposed by the Secretary of State (Mr. Cahan) will be appointed. In that event the Civil Service Commission will appear before the committee and tell its side of the story-because there are always two sides to any story. Until that examination is completed, and findings based on evidence are arrived at, I do not propose to criticize the Civil Service Commission in any way.
A certain amount of political patronage affecting minor jobs still flourishes, unfortunately. I regret to say that a letter from a ward chairman, a member of parliament or a defeated candidate is still as potent to-day as it has been in the past. Nothing has hurt the people of my own constituency more than the fact that, in these hard times, those who are in need of help cannot obtain assistance. I think we should consider ourselves as Canadians first and party men afterwards.


An hon. MEMBER:: Oh, oh.
Mr. AHEARN; The hon. member may laugh, but that is my belief. I hope to see the civil service kept open to every Canadian, irrespective of party, who is able to qualify for the positions vacant, and that the act will continue to protect those already in the

Civil Service Act-Mr. Guthrie
service from favouritism and unfair influences. The preference now given to war veterans should be retained. It is a contract which must be kept if we are to keep faith with those who served during the war. The partial wrecking of the Royal Canadian Air Force constitutes a great blow to all service men and surely no further blows should be allowed to fall upon them.


Mr. A. A. HEAPS (North Winnipeg):: Mr Speaker, I am going to ask the house for permission to withdraw my amendment to this bill. I have been informed that it is the intention of the government to propose an amendment which, if passed, would have the same effect as if my amendment had carried.
I have been favoured with a copy of the proposed amendment and I note it contains the provision for the appointment of a committee of this house to inquire into practically all phases of the administration of the Civil Service Act. I welcome such an investigation and I therefore ask leave to withdraw my amendment.


Hon. HUGH GUTHRIE (Minister of Justice) :: Mr. Speaker, perhaps it might be well
to read the amendment which has been submitted to the right hon. leader of the opposition (Mr. Mackenzie King) and to the leader of the party in the other corner (Mr. Gardiner). The motion for six months' hoist having been withdrawn, I beg to move, seconded by Mr. Ryckman, the following:
That all the words after "that" be struck out and the following substituted therefor:
The appointments to, and the control and direction of, the civil service of Canada, and, generally, the administration and operation of the Civil Service Act, be referred to a special committee consisting of seven members of this house, to be appointed hereafter, with instruction to inquire into and report concerning the repeal or amendment of any of the provisions of said act or the substitution therefor or addition thereto of other provisions, as the committee may deem advisable, with power to send for persons, papers and records and to report from time to time.
The effect of the passing of this amendment will be to block the second reading of the present bill, and the question, not of the present bill, but of the Civil Service Act as set out in this amendment, will be then referred to a special committee of seven members.


William Lyon Mackenzie King: Mr. Speaker, as
the Minister of Justice (Mr. Guthrie) has mentioned his submission of this amendment to myself as leader of the opposition, I should like to say that when that was done I expressed to the minister, as he has just said, the view that in my opinion such an amendment would be satisfactory to hon. members on this side. I should like it to be understood that in expressing that view I had no desire to curtail in any way the debate or discussion.


Hugh Guthrie: The debate could proceed on this amendment.


William Lyon Mackenzie King: It was not an
agreement in any sense to bind hon. members on this side of the house to any arrangement.
Amendment (Mr. Heaps) withdrawn.


Pierre Édouard Blondin: The question is now on
the amendment moved by the hon. Minister of Justice (Mr. Guthrie).


Ian Alistair Mackenzie: Mr. Speaker, I am in entire sympathy with the amendment moved by the Minister of Justice, but I have grave doubts if it is in order on the second reading of this bill.


Richard Bedford Bennett: It is covered by May.


Ian Alistair Mackenzie: I am
asking His Honour, not a private member.


Pierre Édouard Blondin: I have no doubt it is in
order.


Mr. F. W. PERRAS (Wright):: Mr. Speaker, I am very happy indeed to associate myself with those who have preceded me and to say that I stand four-square in favour of the merit system. I have a good many civil servants in my constituency who have given faithful and diligent service to the crown. Some of them have been employed for a number of years; others have been in the government service for shorter periods, but they are all doing their work in a most satisfactory manner and are entitled to be protected. My principal objection to the present bill is that those who would enter the service in the hope of securing permanent employment would never be sure of their position. After serving a number of years and after buying property and entering into numerous obligations on the strength of a permanent position, they might find themselves on the street and their families placed in very painful circumstances
I believe in the merit system, I think it is the fairer way of making appointments, and in the long run it is productive of the best results. It is also more satisfactory for the employees themselves. After giving many years of faithful service it is only fair that they should obtain the promotion to which they are entitled. Under this system the employees

Civil Service Act-Mr. Euler
are satisfied and I am sure that a satisfied employee gives much more attention and care to his employer's business than one who is discontented. It is because I am one of those who firmly believe a faithful employee should be protected that I am in favour of the continuance of the merit system.
If any objection can be raised to the present system I think it would be to the provisions of the law itself. I am opposed to the bill but I would not object to this matter being referred to a special committee so that any difficulties now present may be removed. I would not, however, want anything done which would adversely affect the present merit system, and I will vote against any attack made upon it.


Mr. E. A. PECK (West Peterborough):: I want to say a word or two on this bill. Speaking generally, I am not in favour of the bill receiving the endorsation of this house, but there is a matter which I think should be taken into consideration by the committee, at all events, to which this whole question is going to be referred.
I do not think the member for the district in which an appointment is to be made should be entirely ignored. After all, the member should have some say as to who should be appointed. He is as a rule a person of reasonable intelligence, and more than that, he is the choice of the people of the district. Surely, therefore, he should have some voice in the selection of those who are to carry on the business of the government in the riding that he represents. The inside service is not under consideration in this connection at all, but when there is a vacancy in the outside service, what happens at the present time? There is a perfunctory kind of examination; some representative of the department concerned, I suppose, goes down to the district, probably knowing nothing of it or of the candidates, and after making a few cursory inquiries goes back and reports to the Civil Service Commission that such and such a person is the one he thinks should be appointed to the position. He has not the means of knowledge which are open to the member for the district, because generally the member has been brought up in that district and is very well acquainted with the people who are likely to be applicants. So I submit that the committee should consider this question; that after a list of eligible candidates has been prepared by the commission it should be submitted to the member for the district, or at least the first three or four names on the list, so that the member may express his opinion as to the merits of the candidate. In that way we would

avoid having someone appointed who is not really under all the circumstances the most suitable person for the position. I think the member can be relied upon to select a suitable candidate. He is responsible to the people he represents, and I am sure he can be relied upon to decide on the basis of merit.


Hon. W. D. EULER (North Waterloo):: I suppose there is very little to be gained in prolonging the debate after the announcement by the Minister of Justice (Mr. Guthrie) that he proposes to appoint a committee to inquire into the administration of the Civil Service Act and possible changes that may be made in it, but I should like to state my own view that it would be a backward step to make any drastic change in the principle of the Civil Service Act.
I am at a loss to know whence come the objections to the act. Perhaps I should not put it in that way. So far as I can ascertain, there has never been any great objection on the part of the Canadian people to the purpose and operation of the Civil Service Act as it is to-day. The objections come almost entirely, I believe, from individual members of the House of Commons, who seem to believe that they are in a better position to make these appointments than the members of the Civil Service Commission. There may occasionally be some truth in that statement, but as a general principle I think it is absolutely incorrect, because with the best of intentions- I give credit to most, in fact all, of the members of the house for a desire to discharge their public duties with absolute honesty-it is entirely unavoidable if you return to the system of political patronage that the pressure will be so great that the chief thing to be observed in making recommendations to the Civil Service Commission will not be the merit and ability of the candidate to perform the duties of the office, but rather whether he has performed the right kind of political service for the party involved.


Edward Armour Peck: Not necessarily.


William Daum Euler: Not necessarily, but I am
afraid that that will be the case in very, very many instances.
The Civil Service Act was enacted, if I remember correctly, in 1918, under the Union government, as it was known. I think it has worked fairly well, although in 1921, again if I remember correctly, there was an attempt made to drive what was known then as a coach-and-four through the Civil Service Act by what was known as the Spinney bill. I happened to be a member of the committee to which the Spinney bill was referred, and I

Civil Service Act-Mr. Bennett
opposed the recommendation made by the committee at that time. In that recommendation was a clause to the effeot that the Civil Service Commission should have the power to divest itself of authority to appoint certain employees to the civil service if they regarded such action as being in the public interest. I hope that no such recommendation will be made by the committee which is now to be appointed, because that would transfer authority from parliament to its creature, the Civil Service Commission. If any changes are to be made, they should be made by parliament itself.
I am not here to say that there are not difficulties in the administration of the Civil Service Aot. After an operation of some thirteen or fourteen years I think it quite likely that changes in the act could be made with advantage to the service. Possibly I might be able to point out some myself. The statement has been made at times that one result of the enactment of the Civil Service Act as it is to-day has been to transfer the patronage from the members or the ministers to the heads of branches in the departments, and it may be that that has sometimes been the case. I can conceive of cases where the heads of branches, to whom after all is committed the giving of the ratings where promotions are concerned, may, if they do not do their duty, exercise favouritism either on political or on personal grounds. I am almost certain that that at times has been done and that in isolated instances favouritism or patronage has been exercised by the head of a branch rather than by the minister himself. But despite any weaknesses that may exist in the operation of the act, I still hold that the advantages to be gained by the provisions of the act are so much greater than any defects there may be, that there is really no argument with regard to the matter. There may have been difficulties, there may have been disadvantages, there may have been abuses in the administration of the act. If so, they should be disclosed before the committee.
It seems to me that there is a good deal of money wasted to-day. For instance, tonight I received in my mail notice of an appointment to be made to the wardenship of one of our penitentiaries. It is pretty much a waste of rime and money to print and distribute these notices. We receive them almost daily at home, and they are of absolutely no use to anybody. That practice might just as well be discontinued, because we have nothing whatever to say in the making of the appointments. I have a certain
degree of sympathy with the member for West Peterborough (Mr. Peck) when he says that the member might very well be consulted by those making inquiries in his neighbourhood as to appointments to certain vacancies. I can see no particular objection to that so long as there is no duress or compulsion, so long as the member is not clothed with any authority to dictate to those making the investigation.
I am entirely opposed to the principle of this bill and l am absolutely in favour of the amendment which will refer to a committee the matter of investigation and possible amendments to the act.


Richard Bedford Bennett: I have heard observations made by hon. gentlemen opposite with respeot to the position I have frequently taken in connection with civil service appointments. I have advocated the merit system on more than one occasion in this house and out of it. During the last fifteen months I have had occasion to examine the operations of the statute, and I think perhaps this house is overlooking the fact that after we concede the merit system is the proper system, the next question is: Who is to determine merit? That is where the difficulty has arisen, and it is a real difficulty.
Let me give this house an illustration: In a certain town of this dominion it was necessary to appoint a caretaker for a public building. A representative of the Department of Public Works met the applicants and, having seen them and discussed their qualifications, placed one of them in charge temporarily. That man, had, first, the qualification of being a returned soldier; secondly, he had had some experience in the sort of work required; thirdly, he was of proper age, and lastly his scholastic attainments consisted of a public school education. He wrote the application in his own handwriting. There were other applicants for the same position; they, too, wrote their applications in their own handwriting, as required; at least some of them were returned soldiers. The temporary employee was rated by the public works examiner as being better qualified for the position than anyone else. Suddenly however an educational test became necessary for the job of caretaker, and a clerk in this city was named to determine the educational qualifications of the applicants. Without seeing them, and without any examination other than looking at the application forms which they had filed, he gave an applicant other than the one who was temporarily in charge eight points more than

Civil Service Act-Mr. Bennett
that temporary employee. The result is that the temporary appointee was put out of his position, and the appointment was given to the one who had the educational qualifications determined in his absence from looking at his application form; and mark you, the selection was made not by the Civil Service Commission but by a clerk who receives compensation I think wholly in keeping with his merits, and who was appointed for reasons which need not be discussed.
There you have the merit system; there you have an instance where the merit of that caretaker was determined by a clerk in Ottawa who never saw the applicants, and who determined that the educational qualifications of the one appointed were superior to those of the unfortunate young man who was in charge, who was also a returned soldier and who had as good an education, I would say -because I have photostatic copies of the original documents-as the one who succeeded in securing the position.
It must be apparent therefore that something must be done by which the merits of contending applicants may be decided by pioper methods. It was that case and other cases of the same type which made me so desirous of having this matter considered by a committee. We are shocked when we think of a man giving absolute satisfaction in a position, and who is actually better qualified by experience, being removed from it because, after looking at two application forms and without seeing or examining the applicants in any way, the educational test of one is said to be superior to the other.
I am now advised by the commission that the educational test has been removed in connection with positions of that kind. The result is that if that unfortunate returned man now had his position he would be able to keep it, but because attention was directed to this abuse he is now out of a position and another man who was not seen by the examiner and was given a rating of eight points higher than his competitor, on educational qualifications, is now working. I am bound to say that very ugly rumours were about as to what determined the difference of eight points; I leave them out, however, as they have nothing to do with the matter under discussion, I merely mention the circumstance.
Matters such as that have brought suspicion and distrust to the minds of many people concerning the commission, and have necessitated action being taken. Only the other day complaints were made as to the high expense of its operation. We gave notice to

that branch of the public service, as we did to others, concerning temporary employees. To-day we are advised that they can effect retrenchment to the extent of $9,000 per annum by the withdrawal of a certain number of temporary employees. That represents the interest on only $180,000, but indicates clearly why the public outside of Ottawa has become so deeply interested in what factors determine merit. I could recite a great many more cases of a similar character. Mistakes will happen; we must allow for them. Difficulties have to be overcome by experience in the operation of a statute. The present statute has been in force thirteen years, and the circumstances to which I referred happened only last year. As I say, there are others just like it. It is for that reason the government has concluded it owes a duty to the merit system to see that the factors which determine merit are factors not under the control of a hidden hand which operates through an official drawing an insignificant compensation, and with power to determine the life or death, officially, of applicants for positions. It is for that reason the government asks that this bill be referred to a committee so that these matters may be considered.


Mr. ARTHUR DENIS (St. Denis) (Translation) :: Mr. Speaker, I listened attentively to the speeches of the members who preceded me in this debate. Some were in favour of the bill introduced by the hon. member for Dorchester (Mr. Gagnon) requesting this house to amend the Civil Service Act by excluding the outside service, others, perhaps for personal reasons, express contrary views and oppose the bill.
In no manner do I wish to criticize the Civil Service Commission! Far be it from my thought, because I feel certain that in the discharge of their duties they have acted honestly to the best of their ability and in the interests of the public. However, I wish to state-even at the risk of shocking the house-that the Civil Service Act rests on a false principle, that is deceit. It was framed with a view of depriving members of both present and future governments of the responsibilities inherent to the administration. I state that the act is contrary to the principle of self-government, because a government conscious of its responsibilities must be vested with the authority necessary to appoint its officials or employees.
Far from being opposed to the merit system, I should like to see all applicants for positions in the public service, submit to the required tests; however, I would insist

Civil Service Act-Mr. Denis
that these examinations be corrected by those who are responsible for the administration, by those who are accountable to the people, and thereby best suited to choose, among the applicants, candidates who are as well qualified as those chosen by the present commission.
I am therefore in favour of the bill because it is in keeping with the principle of selfgovernment, and, because, notwithstanding the Civil Service Act, former governments as well as this government, have always managed to find positions for their friends. When the question of promotion arises, the heads of departments, for instance, are requested by the Civil Service Commissioners to report as to the qualifications required by the candidates, and I may state that often, under previous governments and the present one, favouritism was shown on such occasions to friends of the government which happened to be in power. Bearing in mind our responsibilities as legislators, we should avoid deceiving the electorate and enact legislation based on sincerity and honesty of purpose, so as to satisfy everybody and also in the best interests of Canada.
I therefore again state, sir, that this act is unjust-not to say hypocritical-and has but one aim, that of deceiving the members of Parliament and the candidates who aspire after civil service positions. In closing my remarks, I again state that I am in favour of this bill, however, I would not support it if I thought it had been introduced in order to reestablish patronage in the civil service. I believe in the sincerity of the sponsor of this bill and I am convinced the merit system will be retained in the administration of the civil service.
Instead of applying this system "at large" as at present, it should be applied in each department in such a way that the civil employees would be fairly dealt with, not be disappointed in their rights and not be dismissed for trivial reasons, like a large number of postmasters have been since this government is in power.
An hon. MEMBER (Translation): Do not forget that under the late government dismissals also took place.


Joseph-Arthur Denis: For these
reasons, sir, I am in favour of the principle of the bill, and I trust that in the future this government, as well as the government which will, I am certain, replace it in two years, will have the right to appoint its employees in keeping with a merit system which takes into account the government's responsibility towards the people.


Ambrose Upton Gledstanes Bury: Whatever sentiments, Mr. Speaker, we may individually entertain towards either the bill under discussion or the motion which was moved by my friend from Muskoka-Ontario (Mr. McGibbon), I think we can all agree that they have both served a good purpose in bringing up for discussion on the floor of the house, and we hope for some practical settlement, a question that has been-not to use a more inelegant term-long over-ripe for settlement. It is a question of very great importance to the public service of the dominion. I hope that the amendment which has been moved by the hon. Minister of Justice (Mr. Guthrie) will carry the support of the house. Not that I believe that it is the best way of dealing with the matter, but because it is a step in the right drection and maj'' enable us later to take a further step.
The questions raised and the issues involved in the bill itself and in the resolution affect the interests vitally and profoundly of a large body of our fellow citizens, many of whom have devoted practically all the active years of their life to the public service, and some of whom have built up a record for industry and effective and honest work of which any nation might well be proud. But those questions and issues concern not merely this great body of public servants, but the public service as a whole and the interests of the dominion. Therefore it seems to me that parliament can do nothing less than give to them the most serious consideration, the most searching inquiry and the strictest nonpartisan and patriotic thought.
When the hon. member introduced his resolution he ventured the assertion that he was assured of the support of nine-tenths of the members of the house. I doubted it at the time, but I said to myself:	Well, if that be
true, I am one of the twenty-four and a half members who constitute the one-tenth. I may be only the half member of the despicable minority, but I can take no other stand than I now take. I find, however, during the course of this debate that my hon. friend grossly exaggerated the amount of sympathy and support this resolution would evoke, and if I am any judge of the sentiments of the house I am quite satisfied that the resolution moved by the Minister of Justice will carry.
There were two .propositions put forward by the hon. member for Muskoka-Ontario from which I wish at once to dissociate myself. He said that the present act, the present civil service system, was a relic of war hysteria, that the parliament of 1918 was stampeded into taking up a position which was extreme,

Civil Service Act-Mr. Bury
which it never should have adopted, and from which we must now retreat. It may be that there is a certain measure of truth in the fact that war sentiment had its effect upon the measure introduced in 1918; it would have been unnatural if that had not been the case. Men felt profoundly at the time. But, Mr. Speaker, while we may give the greatest possible weight to the argument that postwar sentiment played its part in determining the provisions of the bill and the nature of the civil service system set up by the act, this argument has to do with details and not with the principle of the act itself. As I listened to the hon. member for Dorchester (Mr. Gagnon), I could find nothing in his speech dealing with the principle of the system or of the act, though I did find much that dealt with the administration of the act and with details.
If that be true, and if the controversy to-day has to do with details and not with orinoiple, does it not rather savour of a too drastic remedy to suggest that we should sacrifice the principle in order to rectify the details? Is it not a little like proposing to cut off Cromwell's head in order to remove his wart? We remember that the Protector had pretty strong views as to how he should be treated. He said to Lely, the great Stuart painter of the time, "Paint me as I am. If you leave out the scars and wrinkles I will not pay you a shilling." "Paint me, wart and all." If anyone had suggested that in order to increase his beauty the wart and other blemishes should foe removed by taking off his head, I can well imagine the sentiments he would have expressed. But the .hill, and the resolution which has been dropped, both proposed to sacrifice the .principle for the sake of the administration of that principle.


Peter McGibbon: Does my bon. friend wish to indicate that the dropping of responsible government by appointing the Civil Service Commission was a detail?


Ambrose Upton Gledstanes Bury: I am coming to the second proposition which my hon. friend made, and I will answer his question when I come to it.


Peter McGibbon: Be sure you come to it.


Ambrose Upton Gledstanes Bury: I will answer my hon. friend's question; I will not shirk it in the least. I have given one answer to the first proposition, that the Civil Service Act was a relic of war hysteria. Another answer, given by my friend from Bow River (Mr. Garland), seems most conclusive and convincing. He showed that the principle of the act was laid down in 1907, seven years before the war broke out, by Sir Robert Borden in the Halifax platform, and

was re-affirmed by Sir George Foster in 1903 before the first rumblings of the 1914 war were heard. Even if you put the first signs of the great war at the annexation of Bosnia and Herzegovina, as some of us did at the time, the answer still applies. Seven years before the war this principle was proclaimed, and it was reasserted one year later.
I was not in Canada in 1907; I only came in 1912. But I remember that when I took an interest in provincial and federal politics in the beginning of 1913, almost as soon as I arrived in the city where I still live, I discovered that there were two problems which obsessed the minds of the Conservatives of Alberta. One of them was the return of their natural resources, for which *they were fighting, and the other was the introduction of a proper civil service system that would do away with the abominable system of patronage. I flung myself heart and soul into the fray in support of the second of these proposals, and in 1913 I had an opportunity to assert to a large assembly in Edmonton that the .people of Canada might as well expect to get decent public service from their civil servants under the patronage system as they might expect to distil attar of roses from a skunk. Perhaps that is a figure of speech more forcible than refined, but it is absolutely true. I am not reflecting upon the civil servants of 1912 or 1913, or any other year up to 1918.


Mr. SHAVER:: Will the hon. gentleman
permit a question? I think he compared the civil service -of to-day with attar of roses.


Ambrose Upton Gledstanes Bury: I did not compare the civil
service of to-day with attar of roses at all.


Frank Thomas Shaver: At any rate this is the
question I wish to ask: Does the hon. gentleman consider that the personnel of the outside service to-day is more efficient than it was twenty years ago?


Ambrose Upton Gledstanes Bury: I am not saying they are more efficient; I am saying that I do not reflect upon the civil service of 1912 or 1913 or subsequent years to 1918. In many respects we were given good service, but we did not get it because of the principle of patronage. We got it in spite of that principle, and because of the fact that notwithstanding the patronage, ordinary men are honest, and ordinary men want to perform the duties for which they are paid, however abominable the system under which they are appointed and maintained in office.
There was a second proposition made by my hon. friend from Muskoka-Ontario,

Civil Service Act-Mr. Bury
which brings me to the answering of the question he put to me a few minutes ago. He made the statement that the reason why we should change the present system and go back to patronage in respect to the outside service was that the member for the constituency was best fitted to say who should fill positions in that constituency. That was a staggering proposition to me. Perhaps I have not been in the house long enough to sustain shocks of that kind, but when he made that statement I indulged in a little introspection. I began to argue, "Well, if the member of a constituency is the man most capable of saying who should fill positions in the outside service, or in any part of the service, it would appear to follow that if a member is not the man most capable of saying who should fill positions, he should not be the member; he is out of his place." I began to wonder whether after all I was properly in my place in this house because I could not convince myself honestly that I was most capable of filling all civil service positions in the city of Edmonton. Now you know it is rather a serious thing to undermine the confidence of a member of parliament in his divine right to sit in the House of Commons. We are all so perfectly certain that our election made us the proper representatives of our constituencies, that we are the best fitted to represent the people there, and it is not nice to have that confidence undermined. But the doubt did not trouble me very long because I have come to the conclusion that it is no part of the business of any member of the House of Commons to make appointments to the civil service. It is no part of representative government; it has no connection with the principle of representative government. That is the answer I make to my hon. friend's question which he put to me a few minutes ago. It is no part of the principle of representative government, no part of the democratic principle that the members of the House of Commons should appoint the civil servants of the country. If that proposition were true, then the ideal towards which we should strive, in the form of our civil service, we should get from the United States instead of from the mother country; and if I had to choose the line of direction along which I should wish the civil service of Canada to develop, it would certainly not be southward but towards the other side of the Atlantic, towards the motherland which has built up a civil service second to none in the world. England has been working on the civil service problem since 1855. She has had commission after commission since that time. I have the list of them here but I will not detain the house by reading it.
Let me say, however, that there is no people that has the genius for practical government in so great a degree as the British people, and there is no phase of public life in which the people of Great Britain show their practical sense so well as in the sphere of administration. And they have shown it in its full essence and flower in their civil service system. That is one reason why I should prefer, instead of the amendment moved by the Minister of Justice and the appointment of a committee of the house to inquire into this subject, that a commissioner be sent over to study the English system of civil service on the spot, to meet the civil servants of England on the spot, and on the spot to see how that system works. He could then report to the government what he had discovered in regard to the methods of operation of that system.
Let me quote the words of Sir William Clark, High Commissioner for Great Britain in Canada, in an address given at a luncheon on May 29 to the Civil Service Federation. He said:
Someone will always grumble whatever the system may be, but I have no hesitation in saying that ours commands the general confidence of the service

That is a most important thing; but can you honestly say that the present system in Canada has secured and holds the confidence of the majority of the civil servants of Canada? I cannot say so from my little experience and from the expressions of sentiment that have come to me from one and another of them.
-and as civil servants you will agree that confidence in this respect is wholly essential for the maintenance of service morale.
But if the argument is true that the member of the constituency is the best man to make appointments, the man most capable of making them, I am faced with grave difficulties. In my constituency there is a post office and I venture to say that, if I started to make appointments to that post office, the hon. member for West Edmonton (Mr. Stewart) would come and say to me, "Bury, this is not the post office of East Edmonton but the post office of the city of Edmonton, and I should have a say, just as much as you, in the appointments that are made in the city of Edmonton". There are Indian reserves that may lie on the border of a constituency. It may be that an Indian reserve spreads into another constituency. Well, who is to determine the appointee there ? Let me ask the house another question. If that principle is true, why stop at the outside civil service? Why leave poor Ottawa out? If the member

Civil Service Act-Mr. Bury

is the best man to make appointments in the outside civil service, why not in the inside as well? I cannot see why there should be a distinction. I cannot justify the discrimination against the city of Ottawa and the large number of civil servants who make up the civil service staff in this city.
The ideal of a civil service is twofold: to get the best men and to get from the best men the best service which each of them can give. And I venture to say that we will attain neither end through a system of patronage. You will not get the best men.. Often the best men in a- constituency have no particular regard for politics at all; they are not interested in politics. They occupy towards politics the same relation that the great mass of the people do who are not partisans on either side, the people who swing elections. I have tried again and again to get my people to understand that elections are not won or lost by the partisans but are won or lost by the movement of the great non-partisan body of the electors of the country who must be convinced of the soundness and the justice of a policy before they will support it. The best men in any constituency may not be partisans. They may say to the partisans of a political organization, as Mercutio said:
A plague o' both your houses . . .
They have made worms' meat of me.
A plague o' both your houses-they have made politicians' meat of me; between the two of you I am killed. That is or may be the attitude of the best man in the constituency, and if that is true what chance has he of appointment? We are not living in the millenium; we are not Hiving under conditions of Utopia; and while I am willing to admit that I have not noticed any barbed tails or cloven hoofs, I have not heard the rustle of any wings on either side of the house. I know perfectly well what would happen. Whatever hon. members may say, and however much they may protest that the principle of patronage would be honestly and honourably exercised, human nature being human nature and political exigencies being political exigencies, in the heat of on election or in the orisis of one approaching, I know perfectly well what would happen, and from the crown of my head to the sole of my feet I am opposed to any movement looking to the return of the patronage system. You will not get the best men. What kind of service are you going to get? The essential for good services is singleness of eye. Will you get it? No; every one in the service will have one eye on the results of the next election and the other on his work; one eye will be on his duties and the

other on the movement of political sentiment throughout his particular constituency and throughout the country. Instead of singleness of eye we shall develop what might be termed the civil service squint; and may we be forever preserved from that. There can be singleness of eye only when a man knows that as long as he is doing his duty well and faithfully, no power, political or otherwise, can disturb him. We will never have the best service available until that is a fact.
It is said that it is not proposed to give a member the power to dismiss. Why not? If he is the best man to appoint, why is he not the best man to dismiss? Where are we going to draw the line, and what right have we to draw a line? Is a man who has won a federal riding by one, two, three or a half dozen votes to be divinely invested with some strange power which he did not have before the election to enable him to know who is the best man to appoint? If so, then I ask: why is he not the proper person to dismiss? Once the power of appointment is given it will not be very long before the power of dismissal creeps in. Even if it did not, it would be hanging over the heads of the civil servants. There would be continual temptation to curry favour because they would feel they were at the mercy of political tides and political sentiments; they would feel they were at the mercy of some man who through some passing wave in the tide of political feeling had been put into power.
I intend to support the amendment of the hon. Minister of Justice, not because I believe it to be the beet amendment possible, but because I hope that when its purpose is effectuated a commission will be sent to England to obtain first hand information in connection with the working of the English civil service.
Mr. JEAN-FRANQOIS POULIOT (Temis-couata): Mr. Speaker, as the hon. member for East Edmonton (Mr. Bury) has given to the house his reasons for supporting the amendment of the hon. Minister of Justice (Mr. Guthrie), I should supply to the house some evidence to show the disregard into which the Civil Service Act has fallen. The evidence which I will present does not cover all members of the cabinet, as it would take such a long time to make a complete investigation, but may I give a few instances in connection with the department of the Postmaster General (Mr. Sauve) which, I think, will dumbfound hon. members on both sides of the house.
On November 23, 1930, the minister stated that fanaticism was Canada's worst enemy,

Civil Service Act-Mr. Pouliot
and in the same month he declared that he would defend a faithful employee of the government against even his own personal friends. That is, if a Conservative member or a Conservative defeated candidate asked for the dismissal of an honest employee, the Postmaster General would reply: Shut up, do not say a word; that man is a faithful employee and I am bound to defend him against your complaint; you have no reason to complain and I will stand by my promise. When in Cornwall the minister made a very nice speech and he told of how his heart bled when anyone mentioned dismissals. He said he had the courage not to dismiss a faithful employee who was doing his duty. I should like to quote from a translation of that speech, as follows:
From the moment I took office as Postmaster General, I promised justice, economy and honest administration. On that occasion I declared that the civil servant, postmaster or other employee who performed his duties as required and who had not violated the law by taking an active part in politics had nothing to fear from me, that I would protect him even against my own friends. The postmaster who did not take part in perpetrating an injustice by accepting the place of one of his fellow citizens, unjustly dismissed, had nothing to fear. The letter carrier who in the fulfilment of his duties of distributing mail from door to door did not become the active agent of any political party, had nothing to fear.
In presenting this evidence to the house I will not mention names as I have no desire to reflect on anyone, but any hon. member who desires particular information can obtain it.
In a certain country post office the postmaster had a daughter of about sixteen or seventeen years of age. This daughter frequently visited the post office and she became very much interested in the correspondence of the boys and girls of the village. One day a friend borrowed her coat and found it to be extra heavy on one side. Upon investigation she found in one of the pockets between fifty or sixty letters addressed to different boys and girls in the neighbourhood. Complaints were made, the postmaster was dismissed and another appointment made by the Civil Service Commission. Was this man unjustly dismissed? His daughter had intercepted letters in the post office, and what happened to him was not because of his politics. He lost his job. He was replaced by a competent man. Last year there was an investigation about the latter. Ten witnesses were heard. One of them was this man's predecessor, the former postmaster, who had lost the post office. What was his evidence? He said: I have no knowledge that 41761-351
the postmaster is guilty of political partisanship. And that man lives the second door away from the post office. He had no reason at all for not telling the commissioner what he knew about the postmaster who had succeeded him, because he knew that he had lost the postmastership on account of the doings of his daughter. He was under oath before the commissioner and he told the truth, and that was his evidence. The mayor of the municipality, who is a Conservative chieftain or leader, gave exactly the same evidence. Nine witnesses out of ten gave exactly the same evidence. Only one witness stated that the postmaster had shown around a paper giving figures as to what the local member had obtained for his constituency, and that was denied right off by another witness. The commissioner asked the witness: Did the postmaster canvass you to vote for the candidate? The witness said no, and the commissioner came back and said: Are you sure that he did not canvass you? The witness again said no. The commissioner then asked: Do you remember that he did not canvass you? And the witness said no,
I do not remember that. Here is his statement as drafted by the commissioner:
I do not recall having talked politics with the postmaster at the post office. I am his brother-in-law.
The only witness who gave that so-called evidence against the postmaster was a newcomer to the village. He came from another parish where he had left no good souvenirs. He was the only one who made a complaint against the postmaster and he was interested in making it. His evidence was not corroborated, on the contrary was denied. What happened? The postmaster, who is a former mayor of the municipality, was dismissed, and he was replaced by the very same man who had accused him, the only one who had accused him, in spite of the fact that all the Conservative leaders in the community who lived near to him said that to their knowledge he had taken no part in politics.
The Postmaster General says:
The postmaster who did not take part in perpetrating an injustice by accepting the place of one of his fellow citizens, unjustly dismissed, had nothing to fear. The civil servant, postmaster or other employee who performed his duties as required and who had not violated the law by taking an active part in politics had nothing to fear from me, that I would protect him even against my own friends.
In this case the majority of the favourable witnesses were the friends, and the best friends, of the Postmaster General. They were against dismissal, but evidently the

Civil Service Act-Mr. Pouliot
Postmaster General acted against his own friends in that case. A petition was signed by a large majority of the people within the post office area, by the cure and many others to prevent a change of post office, but it was disregarded and the postmastership was given to a man who had made an interested and a false complaint against the postmaster. What I have said so far is only to make the mouths water of those hon. gentlemen who are honouring me with their attention. Now I have something much nicer to tell them.
As every member of this house knows, the Post Office Department has sent to all postmasters throughout the country a circular letter advising them that they are strictly forbidden to take any part in federal or provincial elections, and that those who had done so had better resign in order to save the cost of an expensive investigation.
Here is the case of a postmaster at a place I will name, St. Eusebe-de-Cabano. The postmaster, who was also mayor, received such a circular letter and he resigned. What happened? He was replaced by a man whom I will name, and for a very good reason, as the hon. members will see. He is called Paul Langlois, and he replaced the former postmaster on June 30, 1931. A month and a half later or so the provincial elections were taking place in the province of Quebec, and Mr. Langlois could not show in any better way his gratitude to the Postmaster General than by canvassing for the provincial Conservative party. Langlois was replacing a man who had received a notice of dismissal because he was supposed to have taken some part in the election, whether federal or provincial I do not know. Here is what he did, and I am very sorry that the hon. Postmaster General has left the house with his portfolio under his arm. I hope that some of his friends will call him back here so that he can hear what I am saying.
On or about August 12 of last year Langlois, the postmaster, went to Riviere-Bleue in his car to get some liquor to be used in canvassing. He was accompanied by three men named Thimothee Dube, Pierre Dube and Jos. Albert Dube. I do not wonder what their political affiliations are, but naturally at election time one is rather suspicious about such joy rides. When they came back with the liquor, Dube's rig was at Langlois', and the new postmaster transferred the liquor from the auto to the rig, probably keeping some for his own use. Though all this took place at night, it was clearly witnessed by someone who reported it very accurately. I would ask the Postmaster General this ques-
(Mr. Pouliot.]
tion:	If a man must resign his position as
postmaster upon a charge not specified but perhaps because he has been accused of canvassing in the federal or provincial elections, will the Postmaster General take' the same steps with regard to a postmaster who has carried liquor in his own car to be used in political canvassing?
If the mouths of my hon. friends opposite water a little bit, I have something even more relishing ito tell them. In my constituency there is a parish named Sully, situated on the Transcontinental railway. There were rumours abroad that the postmaster of that place was to be dismissed). He also was mayor, and a very dignified gentleman who did not incur any blame, so far as I know. His removal seems to have been founded on the old principle that to the victor belongs the spoils, and although the Conservative candidate was defeated he was, nevertheless, the victor so far as the granting of postal offices to this or that one was concerned.
In that parish there was another gentleman named Isidore Jean, a returned soldier whose regimental number was 2245410. He served two years at the front, performed his duty as a good soldier, and as the parish is not very large he knew there were some intrigues afoot to dismiss the postmaster. Naturally, as charity begins at home he thought he had better take his chance and, as a result, wrote to the Minister of Pensions and National Health (Mr. MacLaren), to the Prime Minister (Mr. Bennett) and to the Postmaster General, saying, in effect, "If you intend to dismiss the postmaster in charge of the post office I shall be very happy to file my application for that position." Although the letter is in the French language, as it is not very long I shall read it. This letter is from Isidore Jean to the Postmaster General, and is dated November 2, 1931:
(Translation):
Honorable sir,
On February 17, 1931, the right hon. Prime Minister's secretary wrote to me that he had forwarded to you my application for the post of postmaster at Sully in the event of this position becoming vacant.
On October 5, the same gentleman suggested that 1 should communicate directly with the secretary of the Civil Service Commission and with yourself, since you have complete jurisdiction over your department.
On October 28, the Minister of Pensions' secretary wrote to me that he had forwarded to you my letter and the others attached for your kind consideration.
On March 4, 1931, your acting deputy minister wrote to me that there was no vacancy in the post office at Sully at that time and that should it become necessary to make a

Civil Service Act-Mr. Pouliot
change the appointment of the new incumbent would be made by the Civil Service Commission. He further added that my application had been noted and that it would be referred to the commission should the circumstances warrant it.
On September 28, your deputy minister wrote to me that should it be necessary to make a change at Sully, the permanent appointment of the future incumbent would be made by the Civil Service Commission which would advertise publicly the vacancy occurring in that locality, and that the minister had taken careful note of my application.
On October 14, your deputy minister again wrote to me that my application had been referred to him by the private secretary of the minister and that he wished to draw my attention to his letter of September 28.
The officials of your department wrote to me on three different occasions this year that in the event of a vacancy occurring the appointment of a postmaster at Sully would be made by the Civil Service Commission. Should you decide to make a temporary appointment, while awaiting the ratification of this appointment by the Civil Service Commission, may I have the honour to remind you of my application for the post of temporary postmaster at Sully, in case you decided to replace the present postmaster, and this, on the score of my record of services at the front where I fought during two years. My regimental number is the following: 2245410.
I am, sir,
Your grateful servant
(Sgd.) Isidore Jean.
What happened? That man was told by the departments of Pensions and National Health and of the Postmaster General that in the event of a dismissal, and a vacancy in the post office referred to, the matter would come before the Civil Service Commission for the nomination of a new postmaster. What was done? The application of the man who had a creditable war record was entirely disregarded, and the Postmaster General appointed another man who had had no service at the front. In my view this would have been a fit case to bring before the British Empire Service League to show that the Postmaster General paid no attention to the soldier's application to fill the vacancy which occurred in that post office. This particular case deserved serious consideration because the applicant was a poor soldier who is at present unemployed; therefore the reasons for his appointment were two-fold. It is indeed unfortunate that his application was disregarded by the Postmaster General in spite of and against the provisions of the Civil Service Act.
Not only did the protege of the Postmaster General carry liquor in times of provincial elections, and not only does he disregard the Civil Service Act so far as it applies to veterans, but there is something to relate even better than that. It is this: My contention is that in this country public offices should be held either by Canadians by birth or Canadians by naturalization, and that aliens should not be allowed to occupy public offices. I have in mind an instance which occurred at Pointe Lebel, and because that place is in the constituency of Charlevoix-Saguenay I am sure my hon. friend from that constituency (Mr. Casgrain) will be pleased to hear about it. The former postmaster was dismissed and replaced by a man named Grenier. That man came from France some years ago, and I am told from reliable sources that he has never been naturalized. I communicated with the Department of the Secretary of State to learn if Grenier of Pointe Lebel was naturalized. I am under the impression that my hon. friend from Charlevoix-Saguenay will vouch for my statement that this man Grenier came from France some years ago, and was never naturalized. When we came to the naturalization branch of the Department of the Secretary of State we asked if they had any record of Grenier, and they replied that from the year 1915, when records were first kept they had no record. I was told to communicate with the Bureau of Statistics, but when I approached that branch of the service I was answered that information could not be given because the information on the sheets filled out for statistical purposes, or for. purposes of census, was given in strict confidence. As a result I could not get the information I desired. The evidence, so far, is that there is no record of Grenier in the Department of the Secretary of State and it is a fact that Grenier is not a Canadian by birth or naturalization and is not entitled to public office. Rather than allow Canadians by birth or naturalization to enjoy public offices the Postmaster General deprives them of their rights and gives preference to foreigners. It is not at all surprising that the returned soldier feels he is not receiving fair treatment.
But there is more than that Mr. Speaker. Last year, speaking on the budget, my hon. friend, then Minister of Fisheries, now Minister of Finance (Mr. Rhodes), said:
I am sure my hon. friend from North Waterloo (Mr. Euler) and his leader would have been the first to take exception with, during the last session under the previous government, hon. members on the other side of the house who had fastened the responsibility upon the then government for the utterances of my hon- friend from Temiscouata (Mr. Pouliot), when he made attacks upon the premier of the province of Quebec.
Was he referring to a memorandum based on the fact that aliens in the province of Quebec were entitled by statute to be ap-

Civil Service Act-Mr. Brown
pointed to public office? I communicated with the premiers of 'the other eight provinces asking what stand they took in the matter, and this is the answer I received from the hon. gentleman who was then premier of Nova Scotia and is now Minister of Finance in this government:
Absence from my office in other portions of the province has prevented me from making earlier acknowledgment of your letter of June 26th.
The ground you take with respect to the holding of office by aliens is, in my opinion, undoubtedly sound.
I hope my hon. friend will have the courage to stand by the views he then expressed and support me in my demand that the Postmaster General be required to furnish all available information about that man Grenier, as to whether he lives under a false name, when he came to this country, when he was naturalized. and on whose recommendation he received his appointment.
Let me conclude my remarks in the sweet language of France by giving an excerpt from an article published by the hon. Postmaster General:
Je le repete, avouons franehement nos erreurs afin de benefieier autant que possible meme de nos fautes.
This may be translated:
Let us be frank about our mistakes in order that we may get as much benefit as possible from them.
A fine sentiment! I hope he will have those words recorded in homespun and place them in front of his desk that he may ponder them frequently. I must ask the Postmaster General to be serious. Most of his colleagues seem to have greater respect for the Civil Service Act. So should he. He is not a bad man. He should be strong enough to resist his friends. I am sure that when he made the promise he was confident of his strength to keep it as a man. Now, why doesn't he do so? He should do it for the reason expressed by 'the hon. member for East Edmonton. I listened with very much interest to the hon. member's speech. He said it would be a very bad thing for the civil service if civil servants could not live in peace and be free of anxiety about their future, that only in this way could they give the thorough service that the country expected from them. I submit that that is a very strong argument in favour of the Postmaster General doing what he is requested to do. The reason is that after a man has been in the cavil service for a number of years it is difficult for him to return to his former occupation. What I am

trying to convey is well-expressed in French -those men become "deracines." The civil service of Canada is as good as that of any other country in the world, and it should be protected against those greedy and lazy persons who by intrigue seek to bring about the dismissal of industrious and capable civil servants in order that they may be appointed to the vacancies so created. I hope tomorrow morning, Mr. Speaker, the Postmaster General, who is not in his seat to-night, will read Hansard and take heed of what has been said this evening.


John Livingstone Brown: Mr. Speaker, had the motion for second reading of the bill been proceeded with I should have been compelled to vote against it. I wish to express the pleasure I derived from the speech delivered by the hon. member for East Edmonton (Mr. Bury). I am sure we all regret that the occasions are not more numerous when he participates in debate. Those of us who were here with him in the hectic session of 1926 will remember the many fine speeches he then delivered, and I feel certain we regret that the limitations imposed upon a supporter of the government prevent us from hearing the hon. gentleman oftener.
I am heartily in sympathy with the sentiments he expressed. I should like also to commend the speech made by the hon. member for Bow River (Mr. Garland), in which he set before us very clearly the position with regard to the Civil Service Commission. I believe I am safe in making the statement that only a minority on either side of the house is in favour of doing away with the Civil Service Act and returning to the old patronage system. I know that is true of this side of the house, and I am happy to believe from the speeches made to-night that it is also true of the other side. I have always been strongly opposed to the patronage system. While it may be true that the act is not working perfectly at present, there is no reason to suppose that as time goes on it may not be administered more efficiently. I think there is every reason why an investigation into the working of the act should be undertaken. Undoubtedly there are just causes for complaint, and if these were threshed out before a committee I hope the result would be beneficial to the service as a whole.
I do not think the government has handled this matter in the best possible way. At the outset they very well could have removed from the minds of hon. members any fear of the possibility of the merit system being destroyed. Perhaps it was necessary to

Civil Service Act-Mr. McGibbon
give the hon. member for Dorchester an opportunity to fulfil the pledge which undoubtedly he made to his constituents, that he would do his best to secure a return to the patronage system. I think we had his own word for it last session that he made such a pledge, and perhaps it was necessary that he should be allowed an opportunity to keep it. At the same time I think if a little different course had been pursued by the government we would have had our minds satisfied on this question at an earlier time, and perhaps there would not have been the necessity for so much discussion on the merits of the case.


Peter McGibbon: Mr. Speaker, it was not my intention to take any part in this debate until a number of hon. members seemed to prefer to discuss me rather than the question before the house. One of the principal objections has been that the member is not the man best qualified to make any appointment that may be necessary in his riding. The hon. member for East Edmonton (Mr. Bury) was particularly strong on this point. I am quite willing to concede, Mr. Speaker, that the hon. member is capable of speaking for himself, and I have no quarrel with the decision he makes when he says he is not capable of making the appointments that may be necessary in his constituency. That is his prerogative and his privilege; as he sits in judgment upon his own capabilities and renders a verdict of that nature, far be it from me to dispute its accuracy. I think possibly that is quite true, but the unfortunate thing is that in such a case he is not the one who suffers; the people who send him here suffer, and that is rather too bad. It is too bad that any riding in Canada should have a representative who admits on the floor of the house that he is incapable of filling positions which may become vacant in that riding.


Ambrose Upton Gledstanes Bury: I did not say I was incapable
of doing so; I said I was not the person best fitted to make the appointments.


Peter McGibbon: My hon. friend says he is not the best person, so obviously he is not the best member.


Mr. BOUCHARD:: He was thinking of you [DOT]as the best.


Peter McGibbon: I have no objection to my hon. friend speaking for himself, but I do object to him speaking for me. He is not capable of doing that. I say further, Mr. Speaker, that this is not a matter of appointments or of patronage; there is a bigger question involved It is a question of the principle of responsible government.


Mr. POWER:: Hear, hear.


Peter McGibbon: I thank the hon. member for Quebec South (Mr. Power); I have always admired his judgment and found it good. I take that very seriously. Responsible government is something for which great struggles have been waged in the past in every country in the world. The three great objects of the revolution of 1690 were responsible government, the supremacy of the House of Commons and the assurance that the House of Commons should represent the voice of the people.
In connection with these appointments, who is responsible? Is there any responsibility any place?


Ambrose Upton Gledstanes Bury: May I ask the hon. gentleman a question?


Peter McGibbon: Do not make it too hard.


Ambrose Upton Gledstanes Bury: Is there not responsible government in Great Britain?


Peter McGibbon: Yes, but Great Britain has not a civil service like ours. The hon. member started to discuss the civil service of Great Britain; he only showed that he did not know anything about it. I object to these men speaking for me; I object to them speaking for the people in my riding, and in spite of what the hon. member for Lisgar (Mr. Brown) has said I believe that three-quarters of the members of this house would vote for this motion if they were given a free ballot. It is only party exigencies that keep them from doing so. They know it is the best thing.
Look at the appointments which 'have been made by this Civil Service Commission. Does anyone in the house not remember what happened in the last few years, when the Postmaster General rose in his place and told of the hundreds of postmasters who had been dismissed because of shortages in their funds? Does that reflect great credit upon the Civil Service Commission? Within the last week or so we have had a second scandal aired. Did we have that sort of thing in the past? Would not appointments made in the past by representatives of the people compare favourably with those that have been made by the Civil Service Commission?
Another objection I have is this: I do not like the communications which the civil service of Ottawa have had the impudence to mail to me and other members of the

Civil Service Act-Mr. McGibbon
House of Commons. I am not seeking to interfere with tlhe inside service, and I say they have no business to interfere with the service in my riding. If there is one thing that disgusts me more than another it is the attitude that has been shown by the civil service of Ottawa towards the proposed cut in their salaries. Where is the man or woman in this country to-day making as much as they were making three or four years ago? Let me say further that more than 99 per cent of the money which pays these civil servants comes from people outside of this city. The civil service does not belong entirely to the city of Ottawa; it belongs to the Dominion of Canada. They should remember that it gives them work in good times and bad, in good weather and 'bad. They are not like the people we are feeding a,t the public expense in northern Ontario to-day, who find their pay docked for every sitormy day when they cannot work. I say, sir, I have been disgusted with their attitude in a crisis of this kind when this country, like every other country in the world, is in financial difficulties. They are not willing to take voluntarily and joyfully a out that is not equal to the decrease in the cost of living.


Joseph Georges Bouchard: Has my hon. friend
read the speech from the throne which states that the country is very prosperous?


Peter McGibbon: I fail to see any intelligent connection between that question and the remarks I was making.
I want to say again, sir, that this is not a matter of patronage. I do not think there is any hon. member of this house who wants the disagreeable job of making appointments. As I have said, patronage will kill any member if he gets enough of it; there is no doubt about that. But the people in my riding want me to assume that responsibility and I should be a coward if I were not prepared to do so. They want me to be their representative and they want me because .they have some control over me; and when the day comes that I do not do what they want they will put me out. But they have no control, nor has any other constituency any control over the people who are making appointments to-day. And, Mr. Speaker, patronage has not been done away with. Why do we try to fool ourselves? Every hon. member knows that it has not been done away with. Every hon. member knows also that the educational test or the merit test in the outside service is not worth a snap of the finger.
I agree with the leader of the opposition (Mr. Mackenzie King) in that speech he made a year ago, that, too much has been taken

away from the people's representatives. I believe that, with profit to this country, some of that responsibility could be restored. Everyone knows that when a member has to make an appointment he is going to make the best he can. I shall be told that when the Conservatives are in power a Conservative will be appointed. I grant you that; he would be in my riding anyway. But supposing there were a better one in the Liberal party-


An hon. MEMBER:: You would not appoint him.


Peter McGibbon: Never mind whether I would appoint him or not. But I contend that if you got the second best man in every riding in this country you would get a higher class than under the Civil Service Commission. I am sometimes disgusted at the way debates will turn and twist un this house. It seems that at times one leader will throw it this way and another will give it a twist in some other direction ; and then we get on a high moral plane as in this debate and almost immortalize the Civil Service Commission, though it has been one of the disgraceful black spots on the government of the country. Everyone knows it. Where could you find anything such as was exhibited in the courts a little while ago?
I do not want the house or the country to think that I want the job of going out and beheading .people. Decent people-and members of parliament are decent-do not do that sort of thing. Moreover, when a man is in a position for three or four years he loses connection with the past, and no decent member of parliament is going to kick him out even if he belongs to the other party. I have been disgusted with that argument. I do not believe there is a man in this house who would do such a thing without grave cause, and then he would do it very reluctantly. For these reasons I am glad that this question is going to a committee where all phases of it can be discussed, and when the committee reports to the house no doubt it will be able to advise along better lines.


Alfred Speakman: May I ask the hon. member one question. I understand that he is in favour of the elected representative of the people exercising his functions within his constituency in making outside appointments. In his opinion would that apply to every elected member or only to the elected members supporting the government in power? And, in that case, would he believe in the system which has been followed at times, of the defeated candidate on the government side

Civil Service Act-Mr. Boulanger
receiving that power of making these appointments although the people had rejected him as
their representative?


Peter McGibbon: That is not hard to answer. I have said three or four times that personally I do not care where the member sits. But there is this to be said about it. Whether a Liberal or a Conservative government is in power, you are demanding of your representative in every riding certain services to be done and I do not see how you can overlook him in regard to the responsibility for making appointments.


Mr. J. OSCAR BOULANGER (Bellechasse) (Translation):: Mr. Speaker, the opportunity of supporting the bill of my bon. friend and neighbour the member for Dorchester (Mr. Gagnon) would have pieiased me much, unfortunately, I fear this opportunity will not be afforded to us, as the amendment moved by the hon. Minister of Justice is probably tantamount to full burial honours for the bill.
I would have been pleased, I stated, to be given the opportunity of supporting the bill because, two years hence, it would have given us a chance of rectifying the injustice perpetrated by this government which dismissed, without reasons and contrary to the Civil Service Act, a considerable number of employees.
I entirely agree with the sponsor of this bill and with my hon. friend the member for St. Denis (Mr. Denis) in their statement that the Civil Service Act rests on a false principle. I listened attentively to my bon. friend from Dorchester when he introduced his bill. He established rather a strong 'Case against the Civil Service Act and the commission. I expected to hear him ask for the repeal of the act and the disestablishment of the Civil Service Commission. I was amazed in reading over his bill to find that he did not recommend the repeal of the act, not even the suppression of the commission, but simply requested the exclusion of the outside service from the operation of the act. However, I would have supported this measure because it is a step forward in the -right direction.
Again do I state, the Civil Service Act rests on a false principle. If the government is vested with the responsibilities of the administration, the public employees share with the government in this administration of the affairs of the country. If the government is to be held responsible for the work of its co-operators, I fail to understand why it would not be so as regards their appointment and their selection as they think proper. Moreover this act lends itself to deceit as the hon. member for
St. Denis (Mr. Denis) stated' just now; it is one of these insincere measures that governments enact once in a while with the fixed mental reservation of disregarding it. The election act is another instance; the government themselves are the main offenders. They, themselves, have made the most frequent inroads on the provisions of the Civil Service Act, they are the first to disregard it and to show their contempt.
To illustrate my argument, let me cite two cases. First, I shall draw the attention of members to the Votes and Proceedings of this house, of July 30, 1931, at page 661:
Weights and measures inspection (including International Bureau of Weights and Measures)

further amount required for the salary, including the appointment of Charles Hippolyte Couture, Inspector of Weights and Measures, Quebec district, Quebec city, at $1,560 per annum, from April 1, 1931, notwithstanding anything to the contrary in the Civil Service Act.
The following are the facts: If I am well informed, there was a vacancy in the Bureau of Weights and Measures, at Quebec. The Civil Sendee Commission, having advertised the position, and received applications, held an examination, after which a list of those eligible was drawn. At the head of this list was a veteran by the name of Mathieu Parrot, of Quebec city. Parrot was awarded 86 points, he was at the head of this list, moreover, he was given the preference owing to his being a veteran. This did not suit Couture's backer who wanted to have him appointed, at all costs. It was then that his supporter found a flaw in the Civil Service Act, as I have just pointed out, and had his friend appointed, notwithstanding anything to the contrary in the Civil Service Act, and against the wishes of the commission itself. This is a case where the government themselves disregarded the Civil Service Act.
On the same day by a special vote, another appointment was made contrary to the Act; this is another instance of the disregard of the legislation enacted by the government. You will find in the Votes and Proceedings of the same date, page 656, the following:
To appoint hereby J. L. A. Tanguay, a clerk, grade i, in the minister's office at Quebec from August 7, 1930, at $1,860 per annum, $3,100.
I must mention, by the way, that our friends who so highly criticized a certain act of the Quebec legislature because it had a retroactive effect, were in no way bashful in the present case to give a retroactive effect to this appointment. This is a further instance showing how the government conforms to the laws they enact. We therefore have a right to say that

Civil Service Act-Mr. Boulanger
the Civil Service Act is utterly hypocritical, and that the government is the first to disregard its provisions. Let me further add that these two gentlemen appointed by a special vote of the house, one on the motion of the Minister of Justice (Mr. Guthrie), the other on the motion of the Minister of Trade and Commerce (Mr. Stevens), are two common election workers (cabaleurs) of the lowest order. They are, to all intents, political appointments. Couture, again, if I am well informed, was dismissed in 1926, because he was the cause of disorder at a meeting held by the Hon. Lucien Cannon, in the county of Dorchester. He was employed, previous to that, by the weights and measures branch and lost his position for having taken an active part in politics and being the cause of disorder at a public meeting. One had recourse to this dodge or underhand dealing, after his dismissal for political partisanship, in order to reappoint him in the weights and measures branch, notwithstanding the Civil Service Commission's protest and in violation of the act, thereby doing a grave injustice to the veteran Mathieu Parrot.
Let us now examine the case of Tanguay with whom I am better acquainted, since he is a political organizer in my county. Tanguay was appointed to the minister's office as a fourth grade clerk. If I am well informed, Tanguay controls the patronage in Quebec, that is he is a middleman and performs the dirty work of the Conservative party. In my county a dozen postmasters were dismissed without cause, and contrary to the Civil Service Act, and, according to what I heard, these dismissals took place mainly at the request of Mr. Tanguay himself. At the last provincial election, in 1931, Mr. Tanguay was the principal speaker of the Conservative candidate in Bellechasse; he meddled in the election, spoke at all meetings and thereby took an active political part. I took upon myself the responsibility of denouncing him to the Prime Minister of Canada (Mr. Bennett) , who through his secretary, wrote to me that he had referred my complaint to the Minister of Justice. The other day I inquired whether my complaint had been received, whether an inquiry would be held and Tanguay dismissed, in the event of my complaint being substantiated. The Minister of Justice informed me that the Department of Justice had no information with respect to the complaint lodged against Tanguay. Nevertheless, it had been lodged with the Prime Minister, and his secretary had written to me that it had been referred to the Minister of Justice. Let us suppose, for a moment, 
that the Minister of Justice had not received this complaint, the question which I placed on the orders of the day, some time ago, was a sufficient notice to the government of my complaint of political partisanship lodged against Tanguay, and the government is bound, in honour, equity and justice, after occasionally dismissing public employees for trivial causes, to hold an inquiry on a complaint lodged by a member of parliament and supported by the evidence.
The government should order an inquiry and dismiss this employee, if my complaint is well grounded.
The postmaster of Beaumont was dismissed under the plea thait he had decorated his residence on polling day, in September 1926, but, on that day the person referred to was not yet appointed as postmaster; he was only appointed the following month.
The postmaster at LaDurantaye was dismissed, because his son, who is married and is not living with his father had in his automobile-the automobile of the son, not that of the father-the photograph of the leader of the opposition (Mr. Mackenzie King). An inquiry was held by three defeated candidates. You may judge how slim were the chances of this poor postmaster in such an inquiry 1 A large number of postmasters were dismissed without cause, and here is a public employee in receipt of $1,860 per year, who openly and brazenly takes part in a political campaign. A complaint is lodged against him by a member of parliament, a complaint founded in fact, and it is impossible to obtain an inquiry; we cannot even obtain a straight and honest answer from the Minister of Justice (Mr. Guthrie) to a question put to him the other day with reference to this matter.
I protest, sir. against such government methods, especially when to all purposes it approves the Civil Service Act. Since the government is opposed to the repeal of this act, why should it not be the first to comply with the letter and spirit of the act, and grant to civil servants, who are so unfortunate as to be Liberals, all the protection to which they are entitled.
The government should also see that civil servants whom they appoint conform to the law. Since it is wrong for a Liberal to be even suspected of political partisanship, surely civil servants appointed by the government should themselves bow to the law and not be guilty of obvious and glaring irregularities as those referred to.
Although opposed to the principle of the Civil Service Act, I am in favour of having a commission in order to classify candidates

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and have them undergo a test. I simply ask that appointments be subject to the jurisdiction of the government; that the latter be held responsible and given the final word m such matters.
It is held that the Civil Service Act was passed with a view of abolishing the patronage system, this is a mistake. Patronage has not been abolished, it has simply changed hands. It was taken away from members and placed in the hands of heads of departments, chief clerks and high officials. The civil service commission should be given a competent board of examiners and inspectors, it should control the tests of candidates to the various positions and it should be given the necessary authority to rate these candidates. At present, the commission has not the required staff to carry on this work. Examinations and classification are being looked after by civil servants. The latter themselves control the patronage. When an appointment is to be made, the commission sends all the examination papers to the chief clerk concerned and it is the latter himself who determines the grade and makes the appointment. Again do I state patronage has not been abolished, it has simply changed hands; it is replaced by a system of deceit as the hon. member for St. Denis (Mr. Denis) stated a short while ago-and productive of deception; it is therefore only reasonable that this system be changed.
Amendment (Mr. Guthrie) agreed to.
Motion (Mr. Gagnon) as amended agreed to.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Friday, February 26, 1932