1932-04-21

PRIVATE BILLS


[Stage Direction]
Bill No. 47, for the relief of Eva Corker Trill.-Mr. Bell (St. Antoine).
Bill No. 48, for the relief of George Senkler Morgan.-Mr. Bell (St. Antoine).
Bill No. 49, for the relief of Agnes May Jack Evans.-Mr. Bell (St. Antoine).
Bill No. 50, for the relief of Mabel Constance Small Cossar.-Mr. Bell (St. Antoine).
Bill No. 51, for the relief of Olive Pearl Beattie Watkins.-Mr. Bell (St. Antoine).
Bill No. 52, for the relief of Assad Kalil Eddy, known as Joseph Candle.-Mr. Bell (St. Antoine).
Mr. STINSON moved:: That pursuant to special order made 19th April, instant, the said bills be now read a first and a second time and referred to the select standing committee on miscellaneous private bills (together with the evidence, etc., taken before the standing committee of the Senate on divorce on the petitions on which the said bills were founded).


[Stage Direction]
Motion agreed to.

Right Hon. R. B. BENNETT (Prime Minister):: Mr. Speaker, I understand it is acceptable to the opposition that we should proceed with the debate upon the ways and means motion until six o'clock to-night and then take up supply. If so, I will move formally, seconded by Mr. Rhodes:
That the order of business for this day until six o'clock be the same as on Wednesdays, and after eight o'clock as provided by the rules for Thursday.
Is that acceptable?


Hon. ERNEST LAPOINTE (Quebec East):: I have no objection. I should like my right hon. friend to indicate what departments will be taken up, some members having asked me as to this.


Richard Bedford Bennett: We are in a position to finish Fisheries, I think the Secretary of State is ready to proceed with his estimates, and we will proceed with any other departments that the right hon. gentleman may desire. At eleven o'clock we will name definitely the supply to be taken up to-morrow.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Hon. C. H. CAHAN (Secretary of State) moved for leave to introduce Bill No. 53, to amend the Act of Incorporation of The Frontier College.
Motion agreed to and bill read the first time.

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

Mr. RHEAUME:: 1.	What amount was expended on the meteorological station at Dolbeau, residence of Mr. Elisee Morin, from January 1, 1930, to April 1, 1932?
_ 2. What was the cost of the installation of instruments in the residence of Mr. Elisee Morin, at Dolbeau?
3.	What was the cost of the tower erected at the said residence, and when was it finished?


Mr. DURANLEAU:: 1.	$1,734.66 (including 2 and 3).
2.	$438.56.
3.	$86; October 3, 1931.


CONFEDERATION BUILDING EMPLOYEES
Mr. ILSLEY:: 1.	How many persons work in the new Confederation building?
2.	What is the number in each department?


Mr. CAHAN:: 1. and 2.
Agriculture			323
Auditor General			191
Justice		
Labour			148
Public Works		
Total		
*Of whom 80 are part time charmen and charwomen working 2J hours per day.
221S
Manitoba Savings Office


LOANS TO CHARTERED BANKS
Mr. SPENCER:: 1.	What were the total loans under the Finance Act to the chartered banks in Canada from the 28th February, 1931, to the 28th February, 1932?
2.	What were the total amounts advanced to each Canadian bank during this period?


Mr. RHODES:: 1.	On the 28th of February, 1931, loans outstanding were $8,500,000. Between that date and February 29th, 1932, loans made from time to time amounted to $282,000,000, while repayments amounted to $254,000,000, thus leaving $36,500,000 of loans	outstanding on
February 29th, 1932.
2.	.
Canadienne Nationale.. .	$ 35,500,000
Commerce	 48,000,000
Dominion	 12,000,000
Imperial	 8,500,000
Montreal	 20,000,000
M. C. & D. S	 3,500,000
Nova Scotia	 11,000,000
Provinciale	 4,000,000
Royal	 137,000,000
Toronto	 2,500,000


$282,000,000 CHARTERED BANKS-CURRENCY ADVANCES
Mr. REID:: 1.	What amount of currency was advanced to the banks, under the Finance Act, for the months of October, November and December, 1930, giving the respective amounts in each month ?
2.	What rate of interest was charged the banks for the advances made to them during these months?
3.	AVhat security did the banks have to put up for the advances made?
4.	Were those advances made by way of loan, and if so, for how long a period?
5.	Did the rate of interest charged the banks vary throughout the year?


Mr. RHODES:: 1.	October, 1930, $25,000,000; November, 1930, $39,000,000; December, 1930, $25,000,000.
2.	4i per cent on advances against all securities other than 4 per cent treasury notes in connection with which 31 per cent was the authorized rate.
3.	Advances to the amount of $87,162,000 were made against Dominion of Canada securities and $1,838,000 against approved provincial and municipal securities as provided for by section 5 of the Finance Act.
4.	Yes. Repayable at any time before May 1, 1931.
5.	No.


QUESTION PASSED AS ORDER FOR RETURN
Mr POULIOT:: 1.	By whom, to whom and at what date was Alexis Michaud's application for the Cacouna Indian agency, dated January 15, 1932, forwarded ?
2.	Is that application form filled in hand writing or is it typewritten, with the exception of the signature?
3.	At what date, where and by whom was it received?
4.	Was it accompanied by any letter?
5.	If so, from whom?
6.	By whom, to whom and at what date was Alexis Michaud's application for the Cacouna Indian agency, dated January 21, 1932, forwarded ?
7.	Is that application form filled in hand writing or is it typewritten, with the exception of the signature?
8.	At what date, where and by whom was it received?
9.	Was it accompanied by any letter?
10.	If so, from whom?
11.	Why was a second application forwarded by or on behalf of Mr. Alexis Michaud for that position?


MANITOBA SAVINGS OFFICE
[Stage Direction]
On the orders of the day:
Mr. A. L. BEAUBIEN (Provencher):: Mr. Speaker, may I ask the Prime Minister a question based upon an article in the Montreal Gazette of this morning? I will read only three lines of the article:
The Manitoba premier denied he had stated to Mr. Bennett that he had decided to close the savings office.
Is the Prime Minister in a position to make a statement in regard to that denial?


Richard Bedford Bennett: Mr. Speaker, I have already intimated my recollection of the conversation. When I saw the article in the papers I telephoned to the banks, and I find that on the date that I indicated, namely, the 26th day of January last, Mr. Bracken, with Mr. Williams, went to Montreal-as I indicated-and he there endeavoured to sell the savings office to the banks, as he did in Toronto. When he came to me on the succeeding day he stated just what that meant, that is, that he had concluded to take the step that I have alluded to. I think he is confusing two occasions. He did not speak of taking the action I indicated the first time he saw me, but on the occasion in January, that I mentioned on
Conversion Loan

Tuesday, the discussion took place. If the hon. gentleman desires, he can, by communicating with the banks in Toronto and Montreal, find that the effort was made to dispose of the savings office by having the banks take it over as I have indicated.


Arthur-Lucien Beaubien: Thank you.


CONVERSION LOAN
[Stage Direction]
On the orders of the day:
Hon. E. N. RHODES (Minister of Finance):: Mr. Speaker, one week ago to-day I directed the attention of the house to an observation which had been made in the course of the budget debate by the hon. member for Sherbrooke (Mr. Howard). What I said upon that occasion will be found at page 2003 of Hansard. The hon. member was absent for a period of days, but now he is present in his seat I would ask him either to support or withdraw the remarks to which I made reference at that time.


Ernest Lapointe: Before my hon.
friend for Sherbrooke rises, I think, Mr. Speaker, that objection to words uttered in the course of a debate must be taken at the time the words are uttered. If I remember well, my hon. friend the Minister of Finance was in the very seat he now occupies when the member for Sherbrooke was delivering his address. The hon. minister did not say a word at the time, he did not take any objection, and I do not think it is in order for him to raise the question to-day.


Edgar Nelson Rhodes: Mr. Speaker, it is quite
true I was in my place on the occasion when the bon. member for Sherbrooke was speaking, but I was interrupted a number of times during the course of the debate. I find no fault with this, but the fact is either a message would be handed to me or an hon. member would come to discuss certain questions with me, and as a matter of fact the full drift of the remarks of the hon. member was not borne in on me at the time. I do not propose to discuss the point of order at all. It is only a question of the general fitness of the character of the remarks and the charges implied in them, and I should think the hon. member for Sherbrooke would be the last person to wish to shield himself behind any question of order.


Ernest Lapointe: Behind the rules is always good shelter for a member of parliament.


Mr. SPEAKER:: If the hon. member for
Sherbrooke wishes to support the objection taken by the ex-Minister of Justice (Mr. Lapointe), I shall reserve my decision on the point of order.


Ernest Lapointe: Mr. Speaker, I do not
need the support of the member for Sherbrooke for the point of order I am taking.


Pierre Édouard Blondin: I am not suggesting that the hon. member needs any support, but it is a question for the hon. member for Sherbrooke to decide as to his own action.


Ernest Lapointe: Any member of the
house has the right to see that the rules of the house are observed.


Pierre Édouard Blondin: If the hon. member for
Sherbrooke does not wish to reply to the observations of the Minister of Finance, I shall reserve my decision.


Ernest Lapointe: I do not know whether
he does or not; I do.


Mr. GUTHRIE:: That ought to settle it.


THE BUDGET
[Stage Direction]
The house resumed from Wednesday, April 20, consideration of the motion of Hon. E. N. Rhodes (Minister of Finance) that Mr. Speaker do now leave the chair for the house to go into committee of ways and means, the proposed amendment thereto of Mr. Ralston, and the proposed amendment to the amendment of Mr. Gardiner.
Mr. WILLIAM IRVINE (Wetaskiwin):: Mr. Speaker, time forbids that I make any extended references to the speeches already made during this debate. One of the most notable, I think, was the address of the Minister of Trade and Commerce (Mr. Stevens). It was a notable speech in that it struck a new note and indicated a new viewpoint coming from the treasury benches, and I think we may hope that it will become the basis, in the not far distant future, of an entirely different policy in this country. Worthy also of much study and discussion was the speech made by the hon. member for Macleod (Mr. Coote) yesterday afternoon, which was an able defence of the amendment moved from this corner of the house and an interpretation of the financial system, and which contained suggestions as to how we might get out of
The Budget-Mr. Irvine

our present economic difficulty. I should like also, to offer my congratulations to the Minister of Finance (Mr. Rhodes) who, for his many good qualities, is very highly respected in this house. I regret that the world situation, and particularly the economic situation in Canada, should have been such as to make difficult the presentation of his first budget.
I should like also to offer a word of congratulation to the government. As is well known, I hold very different views, both on questions of economics and politics, from those to which expression has been given in the policies of this government, as well as in the policies of preceding governments. Nevertheless, I am not unmindful of the colossal task confronting this administration at the present time, and in view of that fact I will not snarl at the heels of the government. Civilization to-day is in the process of a readjustment so fundamental in character as ultimately to leave untouched no field of knowledge or of experience, nor any institution without at least some modification. In Canada, as in other countries, we are confronted with a situation for which history offers no parallel. Therefore we must face this fact, that there are no precedents which we can fittingly apply, and we must work our way out by doing things which no one knows how to do because they have never been done before. In view of all this I gladly congratulate the government on its able leadership, its honest administration, its decisive and at times courageous actions and its sincere devotion to the well-being of the nation. But when all these things have been said and acknowledged it does not by any means follow that success has been secured. In other words I have no criticism of the captain of our ship, Canada, in so far as his ability as a navigator is concerned. I have no criticism of his seamanship or of the character and ability of his crew. The objection I am going to register to-day is with the direction in which the ship is going and the port towards which it is bound.
I want to direct my attention particularly, Mr. Speaker, to the subamendment moved from this corner of the house. As will be seen by hon. members, this subamendment is a challenge to the existing system, and I had hoped that the debate which followed would have been on that issue and that some difference of opinion would have been offered either with regard to the statements of fact included in the subamendment, the opinions expressed as to the proper interpretation of the economic situation, or to the proposals themselves.

With regard to the amendment I have to say that I look upon it as supporting the budget, since it takes exception only to what to my mind is an infinitesimal detail in the great national policy and attributes to that detail all the present difficulties of our economic life. Since it takes exception to only one small detail in the budget I assume that those moving it are perfectly satisfied with the system as a whole, and so far as I am concerned the amendment by implication really supports the budget. The subamendment, however, unqualifiedly declares that it does not think the present capitalistic system can be salvaged in its present form but that definite modifications are necessary, and so I should like to direct the attention of the house first to the statements of fact contained in the subamendment.
In the subamendment it is stated that there is an ample supply of natural resources to provide the people of Canada with all the primary needs of life: that we have sufficient and efficient industrial machinery, including plant equipment and skilled workers which, if applied to the natural resources, could produce all that we require in Canada. Further it is said that notwithstanding these facts our debts, personal, social and national, are increasing. These are facts that have not been challenged by anyone during the course of this debate, and I question whether anyone will have the temerity to challenge them. They are too obvious to the people at large; they cannot be challenged. Then, with these facts before us, we express the opinion that since this is the case, and our people are hungry and without work or economic hope, the trouble is to be found in the economic system itself. No one has challenged that opinion. It is only an opinion, and I admit that it may be challenged successfully, but so far no one has said there is not some defect in an economic system capable of producing the results enumerated.
Then we come to the next step; having emphasized the importance of finance in the national policy to-day we offer the suggestion, as a first step towards a solution of the economic problem facing the people of Canada, that there should be a nationalization of the credit system of this country. The hon. member for Macleod dealt specifically with that part of our subamendment yesterday, so I will not deal with it further at this time, but will rather turn my attention to the general viewpoint which the subamendment seeks to envisage with regard to the economic conditions with which it deals.

The Budget-Mr. Irvine
The budget itself, the subject of all our discussion, and in connection with which our subamendment has been moved, to my mind is a very true reflex of the psychological condition of the country in respect of our economic problem. It is a budget exactly the same in all major respects as other budgets presented by various governments of the world. These are the outstanding characteristics of the budget. It reveals a marked decline in trade, a falling-off of revenue, a reduction of public services, increased taxation, a reduction in the salaries of public servants and an increase in debt. I am not blaming the government for all these dismal things; I am merely enumerating what the budget discloses to us and to the people of Canada and pointing out the idea which it reflects that there is great necessity in this country for curtailment of expenditures, for curtailment of purchasing power-that for some reason or other we ought to be taking care of our wealth instead of using it.
Now, the budget as a whole presents one issue in particular to which I wish to call attention. That issue is this: Shall this government, shall this parliament, shall this people of Canada be controlled by money or shall it control money? That is not to say that some individuals of great wealth determine the policy of governments, but it is to say that the monetary system is accepted both by parliament and by the people as a sacred institution to be preserved at all costs; and once that is accepted then the factors which I have enumerated as appearing in the budget become, under present conditions, inevitable.
Let me call the attention of this house and of the country to the tragedy of waste which this policy, reflected in the budget, means. There seems to be a desire to save. Well, I am interested in what we are trying to save. Are we really practising a form of economy which will save the real wealth of the nation or are we being penny wise and pound foolish? While we are saving figures in a book, through the present system of book-keeping, while we are curtailing expenditures as the budget provides, what about the waste of the machine that is standing idle? What about the waste of the great surplus of goods which no one is able to use because they cannot be bought? What about the waste of human values-the unemployed who are hopelessly walking the streets? What about the waste of youth looking forward in hopefulness to find some expression for their best selves in Canada? What about them? These are the things we ought to be conserving; these are the places where we ought to practise economy. But we cannot save these things while practising
this form of economy under the present financial system.
It has been said by many that this is a dollar civilization, that the dollar has been regarded as the god of our age. If this was ever true it is more true to-day than at any other time in the world's history. Canada, like other nations, sits in sackcloth and ashes, offering her sacrifices to the dollar deity. Every luxury denied to the Canadian people in the face of the present abundance is a sacrifice to the dollar deity. Every curtailment of public services, the great mass of the unemployed, the comfort denied the masses of the people, the very necessities of life denied to many-these are all in the line of sacrifices to a book-keeping system. I am reminded of an incident in the history of the great Jewidh people. When Moses took a holiday, he found on his return that there had been great disruption in the camp, and the people were worshipping a golden calf. He sent for Aaron to explain the situation and Aaron, trying to make some excuse, said that the people had put all their treasures into the fire, and, lo, this calf had come forth. It seems to me that this is about what we are trying to do in Canada to-day: We are pouring all our treasures, out real wealth, our human values, into the fire of the present financial system, and I fear that the only thing that will come out will be a calf. I protest against such sacrifices, especially when economic abundance renders the performance absurd.
The dollar is an invention of mankind for convenience in the exchange of goods, and I hope that Canada will not for long bow the knee to it nor acknowledge it as the sacred dictator of a sacrificial policy unnecessarily imposed upon the people. This policy of rigid economy is due, perhaps, to certain deep-rooted psychological causes as well as economic. I think that we might divide the honours or the dishonours between instinctive and paralyzing fear and lack of vision on the part of this house and of the country at large. That fear is the fear of scarcity, and I presume it was generated at a time when the world ,was Teally in danger of real scarcity, when the tooth and claw method was necessary to survive; and unfortunately for us it appears that instinct does not respond as readily to a new set of circumstances as does intelligence. Instinct has a tendency to go on in a straight line while intelligence notes all the facts of a changed situation. And so it is to-day that we, in spite of the abundance which we are conscious of possessing, go on in a straight line towards scarcity, hampering and
The Budget-Mr. Irvine

hindering the distribution of goods which we have already been able to produce. The fear psychology is gradually developing. Capitalists are afraid that capitalism will collapse, and the socialists and those who are usually termed reds, all opposed to the capitalistic system, are afraid that it will not collapse, which might be a greater tragedy than the other. At any rate, all are afraid of some danger. Even Mr. Wells, in one of his writings, expresses the view that civilization is a race between catastrophe and knowledge, and then later he calls the race off because, as he says, there is not enough knowledge to make a race. I disagree with him in his implication, for he implies that civilization has been built without intelligence, and I fail to see how civilization built without intelligence will ever be destroyed by lack of it. However, from Dean Inge and H. G. Wells to the vociferous and ubiquitous communist agitator, they all encourage us to anticipate disaster, until we have developed what we might call an appetite for disaster, which seems to want to satisfy itself.
After all, what is there to fear? We are told that a crash is about to come; and when we read the words which Sir Montagu Norman addressed to some official in France, we can almost hear the reverberations of that great crash. But what is there to crash? The only thing that can crash is our way of doing things-a way which is not doing them very well, a way of doing things which may be standing in the way of better ways of doing things. The only thing that can crash, I say, is our -present system, our method of doing things. The greatest crash would come from the debts of the world, and those of us who are burdened that way do not anticipate that with any sort of disfavour. Let it crash; there is nothing to fear in that.
Capitalism itself is only an incident in the evolution of economics. Economics and all that it stands for will be here when capitalism is gone. But of course there is always danger, for life itself is the most dangerous of all experiments. There are dangers which are usually as great as the achievements with which they are associated. The magnetic compass has been responsible for the death by drowning of mariners in the "Devil's Hole" and of struggles for life in the "Roaring Forties." Every mile that Columbus sailed carried him further in the path of danger; yet he discovered a world. The first aviator faced great danger but he conquered the air. If we are to stand on the threshold of a new age, merely contemplating the dangers ahead, we shall fail in our great achievement. Some

hon. members of the house may disagree with my colleagues and myself when we say that we believe we are on the threshold of a new social order, but we will be permitted to express our views at least. Things cannot go on as they have been going. We cannot express too much our opinion in that regard; we should not shiver in fear but we should look at the great possibilities and contemplate the achievements rather than the dangers which may be entailed.
Let me direct the attention of the house to some elements of progressive stability upon which we may restore the confidence of the nation and go forward with greater hopefulness than we have in the past. It is clear to everyone that the fear of danger cannot be overcome unless there are sound and substantial reasons upon which confidence can be based. Confidence cannot be established by well-sounding phrases, by Babbitt optimism. I repudiate with contempt, as I believe every hon. member of this house does, the fatuous and vaudevillian efforts of those who whistle to keep up the courage of the nation. They tell us to keep smiling and ask the penniless unemployed to buy more. They whistle these tunes at great public gatherings and try to get rid of the danger by their whistle. We cannot do that; we must have confidence but that confidence must be based on something substantial and real. It cannot be re-awakened by the hope of reintroducing a system now dead. There can be no resurrecting of dead institutions any more than there can be a resurrecting of dead bodies. The hope of Canada and the hope of civilization must rest in new performances, in new concepts, in new institutions and new practices. I believe that we are on the threshold of the greatest possibilities which time has ever presented to the human race.
The contributions of capitalism have been great, and one of its greatest contributions has been the abundance with which it has presented the human race. Capitalism has made it possible for us to emerge from the economic jungle where the tooth and claw method of survival was the order of the day and to reach a plane worthy to be called a real human plane. Prior to capitalism, humanity was in a state of perpetual scarcity, competition was the natural method adopted in the struggle for survival. But to-day we are in the age of plenty, as our subamendment very clearly outlines, and there is no more reason for a lack of bread, a lack of clothing, a lack of warmth, a lack of housing or a lack of any of the necessities of life than there is for a lack of water. We are

The Budget-Mr. Irvine
in the age of great surpluses. In one year Canada has produced a surplus of wheat sufficient for our needs for another year. If that were done in the case of all our products, the population of Canada would perish in a week unless we found better ways of distribution than have been found so far. The only method of distribution thus far discovered has been through the wages paid for production; if we produce a surplus there will be no more production, no wages will be paid and we will be faced with starvation in the midst of great abundance. The surpluses with which capitalism has presented the world may truly form the essential basis of cooperative economics. Those surpluses should be the basis of a higher system of ethics than humanity has ever been able to achieve in the past. We have tried to be ethical under a competitive system, but I say that we might just as well try to grow roses on an iceberg as to practise Christian ethics in the midst of a competitive civilization. Even ethics must have a satisfactory physical basis. With such abundance of all that is essential to life we are on the threshold of being released from economic bondage, the greatest bondage ever faced by the world. Before we can reach that freedom we must be prepared to remove all the restrictions introduced during the period of scarcity and evolve a definite method for the distribution of this abundance. This is a task beyond any individual, or even a government, it is a task for society as a whole. We must attempt to alter the whole course of society in order to reap the benefits of the great advantages which capitalism has presented to us.
To-day there is less cause for despair than at any other period in- history. At what period in history have human values received such universal emphasis as during the present period? Internationally there is a struggle going on for the establishment of a permanent basis for wrorld peace. Nationally there is a growing opinion that hunger and poverty are disgraces to society and we are seeking more and more to combine our human goodwill and intelligence in order to eradicate such as enemies of mankind. There is a growing opinion everywhere that the life and happiness of the people must not be hampered or denied by the limitations of certain agencies which man has devised to serve the purposes of life. Never were these human agencies so universal, so well organized, so articulate and potent as now. These qualities, together with our boundless national resources, or machine of production and our army of competent workers should be entered upon the ledger
of the nation by the Minister of Finance (Mr Rhodes) as assets of this country which no debts can outweigh.
We have a difficult problem to face, as have all people who have lived in similar periods of transition, but our assets are greater. Being heirs of the ages, we have greater knowledge to-day than ever before. Our knowledge is not only greater in the aggregate but the capacity of the individual is as great to-day- as, if not greater than, it ever was in the world's history. There is more goodwill in the world to-day than ever before, it has never been more general, more sincere and more forceful. We can still claim to be in possession of courage. Those who read of the exploits of our armies in Europe during the last war know that courage is still in the hearts of Canadians, and they will respond just as much to peaceful exploits as they did to warlike exploits. Human nature is on our side. When we talk about introducing a new economic system most people say: You cannot do that because human nature is against you. Human nature to some people is represented only by criminal exploits. But human nature is greater than that, it will assist us forward with our new system; it is one of the strongest forces in our favour. It is true that capitalism has developed much of the worst in human nature but if we can introduce a system such as is covered by our subamendment there will come a time when we will have an economic ss^stem which will bring out the best in mankind.
To-morrow we shall rediscover man himself and build a civilization worthy of his best. There are deeper wells of greatness in human nature than have so far been suspected. Then youth too is for a new system. The young people of Canada are looking for leadership. They are wise enough to sense the danger of the present system and to appreciate the instability which will come from the denying of the necessities of life in the midst of abundance. Finally that great force referred to by Schopenhauer, Goethe, and others as the "Will to live," has not lost its cunning, nor its creative genius. Having brought the race from the slime of incipient life to the highest achievements of modern civilization it wi'1 not now abandon us. It will discover what to do with abundance. The real challenge to capitalism does not come from communism or socialism, it comes from the will to live inherent in humanity. Capitalism must meet this challenge of life or perish. Life will not be defeated.
With such a heritage of power there is no room for fear, with such strivings of the vital
The Budget-Mr. Irvine

instincts of the race, civilization will and must oome through. Our despairs are but passing clouds before the vision of the mind. Our fears are like the dreams which waken children in the night. Such defeats as we fear may come to individuals, but the race is borne to victory. The great to-morrow is like an unborn babe in the womb of time. The sufferings of the moment, which are real and tragic, are the pains of birth. The life of -civilizations, like that of the race, must find its survival in -new birth. This truth I put down as the sure basis of hope. Beyond the happy scope of myth no corpse has ever come to life. Those who expect to resuscitate capitalistic civilization, like those who spend their times at graves in readiness to welcome resurrection, shall wear forever the dark mantle of despair. New thoughts, new ideals, new systems and new hopes are the new-born children of -to-day who shall be in command to-morrow.
I ask the house to consider the proposals which we put forward in connection with this anticipated new age of abundance so that we may be in a position to take advantage of it, and to vote for the subamendment and economic freedom for the people of Canada.


Mr. ONESIME GAGNON (Dorchester):: Mr. Speaker, may I congratulate the hon. member for Wetaskiwin (Mr. Irvine) upon his very interesting speech. I intend this afternoon to direct my humble remarks especially to my colleagues from western Canada, and I do not know amongst them a more amiable, lovable or sincere friend of the people than my hon. friend. Since I have come to this house, I have been much impressed by the assiduity of members from western Canada who sit with the hon. member for Acadia (Mr. Gardiner), by their spirit of cooperation and high sense of duty.
I did not intend to take part in this debate, but the very interesting speech delivered by the hon. member for Dufferin-Simcoe (Mr. Rowe) has impressed me to such an extent that it behooves me, as a representative of an agricultural division of Quebec, to rise and thank him for having so happily voiced the sentiments of eastern Canada. The hon. member is still a young man; his political career is full of promise; his speech is one of the most persuasive that has been delivered during this session. My hon. friend has been an eloquent advocate of the needs of the farmers; being himself addicted to the farming and live stock industry, he speaks with authority, and I hope the government will avail themselves of the excellent suggestions

he has given them in order to promote the welfare of the farmers and thereby assure our return to prosperity.
May I also congratulate the Minister of Finance (Mr. Rhodes) upon his masterly achievement; his budget has been everywhere highly commended. The minister comes from the beautiful province of Nova Scotia which has been called by a humourist endowed with a high sense of reality: "The land of apples and statesmen." From that province also comes the distinguished financial critic of the Liberal opposition, the hon. member for Shelburne-Yarmouth (Mr. Ralston). By a happy coincidence, they were both born in Amherst, and the brilliant city editor of the Montreal Standard wrote last Saturday in his paper, the following words:
There must have been something about the air of Amherst, Nova Scotia, that whetted minds in keenness and brilliance, in that it created two such outstanding Canadians:-
The hon. Minister of Finance and the hon. member for Shelburne-Yarmouth.
It has been more or less the custom of parliamentarians to avail themselves of the opportunity offered by debates on the budget to praise the work of their respective parties. May I ask my colleagues, in these times of anxiety, to rise to higher ground and forget our party divisions and discussions? On the eve of the great Imperial conference which will, for the first time in history, sit in Ottawa, and which will have to enter upon the long-awaited agreements necessary to assure the economic revival of prosperity in the different dominions forming the British commonwealth of nations, I humbly suggest that we consider the salvation of our country in the light of our duty towards agriculture as outlined by the hon. member for Dufferin-Simcoe.
Let us forget our divisions and recall the words used by Professor Leacock of McGill university in his recent book entitled Return to Prosperity, a book which will prove beneficial to all men interested in studying the different problems which will confront Canada at the Imperial conference. Professor Leacock on the first page of his book says:
"The Imperial conference meets on the call of an emergency."
Speaking in this house at a luncheon tendered him by the Prime Minister (Mr. Bennett), the Right Hon. Winston Churchill said:
"Canada once again stands on the Yimy Ridge of the empire."
Another parliamentarian from England wrote the other day that all the delegates ought to come to Ottawa with outstretched hands.

The Budget-Mr. Gagnon
The Ottawa Citizen of March 5 had on the front page the following caption:
Preparing for Ottawa is Britain's new national slogan.
It continues:
Nothing has captured the imagination of the political, commercial and financial world like the great empire gathering which a few months hence assembles in the Canadian capital. Already ideas of the leading industrial, trade union and business organizations here have been collected by government experts so that a complete review can be made of Britain's trade position.
Have we forgotten our party divisions and discussions to reach such an equanimity, as to enable us to assure the success of that conference? Before setting our hearts to a task of such magnitude, must we not remember that we are Canadians and resolute to achieve a safe return to prosperity?
May I suggest that the imperative task which we must assume is that of safeguarding agriculture? Professor Leacock, in his book which I have just mentioned, calls agriculture "the sheet anchor of national safety." He says:
Agriculture is not a business; it is a way of living, a way of thinking. It carries with it elements of national life that no clattering shuttles and humming wheels can ever supply; in peace, comfort; in war, a guarding arm against starvation. England with a four weeks' parcel of food in August, 1914, ought to have learned this lesson once and for all.
Such a statement provides ample food for thought. Agriculture stands as the very foundation of a nation. The hon. member for Dufferin-Simcoe has rightly said that the "general progress of the dominion depends upon the success of agriculture and. . . upon the soundness of Canadian agriculture depends the future prosperity of this country." I endorse that eloquent sentiment. I regret, however, to say that eastern and western Canada seem to hold different views about agriculture; many people seem to forget that a western farmer as very different from his brother of eastern Canada. Western Canada has developed so rapidly during the last thirty years that the farmers of the west have a very moderate admiration for the fanners of eastern Canada. It seems to me, Mr. Speaker, that before sitting down at the table with the other delegates and devoting many long hours to a study and discussion of the economic proposals submitted by all the sister dominions of the British commonwealth, we should first of all see if our own house is in order. Let us ask ourselves whether eastern Canada rhoroughly understands western Canada, and 41761-140
whether western Canada thoroughly understands the east, which understanding must be brought about before we can have the frame of mind which is essential to building a strong national policy.
By the pact of confederation each province has been entrusted with the task of developing agriculture within its boundaries, and the Dominion government has seen to it that the farmers of Canada as a whole have been helped to stimulate Canadian trade at home and abroad and the production of Canadian commodities. Before the construction of the transcontinental railways and the opening up of new provinces in western Canada, the farmers of the east were not rich. They may not have been very progressive, but at least they were thrifty and paid their debts. In 1840 when the union of upper and lower Canada was brought about, lower Canada or Quebec-why should I not be permitted to say this along with many historians?-had no public debt, while upper Canada, or Ontario, had a large debt, which was paid ungrudgingly by the taxpayers of both provinces. Quebec was then more concerned about responsible government and the freedom of her language than with the hoarding of gold. The farmers of Quebec ever since have continued to be humble tillers of the soil. They have devoted themselves to mixed farming, and later, in the eighties, to dairying, which industry was really first organized in the province of Quebec. In this connection may I say that one of the fathers of the dairy industry in Quebec was a very respectable gentleman from Kamouraska, Mr. Edward Barnard, a brother-in-law of the Hon. Senator Ohapais, and the father of Mr. J. E. Barnard, the brilliant director of L'Evenement of Quebec. The farmers of Quebec have lived happily near the great St. Lawrence in the charming vales of the eastern townships, close to the grand Laurentian mountains, in their small, whitenpainted houses near the village church where they find the inspiration and the courage to carry on the work of their forefathers. At the present time the farmers of Quebec like the farmers of all Canada are suffering great distress, but nevertheless they cheerfully fulfil their tasks, and even now should any of my colleagues from the other provinces happen to be travelling along the St. Lawrence they will hear songs like Alouette, and other gay refrains coming from all the homes.
Confederation has brought to the farmers of Quebec new duties towards the other provinces which they have faithfully fulfilled. But the rapid development of western Canada

The Budget-Mr. Gagnon

and the building of railroads have changed the whole economic structure of this dominion. Thousands of emigrants have been induced to go to the western provinces at the expense of the public treasury. I remember that at the beginning of this century, when Laurier was defending his policy of immigration and was being criticized iby other parties on account of the disastrous consequences which might follow, that grand old man predicted in biblical language that the twentieth century would be Canada's century. A long procession of immigrants has followed the trail to the west, and millions and millions of dollars have been spent in building railroads and establishing those' immigrants on western lands. The crops of wheat of the Canadian west have become fabulous, so much so that Canada has gained the reputation of being the granary of the world.
Canada was then passing through a period of great prosperity and those who were criticizing the policy of the government oif the day in the matter of railroads and immigration were accused of being pessimists and of slandering their own country. It is true, Mr. Speaker, that every Canadian must be proud of our western provinces and of their splendid populations and of the courageous manner in which they have fought the depression, but I have no hesitation in submitting that the historians of the future will regret that the farmers of western Canada have been almost exclusively concerned in the extensive growing of wheat.
They were so successful in wheat farming, in real estate speculation and in other fields of speculation that they believed that prosperity would never cease, and sometimes they would throw a scornful look on the farmers of the east who, happily, remained backward. The western farmers have been so powerful in Ottawa that all parties have been begging for their support. Railways have been built for them in almost every district of Alberta, Manitoba and Saskatchewan, and even during this session, Mr. Speaker, when we hear that our railroads, even the Canadian Pacific Railway, are on the verge of bankruptcy, hon. members from the west are urging the government to build a railway in the Peace river valley. Why, Mr. Speaker, should we not more frequently rise in this house and lay our cards openly on the table and say that, fortunately or otherwise, the ideals and customs and mentality of the Canadians of the western provinces are different from that of the east. Professor Leacock in the -book to which I have already referred makes a dis-

tinction that is worthy of consideration. He says at page 38:
There is in it an almost creative power that makes a British farmer, in the Greek sense, a poet. In Saskatchewan he is an engineer.
Is there not a good deal of truth, Mr. Speaker, in that contention? The farmers of the west are adventurous and bold engineers. The farmers of Ontario and Quebec are modest and thrifty tillers of the soil. In western Canada the farmers cultivate hundreds of acres of wheat. They raise hundreds of heads of cattle, have e^ich a great number of employees, and use the most modern machinery. The farmers of eastern Canada are not industrialists like their brothers of Saskatchewan, Alberta and Manitoba, but they are nevertheless even more attached to the soil where they and their forefathers have been living for more than two hundred years.
Both the farmers of the east and of the west have contributed in their own way to the progress of this country. However, legislators have too often forgotten that the western farmers were engineers and industrialists and that the eastern farmers were different. If I may be permitted to refer to the Bankruptcy Act, which has permitted farmers to make an assignment of their assets for the benefit of their creditors, who will not now admit that while such legislation may have been suitable to the west it has proved disastrous to the farmers of eastern Canada. No farmer of eastern Canada ever at any time has demanded of the legislators that he be allowed to go into bankruptcy. I do not think traders and manufacturers have ever been less inclined than now to ask for such a remedy. I am sure that is the case, for in my eighteen years of practice before the bar never have I seen the estate of a farmer in bankruptcy pay one cent to the creditors. This is why it is that now in the province of Quebec societies of farmers, chambers of commerce, and members of parliament ask that the law be amended so that farmers be excluded from the jurisdiction of the Bankruptcy Act. Last week I appeared before the special committee of this house which is now considering a general revision of the Bankruptcy Act. Many prominent gentlemen from eastern Canada have appeared before that committee, among others, Mr. R. Messier, acting dominion secretary of the Retail Merchants' Association, Montreal; Mr. Lalonde, president of the Catholic Union of the Farmers of the province of Quebec, comprising 16,000 members; Mr. D'Arcy Leonard, representing the Dominion Mortgage and Investments

The Budget-Mr. Gagnon
Association, Toronto. At page 20 of the first report of the committee, Mr. G. T. Clarkson, the distinguished head of the firm of E. R. Clarkson and Company, who appeared before the committee to represent the Toronto Board of Trade and the Dominion Association of Chartered Accountants, said:
In my opinion a farmer should not be subject to this act.
The other day two prominent gentlemen, the hon. member for Compton (Mr. Gobeil) and the hon. member for Drummond-Artha-baska (Mr. Girouard) moved each a resolution-which unfortunately has not been discussed-asking this government to take the necessary steps to exclude the farmers of Quebec from the jurisdiction of the Bankruptcy Act. Recently members from Ontario and Quebec have received a resolution from the Ontario Education Association asking the government to help reassure the credit of the farmers by excluding them from the operation of the act. Undoubtedly the Bankruptcy Act has ruined the credit of the farmers of Quebec.
Now, Mr. Speaker, may I refer to other legislation which has been disastrous to the farmers of eastern Canada; I mean the law enacted in 1929 creating the Canadian Farm Loan Board. This legislation may have been beneficial to the western farmers, but it has not been at all helpful to the farmers of eastern Canada. The rate of interest is too high, the legal fees incident to the granting of loans are also, too high, and the obligation laid upon borrowers to contribute to the special fund is not only unpractical but absurd.
In a period of depression such as we are passing through at the present time we are in a good position to judge whether bankruptcy legislation or legislation for granting loans to farmers is practicable and suitable to the needs of those engaged in agriculture. I would suggest that all the laws concerning agriculture be studied, amended and readapted to suit the needs of the farmers of the different sections of the dominion. The hon. Postmaster General (Mr. Sauve) was right in his suggestion, that such a move ought not to be taken without consulting the provinces. It will be found that there is too much duplication in the granting of subsidies by federal and provincial governments, and such a situation tends to confusion and criticism. It seems to me that we ought to proceed by way of investigation. I was surprised last Sunday to read in the Montreal Standard that Premier Brownlee of Alberta wants a royal commission to be appointed to investi-41761-140J
gate agricultural conditions in western Canada. He is said to have declared that people in other parts of Canada, particularly in the east:
Were ignorant of the serious condition agriculture was in.
I will not say, Mr. Speaker, that the west is ignorant of conditions in the east, for such absolute statements are not at all conducive to harmony and cooperation between the east and the west, but I may summarize the views of the people of eastern Canada by stating that sometimes our western friends act as if they were ignorant of the problems which confront eastern 'Canada. Therefore it seems to me that it is necessary that we investigate agricultural conditions not only in western Canada but throughout the whole country. It does not seem to me to be necessary to have recourse to a royal commission now, but would it not be wise before the Imperial economic conference convenes for all the provinces to send delegates to Ottawa to submit their views with respect to agriculture, such as extension of credit to farmers, the best means of encouraging our live stock, dairy, maple sugar and beet sugar industries, and the sale of all agricultural products.
After the Imperial economic conference I would suggest that the government again invite delegates from all the provinces to meet in Ottawa to try once for all to settle their differences without having recourse to the courts. If we could give to our farmers all the money that has been spent to submit to the courts cases of conflict of federal and provincial jurisdiction, it would he possible to provide for them many beneficial measures of relief. At such a conference we ought to be able to meet in a friendly spirit, to place our cards on the table, and to be ready to make any reasonable compromises that may be necessary. And it would be well to discuss the advisability of giving back to the federal government the Quebec maritime fisheries that were in 1922 wrongfully given to the government of Quebec. This step is demanded by all the fishermen of Quebec, and is the only way to help the fishermen, as was admitted the other day by bon. gentlemen opposite, including the hon. member for Charlevoix-Saguenay (Mr. 'Casgrain) and the hon. member for Antigonish-Guysborough (Mr. Duff). We ought also to discuss the advisability of buying Labrador. It would be well, too, to discuss some practical scheme of credit for the farmers of eastern Canada. Finally, wre should take such steps as to remove all causes of friction between the provinces.
The Budget-Mr. Gagnon

But in the meantime the farmers of eastern Canada are facing an emergency and they cannot wait. Last year we helped the farmers of western Canada; now it is imperative to think of the east. Hon. gentlemen from western Canada, I ask you to help the farmers of eastern Canada. In this respect I do not know of any better scheme than that submitted so eloquently by the hon. member for Dufferin-Simcoe (Mr. Rowe). He suggested that the government grant a bonus or subsidy to encourage the export of agricultural commodities. While we are passing through this economic crisis, stimulation to any avenue of development that will increase employment is surely highly justified, at least while direct relief is being paid out of the treasury. Australia is making a determined effort to sell more meats to Great Britain. May I support the contention of the hon. member for Pontiac (Mr. Belec) and ask the government to try to recapture the bacon export trade which we lost during the war. I think the government should impress upon the delegates at the Imperial conference that it is up to them to help Canadian farmers who, when they went abroad to defend the causes of liberty and civilization, had their avenues of trade in agricultural commodities taken by neutral countries such as Sweden, Norway and Denmark. Since the government are thinking of adopting a policy of direct relief for unemployment the door is wide open for the bonusing of exports of agricultural commodities, and I respectfully submit that such bonuses are necessary because of the present emergency. If we wish prosperity to return we must go to the rural districts and help the farmers create prosperity. Farmers are to save our economic system. Let us save the farmer and communism will vanish.
Let us try to understand each other, gentlemen from the west and gentlemen from the east. Our country is wonderful and we are proud to live in it. Let us secure the future happiness of our children. I respectfully ask my colleagues from western Canada to give us what we are entitled to, and to help our farmers since last year we helped save your western provinces from bankruptcy and ruin. If the French Canadian farmer, for one reason or another, would like to have two or three French words on Canadian bank notes and currency, should it not be a pleasure for our friends and brothers from western Canada to give such a token of courtesy to the four million French Canadians living in this country? With the great development in radio we have found a new way of exchanging ideas and opinions between all the provinces.

Let the old French Canadian romances be broadcast over the western provinces, and nothing will prevent cooperation among the different provinces, and the different races becoming closer and more intimate. In these times of sorrow and depression, if the government cannot give bread to all needy people, at least the government may satisfy the souls of the people.
May I close my few remarks by recalling the words of Right Hon. Winston Churchill, who said that "once more Canada stands on the Vimy Ridge of the empire." I think Vimy Ridge will always illustrate our history. The first time I saw the great painting which hangs on the wall of one of our committee rooms I was greatly impressed by the idea expressed by the painter. At the top of the hill stands a monument dedicated to our heroes by a grateful nation. From the foot of that historic ridge to the top the shades of our soldiers ascend, just as they did on the morning of that memorable day. There they died side by side, Mr. Speaker, brave English Canadians, sturdy Scotch Canadians, gallant Irish Canadians and indomitable French Canadians; there they died, and there their ashes are mingled. They died to give us peace, and now when we are all suffering let peace remain in our souls. Let us forget our differences, and our children will be proud of their fathers.


Mr. W. G. WEIR (Macdonald):: Mr. Speaker, in rising to say a few words in this debate may I be permitted at the outset to extend my congratulations to the Minister of Finance (Mr. Rhodes) on the very able and concise way in which he presented his first budget to the House of Commons a few days ago. May I also extend my congratulations to the hon. member for Shelburne-Yarmouth (Mr. Ralston) for the masterly way in which, as the official critic on this side of the house, he replied to the budget speech of the minister. Congratulations are also due to all hon. members who have taken part in the debate, and who have presented points of view pertaining to their own localities and their own interests. May I be pardoned if I do not follow very closely the remarks of the speakers who have preceded me; I desire to discuss a matter which is of some moment to us in the province of Manitoba and for which I may not have any other opportunity of discussing.
I hold in my hand extracts from a return brought down in the house some time ago showing the amount of money advanced by the federal government under the Unemployment and Farm Relief Act to the governments of the four western provinces. It shows

The Budget-Mr. Weir (Macdonald)
that as of February 26 there had been advanced to the province of British Columbia, $5,664,000; to the province of Alberta, $4,624,000; to the province of Manitoba, $3,205,000; and to the province of Saskatchewan, $16,302,000. It also shows that $6,500,000 was advanced to the province of Saskatchewan for purely provincial government expenses. I do not wish to infer in any sense that the province of Saskatchewan received more money or more federal assistance than it should have received, but I do maintain that the province of Saskatchewan is not five times worse off than is the province of Manitoba. When we see that the province of Saskatchewan was able to secure for purely provincial government purposes some $6,500,000 it does seem passing strange that the province of Manitoba could not obtain some assistance for the provincial savings office.
In his remarks on Tuesday last the Prime Minister stated in effect that it seemed rather hard that when he and his government were confronted with very trying conditions and faced with problems of great magnitude they should be the subject of abuse and a target for criticism. Well, Mr. Speaker, the right hon. gentleman asked for the responsibility, and surely he will not deny anyone the right to criticize his actions. He usually defends his course with vigour and determination, but that is no reason why, if hon. members on this side of the house do not agree with what is being done, they should not have the right to criticize.
I wish now, Mr. Speaker, to refer to two editorials which appeared in Winnipeg newspapers some time ago. The first appeared in the Winnipeg Tribune, which is recognized as the Conservative newspaper in Manitoba, dealing with the closing of the provincial savings office. It is headed "Not Premier Bracken's Fault" and goes on to say:
Whatever other sins he may have to answer for. Premier Bracken cannot be justly saddled with responsibility for the downfall of the provincial savings bank. It is through no fault of his that the institution has been dismembered and its remains fed to the chartered banks.
Sir. Bracken stated his case in the legislature yesterday with moderation and restraint. It is worth noting by the way that a strong case needs no other kind of presentation. The facts speak for themselves without any accompaniment of sound and fury.
The facts speak for Premier Bracken in the circumstances of the constitution of the provincial savings bank and in the manner of its dissolution.
The last thing that was dreamed of or thought possible when the provincial bank was organized was that there could be such a thing as a public questioning of the safety of the deposits. The provincial savings bank was as
strong and secure as the province itself. There could be no danger to the deposits short of an upheaval that would put the province of Manitoba under the hammer in a sheriff's sale, a thing that did not happen, will not happen and could not happen.
But the unexpected thing and what seemed the impossible thing did actually happen. Depositors in the provincial savings bank became anxious about the safety of their money. Whisperings grew into street talk. Street talk grew into small withdrawals. Small withdrawals grew into quite general withdrawals. In short there was a run on the provincial savings bank which, continuing in rising intensity over a period of several weeks, absorbed most of the bank's ready cash.
There was an abundance of security behind every dollar of deposits-securities as good as the province of Manitoba itself-but these securities were not liquid in the chaotic market that prevailed. It became a question of the chartered banks advancing money on Manitoba's securities or the Dominion government advancing it. From neither source was the money available. The savings bank, strong in its foundations as the Rock of Gibraltar, had to go.
It has been said that if Premier Bracken had taken the public into his confidence and made a clear statement of the bank's position the withdrawal of deposits would have ceased. That is a bold conjecture.
If Mr. Bracken had publicly intimated that the bank lacked cash assets, but was otherwise sound the chances are that the run would have been intensified. He could only have made a public announcement with safety if he had been able to find the ready money support he was looking for, and invite all uneasy depositors to go to the bank and get their money. That was the only kind of statement to carry assurance to anxious depositors and stop the drain on deposits.
At no time was Premier Bracken in a position to make such a statement. A neighbourly spirit on the part of the Dominion government would have enabled him to do so, but the Dominion government was not in a mood to play that part. It remained a mildly interested spectator while the savings bank took the count.
From the Winnipeg Free Press I should like to read in part the following editorial:
Manitoba has lost an institution deeply rooted in the popular regard, as the fact that it had 40,000 patrons proves, under circumstances injurious to the credit of the province, and therefore detrimental to private interests as well. The disappearance of the bank is not a very favourable advertisement for Manitoba and Winnipeg. The banks, in keeping with the view that he who pays the piper has the right to call the tune, made their assistance, which was necessary to avoid a worse calamity, contingent upon the bank being turned over to them. They thereby removed what was to them a banking eyesore. The banks are not private institutions but public utilities; the propriety of the course which they have followed in this case, will be properly reviewable by the public when the facts are available.
It is known that the province applied to the Dominion government for help and met with refusal. The explanation by the Dominion, when it is made, may be completely satis-
2230	COMMONS
The Budget-Mr. WeAr (Macdonald)
factory. In theory the Dominion is not responsible for Manitoba's financial enterprises; only the supreme consideration of the public safety could be invoked in an appeal such as that made by the province upon the Dominion. But if-as reports in Ottawa seem to indicate -Mr. Bennett, after denying the province, gave the banks aid in taking over the savings bank, the matter takes on a different complexion. But here judgment may well await the explanation promised by the Prime Minister.
Then there is the matter of the reported organized drive against the bank for ulterior purposes. Here there is something more than rumour to go upon. The premier of the province has said that the disappearance of the bank "must be charged in some degree to ill-considered gossip, but in considerable degree to deliberate propaganda." Deliberate propaganda! By whom and to what end? The people will expect further light upon this point.
Following the opening of the Manitoba legislature, which took place after the provincial savings office had closed, a member of the Labour party moved that a special committee of the house be appointed to inquire into the reasons for the closing of the savings office, and bearing directly upon the two editorials I have read, there are a few extracts of interest which I will read from the evidence taken before that special committee. The first extract I want to give is a report of the evidence of Mr. John McGregor, chairman of the board of trustees of the provincial savings bank:
Suspects Organized Campaign
"I suspect that there was an organized campaign behind it," said John McGregor, chairman of the trustees of the provincial savings office referring to the rumours that the institution was unsafe.
"They came out of the blue sky and were so persistent that one must believe they were organized. It is hard to credit any responsible person with doing that. There was no justification at all for these rumours."
The rumours came to the attention of the trustees on January 11, Mr. McGregor said, previously nothing definite had been heard.
Ill last October the provincial savings office was sound and prosperous, he said. The market value of the office's securities _ in April, 1931, revealed a balance of $377,000 in favour of the office, compared with the booked value. _
In September the value of the securities dropped precipitately, although the number of depositors increased steadily until the end of October. There were, however, unexpectedly heavy withdrawals in November, 1931, to purchase national service loan bonds.
At this point I may say that there was Withdrawn from the provincial savings bank in Manitoba, presumably for the purpose of buying national service loan bonds, the sum of approximately one and a quarter million dollars.
Mr. McGregor stated that the office had been liquid up to that time, although a credit of

$1,000,000 had been obtained from the banks as a precautionary measure against any drop in bond values.
E.	J. Jewers assured Mr. McGregor that there had been no great demand for deposits, hut shortly after January 11, Mr. Jewers informed him that the withdrawals -were becoming steady. A meeting of the trustees was called that afternoon and it was decided to advertise the soundness of the office to offset the rumours.
Royal Burrit, trustee, declared that political attacks on the financial position of the province were, indirectly, attacks on the provincial savings office. The condition of the office and of the province was closely related and any political speech prior to the closing belittling provincial financial affairs was also a blow at the office.
Great Britain's dropping from the gold standard seriously affected the position of the savings office, he stated. But all banks were likewise affected. The serious situation in the securities markets after Britain's action resulted in most banks being not actually liquid.
As a matter of fact, he continued, chartered banks to-day were permitted in their financial statements to value their bonds as of June, 1930, because at present bond prices none of them would be liquid.
The provincial savings office was the victim of circumstances, he continued. It was_ not at any time insolvent; only its liquid position was ever affected seriously and until the run its liquid position was sufficient to meet all depositors' demands.
Continuing with the evidence taken before that special committee, as reported in the press from day to day, I find the following:
Testifies Newton Advised Him To Withdraw Savings
Grandview Auto Dealer Tells of Conversation with Conservative Member for Roblin
F.	Y. Ne-wton, Conservative member for Roblin, in the first week of February advised a friend to withdraw whatever money he might have deposited in provincial savings office, a special legislative committee investigating the closing of the savings office was told Wednesday afternoon.
This testimony was taken from J. I. Orr, automobile dealer at Grandview, Man., who said he had talked with Mr. Newton in Roblin some time during the first week of February.
Before he named the Conservative member of the legislature, Mr. Orr said that a friend had told him that if he had any money in the provincial savings office, he should withdraw it. It was also suggested that Mr. Orr should advise any of his friends to withdraw their savings.	.
Questioned, Mr. Orr said that the friend who had given him the advice was Mr. Newton.
The next evidence taken before the committee is reported as follows:
Tell Of Warnings By F. Y. Newton To Take Out Savings
Schweitzer Also Quoted at Inquiry Into Provincial Savings Office
Prominent Conservatives early in February advised friends to close accounts in the pro-

The Budget-Mr. Weir (Macdonald)
vincial savings office, witnesses Thursday told the special legislative committee investigating the closing of the savings office.
^ Two witnesses from Dauphin described how F. Y. Newton, Conservative member for Roblin, had warned that the institution was not Safe and advised them to take out their money and to tell their friends to close their accounts.
Val. E. Schweitzer, Conservative party organizer, told a friend that the savings office was "broke" and that he should withdraw his money another witness testified.
It was H. L. Pulford, a depositor in the provincial savings office, who said that the Conservative party organizer had advised him to close his account. Mr. Pulford was questioned by Hon. W. J. Major, attorney general.
The next evidence, dated . April 4, 1932, reads:
Willis Urged Brother To Withdraw Savings
Legislative Committee Probing Closing Hears of Wire From Member for Souris
Brief but decisive warning of the closing of the provincial savings office came to a depositor from a member of the Dominion parliament, it was revealed, Saturday, when the special legislative committee investigating the closing of the savings office resumed its inquiry.
This warning was contained in a telegram to Trevor Willis, and it came from his brother, Errick Willis, M.P. for Souris, who was in Ottawa. The telegram read:
"Withdraw money from Donald and Ellice."
This is the location of The Province of Manitoba Savings Office.
The committee also examined J. T. Haig, Conservative member for Winnipeg, question-i ng him to determine the source of rumours which had prompted the Conservative member to write to Premier John Bracken asking whether the provincial savings office was safe.
The coincidence that Mr. Haig's political speech in Brooklands, on February 15, had accurately, although stated interrogatively by Mr. Haig, revealed why Premier Bracken had summoned the legislature, was emphasized in the examination of the Conservative member.
Later on in the evidence Mr. Haig stated that he had communicated his uneasiness about the provincial savings office only to Premier Bracken and Colonel F. G. Taylor, leader of the Conservative party. When questioned as to whether he had discussed the position of the provincial savings office with anyone else, he said he had not. He then added that he might have talked to Dr H. C. Hodgson, president of the Manitoba Conservative Association.


Mr. WILLIS:: Will the hon. member permit a question?


William Gilbert Weir: Yes.


Errick French Willis: Would the hon. member put on Hansard the evidence regarding myself?


William Gilbert Weir: I have just read it.


Errick French Willis: I refer to the evidence taken at the inquiry.


William Gilbert Weir: I have just read it,


Errick French Willis: The hon. member has not
read a word.


William Gilbert Weir: The hon. member can read that himself.


Errick French Willis: I am very thankful.


William Gilbert Weir: 
Mr. J. L. BOWMAN (Dauphin):: Mr. Speaker, I am sure the hon. member for Macdonald (Mr. Weir) will pardon me if I do not join issue with him in regard to the subject which he has been discussing this afternoon. I came prepared to speak entirely on the Canadian National Railways. It would have been a great pleasure to have replied to the arguments presented by him in the house. After all, in respect to the savings bank of Manitoba, there are two outstanding facts: first, that the bank failed because of bad management on the part of the provincial government; second, that the Dominion government, by intervention, saved 42,000 depositors from, to say the least, a great deal of inconvenience and perhaps loss of money. Apart from that, I shall not say anything further. As lion, members are well aware, a provincial election in Manitoba is not very far distant when this issue will be fought out on the public platform of that province, and so far as we on this side are. concerned, we shall be glad to join in anj' such issue as this.
May I join with other members of the house who have preceded me in extending felicitations to the Minister of Finance (Mr. Rhodes) on the very able manner in which he presented his budget and on the fact that during these difficult times he has been able to balance his budget?
With these few preliminary remarks I turn my attention to a discussion of what has again and again been stated to be one of the major problems facing Canada to-day. I could not understand the hon. member for Brome-Missisquoi (Mr. Pickel) stating that the Canadian National railway system should be put into the hands of a receiver or sold to the

The Budget-Mr. Bowman
Canadian Pacific Railway Company. Surely a proposition of that kind cannot be supported.
I was very pleased indeed to hear the explanation made yesterday by the hon. member for Stanstead (Mr. Hackett) with respect to a speech which he had previously made in this house, and as to the meaning of which there may have been some doubt. He stated that he was not in favour of any merger of the Canadian National Railway with the Canadian Pacific Railway. I followed very carefully the remarks of the hon. gentleman, previously made; I had read in full the speech which he delivered to the Canadian Club in Toronto on the Canadian National Railway, and I must say that I rather gathered from those two addresses that the hon. member did have in mind that the Canadian Pacific Railway might perhaps consider purchasing the Canadian National Railway. The reason I say that is that in his address at Toronto the hon. member made the statement that a purchaser might be found. Now when one thinks of any organization or corporation taking over an institution of the size and importance of the Canadian National Railway most people in this country would conclude that there is only one corporation in Canada that would be capable of doing it. I must say, however, that I do not think the hon. member for Stanstead gave his usual consideration to the proposition which he advanced in the house yesterday afternoon. As I understood that proposition it was this, that in all probability we would have to wait for a year before the royal commission on transportation would bring down its report, and that in the meantime the two companies be requested to pool their operations, whereby the hon. member thought a saving of eighty million dollars in one year might be made. May I point out to the hon. member for Stanstead just what that would mean? Calculating on the same basis as last year when economies accounted for a saving of 326,000,000 in the operation of the Canadian National Railways, 314,000,000 of which was in wages, to effect economies amounting to 380,000.000 would mean that between thirty and forty thousand railway employees -would have to be taken out of the service of the two railway companies immediately. That would be the result of following out the suggestion of the hon. member for Stanstead if the saving he suggests might be made were put into effect. I am sure that neither he nor any other member of this house would at this time suggest that thirty or forty, thousand more railway employees be thrown out of
employment without notice and without an opportunity to make preparation for the future.
In dealing with this question I purpose touching as briefly as possible on certain phases of the development of the Canadian National railway system, and of the problem as it exists to-day. All hon. members of the house are fully aware of the conditions under which the Canadian Northern, the Intercolonial, the National Transcontinental, the Grand Trunk and Grand Trunk Pacific were merged into one great corporation called the Canadian National railway system. I would draw attention to this fact, that at the time of that amalgamation, it was really a. merging together of bankrupt concerns. The Grand Trunk Pacific was in the hands of the receiver, the National Transcontinental was still in the hands of the government; the Canadian Northern Railway had failed in its ability to carry on during the war period and had secured financial backing from the provinces and federal government; the Intercolonial had shown deficits year after year, and the Grand Trunk had been dragged down to the verge of bankruptcy by the contract which it had made for the operation of the Grand Trunk Pacific. It must be borne in mind that during those years of the merger, 1919, 1920, 1921, 1922, we were paying out immense sums to meet the deficits of these railways, as follows: 1919, $55,000,000; 1920, 380,000,000; 1921, 370,000,000; 1922,358,000,000. It must be borne in mind that at that time we had a medley of bankrupt concerns operating as separate and distinct entities, and operating at tremendous losses, with a great preponderance of main line mileage over branch line mileage, and with forty-one per cent of the roads out of the hands of the construction contractors only within the previous ten years. These railways were equipped as one might expect bankrupt concerns to be equipped. The first step for the new management of 1922-23 was to construct additional branch lines and to furnish the roads with proper equipment. To mention only a few of those items. Between 1923 and 1930 the following sums were spent; for branch lines, $65,000,000; permanent ways and structures, $106,000,000, of which $20,000,000 was spent in one item alone for creosoted ties; freight cars, $71,000,000; new passenger cars, $29,000,000; locomotives, $36,000,000; telegraph lines,, $7,000,000. One could go on giving similar sums which were spent in that way. It must be remembered when we speak of the tremendous sums of money which were put into these railways that we knew what kind of a bargain we were, making when we took them over. We
The Budget-Mr. Bowman

knew that large sums of money would have to be spent to enable the railways to operate as an efficient and economical unit.
I will admit that expenditures have been made which should not have been made. I do not think that there is anything to justify from fifty to one hundred million dollars being spent on terminals in the city of Montreal. I do not think there is anything to justify the tremendous sums of money that have been spent on the hotel system or on the triangular service on the west coast. The management of the Canadian National Railway undoubtedly made the same mistakes that other great institutions made. What great corporation during the boom years of 1927 and 1928 did not spend immense sums of money that should not have been spent? Nevertheless it must be borne in mind that during this period there has been built up a tremendously efficient transportation machine showing a vast improvement in the efficiency of labour, in mechanical power, in rolling stock and in every other department of railroading. This advance might be summed up by stating that in 1928 there was 31.5 per cent more traffic handled than in 1920 with 220 fewer locomotives and 3,370 fewer cars. It can be truly said that the Canadian National Railways can handle freight and passenger service as economically and as efficiently as any railway organization in the world. During this same period there has grown up among the employees an esprit de corps unexcelled in any similar institution on the face of the globe.
Now, with respect to these expenditures, might I point out that they are behind us, and that we have a well-equipped road ready to handle traffic as economically as any railroad on the American continent.
It devolved upon this new management to coordinate these roads into one great efficient transportation machine and to take every possible means to make the system pay. Just how far the management have succeeded in the performance of this duty under the circumstances which subsequently arose is perhaps a matter of diverse opinion. In times of depression like the present one is apt to stress, to the exclusion of everything else, the monetary loss and the tremendous sums of money from time to time put into this great enterprise. May I take the liberty of reminding hon. members of some of the obstacles with which the management have been faced. First of all, with respect to motor vehicle competition. The first year there were any registrations of motor vehicles was in 1907 when the number was 2,130; in 1910, 8,967; in 1915, 89,944; in 1920, 407,064; in 1921, 513,821;

in 1925, 728,005; and in 1930, 1,239,888-or in the last fifteen years between 1915 and 1930 an increase of 1,289 per cent. The first year that trucks were segregated in the registrations was in 1922, when 37,610 trucks were registered; in 1925, 74,489; in 1930, 165,464. In that same year the registrations of buses were 2,098.
Now, commensurate with this increase in the number of motor vehicles doing business in Canada, there has been an increase in highway mileage, until in 1930 we had 394,372-7 miles of highway, as compared with 42,075 miles of single line railway, 14,567 miles of second and third main track, industrial track, yard and sidings. I am quite free to admit that in the matter of short hauls at certain seasons of the year the motor truck certainly has an economic advantage over the railway. But may I point out that the competition as between the railways and the motor vehicles is most unfair, in that the railway companies are under the regulations of the Board of Railway Commissioners; their rates are fixed by the board; if they want to close a station they have to appeal to the board for approval; once passenger or freight service is established it cannot be changed without approval of the board, and so on all the way down the line. .There is no similar or analogous regulation in respect to motor transportation, and rates can be changed overnight. So we have this situation to-day, that the motor truck is carrying the freight upon which the railways charge a high rate and leaving to the railways the bulky and heavy freight such as grain, lumber and similar products. If this competition continues it simply means the whole rate structure of Canada will have to be changed. In the event of change it must be borne in mind that our grain cannot carry any higher transportation charges, otherwise it may mean considerable damage to our export trade. Then, too, railway employees have to undergo a severe medical examination to show they [DOT] are physically qualified to carry on their duties; no such analogous requirements are made of the drivers of motor trucks or buses. It must also be remembered that the railway companies as common carriers are liable for negligence, and as responsible parties they have to pay damages in the event of being held liable by our courts. Most of the operators of motor trucks and motor buses do not carry any insurance, and in many cases are owned by irresponsible parties, so that it is impossible to recover damages from them. And it must not be forgotten that the railway com-

The Budget-Mr. Bowman
panies operate upon their private right of way, constructed at their own cost, while motor transportation service is carried on on the public highway by corporations and persons operating for private gain.
These differences must be adjusted in fairness both to the railways and to the motor vehicles. I am satisfied that when that adjus-ment does come it will mean increased revenues for the railway companies. Not only so, but if by some coordination of the services a considerable portion of the motor business could be merged with the railway operations it would give employment to many railway employees who to-day are unable to earn a livelihood because of lack of work brought about by the shrinkage in railway traffic. In an article appearing in the March issue of Commerce of the Nation, under the heading "They Enjoy but Don't pay," Mr. A. D. Ferguson, of the bureau of economics of the Canadian National Railways, estimates that the reduced annual revenue of the railway companies of Canada through motor competition is $41,000,000, made up of $17,000,000 in passenger transport and $24,000,000 in freight transport. That was one obstacle to the success of the Canadian National Railway system.
Then, too, may I call the attention of the house to something else. It is generally conceded that in order to operate successfully and at a profit a railway company must have a gradual increase in traffic year after year. As hon. members are well aware, that has not been the case in Canada, though between 1923 and 1928 the revenues of the company have substantially increased. The figures are as follows:


RAILWAY OPERATING RESULTS-
[Stage Direction]
CANADIAN NATIONAL RAILWAYS 1923-1931 (Inclusive)
(Including Eastern Lines Accounts, but Central Vermont for 1930 and 1931 only)
Calendar Year	Gross Operating Revenues	Gross Operating Expenses	Net Revenue from Railway Operations$	$	$1923	254,926,456	234,689,893	20,236,5631924	235,588,182	218,343,931	17,244,2511925	244,971,203	212,706,788	32,264,4151926	266,187,825	219,704,633	46,483,1921927	268,704,294	229,175,600	39,528,6941928	304,591,268	249,731,695	54,859,5731929	290,496,979	248,632,274	. 41,864,7051930	250,368,998	228,288,023	22,080,9751931	200,505,162	199,312,995	1,192,167
Surely the fact that the population of this country has not increased as was anticipated,
and that the business is not there to be done, cannot be blamed on the management.
Another obstacle to the profitable operation of this railway system has been the period of depression through which we are passing at the present time, but I do not know that this depression is without its blessings. With respect to the Canadian National system at least it has called to the attention of the country the seriousness of the problem with which we are faced, and I am sure hon. members of the house were gratified to learn that the estimate for capital requirements and deficit for the coming year has been fixed at some $71,000,000, or $41,000,000 less than the requirements for last year. I think the management are to be congratulated in setting up the finance committee and in making the economies which have been made. When the minister spoke on this subject he pointed out that economies last year amounted to some $13,000,000, and that for the coming year further economies would amount to an additional $15,000,000. In an editorial which appeared in the Toronto Globe shortly after the remarks of the minister on the tabling of the annual report of the company I find this paragraph:
The Globe sincerely congratulates the Minister of Railways on the needed economies which he has brought about-or rather which he insists that the management has brought about-in the operation of the National system. That the past period of prosperity and reckless rivalry in competition induced unwise and unwarranted expenditure is beyond question. Doctor Manion has given the country good service in insisting upon a return to sanity in enterprise and outlay. Retrenchment and rigorous economy-easy to preach but difficult to practise-must necessarily dominate the administration of the system for some years to come. Yet, at the same time, equally in the interests of the people who own the railway, there must be constant care that rigorous economy does not become crippling economy.
One would gather from the remarks of some hon. members that there was a vast difference in the results of the management of our two great railway systems. Let me quote from an editorial which appeared in the Winnipeg Free Press of April 6, 1932:
Canadian National railway operating revenues fell off in 1931 by $45,000,000. For the Canadian Paoific the corresponding figures are $40,000,000. Bearing in mind the difference of mileage and volume of business, the parallel is decidedly close. Operating costs were cut on the Canadian National $26,000,000, on the Canadian Pacific $27,000,000; freight reductions, Canadian National $31,087,127, Canadian Pacific $24,427,239: passenger reductions, Canadian National $8,439,816, Canadian Pacific $8,428,192. If there is any disparity in the earnings of the company in the final analysis, it pretty well resolves itself down into a question of density of traffic.
223S
The Budget-Mr. Bowman
[Stage Direction]
The only remedy for our railway is more trade, more business, more population. All that the people of Canada can reasonably ask of the Canadian National management is that they should protect the property at the lowest possible cost to the public against the time when there will be a revival of prosperity.
The mention of economies naturally brings up the matter of railway employees, and coming as I do from a railway centre I must confess that when I hear of these tremendous reductions I feel that groups of railway employees scattered all over the country are bearing the burden of these economies. Today I received a letter from a man working in the shops at home. He has been employed there for some twenty-five or thirty years, and he tells me that the following reductions have been made in his salary in the last two years: First a day a week was taken off, which meant a reduction of $27 a month; then came the ten per cent reduction, amounting to $14 more and, within the last week or ten days he has been asked to take a further reduction of a day a week, which will amount to $27 more. This means that in the last two years his salary has been reduced by $68 a month. We should take these matters into consideration, and we should bear in mind that one of the invisible benefits to Canada from the operation of the Canadian National railway system is that last year there was paid in wages by the company the sum of $126,950,841, and that the average number of employees was some 91,416. Of every dollar spent by the railway company 63f cents went for labour, while 9 cents went for fuel This $126,000,000 spent in Canada means a tremendous purchasing power and a tremendous consumption, so the welfare of our railway employees is of vital importance to every citizen of this country. These employees have taken salary and time reductions, and some are out of employment entirely. In my own town there are men who have been with the system for fifteen or twenty years, in which time they have acquired seniority rights, nevertheless to-day they are unable to hold a job at all. They may work for two or three months in the course of a year. There is no more loyal body of employees to be found in any institution or corporation in the world than is to be found working for the Canadian National Railways to-day, and it does seem to me that considering their importance to Canada and the purchasing power they represent, together with the fact that with their dependents they number about 400,000 people, they should have greater representation on the board of directors of the company as well as on any other

board which has to do with hours of work, rates of pay and other related matters.
It must also' be borne in mind that during these years of efficiency in operation and economy in handling passenger and freight traffic, during this speeding-up process, the number of injuries to employees has increased to a remarkable extent. In 1915, the number of railway employees injured was 2,573; in 1920 it had increased to 7,719; in 1925 it was 8,256, and in 1929, 12,483. This is all the more reason why someone who is thoroughly familiar with the risks involved in the work should be on the boards which regulate the terms and hours of service.
There is another invisible benefit to Canada from the operation of the Canadian National railway system. I refer to the benefit that has resulted from colonization and settlement. I often think that this benefit is entirely overlooked. When the hon. member for Brome-Missisquoi (Mr. Pickel) talks about handing the railway system over to a receiver, which I presume means the dissolution of the whole system, he should surely bear in mind that we .owe something to the maritime provinces in respect to the operation of the Intercolonial railway, and something to the remote districts that have been opened up and colonized through the operation of the Canadian National railway system. It should be remembered also that a vast amount of new wealth is being produced annually as a result of the settlement of those areas through the Canadian National Railways. In 1928, the Canadian National Railways handled, in grain products, 301,741 cars; live stock, 61,847; coal, 92,496; lumber, 112,459; pulpwood, 99,45S; pulp and paper, 61,654; other forest products^ 83,827. Most of these products have come from territory contiguous to the Canadian National railway system, and would not have been produced at all had not the system opened, up and given means of transportation to and from these various districts.
Mr. SANDERSON:: I take it from the
remarks of the hon. gentleman that he entirely disagrees with the observations of the hon. member for Stanstead (Mr. Hackett) and those of the hon. member for Brome-Missisquoi.


James Langstaff Bowman: I have already covered
that.


Frederick George Sanderson: My hon. friend has
skirted around the subject. Does he disagree with the remarks of those hon, gentlemen?


James Langstaff Bowman: Surely the hon. member
heard me. I have made it quite clear that I

The Budget-Mr. Boulanger
disagree with every word said by the hon. member for Brome-Missisquoi.	*


Frederick George Sanderson: And the hon. member for Stanstead?


James Langstaff Bowman: And I have explained how far I disagree or agree with the hon. member for Stanstead. If there is one thing that can be said to clinch the argument for the continuance intact of the Canadian National Railways, it is the opinion expressed by certain members of this house and, recently, by Sir Henry Thornton before a committee of this house. At page 1644 of the 1932 Hansard, the Minister of Railways (Mr. Manion) stated that had freight rates in Canada been the same as in the United States, $15,000,000 to $26,000,000 more would have been earned iby the railway company. And the hon. member for North Waterloo, at page 39S7 of Hansard of 1931, said that if the freight rates in Canada were as high as in the United States, the Canadian National Railways would not (be registering deficits but would be showing profits. Sir Plenry Thornton, speaking before a committee of this house recently, declared that Canadian rates were the lowest in the world and that, had the Canadian railways enjoyed the same rate scale as the United States roads since 1923, the Canadian National Railways would not only have been able to pay interest on all funded debt owed to the public, but would have had $20,000,000 over. Surely if there is anything to be said with regard to freight rates, so far as Canada and the United States are concerned, if population and density of traffic indicates anything, if -climate and terrain count, the facts are all in favour of a higher freight rate in Canada than in the United States.


Frederick George Sanderson: Will the hon. member permit another question?


Some hon. MEMBERS:: Order.


James Langstaff Bowman: No; the hon. member knows I have only one minute left.


Frederick George Sanderson: The hon. gentleman surely will allow me to ask this question. Is he in favour-


Some hon. MEMBERS:: Order.


Frederick George Sanderson: Is he in favour of the amalgamation of the Canadian Pacific Railway and the Canadian National Railways?


James Langstaff Bowman: Absolutely no; not under any circumstances.


James Langstaff Bowman: I think it would be the greatest calamity that ever befell Canada; it would be a government of railways and not government by this house.


Frederick George Sanderson: Thanks for answering the question.


James Langstaff Bowman: May I conclude with this statement. Bearing in mind:
(1)	That the cost of rebuilding and equipping this great railway system is behind us and that in it we now have a railway capable of handling passenger and freight traffic as efficiently and economically as any of the great railways of the world;
(2)	That this system is o-perated iby men highly capable of performing their respective tasks and duties and who are loyal to the system to the last degree;
(3)	That the problem of motor transportation competition must of necessity be soon adjusted to the benefit of both the railways and the various means of motor transport ;
. (4) That vast benefits continue to accrue to Canada through the products of new wealth from the -farm, the forest, the mines and the great inland waters served by this railway system;
(5)	That tremendous sums of money are yearly saved to this dominion iby the comparatively low freight rates at which our freight is carried;
(6)	That we are now surely at the bottom of this period of depression and that better times are ahead-bearing these considerations in mind, I venture to say that the outlook is not so dark as it appears at the present and that the Canadian National railway system will not only weather this storm but, with a return to prosperity, we shall yet have in this great puiblicly-owned enterprise a transportation system which will pay its way and also return a -portion at least of the vast sums of money we have invested in it.
' Mr. OSCAR BOULANGER (Bellechasse) (Translation): Mr. Speaker, I would not be taking -part in this debate, had I not been invited to do so, a few days ago, by the hon. Postmaster General (Mr. Sauve). I regret that he is not in- his seat. He is probably busy dismissing the last Liberal postmaster left in this country. However, previous to -commenting on his speech, I wish to congratulate my hon. friend and neighbour, the member for Dorchester (Mr. Gagnon), who also is not in his seat, on the splendid speech he delivered this afternoon. I should have liked to congratulate him on- the progress he has made, for this last speech is quite an improvement over the one he delivered at the outset of the


Frederick George Sanderson: Thanks.
The Budget-Mr. Boulanger

session. I therefore extend to him my congratulations on his progress, and my best wishes that he may realize some day the goal of his ambitions. I would have been pleased to tell him that I entirely agree with the ideas he expressed a short while ago, as I also agree with those expressed in the house, a few days ago, by our friend the hon. member for Duf-ferin-Simcoe (Mr. Rowe). The time has come for rural members of eastern Canada, representing the farmers of Quebec and Ontario, to agree in setting forth their claims in order to improve the lot of the farmers whom they represent in this house.
I wonder, sir, whether the Quebec farmers of whom I aim one of the humble representatives, may not be disappointed at the statement made in the house, the other day, by the hon. Postmaster General. During the 1930 election, our hon. friend posed as champion and guardian of his race and pledged himself, if elected, to be the mouthpiece of the farming class.
We therefore would have been pleased to hear him discuss the questions which interest specially the Canadian eastern farmers, and particularly those of the province of Quebec. We would have liked, for instance, to hear him speak on the policy the government intends to adopt with a view of opening up new markets to farm products; we would have been happy to hear him broach the subject of rural loans and state whether the government has the intention of lowering the rate of interest on these loans to farmers; and whether the government is to expedite and simplify the work of the commission on farm loans; we would have been delighted to listen to him discuss the subject of the tuberculins test and immunization of the dairy cattle; we would gladly have listened to him discourse on the return to the land movement and the .policy which the government may have as regards giving a tillage and land clearing bonus; we would have been pleased to hear the Postmaster General discuss the agricultural policy and the measures which the government has the intention of bringing down to improve the lot of this very industrious and important class in the social life of our country.
Instead of discussing these questions, the hon. Postmaster -General devoted the greater part of his speech to making excuses and apologizing for the government's fiasco.
The hon. Postmaster General had inured us to a more aggressive policy. During many years he was leader of the opposition in the Quebec legislature. I must admit that he performed this task in a creditable way. He was then somewhat looked upon as the representative and the mouthpiece of the Quebec

farmers; at least he delighted to -pass himself off as a country folk, as a farmer entirely devoted to the interest of the agricultural class. Judging by the speech he delivered the other night, and from which I shall quote a few extracts, I must say that he simply confined himself to offer excuses for the failure of the agricultural policy of the government. We would have -been -pleased to find out from the hon. Postmaster General whether the government has even an agricultural policy and whether it intends to really do something for the farmers. In reading over the hon. Postmaster General's speech, I discover, at page 2177 of Hansard, the following words:
The government cannot be held responsible for the present world wide crises.
A little further, in the same column, the hon. Postmaster General adds:
If prices of certain products are too low. the government cannot be blamed, but the fault is with the crisis prevailing all over Canada.


Mr. POULIOT (Translation):: A guilty
conscience needs no -accuser.


Mr. BOULANGER (Translation):: Further on, in the same column he states:
Where is the country, which suffers less now from the crisis than we do?
On the following page we find:
If the result is not as great as could be expected, it is, I repeat it, due to causes of which the government is not responsible.


Jean-François Pouliot: We have no responsible government!


Joseph Oscar Lefebre Boulanger: At page 2179 of Hansard, the Postmaster General again apologizes for the government's inaction, in the following words:
There are many things which could be done under ordinary conditions, but we are up against hard times.
I want, sir, to contrast these few quotations taken from the speech delivered in the house, the other day, by the Postmaster General, with certain more emphatic statements which he made during the election of 1930.
We find one of these statements in an excellent newspaper, La Patrie, of Montreal, which is very sympathetic to the Conservative government and to the party-


Mr. GOBEIL (Translation):: Not at that time.


Joseph Oscar Lefebre Boulanger: -and which has the reputation of being a well informed newspaper. According to this newspaper of July 4, 1930, the following is what he
states:
Will war be declared because I am elected as your member?

The Budget-Mr. Boulanger
May I here make a digression. The hon. Postmaster General and the hon. Minister of Marine (Mr. Duranleau)-neither of them is in his seat-charge us with having roused the passions and discussed conscription. If any one, during the 1930 election, discussed conscription and Canada's participation in the war, it is certainly these two hon. gentlemen.
In the same newspaper we find the following account of a meeting held at Laval des Rapides:
Mr. Sauve discusses the attitude taken by Mr. Lacombe in the house-
-the latter was his opponent-
-on various questions interesting especially, the farmers of his county and contrasts the indifference of the one who had just held the mandate with his own solicitude for the Quebec farmers.
In "La Patrie" of July 9, 1930, I find the following under the heading:
Mr. A. Sauve addresses a meeting at l'Abord a Plouffe.	[DOT]
Mr. Sauve explains that he accepted the nomination at the request of a great number of electors, both Liberal and Conservative.
The following are the exact words used by the hon. Postmaster General-his favourite figure of speech is apostrophe-
Farmers of Laval-Two-Mountains, did the policy which my opponent advocated in parliament bring prosperity and happiness in your homes? And you workmen who suffer from unemployment and whose wages are not in keeping with the cost of living, are you satisfied?
May I invite, sir, the hon. Postmaster General to repeat now these criticisms before the farmers and workmen of the county of Laval-Two Mountains. I would advise him to ask these farmers who sell their butter at 16J cents per pound delivered in Montreal, according to the market price ending April 16, 1932, whether they are satisfied. I would suggest to him to inquire from the civil servants whose salaries have just been cut, and especially those who have been dismissed, whether they are satisfied.
I allways recall a large meeting at which the hon. Postmaster General stated:
I have not been always successful, however, I have always stood by my guns because I am much attached to the people of my province; when it was a matter of championing the interests of the farmer, I was always present in the house.
Further on the newspaper says:
Then the speaker criticizes Mr. Lacombe for his attitude on farm loan, the rate of interest of which is too high considering the returns of the land.
I should have liked, the other night, to have heard the hon. Postmaster General re-41761-141


REVISED
[Stage Direction]
quest a reduction in the rate of interest on farm loans.
Further on he states:
I shall go to Ottawa and I shall have sufficient courage to champion your cause under all circumstances. Are you, farmers, going to further submit to the competition of New Zealand butter, which is ruining you? And you, workmen are not your interests linked with those of farming, our main industry in Canada, because when agriculture suffers all are affected. After July 28, you will find in me both an energetic and fearless champion. ... I do not intend at the age of 55 to play the part of valet. If to-morrow . . .
Note well, sir.
-If to-morrow Mr. Bennett introduces a measure contrary to the interests of my race and my country, I will vote against it.
Samuel Gobeil: Did he introduce a single one?


Joseph Oscar Lefebre Boulanger: Mr. William Tremblay, former member for Maisonneuve in the Quebec Legislature, was present at that meeting and, amplifying the remarks made by the hon. Postmaster General, he expressed himself as follows, according to the same newspaper:
Speaking on the lack of markets for wheat Mr. Tremblay stated that the government had failed in its duty because it had not come to the rescue. He spoke of the distress which resulted from such inaction. The whole of our economic life has thus been paralyzed, unemployment has gained ground and our purchasing power decreased.
On July TO, 1930, under the heading "A meeting held by Mr. Arthur Sauve at Oka" "La Patrie" reports the following words of Mr. Sauve:
Do you want as your member a man capable of rendering justice to both parties, Liberals as well as Conservatives? Do you want a man who remains pinned to his seat or a fearless man, capable of respectfully expressing his opinion and make known the requirements of his country and province?
May I point out to you, sir, that if there is a silent member of the cabinet, in the house, a minister pinned, bolted and padlocked to his seat, it is certainly the Postmaster General. He is not lavish with his words, he does not spoil us, he is rather- stingy in this respect, for, if my memory serves me right, the Postmaster General delivers but one speech each session.
On July 11, 1930, under the heading "I shall be an independent member free to protest when necessary" I find the following words in "La Patrie":
Farmers who bewail your lot, you whose children _ are disheartened and filled with anxiety, if you are content with such conditions, vote for Mr. Lacombe. But if you want protection, if is your duty to vote for me. The


EDITION
[Stage Direction]
The Budget-Mr. Boulanger
tariff policy of Mr. King is to blame for the conditions you complain of. The government pretended to change the tariff. But its policy is a deceitful one, to such an extent that the ministers avoid to discuss the results which the budget may have.
The last words could be applied to the hon. Postmaster General himself. When he spoke, the other evening, he was careful not to comment on the present budget he fought shy of the government's agriculture policy, which, in truth, does not exist. Continuing the Postmaster General stated:
If Mr. King is returned to power, I shall sit in the opposition free-as I claim in submitting my nomination-to support sound measures, regardless of party affiliation, such as duty will point out. I shall not be a member bolted to his seat. . . .
He insists on that expression.
. . . but I shall consider myself free to speak my mind when it pleases me and never seeking a reward. If I were aware that such a sacrifice would be expected from me, I would give up political life.
Mr. RHEAUME (Translation):: A senatorship.


Joseph Oscar Lefebre Boulanger: I find
in "La Patrie's" issue of July 14, 1930. under the heading "Mr. Sauve answers Mr. Rinfret" at St. Placide, the following account of the hon. Postmaster General's speech:
Commenting on the crisis existing in this country, the speaker (Mr. Sauve), stated that the government must bear the responsibility of its policy. Answering Mr. Pouliot, the member for Temiseouata, who stated, a few days ago, that the low prices prevailing on butter were due to speculation, Mr. Sauve inquires why the government does not remedy such a situation and protect the farmers.
At St. Augustin, according to "La Patrie" in its issue of July IS, 1930, Mr. Sauve refers to rural questions in the following terms:
Mr. Sauve endorses the policy of a full indemnity for full bred or crossed cattle slaughtered by government officials pursuant to their tuberculine test policy. However, he prefers that, previous to having recourse to such means, immunization should be resorted to, in other words that cattle be treated instead of slaughtered immediately.
We should have been delighted to hear the hon. Postmaster General, who posed as the champion and guardian of the interests of farmers, in the 1930 election, discuss, in the house, the tuberculine test and immunization question of cattle, however he took great care not to do so. At the St. Eustache meeting, on July 20, 1930, our hon. friend broached the subject of Canada's participation in the Empire's wars, and pledged himself not to be the accomplice or the enemy of his race,

neither at Ottawa nor anywhere else. The report of this speech fills two or three columns; I shall not take up the time of the house to read it, but I shall add that after these pacifist statements of our hon. friend the platform collapsed. That topped the climax.
I closely followed, the other evening the speech of the hon. Postmaster General and I wondered what excuses the government could invoke for its negligence towards the Quebec farmers; I wondered what reasons they could give for the indifference they show towards the interests of the farming classes in Canada, had they not the Quebec government and Mr. Tasehereau to fall back upon. Our hon. friend the Postmaster General, with his inoffensive and kind look is a cunning gentleman, he knows how to change the subject in order to avoid an embarrassing question or to turn a difficulty; he thus endeavours to change the discussion to the Prime Minister of Quebec and the latter's government.
I closely followed the excuses he made so as to avoid making a frank and clear statement with reference to a bonus on butter and farm products exports. To my mind, the excuse made by the hon. Postmaster General is quite a childish one. If it is a sound measure, it is so independently of the views of the Hon. Mr. Tasehereau or his Minister of Agriculture. However, I listened to the hon. Postmaster General state, the other evening, with much candour: "If we do not grant an export bonus on butter and other farm products, it is because Quebec has not requested it, it is because the Quebec Prime Minister and his Minister of Agriculture opposed this measure."
First, this statement must be substantiated. However, were it true, since when does this government await, in order to act, that the Quebec government communicate its policy; since when does this government await, in order to introduce a measure, that the Quebec government requests it or any other provincial government? If this bonus is in the interest of farmers, not only of Quebec but of the whole of Canada, this government should itself take the lead in introducing such legislation without waiting for a request from outside. It is, moreover, the first time that I hear a member of the Dominion government state that their policy on a question which interests Canada depends upon the wishes or views of a provincial government.
The hon. member also referred to his statement during the 1931 provincial election with reference to the bonus on butter exports. He contends that he simply stated that the Dominion government would readily consider the question should the Quebec government

Supply-Secretary oj State
make such a request. Well, sir, let me inform the Postmaster General that what is needed at present, what the eastern farmers and those I represent request are not tedious speeches but action. Moreover, the minister was more emphatic in 1931, in the course of his campaign than he was, in the house, the other evening. As evidence, I shall quote a statement he made at a meeting held at St. Eustache, as reported by "La Patrie," in its issue of August 10, 1931, under the heading "Mr. Jean-Paul Sauve promises an inquiry in connection with the Beauharnois Water Power Company."
Hon. Mr. Sauve: When the famous butter question came up, the Bennett Government decided to put an end to this avalanche of New Zealand butter. If the low prices on butter still prevail to-day the Liberal government is to blame. The moment our government assumed power, it cancelled the New Zealand treaty. We promised a bonus on butter, we shall keep our word. The Liberals contend that this measure is absurd. If the Conservatives win the election in Quebec, you may rest assured that you will have it. I am aware that Mr. Bennett" favours such a policy as does Mr. Camillien Houde.
I suppose that there were at the meeting sceptical people who, having heard, in 1930, the pledges of the Postmaster General, had their doubts about the new promises, which were now made in 1931 by the hon. Postmaster General, so turning towards these sceptics, he said:
Remember that it was a Conservative government which, the first, granted a bonus on all Canada's exports.


Edgar Nelson Rhodes: Will the hon. gentleman be able to finish before six o'clock?


Joseph Oscar Lefebre Boulanger: I am afraid not. I have a few more observations to make.


Edgar Nelson Rhodes: Then in view of the fact that we are not proceeding with the budget debate this evening, would the hon. gentleman move the adjournment of the debate?


Joseph Oscar Lefebre Boulanger: I shall be very glad to do so.
On motion of Mr. Boulanger the debate was adjourned.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock. SUPPLY


DEPARTMENT OF SECRETARY OF STATE
[Stage Direction]
The house in committee of supply, Mr. Hanson (York-Sunbury) in the chair. '
41701-141i
Civil Service Commission-salaries,' $204,930; contingencies, $67,000.
Hon. C. H. CAHAN (Secretary of State):: For 'the purpose of securing this vote I represent the Civil Service Commission in this house. In view of the fact that the Civil Service Commission and the administration of the Civil Service Act are being investigated by a special committee, and as the house will have full opportunity when that report comes in to discuss civil service matters, I should like, if possible, to have this vote passed without very much discussion. While the matter is under consideration before a special committee I do not think it would be expedient for me, representing the Civil Service Commission, to enter into a discussion of its operations.


Mr. VENIOT:: I do not wish to delay the estimate at all except to say that I think the minister should have deferred consideration of this item dealing with the Civil Service Commission; for it is not proper that we should discuss a matter that is now under investigation by a committee of this house.


Edgar Nelson Rhodes: The hon. member would
not deny them their salaries?


Peter John Veniot: Would that be denying
them their salaries?


Edgar Nelson Rhodes: No, because one-sixJth has already been voted.


Peter John Veniot: If it would, I would not
delay the passage of the item, but under the circumstances I think the item should stand.


Charles Hazlitt Cahan: If that is the view of the
committee, I shall follow the suggestion of my hon. friend from Gloucester. But it is clear that on the report of that special committee there will be ample opportunity to discuss every phase of it. I should like to have the vote passed, but if objection is made-


Peter John Veniot: I did not put it in the
form of a serious objection. If the hon. Secretary of State will assure us that we shall have ample opportunity to discuss all phases of the question when the report is before us-


Charles Hazlitt Cahan: Quite so.


The CHAIRMAN (Mr. Hanson, York-Sunbury) :: Shall the item carry on that
understanding?


Mr. COOTE :: At this end of the chamber, Mr. Chairman, it was impossible to hear what the understanding was.
Supply-Secretary of State


Olof Hanson: The understanding was that if
this item carries there will be full opportunity when 'the report of the special committee is before the house to discuss any matter that might properly be discussed under this item.


Peter John Veniot: And all phases of the
question.


Olof Hanson: And all phases of the question.


[Stage Direction]
Item agreed to.
Public Archives-salaries, $90,630; contingencies, $13,500.
Mr. STEWART (Edmonton):: There is a
very substantial reduction. Is the staff in the archives being cut?


Charles Hazlitt Cahan: The late Doctor Adam
Shortt, who held an important position in the archives in a consulting capacity, and wTho received a very considerable salary, was removed by death during the year, and we have not as yet filled the position. In addition, Mr. Smith, who was the assistant deputy archivist, has also died, and we are not at present filling his position. There have been a number of minor changes. There are two clerks, grade 2, whose positions we are not filling for the present; also the position of secretary to the executive in the archives, and a departmental librarian. These have all been removed by death or by reaching the age for retirement. I thought in view of the existing conditions and the ability of the present staff to carry on, it was expedient not to fill these positions for the present, and that has led to a considerable reduction in the appropriation.


Mr. BROWN:: I presume that the minister appreciates as we all do the importance of the work of the public archives. It would be very undesirable that it should be neglected in any way, as it is one of the most necessary works to be carried on under the government.


Charles Hazlitt Cahan: So far as the work of the
Archives branch is concerned it will be carried on with full efficiency, but the publications which we have been putting out from time to time may be delayed for a year.


Mr. WOODSWORTH:: May I ask if anyone is carrying out the special work upon which Doctor Shortt was supposed to be engaged for the last few years?


Charles Hazlitt Cahan: For the last few years
Doctor Shortt was engaged in compiling an index to certain important documents which had been acquired in England for the archives.

That work was pretty well completed. As a matter of fact, a year ago I would have retired Dr. Shortt except that for a considerable number of years he had been a very efficient employee of the government and had rendered great service to Canada, and I thought that under those circumstances I should keep him on until he asked to be retired. Less than a week before he died I had a conversation with him, and he told me that he would like to remain on for another year, although he had reached the age limit. I was very sympathetic to his request, and had an order in council passed extending his time for a year beyond the age limit; but he passed away very suddenly.


John Livingstone Brown: What is the age limit?
Mr. CAHAN; Seventy.


John Livingstone Brown: Would it not be desirable
to pursue the same policy with regard to the other officials of the archives?-because there are very few men who have been trained to do that kind of work.
Mr. 'CAHAN: Those connected with the archives who have reached the age limit, so far as possible I have kept in their present positions. The Dominion Archivist, Doctor Doughty, has given long service, and since I have been administering this department I have secured two extensions of time for him because he is known to be very efficient indeed. The time will come, of course, when new appointments must be made. My own personal opinion is that we can eventually secure the services of some one, possibly not as efficient as Doctor Doughty, to deal with the matter of maintaining the archives. Really what the department will require is an efficient financial administrator, who should have about him men with technical and expert experience in the matter of archives.


James Shaver Woodsworth: There are, I believe, a large number of university men doing research work in the archives. Will the cutting down of the library staff make it more difficult for them to carry on their work?


Charles Hazlitt Cahan: Not in the slightest degree. Each one who comes from a university to make investigation at the archives is given a separate desk, and there are all the clerical conveniences necessary for assistance in the work. That is not diminished in any way.


[Stage Direction]
Item agreed to.
Secretary of State-salaries, $316,818; contingencies, $68,280.
Mr. MACKENZIE (Vancouver):: Is there any particular item in the minister's depart-

Supply-Secretary oj State
ment on which we may discuss war reparation claims?


Charles Hazlitt Cahan: Yes. I am bringing down a supplementary estimate, as is customary each }rear, for payment of reparation claims, and that will afford full opportunity for discussion of the subject. It is on that item that discussion has taken place in previous years.


George Gibson Coote: Is any action contemplated by the minister's department to maintain better control over the issuing of charters to corporations to see that the capitalization of the companies bears some relation to the real assets behind them?


Charles Hazlitt Cahan: Since I have been administering the department, close supervision has been exercised over the granting of charters, and I have not received or heard any complaints since I undertook its administration. Every charter is carefully examined, and large powers which were previously given to companies are no longer granted.


Ian Alistair Mackenzie: Can the minister give any indication as to when the supplementary estimates will be down with regard to reparations?


Charles Hazlitt Cahan: I would suggest that the Minister of Finance answer that question. I have put in my estimates to him, and I think just as soon as we complete certain business now before the house they will be brought down.


Mr. GARLAND (Bow River):: In his statement the minister led the committee to infer that the charters now issued were subject to some restrictions in comparison with the old charter forms. What is there in the new charter forms that was not in the old type granted toy the department?


Charles Hazlitt Cahan: Perhaps the hon. gentleman is misconstruing my remarks. I said we have made strict personal supervision of all applications for charters, and have dealt with them on their merits. Our object has been to restrict the charters granted on these applications to those powers which are really essential for carrying on the business contemplated by the applicants.


Edward Joseph Garland: Mr. Chairman, the minister distinctly said in his first statement that the powers granted now were not as wide as those formerly granted. I am anxious to find out what powers have been withheld.


Charles Hazlitt Cahan: If the hon. gentleman would put his question in a different form I could
answer it; I cannot answer that general question. All I say is that every application for a charter is examined and investigated very strictly, and if the applicants seek powers beyond what we deem necessary for the purpose of carrying on the business contemplated, we restrict the powers granted very much indeed as compared with the practice in former years. That is a matter of personal supervision and investigation dealing with each individual application as it comes in.


Edward Joseph Garland: I am
anxious to find out what difference there is to-day in the granting of these charters. The minister distinctly said that the charters granted to-day do not have as wide powers as was the case formerly. What did he mean by the "large powers" formerly granted that are not granted to-day?


Charles Hazlitt Cahan: I thought I had explained
it three times. If the hon. gentleman is accustomed to dealing with powers granted to companies I think he will easily perceive what is meant. In order to answer his question I would have to take each application that has been before me since August, 1930, deal with that application on its merits, and show what powers were applied for and what granted. [DOT]


Edward Joseph Garland: Not at all; just give us one illustration.


Mr. CAYLEY:: I see in some cases there has been an increase. How is the total decrease of $53,000 odd arrived at?


Charles Hazlitt Cahan: If the hon. gentleman will look at page 96 of the estimates giving the details, he will see that formerly we had one head clerk receiving a salary of $3,000 ana one departmental librarian receiving a salary of $2,800; we have not filled those vacancies. Then at the foot of the page he will find the messenger service has been reduced, and that an allowance formerly given to the private secretary has been discontinued. The savings are represented by small amounts of that nature. We have refrained from filling vacancies which have occurred in order that we might keep down the gross amount of the appropriation. I have done what one would do in his own business.


James Shaver Woodsworth: For years past
there has been-shall I say?-a tendency to make it rather difficult for aliens to become naturalized. During the depression a great many newcomers to this country have found themselves discriminated against; they are often the first to be turned off work, and in some instances pressure has been put upon the immigration department by municipalities
Supply-Secretary of State

to have them deported. I should like to have the Secretary of State make a statement with regard to the policy of his department in affording opportunities for these immigrants to obtain their naturalization papers.


Charles Hazlitt Cahan: In 1930, the first year I was in office, there were 10,906 certificates actually issued; in 1931 there were 14,790 certificates issued; so the statistics would indicate that we have not put the restrictions upon the number of certificates issued which many people in this country think we should place. As a matter of fact applications for naturalization are made to the county court of the district in which the applicant resides. If the court refuses to recommend the granting of the certificates, under the law there is no option allowed the Secretary of State to issue the certificates. In some cases, in which I have thought the full evidence was not heard or that due weight had not been given the evidence given before the county court judge, I have asked the under-secretary of state to refer the case back for rehearing in order that injustice might not be done. Apart from that, since I have been in office, after receiving the report of the county court judge ' we have made independent inquiry through officials, as far as we could, in order that we might test the character and standing of the applicant in his community. So many applications have been made that I have been told-though I have no accurate information- that in some instances the county court judge has heard forty or fifty applications in an hour, which would mean that it would be almost impossible in that time for him to make due inquiry. Where mistakes have arisen we have endeavoured to investigate very sympathetically, yet very carefully, in the hope of providing that injustice should not be done. I cannot say very much more in answer to the question of the hon. gentleman?


Mr. SPEAKMAN:: I was just going to ask a question along the same line, though perhaps from a different angle. During last summer, and especially in the months of July, August and September, I noticed that the number of certificates issued ran from 2,000 to 4,000 per month. I was going to ask the minister if in his opinion these increased numbers were due in part to the hard times through which we were passing and to the possibility that in regard to employment or to the obtaining of relief those naturalized citizens had a preference, and that consequently there was a greater rush than usual on the part of people who desired to become naturalized. I wonder if the minister could
'Mr. Woods worth.]
say whether that was one of the reasons for the increase during those months.


Charles Hazlitt Cahan: It is quite possible that this may have been one of the reasons, but to us in the department it seemed that one of the chief reasons for the increase was the adoption of the old age pension act by so many of the provinces. In the west, from which my hon. friend comes, it appears from the applications that settlers who have been in that country for ten, fifteen or twenty years without applying for naturalization, have been told on application for a pension that a pension could not be granted except through the production of a naturalization certificate. I think that has been one great incentive, especially in the provinces of the middle west.


Alfred Speakman: There is one other
question I should like to ask the minister, in connection with the explanation he gave with regard to the somewhat restricted powers granted companies applying for charters. I gathered the impression-and I wanted to make sure that my understanding was correct -that a company applying for a charter for the erection of a smelter, a saw mill, or something of 'the kind, would be held strictly to that undertaking. In the old days the powers granted were so wide in their terms that under such a charter the company might not only erect a saw mill or smelter but might build a railway, establish a line of steamships, obtain various concessions, in fact carry on almost any activity which might be desired. I understand that at present the minister is taking care that the powers granted are restricted to the one object in the mind of the company. Is that so?
Mr. CA'HAN:	As nearly as possible. In
reply to the other question I would direct the attention of the hon. gentleman to the fact that during the last two years throughout Canada an effort has been made to induce aliens resident in this country to apply for certificates of naturalization. I have noticed newspaper reports to the effect that hundreds of sermons have been delivered by clergymen, especially those of the United Church of Canada, advising their parishioners, who are aliens, to apply for these certificates. In the east there are certain associations, such as the Kiwanis clubs and others, who have been carrying on a great deal of propaganda along that line from day to day, and I am sure those educational efforts have induced a great many to apply for naturalization who had been negligent in not doing so previously.

Supply-Secretary of State


Alfred Speakman: I did not quite make
myself clear. The second question I asked had no relation to naturalization certificates; I asked if my understanding of the minister's statement with regard to the narrowing down of the powers granted to companies was correct.


Charles Hazlitt Cahan: I thought I answered that.
We try to keep them limited to the objects they really have in view.


George Gibson Coote: I should like to know whether any steps are taken to see that the capitalization allowed these companies will not permit them to issue a large amount of watered stock. I have in mind some very unfortunate cases in Canada, of companies incorporated under dominion charters which issued a great amount of watered stock that in some cases was held by our life insurance companies, and which proved to be almost worthless. I should like to know if the minister can assure the house that action is being taken by his department at this time to see that the capitalization of many of these companies applying for charters is not such as to permit them to issue watered stock.


Charles Hazlitt Cahan: I can only say that we do
examine these applications strictly, and we endeavour to keep the capitalization within reasonable limits. But after many years of experience in the organization of companies, from the legal point of view I must tell the hon. gentleman that as yet I have never seen a restriction on stock issues that I could not find a very effective and legal way through or around. Mere statutory enactments are very inefficient in that respect.


Mr. GARDINER:: The minister, speaking
from his experience, said that it was impossible to restrain companies from issuing watered stock. Does he mean that the department of the Secretary of State is impotent to control such matters?


Charles Hazlitt Cahan: The Department of State
carries out the law by careful investigation and supervision. Outside of that the department has really no authority; it does not make the law. My suggestion to the hon. gentleman was that what is necessary is to see that no large powers are given in that respect under the law. Nevertheless, those who are astute in such matters can circumvent the law very readily.


Robert Gardiner: In view of the further
answer the minister has given, to the effect that so far as the present law is concerned it does not give his department power to control
the capitalization of these companies, has the minister given any consideration to the possibility of amending the Companies Act so that that power shall be in 'the hands of the Secretary of State, to see .to it that no watered stock shall be issued as has been done in the past? Is that contemplated?


Charles Hazlitt Cahan: If you will allow me to
make an egotistical answer, were I to continue for the next half century as Secretary of State, I might do that while I could administer the act; but I do not think I could frame an act which would govern the conduct of my successor.


Some hon. MEMBERS:: Carried.


Robert Gardiner: I hope hon. gentlemen will nott try to rush this matter without giving it proper consideration. If that is what they intend to do, we can retaliate, although we do not wish to do that. Would it be possible for the minister to devise ways and means at least to curb the situation to some extent? The minister must be aware of what has happened in the last few years, and more particularly during the prosperous period. Many companies split their stock, no new capital being put in, and the people have to pay such commodity prices as will return dividends on that watered stock. Surely the minister is not so impotent in this respect that he cannot propose ways and means of curbing the situation.


Charles Hazlitt Cahan: I know of no way of curbing the gullibility of the small Canadian investor. If he will carefully examine the stock offerings made to him, I am sure he can put an end to that riotous dealing in stocks to which the hon. gentleman has referred.


Charles A. Stewart: But surely
the minister does not intend to say that it cannot be Stopped. Reputable firms in the past have gone out and sold watered stocks and ruined the purchasers of such stocks, and are we to sit by and say that we are utterly impotent to put an end to that sort of thing?


Charles Hazlitt Cahan: The very fact that so many are sent to gaol and to penitentiary for long terms shows that the law is being enforced at the present time. The enforcement of the law with respect to civil obligations is not, however, a matter for my department or for the government of Canada; it is a matter which is imposed by provincial law and within provincial jurisdiction. All I can do is to supervise carefully each charter granted in order to see that, so far as human foresight can foresee, these powers are limited so that
Supply-Secretary oj State

they cannot be used for fraudulent or illegal purposes.


Charles A. Stewart: Yes. But
my hon. friend will readily understand that notwithstanding anything the provinces may dp by setting up boards or commissions to investigate companies and to investigate the issuing of stock and its sale in the provinces, along comes a dominion charter covering all the provinces and providing no control at all. And these are the charters that are exploited all over Canada.


Charles Hazlitt Cahan: My hon. friend's opinion is
not in accordance with the view of the privy council, which says that dominion companies in the respect he mentions are controlled by the provincial authority and are under provincial jurisdiction. My hon. friend should carefully consider it. If he does, I think he will find that the charters which are now being granted are granted under, I do not like to say more careful supervision-I am not making any reflection on my predecessor- but under the supervision of one who has had, as I have had, an experience of thirty or forty years with company law. That experience enables me to assist the officials of the department in imposing restrictions which are beneficial and advantageous to the public. For instance, we found that dominion companies which had acquired surpluses weie selling out and then organizing again under practically the same names to carry on the same business, after having denuded the treasuries of such companies of a large part of their liquid assets. That sort of thing is not carried on now because that sort of company cannot secure a charter from the department under present conditions. I have no control over provincial jurisdictions. Not long ago a member of this house brought to my attention a certain company which had reorganized, and said that they had issued a lot of stock, watered and all that sort of thing, and blamed me for not exercising proper supervision. What I found was that the applicants for that charter had come to our department and, having failed to secure the wide powers which they had applied for, they simply went to a provincial secretary and secured from that provincial secretary's office all the wide powers which we had refused.


Some hon. MEMBERS:: Carried.


James Shaver Woodsworth: I do not know why these gentlemen to the right are so anxious to rush this thing through. In the meantime some of us want to learn more about it. First of all, I should like to know this. After

a charter is granted, what reports are made by the company to the department? Secondly, what supervision has the department over such companies?


Charles Hazlitt Cahan: Every company makes an annual return of its affairs to the department, and that is examined in the department and kept on file for inspection by the public. Outside of that, with regard to their operations, we have no supervision and control beyond seeing that the law is complied with in the respects I have mentioned.


James Shaver Woodsworth: I want to say a
word in support of the position taken by the hon. member for Acadia. Everyone, I think, must realize that there has been a great deal of fleecing of the public not merely by speculation in stocks, about which we have heard, but by the process known as the watering of stock, and I do not think things should be left in the hands of the minister in this regard. It seems to me there ought to be legislation. We may have competent ministers and less competent ministers, conscientious ministers and less conscientious ministers; but we ought not to depend upon the individual. Surely there should be some sort of legislation which would protect the public. The minister has said that you cannot protect people who are gullible. That is not quite fair to the public. The fact is that company operations and manipulations have become so complicated to-day that the ordinary man cannot begin to follow them. And there are a great many legal gentlemen in this chamber who perhaps do not follow them very closely, because when a particular matter comes under scrutiny-as for example, Beauharnois-we have endless controversy as to just where each party stands and what is the real situation. Under these circumstances it seems to me that there should be some sort of law which would protect the public.
May I give a simple illustration? If a milkman coming into town stops at a pump and fills his cans half full with water, he is liable to prosecution. We say he is selling watered milk, an inferior article. I suppose it is something like that we have in mind when we say that a stock is watered; yet the minister seems to be taking the ground that while the public can be protected from unscrupulous milkmen, it is impossible to give protection against unscrupulous promoters or manipulators of company stocks. I do not think we can properly take that position. Incorporation is a great privilege; it affords protection to a company, gives it a standing in the community and enables it to enjoy a certain confidence which otherwise would

Supply-Secretary oj State
not be reposed in it. Incorporation gives a company the right to transact business under certain conditions, and it seems to me that having those special rights and privileges conferred upon it, it should be under some sort of state supervision. I know the character of the reports which come in; I remember once or twice having to look up some of them, and I found they were of a perfunctory character; they did not go sufficiently into the business of the company to enable the minister and his officials to know just what the company had been doing and what its standing was at the moment. It may be that this would require much supervision, as in the case of insurance and loan companies; it might involve considerable expense, but if the companies receive incorporation they might be charged such fees as would ensure their being properly supervised.
I ask, as the hon. member for Acadia has asked: Is it not possible to bring before this house legislation which would do more than is being done to-day in the way of safeguarding the public interest? I do not think I need say to the Secretary of State that the public feels very keenly with regard to this matter. An effort has been made in at least some provinces to control companies in the interests of the public, and something of that kind should be done here.


Charles Hazlitt Cahan: There are laws which visit heavy penalties upon those who water or otherwise deal fraudulently with stocks. The same process of law which indicts and commits to gaol or punishes by both fine and imprisonment those who water milk, brings to the bar and possibly to the penitentiary those who illegally or fraudulently deal with stocks. Under section 120 of the Companies Act wide powers are vested in the Secretary of State, but they can be exercised only on complaint. For the first time in the history of this country I have brought this section into effective operation. No application has been made under that section without a complete and thorough investigation being made, and at times there have been exposures of dominion companies who were dealing fraudulently with their stock, their shareholders, or the general public.


James Shaver Woodsworth: I am not reflecting in any way upon the Secretary of State, but I would point out to him that while it is comparatively easy to secure a conviction against a milkman, it is very difficult for a man who has a few shares in a great corporation to set in motion the wheels which will 'bring the big culprit to justice.


Charles Hazlitt Cahan: In that I differ entirely from the hon. gentleman. His statement simply shows the great abyss which exists between his attitude towards the administration of the law and my own.


Robert Gardiner: In replying to my previous question, the minister evidently did not get my point. He made the statement that his department was doing everything in its power to see to it that the small investor was protected and that any company violating the law was brought to justice. I have before me a publication which shows the investments of the Sun Life Assurance Company-


Charles Hazlitt Cahan: The Sun Life Assurance Company does not come under the jurisdiction of the Secretary of State.


Robert Gardiner: I find that that company has invested in Imperial Oil Company Limited, stock to the exent of 655,500 shares, at a purchase valuation of $7,672,276.78. The present valuation of these shares is given at $5,244,000, showing a net loss to the Sun Life company of $2,428,276.78. The Secretary of State must know that a few years ago the Imperial Oil company split its shares four to one. What has the minister done with that company in regard to that question? Did he take any action? Would he take any action with respect to any company which followed that same course to-day?


Charles Hazlitt Cahan: The matter of the Imperial Oil Company has not been brought to my notice.


Robert Gardiner: I bring it to the minister's notice now.


Charles Hazlitt Cahan: I see no reason in the world, morally, legally or otherwise, why a company with shares valued at $100 should not split them into four shares valued at $25.


Robert Gardiner: The minister is begging the question.


Charles Hazlitt Cahan: I am not begging the question, I am looking it straight in the face. Furthermore, I say to the hon. gentleman that if he will take the stocks and bonds outstanding in this country, dominion, provincial, municipal, town and county debentures and the stocks of the various companies as they were valued in 1929, he will find that to-day the average value of these bonds and stocks is as 35 is to 100. There has been a tremendous loss, amounting to millions and tens of millions of dollars, in the value of the stocks of companies which have been honestly
Supply-Secretary of State

and efficiently administered. That depreciation in the value of these securities is not due to the splitting of shares nor is it solely due to the manipulations which have occurred in the stock market.


Robert Gardiner: The reply of the Secretary of State is simply 'begging the question. The minister has made the statement that because of the decrease in the value of stocks, the weighted value to-day is only 35 as compared with 100 previously. I ask the minister this question: Suppose the Imperial Oil Company had split its stock four to one and had not put in any new capital; suppose the International Nickel company had split its stock without putting in any new capital, had those stocks not been watered would they not have been worth more on the market to-day than they were worth before that action was taken?


Charles Hazlitt Cahan: The hon. gentleman is under an entire misapprehension with regard to watering. Take the Canadian Pacific Railway Company-


Robert Gardiner: That is a different thing.


Charles Hazlitt Cahan: In that instance one hundred dollars of stock represented over $100 of cash invested; 'tihe shares were split four to one and the par value of the present share is $25. Unfortunately it is selling on the market for less than that, but there is no watering in that transaction.


Robert Gardiner: The minister has put
up a big straw man and has knocked him down; that is all he has done. We know quite well what the Canadian Pacific did; they did exactly what the minister stated they did; that is to say, they took a S100 share and split it into four $25 shares. That is the face value of Canadian Pacific stock to-day. Their excuse, when itheir bill was before the railway committee for its endorsation, was that they wanted small investors in Canada to participate in buying Canadian Pacific stock in order that more would be held in this country rather than ouitside it. But to how many companies does that apply? The minister has mentioned the one company we know of, but what about the other companies: what about International Nickel, the Massey-Harris and all those other companies that have split their stocks without putting any more capital into them and have not split their Stocks in the way the minister has cited the Canadian Pacific as having done? The minister is sidestepping the issue, and so far as I can see he is not willing 'to tackle the problem as the people expect him to tackle it.


Edward Joseph Garland: I wish
simply most respectfully to suggest to the minister thait .this matter is really worthy of his serious consideration. Only the other day, in the special committee on radio broadcasting, Mr. Beatty, president of the company to which the minister has referred, proposed the creation .of a great private broadcasting corporation for Canada and suggested that the stock of that company might be held by various individuals and interests within the country, subject to certain restrictions. One condition he mentioned was that the stock should always be held by and be transferable only to Canadians, this Obviously being in order to maintain Canadian ownership. So Mr. Beatty was asked whether he would take any exception to the inclusion in the charter of a clause that would prohibit at any time in the future the watering of the stock, and he said no, he had no objection whatever. I should like to ask the minister two questions: Is there in existence to-day in Canada any law against Stock watering? When we say "stock watering," we mean that a company capitalized in the charter, say, at $2,000,000, issues and secures the subscription of just $1,000,000 in cash. That $1,000,000 is all it has and for many years it operates on that. It happens to strike successful days and the value of the stock on the gambling market advances. The proprietors of the concern then see an opportunity of skinning the public; so without adding another dollar of actual capital, they issue to themselves the balance of the authorized stock and in effect they create an artificial capital of $1,000,000 in addition to the actual capital of $1,000,000. Is there any law to prevent that, and if not, does the minister not think it is high time he provided such a law?


Charles Hazlitt Cahan: All I can say is that if that sort of transaction is carried out in any particular case and my hon. friend will bring the facts to the notice of the law officers of the crown, he will soon ascertain that there are such laws in this country; that that is fraud; that stock cannot be issued for nothing, and that those who do so are liable to be sent to the penitentiary. But I am not enforcing the criminal law of Canada. I am merely a humble secretary of state, the humble bobtail of the administration, attending as patiently as I can to the duties assigned to my department.


Edward Joseph Garland: Owing to the applause I did not quite catch the minister's reply. May I ask him to repeat his

Supply-Secretary oj State
answer to my question: Is there a law that will prevent the actual transaction that I have described?


Charles Hazlitt Cahan: I do not think there is any doubt of that.


Edward Joseph Garland: Will the minister tell us where it is?


Charles Hazlitt Cahan: My hon. friend should not ask me to name a particular section. Of course there is a law; the criminal law of this country applies. It is fraud to do that sort of thing and those who are indicted and found guilty of such fraud are sent to the penitentiary by the courts. I should like to refer hon. members to a recent case in England where, under a law similar to ours, Lord Kylsant, a prominent business man there, was sent to the penitentiary for improperly administering the affairs of his company.


Edward Joseph Garland: It is amazing that we cannot bring about a similar situation in Canada; the minister seems unable to do so, so closely do we copy conditions in the United States, with all the evils that follow such exploitation there. May I suggest to him that if such a law exists, it is high time that he enforce it. I remember only a few years ago in this very house a lengthy debate on the British Empire Steel Corporation, when members of both political parties agreed, and so stated, that the British Empire Steel Corporation, at that time and previously, had been watered to the extent of $50,000,000, if my memory serves me correctly. It happened that it was the Minister of Labour in the Liberal government of the day who made this statement in the house. Surely some action could have been taken at that time, and hon. members ought not to be asked or expected by the minister to produce before him isolated cases. They are all around him; it is public knowledge that this sort of thing is being done. Debate aifter debate has taken place in the house on it. Hardly a year has passed without illustrations being given from this corner and supported by members in other parts of the house. I think the minister is hardly seized of the importance of doing away with this evil.


George Gibson Coote: One of the greatest evils in
commercial life in this country is the watering of stocks and their sale to the public by financial pirates. I should like to bring to the attention of the minister the case of the Canada Power and Paper Company. Has the Secretary of State power to investigate the operations of the men who formed that company and to inform the committee just what
was done, how it was done and who got awav with all the profits that should have gone to those who bought the bonds, and who. as the saying goes, were left holding the bag? Last year I put on the order paper a question asking for the amount of securities of the Canada Power and Paper Company and its subsidiaries held by life insurance companies. It was found that $10,000,000 of premiums paid by the people of Canada were invested in securities of this company and its subsidiaries. I believe a number of good paper companies in this country were ruined by the men who formed that organization. I do not knew whether it had a dominion charter or not. Would the Secretary of State inform us whether it had, whether anything was done in regard to the matter, and if not, whether anything can be done in the future? That is the important question.


Charles Hazlitt Cahan: I do not know of any way
by which you can prevent dishonest men from committing fraud so long as they may do it and still keep out of the penitentiary. It is not my duty to administer the criminal law. I told hon. gentlemen earlier in the debate that if a proper representation is made to me with respect to frauds committed by any company which has obtained a charter under the Companies Act of Canada, provision is made there for investigation, and since I have been in this office, for the first time in the history of Canada, such investigations have been carried out. They have cost large amounts of money, but they have shown that very grave frauds have been perpetrated, and now in the courts those who perpetrated or are alleged to have perpetrated those frauds are being brought to justice. If the hon. member has any case in mind and will bring it to the attention of the Secretary of State, I shall look into the matter carefully and advise him as best I can as to how those guilty of frauds may be brought to justice. But, as I say, I am not administering the criminal law of the country. I have no supervision over the people's morals, nor does it fall to my department to deal with such crimes as are committed. My time is occupied nearly sixteen hours out of every twenty-four in the performance of such duties as are committed to my care.


George Gibson Coote: What we want in this country is a law to prevent these men watering these stocks. It has been done openly by, I think, hundreds of companies in Canada in the past.


Charles Hazlitt Cahan: I do not wish to be discourteous to my hon. friend, but when he
Supply-Secretary of State

talks as he is now doing about watering stocks I begin to wonder as to his knowledge of the matter. It is not the watering of stock that is the chief evil in this country. That is a minor evil, and sometimes when people complain about it without any knowledge of the facts I think they ought to be investigated to find out if they are afflicted with water on the brain.


George Gibson Coote: I would ask the hon. gentleman to withdraw that statement.


James Shaver Woodsworth: I do not know
whether I am one of those whose brains ought to be investigated;, it is quite possible a good many of us may be in that position, but we happen to represent here a considerable number whose brains are of pretty much the same calibre as ours, and we confess quite frankly that we are at an utter loss to know just what to do when we come to a matter of this kind. The Secretary of State rather suggests to us that this whole matter should be left to the courts to decide, but the point we are trying to make is that there is no legislation at the present time adequate to deal with a situation that actually exists. Everyone in this house knows perfectly well that it is next to impossible for a private member to introduce legislation on a matter of this importance with any hope that it will be passed. We cannot even be sure that it will get to a committee; some of us indeed are doubtful whether a bill we sponsor will even get a chance for first reading. Under these circumstances it seems as if we must lay upon the government the responsibility of introducing legislation along this line, and I feel that the Secretary of State, who has to deal with companies, is the one to whom we ought to look for action. Further than that, it is all very well for the Secretary of State to imply that the same kind of action is possible in the big cases as in the small cases, but I respectfully submit that in practice that is not so. It is not possible for a small shareholder to engage a lawyer who will stand any chance whatever against the legal talent that may be engaged by a great corporation. The poor man who has only a few dollars behind him cannot possibly go into a fight against a great corporation, and I do not think it is clarifying the situation for the Secretary of States to suggest that his idea and mine of law are abysmally apart. I do not think that that helps us very much. I want to bring a matter to his attention for the sake of illustration. I happened to find among my papers an editorial from the Manitoba Free Press referring to a particular matter which illustrates the fog in which the

public now finds itself; and if some of us here need our brains examined, I presume the editor of the Free Press also needs his investigated. This editorial-I have not the date-says:	.
When the searchlight is finally turned upon the many deals and transactions that lie in the wake of the moribund Canada Power and Paper corporation, it must be hoped that special attention will be given to the details of the spectacular Anticosti purchase which created a flurry of public attention in the summer of 1926. Nine millions of dollars of the public's money were paid for the securities of the Anticosti corporation which appeared to be backed by the strongest kind of pledges of three important paper companies. That money has in part disappeared, and the Securities Protective Committee contents itself in its circular letter by saying: "As a result of this acquisition by the new company of the undertakings and assets of all companies concerned . . . the Anticosti stumpage agreement will be automatically extinguished."
This is not good enough. Holders of the old 61 per cent Anticosti bonds are to be given new 5J per cent bonds. They therefore, lose substantial amounts of their capital. Holders of the 7 per cent Anticosti preference shares are to get one and a half shares of new common stock for each share previously held. They lose much of their capital, and must accept also junior securities. They are entitled now to the full truth of the Anticosti deal. They must be at least permitted to learn why they have lost their money. Surely this is not asking too much.
The editorial then goes in some detail into the history of the company and its operations, and concludes:
It is now time to throw light upon it. The public is entitled to know, for instance, how much was actually paid for Senator Menier's game preserve. It is entitled to know how much water was poured into the securities issued rvith the island as security. It is entitled to know the costs of cutting pulpwood there. It is entitled to learn whether or not the men who swung the deal exercised sound business judgment. It must know if they are safe persons with whom to invest money in the future.
The time has come for a thorough housecleaning in our financial methods, and the Canada Power and Paper collapse is an excellent reason for beginning it.
That is just one illustration of what is taking place right along. What the public wants to know is what is to be done about it, and we ask the Secretary of State, who grants the charters, whether there is any way by which the public may have some idea whether or not the stock of a company so chartered offers a safe investment. I do not think that we are unreasonable in urging him to consider bringing down legislation that will do something in this regard.


Charles Hazlitt Cahan: I do not wish to prolong the discussion, but there is legislation at the

Supply-Secretary oj State
present time which provides a certain procedure for investigation. For instance, during the past year I instituted an investigation which was very extensive indeed with respect to one of the largest operating corporations in Canada, the Yukon Consolidated Gold Corporation, with a paid-up capital of S6,000,000. I would make exactly the same kind of examination if it were a capital of 86,000 if application were made to me. The public know very well where the facts can be ascertained. If the Canada Power and Paper Company has been incorporated under the Companies Act, then the documents will be on file with reference to the acquisition of the properties for which stock was issued. The facts can be easily ascertained. The later events are found in the court, because if my memory is correct the court approved of the compromise arrangement to which the editor of the Free Press objected in the editorial which my hon. friend has just read. The whole matter was before the court and is a matter of court record; there the real facts can be obtained. But I know of no way in which the Secretary of State can supervise the purchase of, say, Anticosti island, or can properly appreciate the price which should be paid for it. I have no interest in the matter, but men who are competent to judge at the time the land was purchased told me that it had been purchased much below its value, that it was a most valuable acquisition, and that the revenue from its timber and other resources would bring in ample revenue. They told me that they had had its timber resources inspected by very competent experts and that they had the utmost confidence in the undertaking. I know friends of mine invested many thousands of dollars, believing that the reports of those experts would ultimately be realized. Apart from fraud, I know of no way of protecting men against making purchases of timber or mining or other natural resources which in the future may not realize the exaggerated hopes entertained at the time of the purchase. But if any person will allege fraud in regard to the Canada Power and Paper Company, and apply to the Secretary of State in the formal manner provided, I can, if it is incorporated under the Companies Act and unless the company is now out of existence, order a most complete inquiry and investigation with respect to every fact. Time and time again I have so advised men who have made complaints to me. I cannot investigate and imperil the financial stability and credit of companies which are being honestly administered, simply because some newspaper makes reflections upon them; but if fraud is alleged,
then there is a way under the procedure laid down in the Companies Act to conduct such investigation. In every case where applications have been made to me an investigation has been conducted.


Mr. SPENCER:: A few years ago several
of the provinces sought federal legislation with the aim of meeting this difficulty of watered stock-otherwise called "blue sky" legislation. Their position was that without concurrent legislation by the; parliament of Canada they had no control over companies operating under federal charters. What help or encouragement did the provinces get from the Secretary of State in regard to the legislation they proposed?


Charles Hazlitt Cahan: They got just as little
encouragement for the proposition they made to me as they obtained from my predecessor. They asked me to introduce a bill which would transfer certain matters out of the federal jurisdiction into the jurisdiction of the provinces. I told them the proposal was ridiculous, and that no bill that I might introduce could transfer legislative jurisdiction from this parliament to the provincial legislatures. But I also told them that, as soon as they might reasonably desire, the Dominion government, through the Prime Minister, was prepared to call a conference of the representatives of the provincial governments in order to discuss constitutional amendments by which the jurisdiction might be vested in the parliament of Canada in respect to certain matters and in the provincial legislatures in respect to other matters. That was the only answer I could possibly give them.


Henry Elvins Spencer: I am glad the Secretary
of State has told the committee that the Prime Minister intends to take this matter up with the provinces at some future date. Has the minister had many complaints during the last two years with regard to watered stock?


Charles Hazlitt Cahan: We made the most complete investigation, covering fifteen months, in the case of one company, in the course of which we brought witnesses from England and from the ends of Canada to give evidence before a commissioner appointed for the purpose. We are carrying on these investigations from time to time in the department. We do not publish the results in the newspapers, although they are given to the newspapers, and sometimes short memoranda appear with respect to them.


Arthur-Lucien Beaubien: Has the minister investigated the collapse of the Swedish match
Supply-Secretary of State

trust and its relation .to any stock transactions affecting any Canadian company? If not, is it the intention of his department to do so?


Charles Hazlitt Cahan: The hon. gentleman should
advertise his question in the amusement columns of the newspapers.


Some hon. MEMBERS:: Oh, oh.


Charles Hazlitt Cahan: I have no knowledge of any Swedish match trust being incorporated under the Companies Act of Canada.


Arthur-Lucien Beaubien: I think my question is
perfectly proper. I have read in the newspapers that investigations of the Swedish match trust are being conducted all over the world, and I am sure there must be some Canadian transactions connected with that trust. I am putting my question in all seriousness. I think when a fair question is asked the minister should give a decent answer, even though he is getting like the Prime Minister-vexed at everything.


Charles Hazlitt Cahan: I am never vexed.


Arthur-Lucien Beaubien: When I ask a question
I do not want to be insulted by the Secretary of State.


Charles Hazlitt Cahan: If the hon. member thinks
I insulted him I most humbly apologize. I was not vexed when I made the remark to which my hon. friend takes objection, for I am never angry; but I am not aware that the Swedish match trust is organized under any Canadian charter.


Arthur-Lucien Beaubien: I accept the Secretary of State's apology, Mr. Chairman.


Jean-François Pouliot: It is gratifying, Mr. Chcdr-man, to know that this session private legislation with regard to companies is very limited. When some companies come to parliament with a private bill there is often a nigger in the woodpile, and that is why private bills must always be very thoroughly scrutinized. This applies not only to private bills presented to this parliament, but also to similar bills presented to the provincial legislatures. As I say, it is a good thing this session that we have very little private legislation on the order paper. As federal and provincial company law differs in many respects, it is a great mistake to have companies chartered both provincially and federally. The promoters of such companies should make their choice at the time they organize, in order that the public may know whether the companies are provincial or federal in character. This is of the utmost importance, and I cannot understand
[Mr. Beaubien.J
why a company should be acting under the provisions of both federal and provincial statutes. I do not say this with regard to the present minister; I say it objectively and not subjectively, but when there is some trouble in cases where companies have obtained powers both federal and provincial, at times we are told by the officials of the company that it is a provincial concern, but when we communicate with the provincial secretary we are told that it is a federal concern. No one knows where he is with such hybrid organizations. This is why I respectfully suggest that the Secretary of State be very careful about granting charters to companies which already have been organized under provincial laws. In some cases there are regulations with regard to reports and other matters, such as the number of directors, the capital subscribed and so on, which it is impossible to get but which are essential when we have to deal with these companies.


George Gibson Coote: I feel that some of the suggestions which have been made to-night have gone over the minister's head. Possibly they have entered his mind, but I do not think so. I believe the minister as a rule, when he understands a question, is very gentlemanly and courteous and ready to answer, so I think he must have misunderstood some of the matters which have been brought up. I just want to direct his attention to the fact that, in connection with the Canada Power and Paper Company the Financial Post of September 26 last stated that the security holders' protective committee had a plan for the reorganization of the corporation which would cut its capitalization from $103,000,000 to $52,000,000. The article concluded by saying that with the final winding up of the company there would pass out of existence an enterprise which was not a credit to the Canadian corporation field.
The suggestion which I was trying to make to the minister was that if proper supervision was exercised over the capitalization of these companies before they started operations it would save a lot of grief to the investing public in Canada, and would help maintain the confidence of Canadian investors in Canadian corporations. It is very unfortunate that investors in Canada should be compelled to run the risks they do run at present because of what seems to be a very decided difference of opinion between the federal Secretary of State and the different provincial governments, each wanting to .have control of the issuing of charters. I would simply say to the minister that the dominion should refuse incorporation to companies who ask for too large a capitalization for the assets which they possess.

Supply-Secretary oj State
If provincial governments want to give charters to companies which are improperly financed and capitalized, leit the provincial governments take 'the responsibility for so doing. As far as the dominion is concerned, it is time we exercised some supervision, and if necessary introduced legislation which would give the Secretary of State power to supervise the issuing of capital or even debenture stock or bonds by these corporations. I do not think the legislation on the statute books to-day gives the minister the right to exercise that supervision which I think should be exercised, and I suggest that if he has not that authority under the present law he might very well introduce such legislation in this house. It is not open to any private member to do so, since it would involve the expenditure of money, so we can only urge this suggestion upon the minister.


Edward Joseph Garland: 
Charles Hazlitt Cahan: I can only tell my hon.
friend-


The CHAIRMAN (Mr. Geary):: Shall the item carry?


Some hon. MEMBERS:: Carried.


Henry Elvins Spencer: A few moments ago the
Secretary of State told the committee that one investigation with regard to watered stock was being made. He also said that if complaint was made by anyone with regard to watered stock, an investigation would be made. I did not want the names of the companies, but I wanted to know if a dozen or a score or more complaints had been made, *because from the way the public have been dealt with in the last two or three years it seems .to me they do not know they have the right and privilege to have inquiry made by the Secretary of State. I should be glad if the minister would tell the committee whether he has had any considerable number of complaints which would show that the public know of the privileges and rights which are theirs.


Charles Hazlitt Cahan: I can simply repeat what I said before, that since I came into office in August, 1930, we have made a very careful supervision of the terms of the charters issued. During that time only two complaints have been made to my office of the nature suggested by the hon. gentleman.


Henry Elvins Spencer: I hope that after to-night the Secretary of State will be pestered by complaints of those who have suffered from the effect of watered stock in investments.


[Stage Direction]
Item agreed to.
Patent record, $25,000.
Henry Elvins Spencer: Do the fees received from those who apply for patents meet the expenses of running the office?
Supply-Secretary oj State


Charles Hazlitt Cahan: I cannot at the moment distinguish between patents and copyrights, but the revenue is half a million a year and it goes into the consolidated revenue account. Therefore we have to ask for an appropriation from parliament for the expenses.


Mr. CASGRAIN:: Who is in charge of the patent office?


Charles Hazlitt Cahan: Mr. Richard, he has been there many years.


[Stage Direction]
Item agreed to.
International office for the protection of industrial property, international copyright union office and union for the protection of literary and artistic works, $2,000.
Joseph Philippe Baby Casgrain: How is that money distributed? Is it paid in a lump sum or is it distributed to various institutions?


Charles Hazlitt Cahan: It is a contribution made by this country under the Berne convention. It has been outstanding for many years.


[Stage Direction]
Item agreed to.
Expenses under the Canada Temperance Act,
Mr. YENIOT:: Explain.


Charles Hazlitt Cahan: There are only three constituencies in Canada in which the Canada Temperance Act applies, but in case application is made for a repeal in any of these constituencies there has to be an election. Every year it is customary to put in the estimates an amount to pay the expenses of [DOT] such an election, although one is very seldom held.


Henry Elvins Spencer: Can the minister name the constituencies?


Charles Hazlitt Cahan: I know there is one in Quebec, Thetford Mines, and there are two others.
I shall have to ask the hon. gentleman to wait until to-morrow for the answer.


Alfred Speakman: I must confess to ignorance of the application of the Canada Temperance Act. In what way does it apply in certain isolated instances? Do those particular constituencies come under a federal act instead of under provincial legislation?


Charles Hazlitt Cahan: There was passed at one time an act known as the Canada Temperance Act, by which counties or constituencies, were authorized to adopt that act. It was adopted by many constituencies throughout Canada. Under the same act they could vote themselves out of its jurisdiction, and as the years went by the constituencies voted themselves out except in three specific instances. These are still under the act.


Alfred Speakman: I assume that this is what they used to call the old Scott Act. Are these particular constituencies, which must be within some province or other, exempt from the operation of the ordinary provincial legislation?


Charles Hazlitt Cahan: I shall have to refer that question to the Minister of Justice.


[Stage Direction]
Item agreed to.

[Stage Direction]
Salaries, $260,766; contingencies, $30,000.
James Shaver Woodsworth: I should like to have a statement from the minister with regard to the reported influx into this country of a considerable number of boys, I think it is some five hundred. How many are being admitted, and w'hy should they be admitted under the conditions which now exist in Canada?


Hon. W. A. GORDON (Acting Minister of Immigration):: The newspaper reports with respect to the admission of boys-I must make it plain that they are British boys- cast no reflection at all upon the policy of the Department of Immigration. I think I can probably satisfy the hon. member by saying that as severe a restriction has been placed upon migrants coming to Canada as has ever been enforced by the department. For many years associations have been established for the purpose of bringing people to Canada from other lands. These associations have grown up and have spent large amounts of money and there is no doubt that from time to time they have brought people to this country who have proven to foe very acceptable. These associations have not confined their activities to any one race, but mainly have had to do with British peoples.
In connection with the matter referred to by the hon. member, I will say that the provinces have been consulted with respect to what migrants they could absorb, what prospects would be offered to migrants for getting on in the world, or the possibility of their contributing something to the settlement of our vacant lands. The British boys referred to by the newspaper articles are being brought out at the request of the province of Ontario. I interviewed the various agencies and pointed out that we were passing through a time when these boys might meet with obstacles which would give them a good deal of trouble, that perhaps they would not have the same chance as the immigrant who came to Canada a few years ago, and under these circumstances immigration into Canada should be restricted until such time as the outlook might be more

Supply-Immigration
attractive. These various associations embrace the United Church of Canada, the Roman Catholic church and other bodies, and their activities have been known to the department. They first asked for 800 boys, but I stipulated that the maximum movement should be 500, and it will not reach anything like that number. I was satisfied with their assurances that these boys would take up vocations provided for them by the different asso-v iations and would not be a charge upon the country. I am not persuaded at all that Canada is at a point where she can refuse admission to any desirable people, particularly British people.


James Shaver Woodsworth: It is hardly necessary to point out that there are thousands of our Dwn boys just leaving public and high school who find it impossible to dbtain work. They are qualified for farm, office or factory work, but they cannot find openings. It seems to me a very doubtful policy indeed to permit boys from any other country, Great Britain included, to come to this country to take work away from our own Canadian boys, who will then have to walk the streets.


Henry Elvins Spencer: What ages are these boys?


Wesley Ashton Gordon: Mostly between the ages of sixteen and eighteen.


Edward Joseph Garland: Mr. Chairman, I want to protest in as vigorous a manner as ever I have done in this house against the bringing in of these boys. I have not the words at my command to express my utter disapproval of the policy of bringing teen age boys and girls to this country, particularly boys. Only the other day I happened to have the opportunity of studying a report of the Canadian Council on Child and Family Welfare and I find that in the city of Toronto when the single unemployed were registered during the first great registration, some 12-5 per cent of the total single unemployed were boys of teen age, between sixteen and twenty years, the majority of whom were immigrants who had been brought to this country within the previous few years. That condition in the city of Toronto must reflect the general state of affairs throughout the country and should justify the complete abolition of this policy. The minister will find in every principal city in Canada orphan homes out of which numbers of boys and girls who have reached the age when they are required to leave the institution are being dismissed yearly. These boys and girls cannot be taken care of, yet we proceed to pour in hundreds of other boys from the old country. I w'onder if the minister realizes
that there is hardly a province which does not require more and better facilities for the taking care of our own boys and girls?
I think the policy of bringing these young people into this country to work for farmers is nothing short of brutal. Case after case can be cited where extreme hardship has resulted, and the mere excuse, as will doubtless be provided by the minister, that there is inspection, is not sufficient. When an inspector visits a farm he cannot expect a boy who has to live with the farmer to tell the truth if there is any danger of the farmer finding it out. The result is that these boys run away, get into the cities, and add to the .present unemployment problem. I have protested against this matter at every opportunity, and I repeat my protests to-night and ask the minister to reconsider his stand on the matter.


Joseph Philippe Baby Casgrain: Mr. Chairman, I have
no desire to prolong this debate, but since the government now in power, through the mouths of its representatives during the last elections, protested so strongly against the policy adopted by the former administration, I feel it my duty to protest against the policy adopted by the minister. It has been said throughout the country, and particularly in the province of Quebec, that the government which preceded the one now in office was responsible for the hard times and unemployment which existed, because of the fact that too many immigrants had been permitted to enter the country. I think it is my duty as a representative of the people of my constituency, and more especially voicing the sentiments of Quebec, to protest most strongly against the government allowing and helping these boys, even British boys, to come to Canada under present circumstances. There is nso doubt, from the figures that have been given by hon. members who have preceded me, and having regard to the conditions that obtain in the west and also in Ontario, that these young boys who have been allowed to enter Canada will not be a source of help, but in the course of a few weeks or the next few months, or perhaps in a few years, will, as has happened to others in the past, not find enough work to support themselves and probably will become public charges, of which under present circumstances we have already too many. We are told there is no place where our boys who leave college or their own homes, can earn their living; there is no chance for a boy from Quebec who goes to Ontario to meet his people, if he has any there, to find employment and earn his living; and yet we are allowing boys from the other

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side to come in. Even if they are good boys, nevertheless they become surplus labour in Quebec, Ontario and other parts of Canada to which they may drift in the future. I strongly protest against the policy of the present administration, which is lacking in its duty and not fulfilling the promises made during the last election, when hon. members opposite said that if they were returned to power they would see that the flow of immigration which was the cause of the present depression would be stopped.


Mr. EULER:: I should like to ask the minister as to the policy of the department with regard to a phase of the immigration question which has not been mentioned here to-night and which, as a matter of fact, is directly opposed to what might be called immigration. I refer to the subject of deportation. I am quite in accord with any policy that restricts, to the extreme, immigration to Canada at this time, having regard to the depression and the prevailing unemployment. But many deportations are made by the department, I understand at the request of the representatives of the municipalities. I offer no objection to the deportation of foreigners who are undesirable, but I should like to say a word on behalf of a certain class of people who came to this country in good faith, at a time when we wanted them to come, and who have been here perhaps only two, three or four years, not sufficiently long to qualify them for naturalization and citizenship. Some of them, through no fault of their own, though quite willing to work if employment can be obtained, have been placed in the unfortunate position of being deported. There are those who consider, I believe quite honestly, that a man who is not a citizen and who has become a public charge should be returned to the country of his birth. I am not quite in sympathy with that view. When men have come to Canada in good faith, perhaps at the invitation of the federal government; have taken employment, have conducted themselves properly, and would no doubt in due time, just as soon as possible, become Canadian citizens; and when, through no fault of their own but because of the depression that now reigns in this country, they lose their employment as many native-born citizens have done, we should apply the greatest judgment, generosity, fairness and justice to any proposal that they be deported. What is the minister's policy when a request comes, let us say from a municipality, that a certain list of residents, foreigners, who have been here a short time, be deported on the ground that they have become public charges? Does the

department deport them without further investigation? Or does it make inquiries of its own, and if so, upon what principle does it act before deporting those people?


Wesley Ashton Gordon: When I assumed administration of the Immigration department, the situation as I found it in regard to the working out of the question was one which I have never agreed with since I have been able to comprehend the meaning of migration to this country. The question that has just been raised by the hon. member has, of course, given me a good deal of concern. Every case is dealt with upon its merits. In the past, through various influences, through different policies that were adopted, it was thought that the solution of our country's troubles was to encourage people from any quarter of the globe to come to Canada, and for this purpose assisted passages were given and concessions were granted here and there. That policy was not new; it was followed by the United States for many years, and some ten or fifteen years ago they saw the fallacy of it. This government, however, adopted an attitude which I think should be commended. When we came into power, having regard to the fact that we had through various agencies allowed people to come into this country, sometimes as a result of representations made by people not under the direct control of the government of the day, we found ourselves confronted with a situation that was not very comfortable to say the least. Rightly or wrongly, I came to the conclusion that we should take drastic steps to control immigration, from the standpoint, not of pure materialism, but of trying to control our population so that in the future we may be able to say that we have attracted to Canada those best calculated to build up a strong and virile country. So far as I am concerned, that policy has been very sturdily pursued. I am not unmindful of the difficulties involved in the point raised by the hon. member, because I have to deal with such matters every day. Men have been attracted to Canada; they have come here expecting to find work and oportunities far beyond those available to them in their own country. At times they have undoubtedly been induced to come here by promises made by those who in the past had agreements with various transportation companies, promises that could not be fulfilled. That is a burden which the government of Canada, must assume. We have at present in this country from many lands, hundreds of thousands, many of them splendid people, but many of them, I must reluctantly admit, such as we could well do without. We have many people representative of many races; we are faced with the problem of divided families,

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with part of the family in Europe or elsewhere and part of it here, with all the hardship that that involves. Even though we are confronted with a severe depression it will take a great deal of argument to convince me that we have to shut the door to migrants from the British Isles who want to come here, paying their own way, taking care of themselves and bringing money with them, although that is an indifferent matter compared with the spirit that prompts them to come. So far as I am concerned, while at the present time we encourage no one to come here until we clean up at home the mess that was left with us, I want to say to the committee that there will be no shutting of the door to British immigration.


William Daum Euler: I am not sure that the hon. gentleman answered my question. I should like to know the policy of the department in respect to deportations. Does the department accept the recommendations made by municipalities as to deportations, or does it make further inquiry as to the merits of each individual case?


Wesley Ashton Gordon: When a complaint comes in to the department-and under the Immigration Act these complaints come from the clerks of municipalities-against people who have contravened the provisions of the Immigration Act, it is investigated by the officers of the department, and until the case has been finally decided and an appeal has been allowed or dismissed, no deportation takes place. There never has been a deportation of people from this country without careful investigation beforehand.


William Daum Euler: I do not wish to be misunderstood. I have no complaint whatsoever to make with regard to deportations of a delinquent or a man who has committed a crime and is consequently deported after he has served his sentence. I am referring entirely to those who, merely by reason of the fact that they cannot find employment, but would otherwise make desirable citizens, are reported to the department, and I am asking whether in such cases they are deported.


Wesley Ashton Gordon: I know of no case where
deportation has taken place of a desirable citizen simply because he has become a public charge through inability to find employment.
I do not know of any such case.


Mr. SPOTTON:: It is very refreshing indeed to hear the opposition criticizing the immigration policy of this government. I presume that if it had not been for the 750,000 im-
41761-142J
migrants who were brought into this country by the late government during the last six, seven, or eight years, we would not have had such an unemployment problem on our hands to-day. However, my immediate point is this: There seems to be a direct attack tonight against permitting five hundred British boys to enter Canada. Surely bon. gentlemen opposite are straining at a gnat and swallowing a camel. On behalf of those boys in my constituency I just wish to say that we have boys of sixteen to eighteen years of age who came through the Vimy Ridge farm at Guelph and latterly from Norval near Brampton, and in the last four years I have been responsible for bringing some fifty-five of these boys to my constituency. I wish to bear testimony to-night, Mr. Chairman, that my county is very proud of those boys. They came from selected families in the old country and came because they had a desire to learn farming out here, not to tell the boss how to farm or how they do it "over We," but to learn farming as it is done in this country. There may have been one or two or three of them who have gone to the city, but if they have I do not know it, and I keep in close touch with these boys. The farmers in my county want more of them. I had one boy who came to a farmer in my county and stayed two years, grew robust, learned farming and then returned home to England, and he is now one of the greatest boosters Canada has. Another young man succeeded him, and this fall after two years with the same farmer he goes to the agricultural college at Guelph to pursue his further studies there.
I cannot understand why hon. gentlemen who are always talking about doing something that might block any arrangement we might make with the empire at the coming imperial conference, should just a few weeks before that conference meets tell the world that we cannot take five hundred clean British boys and assimilate them here. I think we can do it in the province of Ontario if they are not wanted elsewhere. I could not let this opportunity pass, Mr. Chairman, without stating the .position of the farmers in my county. When hon. gentlemen opposite speak of the unemployed in the cities, there is not a farmer who can go into the cities and find very many boys who want to go out to the country and, learn farming. Most of the farmers in my constituency who apply for boys who do not smoke; they do not want cigarettes being smoked around their buildings. In the ranks of the unemployed in the cities I do not think you could find a young fellow who knows which end of the horse to put a
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collar on, and itbey do not want to know; they do not want to learn farming. So it is ridiculous for hon. gentlemen apposite to say that these British boys are taking employment from those who are to be found in the ranks of the unemployed in our cities. I just rose, Mr. Chairman, on behalf of the few hundred boys who have come to my constituency in the last ten years, to say that they are a very fine type of citizen, and that the farmers in my county are asking for more of them.


Ian Alistair Mackenzie: I have been amazed to hear my hon. friend the Minister of Immigration for the second time during the present session refer to his arduous endeavours to clean up the mess that was left on bis doorstep when the late government went out of office. The only impression that his remarks have left upon me is that they are redolent of his self-appointed pasture. I wish to ask my hon. friend from North Huron who was a member of the opposition in 1929, what was his attitude on that occasion with regard to the stand taken by the leader of his own party in regard to immigration into Canada. The present Minister of Immigration was not a member of the house at that time, but my hon. friend the Minister of Trade and Commerce was here, and for the information of the committee may I just quote the words of his own right hon. leader in a debate in this house just a few short months before his party faced the Canadian people in the election of 1930. It is well known in the minister's own department that the policy of effective restriction of which he now prates so highly, had already been put into effect by the late administration before he was honoured by the portfolio of minister. Here is what the Prime Minister of Canada, then leader of the opposition, said in this house of February 11, 1929, at page 22 of Hansard, speaking in the debate on the address in reply to the speech from the throne:
We have here one of the largest undeveloped areas in the world; we have a very pressing necessity for more people. There need be no misapprehension about that, notwithstanding what has been said from time to time to the contrary.
Then listen to this:
It will be found that the increase of population in this country brought about through bringing additional people in will not only lessen unemployment for those who are now in it, but will increase all employment.
Where are my Tory friends now? Where is the member for North Huron who would not swallow a camel?


George Spotton: In answer to the hon.
member for Vancouver Centre


Ian Alistair Mackenzie: Mr. Chairman-


George Spotton: Mr. Chairman, the hon. member asked me a question.


Ian Alistair Mackenzie: The hon. member for North Huron may reply when I am through.


George Spotton: The hon. member asked
me a question twice, Mr. Chairman, and I should like to-


Ian Alistair Mackenzie: My hon.
friend can answer all the questions he likes when I sit down. My hon. friend from North Huron said that we were straining at a gnat and swallowing a camel. By his silence during the speech of his own leader, now the Prime Minister of Canada, he not only swallowed a camel-he swallowed a whole camel corps. During the session of 1929 the then leader of the opposition, now Prime Minister, a few short months before the general election of 1930, used these words, as recorded in Hansard, that the bringing into Canada of immigrants would not only lessen unemployment but would increase employment all through the dominion. Let me quote him further at page 23:
Mr. Bennett:	The minister says: "Hear,
hear." The responsibility rests with him and his government. We have no power to control the expenditures; we have no power over the money of this country; but all I can say is that "when in the fullness of time that power is entrusted to those who sit to the left of the Speaker, they wall deal with the immigration problem in a different manner.
And what was that different manner? The general organizer of the Tory party, who is now a distinguished member of the Senate, introduced into this house a resolution for bringing in 300,000 immigrants to settle the vast spaces of our western prairies. The government spent millions of dollars last year in Saskatchewan to help the destitute. How many millions of dollars would it have cost this Tory government if the plans of its general organizer had been put into effect?
Now, sir, my versatile and volatile friend the Minister of Railways gave expression to this perfect gem, and I hope my friend from North Huron will remember it. I am quoting from page 2746 of Hansard of May 22, 1929:
My complaint is not so much that the number of British immigrants is not larger, as that our immigration of all classes is much too small. The question is often asked: how; many can we absorb in this country? I submit that w-e can absorb as many as we can put at useful occupations and as many as vre can handle without crowding out the other classes of the people already here, whether they be farmers or labouring people. I submit, Mr. Speaker, that

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we could take many times the numbers of people of all kinds than we are getting at the present time.
That was the official policy of the Conservative party a few months before they went to the country in 1930.


An hon. MEMBER:: Quote it again.


Ian Alistair Mackenzie: I am
going to quote another passage which is equally significant. At page 2752 of Hansard in the same speech the present Minister of Railways said:
It is obvious to my mind that the government has not a satisfactory immigration policy. If Canada is to grow, prosper, and progress, it is the duty of this government to awaken to its responsibilities and really try to bring down an immigration policy adequate to the needs of this dominion.
That, Mr. Chairman, was the policy of the present Prime Minister in 1929, that was the policy of the Minister of Railways in 1929, that was the policy of the distinguished organizer of the Conservative party in 1929, that was the policy of every single member of the Conservative party who supported his leader in this house in 1929. Then in 1930 they went to the country on a diametrically opposite policy, and yet the Minister of Immigration has the audacity to come to this committee this evening-


Some hon. MEMBERS:: Oh, oh.


Ian Alistair Mackenzie: He has
the audacity to come to this committee this evening and talk about the "mess" left upon his doorstep. If there were too many immigrants brought into Canada in the three or four years preceding 1930, the fault lies not with the then administration but with the official opposition of that day; for if their recommendations had been hearkened to we would have had ten, twenty, yes, one hundred times as many immigrants as were admitted -and then the Minister of Immigration would have had on his doorstep that "mess" to which he has referred twice this session. I hope the members of the Conservative party will read the record of what passed in this chamber in the session of 1929, for then they will realize that the work of the late administration was effective in restricting the flow of immigration, although in taking that course they had to fight against the pressure put upon them by the leaders of the Conservative party to flood Canada with immigrants for a period of five, six or seven years.


Mr. MITCHELL:: Mr. Chairman, early in the discussion the Minister of Immigration said that no one was deported until he had had an opportunity to appeal to the department. The case which I am about to deal with has to do with the city from which I come, and I think there are many like it. The lady in this instance had been in Canada for over twenty years, she was married in this country and had three children, whose present ages are eighteen, seventeen and fifteen; she developed fits and was put into an institution at Woodstock Ontario; she was deported on October 3, 1931, and was on the way to Great Britain before her husband even knew what had happened. What is the policy of this department with respect to the husband and three children who are left in the dominion?


Wesley Ashton Gordon: I cannot identify 'the case to which the hon. member refers, but for his information I may say that the deportation of people to their country of origin is not done in any autocratic, cruel way, such as might be inferred from his remarks. They are given every opportunity, so far as I know, because their cases come under review time and again, with a view to finding out what responsibility this country has to take care of these poor unfortunates who find themselves in mental difficulty and have to be put in mental hospitals. I am sure the hon. member recognizes that the province of Ontario and the other provinces have spent many millions of dollars in order to treat and take care of mental cases. I think it is incumbent on the other nations of the world to take a leaf out of the provinces' book and to assume their responsibilities in this regard. I can assure the hon. member that no case that I have any recollection of has not received very careful consideration by the department in an effort to place the responsibility where it lies. As these cases come up every day it is impossible for me to identify this particular case.


Humphrey Mitchell: These cases are well
known in the section of the country from which I come. What the people of Hamilton most object to with respect to this case-it was widely discussed last year-was the separation of the mother from her husband and her children without their knowledge. We want to know what is to become of the three children. It was at least the bounden duty of the department to let the husband know that his wife was going to be deported. I would like to say that the lady in question is living the life of a normal human being in England, and is not in any institution of any kind at the present time.


Wesley Ashton Gordon: Would the hon. member
give me the name?
Sup-ply-Immigration


Humphrey Mitchell: I will give the minister the name.


George Spotton: I must apologize for
rising, but since the hon. member for all Vancouver directed two questions to me and would not allow me to answer I will take this opportunity of doing so. The hon. member asked me where I stood. He may not be able to understand this, but I have often stood for myself, and I have not always stood behind the various leaders of the Conservative party. Probably my hon. friend will not be able to understand that. On every fit occasion for the last thirty years I have always stated that there was no hurry to populate Canada with the- different European nations. Those who are here are all citizens of Canada and they are all our brothers, but throughout my whole life my attitude has been that this is the last of the new countries. During the thirty or thirty-five years I have considered this matter it has been my belief that Europe was becoming overcrowded, and the different countries were looking to Canada because, as I say, it was the last of the new countries. I always said there was no hurry to fill up our great west but that we should keep it for the children, and the children's children, of the two great pioneer races of Canada.
That always has been my position, and it will continue to be so. What is going to happen in the future if we fill up our great west? The two great pioneer races in Canada must, reserve a place for generations yet unborn.
What matter that at different times Our fathers claimed the sod;
What matter that at different shrines They prayed unto one God;
In fortune and in fame were bound In stronger links than steel;
And neither could be safe or sound But in the other's weal.
That has been my stand, I wish to inform the hon. member for all Vancouver, throughout my whole life.


Mr. GERSHAW:: I should like to ask the minister what is the policy with regard to divided families. He mentioned the problem . of bringing divided families together, and I should like to ask if a man in this country who has a close relative in a European country other than Great Britain has a chance of getting that relative out to Canada at the present time.


Wesley Ashton Gordon: The policy of the department with respect to the union of divided families is first to investigate closely that part of the family residing in Canada. If on hvestigation we find that the person in Can-

ada is acceptable in ithe view of the departmental officials and of myself, and that the person sought to be brought to Canada will not disturb or be a burden upon labour in this country, then a recommendation is made to council and an appropriate order in council is passed. All those orders in council are available to hon. members of the house. Of course, of necessity that policy must be relaxed when we get through this depression.


Mr. LUCHKOVICH:: I believe the minister did not quite understand the question of the hon. member for Medicine Hat. I think what the hon. member	meant was	this: If	a manand his wife in	this country	have a	boy or
girl in the old country, and that child has reached the age of twenty-one years, I believe they cannot bring the child to Canada because of some regulation enacted in the past. I should like to ask if a father or a mother can bring a boy or a girl of twenty-two years of age from Poland or Roumania to Canada.


Wesley Ashton Gordon: Not as a matter of right. We are charged with trying to preserve, for the present at	least, the	labour	marketin Canada for	persons at	present	within
Canada. While it may occasion some distress to (parents to be unalble to bring their twenty-two year old boy to this country, yet we must preserve to the people who are here what labour is available to them. However, I hope that is not a policy which will have to be pursued for a very long time. Each case is dealt with on its merits, but the underlying principle is this: If the person sought to be brought to Canada is likely to take a position in the labour market here which will displace some person alreadjy legally and properly in Canada, then the reunion will have to be postponed until things take a different turn.


Humphrey Mitchell: I just want to ask the minister a question in connection with the speech he made in this house on February 23. At page 440 of Hansard I find the following words:
. . . whether we like it or not, we must get over to the positive side of immigration, because we must have more people if we hope to pay off the debt with which ten million people are loaded at present by reason of the railroad problem on our hands.


Joseph Philippe Baby Casgrain: Is that the policy of the government?


James Langstaff Bowman: Mr. Chairman-


Humphrey Mitchell: I would like an answer to my question, because this matter has been the subject of discussion in the labour movement in the city in which I reside. What

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is the policy of the Minister of Immigration in connection with the announcement he made in this house this year?


Wesley Ashton Gordon: I do not know that I need add much to what I said on that occasion. Anyone who has followed the debates in this house and who has an appreciation of the different railway and road services that have been created in this country, preceding settlement, must recognize that in order to get the fullest advantage of them, and indeed to pay for them, people must be colonized along those services. I do not think the hon. member need have any great fear that in its administration of the immigration laws the present government will induce to come to Canada people who are likely to disturb the labour market. But we have an immense country. The hon. member for Vancouver Centre blamed the situation upon someone on this side of the house, and charged me with blaming it on members on the other side of the house. That really does not mean much to m-e, because at present I am administering this department, and my task is to colonize the people at home, with full knowledge of the fact that without an increased population, carefully selected-which may be a slow process-this may be difficult.
That is what I meant by the positive side of immigration. We will ultimately get to the point where we will have a population which properly colonized, will be able to share the burden of debt which has arisen from the public services we have projected and made available to the people of this country. That is the policy of the government.


James Langstaff Bowman: I gather from the remarks of the hon. member for Vancouver Centre that the policy of the Conservative party in 1929 was wrong. If that is so, I presume the party will be commended for changing their policy and getting on the right track now. With respect to permitting teen age boys to come to Canada, I appreciate the difficulties with which the government is faced when these youths are brought in from Great Britain. It is a serious matter. I also appreciate the difficulty in putting into force rules or regulations which perhaps would interfere with the good will and good feeling which exist between Canada and the old country at the present time. Possibly a gentle hint from the minister or from the government to the authorities responsible in the old countrj', or those who are thinking of bringing these jmuths to Canada, might have the desired effect without the necessity of there being any binding rules or regulations adopted by the Department of Immigration.


Henry Elvins Spencer: I notice quite a decrease in the amount asked for this year. Can the minister tell us where the cut has been made?


Wesley Ashton Gordon: The decrease is due to the abolition of certain offices: one chief clerk; one woman officer; one clerk retired; two clerks, grade four; one clerk, grade three; four stenographers, grade two; two typists, grade two; one typist, grade one; one clerk, grade two; one messenger. Then, of course, there is the ten per cent reduction in salaries.


Mr. CARMICHAEL:: A year ago the minister made a statement with regard to the placement of families in various provinces under his back to the land policy, which he advocated. Has he any information to give the committee now?


Wesley Ashton Gordon: Rightly or wrongly-I do not know whether hon. members will agree with me-it became apparent to me when I assumed my present office that there were and would continue to be in increasing numbers people unemployed who were formerly engaged in industry. In Canada we had many families who had farm experience and who had gone to the cities, attracted there by high wages. They found themselves out of employment and although they had some money it was dwindling through payment of rents and so on. I thought it desirable to enlist the services of the railway companies and of those who had theretofore been interested in immigration, with a view to coordinating the efforts of all. The purpose was, by helping people to select vacant farms, of which we had many thousands, to enable them to go back to the land and become selfsupporting. Someone may disagree with that and say that that is not the place in which to become self reliant. I am not prepared yet to agree with those who hold that view. However, we did meet with a measure of success, which I think is commendable. Many people who found themselves out of work, with some money and with farm experience and an agricultural background, joined in the effort and went back to the land. The latest figures we have, so far as the railways and the department are concerned, show that just under fifty thousand people are back on the land to-day. That comprises families who have taken up farms, and about fourteen thousand single men who are working on the farms of Canada.


Mr. VALLANCE:: Where did they go?


Wesley Ashton Gordon: I could scarcely trace the fifty thousand.


John Vallance: Tell us where some went.
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Joseph Philippe Baby Casgrain: What proportion established themselves in certain parts of Quebec?


Wesley Ashton Gordon: I will come to that. The department pursued the project which it outlined for itself in the fall of 1930 and, I believe, every province in Canada followed in the wake. Certainly Ontario and Quebec did, as well as the western provinces, and the maritime provinces, in a measure. I have not the figures as to what they have done, but if any hon. member would like to have the figures which the railways and the Immigration department have for the farm placements, they are available, because we have kept complete records of each family, where they have gone, what wages they are receiving, and so on. I do not think that the families would care to have their names heralded from the housetops. They are receiving no help from the government. They are doing all right and are going to make good.


Peter John Veniot: Would the minister be good enough to table in the near future a report of that transaction so that we will know where we are?


Wesley Ashton Gordon: I shall be very glad to
table a report, but I do not want to give the names of the people who have gone to the farms.


Peter John Veniot: Why?


Wesley Ashton Gordon: That is their own business.


Joseph Philippe Baby Casgrain: The minister could state how many had settled in each locality.


Wesley Ashton Gordon: Yes, but not their names.


John Vallance: I think the minister knows what he wants to convey, but there seems to be a misunderstanding in the committee as to what he is actually conveying. When the minister speaks of settling these people on farms, does he mean settling single men as hired men, or is he referring to those placed on abandoned farms? If the latter, I should like to know where those abandoned farms are, because I do not know of a single instance where this has taken place. Is the minister referring to the single men placed under the provisions of the Unemployment and Farm Relief Act, where the farmers were paid by the government for the keep of the men?


Wesley Ashton Gordon: No, I have no reference
to that. The families which have been settled on farms consist of people who had sufficient money to go back to the land under the

guidance of the railways and the department. I was not referring to the single men placed on farms and assisted by government gratuities, I was dealing strictly with the business of the department.


Mr. BRADETTE:: I am vitally interested
in the question of colonization, because my riding has shown the greatest improvement in this respect of any district in Canada. During the last ten years the number of occupied farms in Cochrane county has increased from 274 to 2,490. Last year I endeavoured to obtain the information now being asked for by hon. members, but I was unable to do so. Will the minister advise the committee how many pe'ople have been settled in North Timiskaming?


Wesley Ashton Gordon: I am sorry I am unable
to give the information asked for by the hon. member, and unless a resurvey were made to divide Canada into ridings for the purpose, I doubt if it could be supplied. The following figures show the number placed between October 1, 1930, and February 29, 1932:
British Columbia	 70
Alberta	 1,360
Saskatchewan	 696
Manitoba	 904
Ontario	 2,567
Quebec		127
Maritime provinces	 431
I have examined the reports of the railways and I find them to be very accurate. The families placed by the Canadian National Railways number 2,894; by the Canadian Pacific Railway, 2,471, and by the department, 987. The single men placed by the Canadian National Railways number 2,983; by the Canadian Pacific Railway, 4,331 and by the department, 6,155. These figures cover the same period to which I have referred, from October 1, 1930 to February 29, 1932. On the basis of five members to a family, 45,229 individuals have been absorbed in agriculture.


Joseph-Arthur Bradette: Mr. Chairman, I still maintain I am not receiving the information for which I have been looking for the last two years and to which I am entitled. The hon. minister has just stated that those who have been placed on farms would not like to have their names shouted from the housetops, but this government has been going up and down the country boasting of its wonderful back to the land policy. The hon. minister has just stated that 50,000 people have been placed on farms without any assistance from the government, but I maintain that to do that is humanly impossible. The minister knows that in northern Ontario the settlers will require provincial or federal aid before they will be

Supply-Immigration
able to seed their land. People cannot be taken from the cities and placed on the land without assistance from the government, especially with the present low prices being received for farm products. If the government sees fit to announce this policy throughout the length and breadth of this country, it should furnish the information to which the committee is entitled. There is no back to the land scheme which is workable under present conditions without aid from either the provincial or the dominion government. I have received hundreds of letters asking for federal aid, and the government owes it to the committee to announce a clear and definite policy in connection with land settlement. Mention is made of abandoned farms, but there must be some reason why those farms were abandoned- there is no doubt that the original holders could not make a living. It would be impossible to take people from the cities and place them upon the .land in northern Ontario without governmental aid. I shall not criticize, but will support any movement which will alleviate unemployment in the cities, but I do not want to see the unemployment in the rural districts become worse. I have enough faith in the minister to feel assured that he will do his best to see that this situation is remedied.


Wesley Ashton Gordon: I think I have a fair idea of the difficulties being faced by settlers in the riding of the hon. member (Mr. Bradette) as well as throughout Canada generally because incidentally I have come into contact with them for many years. But I should not like his observations to go without some passing comment. I trust the hon. member does not complain because the government has met with a degree of success in having people return to the land on their own money, the government making the way as easy as it could for them, only with advice, I will admit, as to placing them upon the land best suited to them. I trust he will not complain as to the success the department may have attained in that regard.
With respect to settlers in the northern part of Ontario, I know their plight; I am acquainted with their difficulties and I appreciate the courage which they have exhibited throughout this period of depression. I have reason to remember their courage during the past two or three years; I am not unmindful of their wants; I am acquainted with the efforts that have been made by both the Quebec and the Ontario government to assist them while they have been cleaning up their farms. I do not. need to tell the hon. member that those settlers will receive most sympathetic support.


Peter John Veniot: May I ask the minister
whether the list he just read showing the returns to the farm by provinces, includes all he has in mind? If it does, I may say that he has given no figures showing 50,000.


Wesley Ashton Gordon: The figures-and this is all I have said in the house or out of it- including the units of families together with single men, would amount, as of April 2, to 44,959. That is being increased each week. This is on the basis of five to each family.


Peter John Veniot: That does not agree with the figures the minister read for his province.


Mr. STEVENS:: He gave figures of families.


John Vallance: I noticed the minister quoted the figures for the various provinces. The other night, when the hon. member for Saskatoon was speaking, I think on the Unemployment and Farm Relief bill, he read from some letters that he had received from settlers that had been placed in Meadow Lake, north of Battleford, showing how successful they had been. I know the country into which those people went and I know a number of people who have gone in there and done well; but all the people I know that have gone into the northern portions of Saskatchewan have been those driven out of the south because of the conditions existing there. If the minister is counting those people-


Wesley Ashton Gordon: I can assure the hon. member I am not.


John Vallance: I have watched the
migrations of those people in the last two years. Situated as I am on the west centre of Saskatchewan, I have seen hundreds of them go in. Is it the intention of the government, now that they are placing them on abandoned farms, as the minister has stated-


Wesley Ashton Gordon: Not only on abandoned farms-on any farms available, or crown lands.


John Vallance: The only farms available to-day in Saskatchewan are either homesteads along the northern fringe of settlement or abandoned farms, because you cannot sell a farm; if the minister knows where he can make any sales, I wish he would let me know.


Wesley Ashton Gordon: I am making them every day. If the hon. member has a farm to sell, let him place it with me.


John Vallance: We are dealing with immigration of British boys. I listened to the hon. member for Dauphin give as his reason why we should go, as we say in Scotch, "very canny" at this time, the approach of thp
Canada Power Corporation

imperial conference. I am of the same opinion that we should go "very canny," but not for that reason. Looking at the question from the boys' viewpoint, I do not think this is any time to bring a boy from Great Britain into conditions such as prevail in Canada to-day. I might tell the minister it is just twenty-six years ago to-day since I left the Clyde, but the day I reached Canada conditions were very different from what they are now and any boy coming from Great Britain at this time will find the struggle much harder than did those of us who came here when I did.


Wesley Ashton Gordon: The hon. member is too modest.


John Vallance: I ana not. There are hundreds who have done the same as I. I urge the government to go very slowly in inviting those boys to come to Canada at this time. Like the hon. member for Bow River and for the same reason, I know many of them and get close to them because I am a fellow countryman. We have travelled the road they will have to travel if they come here.


Frederick William Gershaw: The minister said that he had not given any assistance in a financial way. Has he received any request from the provinces to help to place on the land some of the experienced farmers who are unemployed? I quite agree that land in some places is available. If such a request were to come to him, would his department be willing to consider it in view of the fact that in any case they have to keep most of these people?


Wesley Ashton Gordon: The question of giving state aid to colonization-and it has been a subject that many countries in the western hemisphere have undertaken-is one that requires a great deal of consideration. We in Canada have from time to time given aid; shortly after the war we started on rather an elaborate program of state-aided settlement. In view of the present situation the success of that is very difficult to measure. When the program of the department became known with respect to reestablishing people on the farms where they would at least be able to look after themselves in a modest kind of way, many requests came in from all kinds of societies and even at times from provinces, outlining schemes whereby people could be put on the land and be state-aided with money. This is a matter that would require most careful consideration. When I started out to try to reestablish people on the land, my viewpoint was that we would take 
people from the cities, get them off the unemployment shelves and make them selfsupporting.
Item stands.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Friday, April 22, 1932