1932-04-06

[Stage Direction]
Mr. A. U. G. BURY (East Edmonton) presented the first report of the select standing committee on standing orders.
Mr. BURY moved that the first report be concurred in.
Motion agreed to.

Right Hon. R. B. BENNETT (Prime Minister) :: Mr. Speaker, I beg to lay upon the
table, for the Minister of Labour (Mr. Gordon) who is absent to-day, orders in council numbers 750, 751, 752, 753, 754, 755 and 757 passed under the provisions of the Unemployment and Farm Relief Act, 1931, and the Unemployment and Farm Relief Continuance Act, 1932.



BANKRUPTCY ACT AMENDMENT


Hon. HUGH GUTHRIE (Minister of Justice) moved:: That Messrs. Hackett, MacDonald (Cape Breton South), Gaming, Gobeil, Anderson (Toronto), Spence, Kennedy (Winnipeg South Centre), Turnbull, Perley (Qu'Appelle), Fraser (Cariboo), Butcher, Elliott. Jacobs, Lapointe, Mackenzie (Vancouver), Ralston, Speakman and Carmichael be a special committee to consider and report upon Bill 41, an act to amend the Bankruptcy Act, and that standing order 65 be suspended in relation thereto.
He said:	The motion moved yesterday
referred to a committee consisting of seventeen members, while the present motion refers to a committee of eighteen members and I ask the consent of the house to increase the personnel by one.


[Stage Direction]
Motion agreed to.

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

Mr. MARCIL:: 1.	Has the postmaster of Gascons, Quebec, been dismissed and for what reason?
2.	Has a temporary postmaster been appointed, if so, what is his name and on whose recommendation was the appointment made?
3.	Has a permanent appointment been made in that office?


Mr. SAUVE:: 1.	Yes-commissioners' report found postmaster guilty of active political partisanship.

Questions
2.	Yes-Wm. P. Brotherton. Recommended by Hon. Dr. E. Paquet.
3.	No.


PICTOU, N.S., MARINE AGENT
Mr. ILSLEY:: 1.	Has the position of agent of the Marine department at Pictou, Nova Scotia, been abolished?
2.	If not, who is the present agent?
3.	If the position has not been abolished, is it the intention of the government to abolish it?


Mr. DURANLEAU:: 1.	No.
2.	There is none.
3.	Under consideration.


GIRONDE, QUE., POSTMASTERSHIP
Mr. POULIOT:: 1.	On what date was Mr. Johnny April dismissed as postmaster at Gironde, Quebec?
2.	Why was he dismissed?
3.	Did many persons apply for his position?
4.	If so, what are their names?
5.	On whose recommendation did the Postmaster General appoint the present postmaster, and why was he chosen in preference to other candidates?


Mr. SAUVE:: 1.	5th September, 1931.
2.	Commissioners' report found postmaster guilty of active political partisanship.
3 and 4. One applicant, Mrs. Joseph Rioux.
5. Recommended by Mr. C. E. Dube.


FADVEL, QUE., POSTMASTERSHIP
Mr. MARCIL:: 1.	Has the postmaster of Fauvel, county of Bonaventure, Quebec, been dismissed and for what reasons?
2.	If so, who has been appointed postmaster and on whose recommendation?


Mr. SAUVE:: 1.	Yes. Commissioner's report found postmaster guilty of active political partisanship.
2.	Paul Babin. Recommended by Honourable Dr. E. Paquet.


HOPETOWN, QUE., POSTMASTERSHIP
Mr. MARCIL:: Who has been appointed postmaster at Hopetown, county of Bonaventure, Quebec, and on whose recommendation?


Mr. SAUVE:: Ronald McRae, recommended by Honourable Doctor E. Paquet.


ST. FRANCOIS D'ASSISES, QUE., POSTMASTERSHIP
Charles Marcil: Who has been appointed postmaster at St. Francois d'Assises, county of Bonaventure, Quebec, and on whose recommendation?
41761-110J


Arthur Sauvé: Miss Marguerite M. Martin, recommended by Honourable Dr. E. Paquet.


ST. CHARLES DE CAPLAN, QUE., POSTMASTERSHIP
Mr. MARCIL:: 1.	Has the postmaster of St. Charles de Caplan, county of Bonaventure, Quebec, been dismissed?
2.	If so, has a permanent appointment been made to that office, and who has been appointed?


Mr. SAUVE:: 1.	Yes.
2.	No permanent appointment made yet. Office in temporary charge of Louis Arsenault.


ST. CHARLES DE CAPLAN, QUE., MAH, SERVICE
Mr. MARCIL:: 1.	Has a contract been awarded for the mail service between the post office at St. Charles de Caplan, county of Bonaventure, Quebec, and the railway station, if so, to whom and at what price?
2.	Who were the tenderers?


Mr. SAUVE:: 1.	(a) Yes; (b) Lueien Bujold at $239 per annum.
2.	Lueien Bujold, Gerard Hudon, Louis Arsenault.


CAPLAN EAST, QUE., POSTMASTERSHIP
Mr. MARCIL:: 1.	Is it the intention of the Post Office Department to change the location of the post office at Caplan East, Quebec, and to transfer it to the adjoining parish of St. Simeon de Bonaventure?
2.	If so, who is to be the postmaster, and on whose recommendation is this change made?


Arthur Sauvé: 1 and 2. Arrangements have been made for the closing of Caplan East post office on account of its proximity to Ruisseau Leblanc, three-fifths of a mile.


CHAMBLY CANAL SUPERINTENDENT
Mr. GOULET:: What is the name of the present superintendent of the Chambly canal?


Mr. MANION:: Mr. J. H. Cantin occupies the position of superintendent of the Chamibly canal.


UNOPPOSED MOTIONS FOR PAPERS
Charles Marcil: For a copy of the commissioners' report and evidence in connection with the investigation
Questions

held in regard to the post office of Hopetown and St. Francois d'Assises, county of Bona-venture, Quebec, on the instructions of the Postmaster General.


FOREST CITY, N.B.-CUSTOMS AND IMMIGRATION OFFICERS
Mr. VENIOT:: For a copy of ailil applications and correspondence, as well as the report of the Civil Service Commission, in connection with the appointment of customs and immigration officers at Forest City, New Brunswick.


JAYNES PILE DRIVING COMPANY
Mr. REID:: For a copy of the report of Mr. Brydone Jack, supervising engineer at Vancouver, British Columbia, into matters in connection with a dispute of wages on contract work let to the Jaynes Pile Driving Company, on the south jetty of the Fraser river, British Columbia.


GRONDINES, QUE.-LIGHT KEEPER
Mr. DESROCHERS:: For a copy of all correspondence and reports in connection with the dismissal of Charles W. Laganiere, of Grondines, as lighthouse keeper, on September 11, 1931; also a statement as to whether or not witnesses heard before Mr. Leon Methot in connection with this case were under oath.


DESCHAMBAULT, QUE.-POSTMASTER
Jules Desrochers: For a copy of the report of the commissioner, and the evidence given at the inquiry held at Deschambault, on January 30, 1931, in connection with the dismissal of Mr. Ferdinand Dussault, as postmaster of that place.


MANITOBA SAVINGS BANK
Mr. WOODSWORTH:: For a copy of all documents, letters, telegrams, reports or other correspondence or communications or memoranda, between the Prime Minister or the Minister of Finance and Mr. Bracken, Premier of Manitoba, relating to the Manitoba Provincial Savings Bank.


James Shaver Woodsworth: For a copy of all documents, letters, telegrams, reports or other correspondence or communications or memoranda, between the Prime Minister or the Minister of Finance and the representatives of any of the chartered banks, relating to the Manitoba Provincial Savings Bank.


RAILWAYS AND SHIPPING
[Stage Direction]
On. the orders of the day:
Mr. H. E. SPENCER (Battle River):: Can the Minister of Railways and Canals tell the house when the special committee on railways and shipping will be called to meet?


Robert James Manion: It is called to meet to-morrow.


CANADIAN NATIONAL RAILWAYS
[Stage Direction]
On the orders of the day:
Mr. WILLIAM DUFF (Antigonish-Guys-borough):: I should like to address a question to the Minister of Railways. Under clause 1 of chapter 34 of the statutes of 1929, respecting the construction of a Canadian National railway line from Sunnybrae to Guysborough in the province of Nova Scotia, the completion of construction must be made prior to August 31, 1932. Is it the intention of the government to extend the time beyond that date so that the railway may be completed?


Robert James Manion: I shall give an answer to the hon. gentleman to-morrow.


THE BUDGET
Hon. E. N. RHODES (Minister of Finance) moved:: That Mr. Speaker do now leave the chair for the house to go into committee of ways and means.
He said: Mr. Speaker, in moving that you do now leave the chaiT for the purpose of enabling the house to resolve itself into committee of ways and means, to make good the supply to be granted to His Majesty for the fiscal year ending March 31, 1933, may I at the outset crave your indulgence for those imperfections which are bound to appear in the discharge of a difficult and onerous task on the part of one who has been Minister of Finance for but a few short crowded weeks.
These imperfections will be the more apparent and my task the more difficult when viewed in the light of the brilliant achievements of my immediate predecessor in office.
This review of the year's financial operations will be made under five headings:
(1)	A brief reference to events which have so profoundly disturbed international finance and the consequent reactions on our own situation;
(2)	The financial operations and accounts of the dominion for the fiscal year ended March 31, and in this regard it will be understood that the figures are not final but represent the closest estimates that can be made;
(3)	Canada's trade and commerce;
(4)	The estimated revenue and expenditure for the fiscal year 1932-33, and
(5)	Ways and means for securing the revenues required to meet, the estimated expenditures.

The Budget-Mr. Rhodes
The past year was replete with financial difficulties and problems, many without precedent. Canada, in common with other nations, was in the midst of a period of declining prices and diminishing revenues. During the summer, coming events began to cast their shadow over international finance. The crisis in Germany, following quickly after the collapse in May of the most important bank in Austria, brought sharply to the attention of the world the need for international action upon the vexed question of reparations and inter-governmental war debts. The proposals of President Hoover for a one year moratorium were heralded as a signal for returning world confidence, but the optimism was unfortunately short lived. Although the debt holiday was accepted after some delay, its effect was partially lost in the controversy which served only to emphasize the difficulties of the situation. Meanwhile, the climax drew near, brought on by a repatriation of credits and consequent withdrawals of gold from countries whose reserves had already been reduced. Throughout the world, gold was ceasing to be a medium of exchange, becoming instead a commodity to be jealously guarded. The pound sterling became daily subject to test and finally the world was startled by the announcement on September 21 that Great Britain had been forced off the gold standard. She was followed in rapid succession by many other countries. In the United States, problems arose as a result, on the one hand, of hoarding by individuals, and, on the other, of the effort of their great financial institutions to build up their "liquid position." The fall of foreign exchanges and the dumping of securities brought on practically a demoralization of the investment markets.
It goes without saying that these events had a peculiar significance for Canada, a debtor country, having at the moment an unfavourable trade balance. Our exchange could be maintained only so long as financial operations, based upon normal conditions and confidence, were resulting in a net inflow of money. Between October 1, 1931, and March 31, 1932, the dominion, provinces, municipalities and semi-public bodies, had, it was estimated, S72,000,000 of debt maturing in New York or London, and, in addition, $80,000,000 of external interest charges had to be provided. Added to these, there were the debts of corporations and individuals. With these obligations to be met, the dislocation of external money markets presented no inconsiderable threat to our credit abroad.
Steps had been taken on September 8 to improve our position in New York by the opening up of negotiations for the sale of
$50,000,000 dominion guaranteed bonds of the Canadian National Railways which at that time had $37,000,000 of short-term credits borrowed in that market. The best tender wa.s from a syndicate which purchased $25,000,000 outright and took an option on the remainder. The issue was popularly priced, and the option was exercised. However, much of the buying was on Canadian account, and it was necessary to arrange for partial settlement in Canada, the consequence being that to avoid a serious disruption of the already sensitive exchange situation, only part of the New York short-term loans could be paid off, leaving $18,500,000 to be renewed.
Following the decline in sterling, the Canadian dollar showed -continual depreciation. The low was reached on December 16, when the premium on New York funds was 24J per cent. It was realized that, notwithstanding the high credit position of Canada, any effort to stabilize exchange at par with gold could not, under conditions then existing, be successful. Out policy was therefore directed to accomplishing two results: First, to ensure the prompt payment of all obligations due abroad according to contract and, second, to assist in maintaining normal currency and credit conditions within Canada.
On the 14th of September, the government commenced buying the gold production of the larger Canadian mines, on a basis approximate to the value of New York funds. This gold has been used to meet obligations in New York and has been sufficient to keep the dominion out of the exchange market, and at times to provide external gold funds for the National Railways and provinces. From the viewpoint of Canadian commerce, the policy was generally advantageous.
With respect to the internal situation, the needs of industry, of crop-marketing agencies and of public bodies harassed by falling revenues, made it obligatory that credit facilities in Canada continue to operate smoothly and at reasonable cost to borrowers. Also it was imperative that there be no flight from the Canadian dollar through fear of inflation. This could be accomplished only by maintaining domestic confidence and by preserving a reservoir of credit which could be drawn upon to meet any external crisis. It was successfully accomplished under a policy authorized by the order in council of October 19, which, while maintaining the redemption rights under the Dominion Notes Act, permitted the export of gold only under licence issuable by the Minister of Finance to chartered banks. On the 19th of October, the note issue, including those issued under
The Budget-Mr. Rhodes

the Finance Act, was $144,468,571, and the gold holding represented over 45 per cent of the face value of the issue. On the 19th of March, 1932, the note issue, including those issued under the Finance Act, was $142,896,193; the gold holding,represented over 45 per cent
The number of licences issued to March 1 was 182, representing gold to the value of $28,969,566. Of this amount $19,839,286 was on the Dominion's account, being gold purchased from the mines; the balance was the property of miners, banks and individuals who deal in gold.
Well may Canadians look back with satisfaction over what has been accomplished. All external debts have been met on the due dates. The $72,000,000 principal amount of external debts, payable by the public! bodies of Canada and maturing before March 31, was provided for partly by repayment and partly by renewal, but at this date only $33,000,000 of the original amount is represented by debt owing abroad, and this balance is so arranged that orderly redemption can be carried out without embarrassment. The holders of Canadian securities with obligations for external payment have received their 80 millions of interest as it became due.
This accomplishment, together with the strength of our banking system and stability
of our financial institutions generally, has contributed greatly to the return of confidence, as exhibited in the improvement of the Canadian dollar in the exchange market, and in the higher quotations for Canadian public securities.
Revenues 1931-32
The financial statements published from month to month during the year have indicated that, in common with ail other countries in the world, we have experienced a marked decline in taxation revenue, which represents approximately 83 per cent of the total receipts of the government. Of the major sources, the income tax alone has brought in approximately the sum estimated, having, yielded $61,000,000. Customs receipts fell to $102,800,000, reflecting the drop in the value of imports occasioned by a number of factors, such as the further decline in prices, the unfavourable exchange rate as regards importations from the United States and generally the policy of encouraging production in Canada.
The total receipts from taxes will be $273,300,000, a statement of which, together with the comparative figures for the previous four years, is now submitted.
Taxation Revenues
(000 omitted)
-	1927-28	1928-29	1929-30	1930-31	Estimated 1931-32Customs Import Duties	S 156,986	$ 187,206	179,430	S 131,209	102,891Excise Duties	
War Tax Revenues:	57,401	63,685	65,036	57,747	48,688Banks	
Trust and Loan Companies	1,225 345	1,243 8	1,408	1,429	1,397Insurance Companies	999	895	74	74	Delayed Business Profits	956	455	173	34	3Income Tax	56,571	59,422	69,021	71,048	61,000Sales Tax	
Manufacturers' stamp, transportation	72,100	63,646	44,859	20,784	41,271taxes, etc	18,123	19,361	18,550	13,951	18,098Total Receipts from Taxation	364,706	395,921	378,551	296,276	273,348
Public Service Revenues
Collections from the various public services, it is estimated, will total $54,000,000. Post office, which is the major contributor under this head, will show an increase of $1,500,000 due to the raise in postage rates and because postage stamps may now be used for certain excise stamp taxes. The post office revenues are estimated at $31,748,000, as against expenditures estimated at $34,550,000. This does not include disbursements made by other departments on account of post office, nor does it, on the other hand, give any credit for 
handling the mail of the various branches of the public service free of charge.
Interest on investments, being payments from harbour commissions, boards, etc., financed by way of loans from the Dominion, and including the regular payments by Roumania on its loan, it is estimated will total $10,000,000. In this is included the interest paid by the chartered banks for advances under the Finance Act, which it is estimated will amount to $360,247, as compared with $539,984 last year. A five year comparison of the revenue from these public services follows:

The Budget-Mr. Rhodes
Non-Tax Revenues
-	1927-28	1928-29	1929-30	1930-31	Estimated 1931-328	S	$	$	%Can. Grain Act	2,677,877	2,992,540	2,047,207	2,179,047	1,435,054Can. Gazette	81,243	80,214	93,890	71,197	71,2291,355,677	1,230,333	1,043,647	1,026,671	981,9633,626,236	4,041,095	4,300,710	3,678,487	4,035,864Chinese Revenue	14,179	18,224	14,345	21,996	11,5333,688,595	4,070,339	4,139,104	1,655,401	486,974Electricity	563,913	563,964	546,957	632,151	389,405Fines and Forfeitures	568,140	655,485	748,343	433,716	241,326Fisheries	119,144	109,300	110,724	73,937	40,197Gas Inspection	85,716	92,398	100,763	94,255	75,513Insurance Inspection	123,768	131,626	138,780	148,942	150,993Interest on Investments	10,937,822	12,227,562	13,518,205	10,421,224	9,997,357Marine	191,564	182,810	184,637	199,000	137,358Mariners' Fund	222,048	236,808	209,322	201,768	186,018Military College	20,232	20,204	19,820	19,882	20,045Military Pension Revenue	128,017	155,830	158,881	159,000	159,991Ordnance Lands	14,206	24,830	30,277	29,384	13,769Patent and Copyright Fees	495,792	530,239	574,918	559,646	522,846Penitentiaries	177,933	178,449	181,024	183,288	145,086Post Office	31,562,580	30,611,964	33,345,385	30,212,326	31,747,750Premium Discount and Exchange	594,211	568,846	531,366	521,026	2,754,526Public Works	395,281	414,085	408,151	362,391	358,083R.C.M.P. Officers' Pens	6,144 172	6,373 81	6,471 5	6,357	6,871Weights and Measures	361,690	399,247	407,248	419,750	400,455Total Non-Tax Revenues	58,012,180	59,542,846	62,860,180	53,310,842	54,370,206
Special Receipts
Having accepted the principle of the moratorium in respect of inter-governmental debts, our receipts from German reparations annuities were reduced to $1,001,570 applicable to the period prior to the 1st of July.
This has been supplemented by $6,000,000 received from the custodian of enemy property and taken into our accounts as a partial offset to the disbursements from the consolidated revenue fund in respect of compensation paid to civilians for damages sustained in the war.
The following is a comparative summary of the total revenues over the last five-year period:
Summary of all Revenues (000 omitted)
1927-28	1928-29	1929-30	1930-31	Estimated 1931-32%	$	%	. $	%Receipts from Taxation	364,706	395,921	378,551	296,276	273,348Non-Tax Revenues	58,012	59,543	62,860	53,311	54,371Consolidated Fund Receipts	422,718	455,464	441,411	349,587	327,719Special Receipts	7,129	5,476	4,771	6,622	7,022Grand Total	429,847	460,940	446,182	356,209	334,741
Ordinary Expenditures 1931-32
The ordinary expenditures for the year are placed at $378,700,000, which is approximately $19,000,000 less than was estimated. The expenditures on services for which provision is made annually by vote actually were $25,-
000,000, less than the amounts authorized by parliament. On the other hand, certain statutory expenditures, such as subsidies to provinces, old age pensions and exchange, exceeded the estimate by $6,000,000.
Over $3,635,000 was in connection with exchange, mainly the premium on gold pur-
The Budget-Air. Rhodes

sinking funds, which made a net expense for the year on premium, discount and exchange of 8881,000.
A statement by services of expenditure on ordinary account for the last five fiscal years is as follows:
Expenditures by Services on Ordinary Account
(000 omitted)
1927-28	1928-29	1929-30	1930-31	Estimated 1931-32Finance-	S	*	$	$	$Interest on Public Debt	128,903	124,990	121,566	121,290	121,163Subsidies to provinces	12,517	12,554	12,497	17,436	13,695Charges of management	885	923	1,016	920	874Premium, Disc, and Exchange	42	67	73	19	3,635Superannuation	1,499	1,409	1,321	1,238	1,148Civil Government	11,576	11,820	12,258	12,628	12,181Agriculture	6,488	7,202	9,287	9,144	9,275Fisheries	1,751	1,974	2,274	2,262	1,922Immigration	2,705	2,632	2,757	2,255	1,857Indian Affairs	4,200	4,598	5,135	5,866	4,861Interior-	Dominion Lands and Parks	4,083	4,987	5,480	4,970	2,659Scientific Institutions	734	794	817	817	550Govt, of N.W. Territories	'	250	318	435	546	376Govt, of the Yukon	178	184	186	201	184Justice-	Administration	2,191	2,203	2,199	2,214	2,216Penitentiaries	1,756	1,808	2,561	3,237	2,808Labour-	Technical Education	966	1,152	413	391	300Old Age Pensions	131	833	1,537	5,658	10,251General	314	365	416	511	353Legislation-	Parliament	1,996	2,264	2,293	2,428	2,779Elections	45	62	26	2,235	127Marine-	Ocean and River	3,749	3,683	5,136	3,639	3,824Lighthouse and Coast	2,771	2,813	2,875	3,392	2,620Scientific Institutions	270	288	317	368	417Steamboat Inspection	131	141	140	144	144Mines	624	679	806	789	649National Defence-	Militia Services	10,152	11,044	11,033	10,953	9,802Naval Services	1,702	1,836	3,013	3,598	3,215Air Services	3,892	5,041	5,921	7,147	4,072General Services	116	103	227	127	4Govt. N.W.T. (Radio)	143	139	140	218	198National Revenue	11,801	12,877	13,131	13,206	13,033Pensions, War, etc	39,778	41,487	40,407	45,966	48,529Pensions and National Health- Treatment and after-care of returned	soldiers	6,959	7,902	8,494	9,774	11,244Health	771	924	1,021	943	895Post Office	31,783	33,483	35,037	36,293	34,551Public Works-	Charges to Income	14,037	17,003	18,134	23,763	16,060Charges to collection of revenue	943	940	924	936	774Railways and Canals-	Maritime Freight Rates Act, 1927	3,471	7,178	7,401	10,327	11,247Other Charges to Income	2,367	1,120	1,280	1,200	895Charges to collection of revenue	2,535	2,405	2,460	2,911	2,683R.C.M. Police	2,300	2,601	2,902	2,955	3,287Soldier and General Land Settlement	Administration	1,334	1,442	1,362	1,300	1,043Trade and Commerce-	Canada Grain Act, Exhibitions, etc....	4,016	4,476	4,894	6,586	8,137Bounties, copper bars, etc	83	79	40	92	145Mail Subsidies and Steamship Sub-	ventions	845	1,026	1,083	1,323	3,025Other Expenditures	6,385	7,104	5,055	5,342	5,036Total Ordinary Expenditures...	336,168	350,953	357,780	389,558	378,743
chased from the mines. This expenditure was largely offset on the revenue side by credits totalling $2,248,000, resulting from the sale of New York exchange and the discount on sterling purchased to meet London requirements. A further credit of $506,000 was realized in the purchase below par of sterling securities for

The Budget-Mr. Rhodes
Capital Expenditures
The amount voted for capital expenditures was 818,861,000, of which it is estimated $16,-
975,000	was spent in 1931-32. A year ago the expenditures on capital account were $28,-
200,000.	Savings of $600,000 were made by the Department of Public Works and $1,300,000
by Railways and Canals. The principal items of expenditure were: Hudson Bay railway, $5,215,000; Welland canal, $2,940,000; St. Lawrence river Channel dredging, $4,200,000; and the Research building, Ottawa, $1,700,000.
A five-year comparison of capital expenditures follows:
Capital Expenditures (000 omitted)
-	1927-28	1928-29	1929-30	1930-31	Estimated 1931-32$	$	$	$	$13,763	13,164	9,324	9,842	3,255Railways	3,592	6,302	6,663	6,371	6,269Public Works	3,281	3,343	6,574	12,009	7,45120,636	22,809	22,561	28,222	16,975
Special Expenditures
It is estimated that special expenditures will amount to $55,100,000, as compared with $16,789,000 on this account in the previous year. The chief items are wheat bonus and unemployment relief.
The wheat bonus will cost $11,000,000 as compared with the estimate made originally of $7,000,000, the increase being due to the fact that the crop proved to be greater than was anticipated.
Unemployment Relief Act, 1930
A reference to the Public Accounts will disclose that as of March 31, 1931, the sum of $4,432,000 had been paid on account of unemployment relief under the authority of the act of 1930. In the year now under review, expenditures on the authority of that act will, it is estimated, amount to $13,250,000. This brings the total expenditure by the Dominion under the authority of the 1930 legislation to $17,682,000. A small residue of accounts has still to be adjusted, the estimated amount being $400,000.
Unemployment and Farm Relief Aot, 1931
Expenditures under the Unemployment and Farm Relief Act of 1931 fall into three divisions:
(1)	Dominion services, the Whole cost of which is borne by our treasury;
(2)	Provincial and municipal public works, to which the Dominion contributes an agreed proportion and
(3)	Direct relief, to which also the Dominion contributes a proportion of the provincial and municipal expenditures.
Under Dominion services, expenditures amounting to $6,481,000 have been approved, of which $3,765,000 will be chargeable to the accounts of the fiscal year now ended. The distribution by departments is as follows:
Public Works	$ 1,560,000
Railways and Canals	 568,000
Interior	 885,000
National Defence	 71,000
Justice	 83,200
Board of Railway Commissioners		500,000
National Battlefields' Commission		25.000
Agriculture	 7,000
Administration	 65,800

The program of provincial and municipal public works involves an expenditure estimated at $70,469,675, of which the Dominion's contribution is placed at $26,586,763. These undertakings are under the control of either provincial or municipal authority, and payments of the Dominion's contribution are made only after the submission of accounts for expenditure, duly certified by the appropriate provincial authority. Under this head, provision is made in the accounts of the fiscal year 1931-32 for disbursements of $12,278,000. The following statement shows a division of this program of works by provinces:
The Budget-Mr. Rhodes

Unemployment Relief Works, 1931
Province	Total Works	Dominion Share	Provincial and Municipal SharePrince Edward Island	$ 272,250 2.546.869 1.911.870 14,612,975 27,869,177 6,565,495 5,519,843	s	$Nova Scotia	New Brunswick	Quebec	Ontario	Manitoba	Saskatchewan	2,759,921Alberta	British Columbia	5,999,971	
70,469,675	26,586,763	43,882,912
For direct relief, the federal contribution chargeable to the 1931-32 accounts is estimated at $8,957,000, the major part of which applies to the drought areas in Saskatchewan.
To sum up, these special expenditures for unemployment and farm relief in the fiscal year 1931-32 will be $13,250,000 under the legislation of 1930, and $25,000,000 under the legislation of 1931, a total of $38,250,000, and the balance of commitments to be carried over into the next fiscal year will 'be $16,000,300, not including provision for direct relief beyond the actual disbursements mentioned above. The latter requirements are difficult to estimate as they are governed by the exigencies of the situation in the different provinces and it requires a considerable period after the actual relief payments are made for the accounts for the Dominion's share to reach Ottawa.
Provincial Financing
Having dealt with expenditures for unemployment and farm relief, it may be appropriate, while on the subject, to refer to further assistance rendered to provincial governments by way of loans. It is a matter of common
-	Loans covering obligations maturing in New York	Loans for public works and relief	Loans for governmental services	TotalManitoba	$ 1,189,185 3,934,341 3,142,000 3,371,664	$ 1,794,733 500,000 1,000,000 1,000,000	$	S 2,983,918 10,934,341 4,142,000 4,371,664Saskatchewan	6,500,000	Alberta	British Columbia	
11,637,190	4,294,733	6,500,000	22,431,923
knowledge that for some months various provincial bodies have been unaJble to issue securities on the New York market, where they have had obligations falling due. In order to protect the credit of Canada as a whole, temporary assistance was given to certain of the provinces in meeting their obligations, but in no instance did the government undertake the role of banker with respect to the redemption of maturing provincial debts in New York until it was satisfied that every other avenue had been diligently explored by the province without success. The sums advanced under this head total $11,637,190. In addition to this amount, $10,794,000 was loaned for internal purposes, including provincial share of relief works. In those instances the government's assistance was given as a part of its relief program on the urgent representations of the provinces that in existing circumstances their commitments could not be fulfilled without such aid from the Dominion. As security, the Dominion holds one-year treasury bills of the provinces and the rate of interest charged is that which the Dominion had to pay for the money. The loans by provinces are:
{Mr. Rhodes.]

The Budget-Mr. Rhodes
Including loans and expenditures, Dominion relief and assistance to the provinces, will disbursements on account of unemployment total $60,681,923 as follows.
Act of 1930	
Act of 1931-
Federal Services	
Provincial and Municipal Works Direct Relief	
	 $13,250,000

Loans to provinces (not including advance payments on account of Dominion contributions)-
Manitoba	
Saskatchewan	
Alberta	
British Columbia	
2,983,918
10,934,341
4,142,000
4,371,664
22,431,923
60,681,923
A comparative statement showing special expenditures during the last five fiscal years follows:
Statement of Special Expenditures
(000 omitted)
-	1927-28	1928-29	1929-30	1930-31	Estimated 1931-32$ 1,861 13 1,692	$ 120 11 2,056	$ 95 17 3,027 6,700	$ 110 193 2,955 500 4,432	$ 86 1,336 3,407 1,027 13,250 25,000 11,032
8,599	
					
	3,566	2,187	9,839	16,789	55,138
Loans and Advances Non-Active
Advances to certain corporations, being noninterest producing, are treated as expenditures in estimating our debt position. These advances were three in number-$1,360,000 to tile (Merchant Marine and Canadian National (West Indies) Service, $1,495,000 to Quebec
Harbour Commission, and $534,000 in payment of interest which the Dominion guaranteed on bonds issued by the Harbour Commissioners of Montreal in connection with the harbour bridge. There is now presented a five-year summary of expenditures under the heading of Loans and Advances, Non-Active:
Statement of Loans and Advances, Non-Active (000 omitted)
-	1927-28	1928-29	1929-30	1930-31	Estimated 1931-32$	$	$ 2,933 2,491 2,821 17	$	$Loans to Canadian National Steamships... Loans to Quebec Harbour Commissioners.	1,000 1,458	758 2,888	1,827 3,491 170	1,361 1,495 534Accounts carried as Active Assets transferred to Non-Active	16,036	10,000	18,494	13,646	8,262	5,488	3,390
The Budget-Mr. Rhodes

The total of all expenditures for the year summarizing the expenditures by divisions, is is 8454,246,000. A comparative statement now submitted:
Summary of all Expenditures
(000 omitted)
-	1927-28	1928-29	1929-30	1930-31	Estimated 1931-32Ordinary expenditure	$ 336,168 20,636 3,566 18,494	$ 350,953 22,809 2,187 13,646	$ 357,780 22,561 9,839 8,262	$ 389,558 28,222 16,789 5,488	$ 378,743 16,975 55,138 3,390Capital	Special	Loans and advances non-active..	
378,864	389,595	398,442	440,057	454,246
Having detailed the revenues from all sources and the expenditures under the appropriate divisions, the net result of the accounts for the year may now be indicated. With ordinary revenues of $327,719,000 and ordinary expenditures amounting to $378,-
743,000,	the resulting deficit on ordinary account is $51,024,000, which has occurred as a consequence of the decreased yield from taxation and notwithstanding the reductions made in expenditures. Special expenditures, including $49,282,000 for unemployment relief and wheat bonus as previously detailed, total
855,138,000.	As an offset to this amount, $7,022,000 was received in special revenues, leaving a balance not provided from income of $48,116,000. In addition, there are the capital
expenditures of $16,975,000 and loans and advances non-active of $3,390,000. The amount, therefore, of the increase in debt for the year is $119,505,000.
1931 Conversion Loan
Reference was made in the budget last year to the conversion loan campaign which had just closed. As a matter of record, the final figures in connection with this debt operation are now presented: Of the $1,084-
800,000	in bonds eligible for conversion, $638,-
600,000,	or sixty per cent, were converted. This operation did not involve any change in the amount of public debt outstanding, as the exchange was made at par. Details of the conversion are:
Loans Eligible for Conversion	Amount Outstanding May 1, 1931	Amount Converted5% War Loan maturing October 1,1931	S 52,929,600 73,323,150 446,659,950 511,910,650	$ 38,625,700 37,523,200 276,688,100 285,772,30054% Renewal Loan maturing Nov. 1, 1932	5i% Victory Loan maturing November 1,1933..	54% Victory Loan maturing November 1, 1934	
$ 1,084,823,350	8 638,609,300
The time for this conversion loan was admirably chosen. Its execution was attended with outstanding success, and its effect upon our financial position has been marked. That this is so is due entirely to the vision of the Prime Minister whose conception it was and under whose guidance it was conducted. *The total expenses in connection with the Conversion Loan were slightly over one-half of one per cent.
The conversion loan operations had resulted in 70 per cent of the October 1st maturity be-
While the conversion had no immediate effect on the annual interest charges, the government will benefit substantially within the next few years by reason of the lower interest rates obtained. This is indicated by the following statement:
Fiscal year	Saving in
interest
{{SiHg	 $ 193,128
J934-35	 3,335,241
1935-36 and annually thereafter	 6,192,964

The Budget-Mr. Rhodes
ing refunded. There remained only about $13,000,000 to be paid on the due date. The state of the public finances did not permit this to be met out of current revenues. Consequently in August, Canadian institutions were invited to tender for the purchase of all or part of $13,000,000 to be absorbed into the 1946-56 Conversion Loan series at the interest rate of 4J per cent. Tenders were accepted at par for $4,500,000. The balance was arranged through temporary credits with the Bank of Montreal, which were later paid off from the proceeds of the National Service Loan.
Temporary Borrowings
In September last the Canadian National Railways required funds in New York to meet maturing credits and these were financed directly by the government by an issue of $18,500,000 in three months' 2\ per cent treasury bills, which were sold to the Chase National Bank of New York at par. At the same time, $500,000 was borrowed for purposes of the Dominion, making the total $19,000,000. When the bills matured in December, $1,000,000 were redeemed and the balance renewed for ninety days at 5 per cent; subsequently $3,000,000 were redeemed, leaving $15,000,000 still outstanding.
Pending flotation of the National Service Loan in November, it was necessary to borrow temporarily on treasury bills from the chartered banks in Canada, an aggregate arhount of $34,800,000. These bills have since been retired.
National Service Loan
A major operation for the year was the flotation of the 5 per cent National Service Loan in November. The subscription lists were opened on November 23rd with provision that they might remain open until December 12th. The bonds were offered for public subscription in two maturities at a price of 99-25 and accrued interest for the five-year bonds, and at 99 and accrued interest for the ten-year bonds maturing in 1941. The campaign was under the direction of a Dominion-wide management committee, under the chairmanship of Sir Charles Gordoii, President of the Bank of Montreal.
The offering was $150,000,000 and, while provision was made for the campaign to extend over a period of twenty days, the issue met with such popular response, that the amount was substantially over-subscribed and the lists closed on November 30th: but, to meet popular demand, subscribers on November 30th were allowed to offer in pavment cheques dated December 1st. The accepted over-subscription was $71,198,200, the total issue being $221,198,200, of which $79,535,200 was for the 1936 maturity and $141,663,000 for the 1941 maturity. The total number of subscriptions was 109,000, indicating that the loan was widely distributed. While the banks made application for $30,000,000 the government took the view that it was in the national interest to give the preference to small investors; therefore, when subscriptions far exceeded the $150,000,000 offering, the banks were asked to withdraw their applications.
The following statement indicates the extent and nature of the distribution:
National Service Loan
Distribution of Subscriptions
-	Number	AmountSubscriptions of less than SI, 000	55,761 48,649 2,937 1,013 310 241	$ 21,629,900 88.889.900 24.106.900 18.154.200 12.815.900 52.918.200 2,683,200Subscriptions of $1,000 to $5,000 inclusive	Subscriptions of $5,100 to $10,000 inclusive	Subscriptions of $10,100 to $25,000 inclusive	Subscriptions of $25,100 to $50,000 inclusive*	Subscriptions of over $50,000*	Unallocated	
108,911	$ 221,198,200
* Largely made by institutions.
In making announcement on the night of November 29th of the acceptance of the oversubscription which, due to the influx of applications on the last day, turned out to be much larger than was then anticipated, it was stated that the government would put into
The Budget-Mr. Rhodes

motion a plan whereby the excess would be used for debt reduction. As of this date, $50,-
745,000	of debt has been taken up, while over $11,600,000 is temporarily invested in provincial treasury bills of the four western provinces taken in connection with New York debts.
The expense of raising the National Service Loan, including commissions, advertising, printing and delivery of securities, was less than one per cent.
Canadian National Railway Company
The annual report of the Canadian National Railway Company for the year 1931 having already been presented to the house and the whole railway problem being under review by a royal commission, remarks under this head will be confined to a brief statement of the operating results and capital requirements in the year and the financing arranged.
The year 1931 was marked by a further severe drop in gross earnings to a low point since 1919, and notwithstanding reduced operating expenses, the system's operations (excluding eastern lines) showed a net income deficit of $84,262,000 after taking into consideration all debt charges, an increase of $23,000,000 over 1930. Deducting the interest charged but not paid upon debt to the government represented by loans and advances carried in the public accounts as non-active assets, the loss amounted to $52,200,000 and this is the amount which might be considered as the addition to the country's deficit for the year, in interest charges in respect of government loans having already been absorbed in the public accounts.
In addition to provision for the deficit, it was necessary to provide a further large sum for capital expenditures and the retirement of railway debt. While new capital expenditures were greatly curtailed in 1931, commitments arising out of expenditure programs for branch lines, terminals and hotels undertaken prior to 1930, were still large. The total financial provision which the government was required to make, either directly or indirectly, for expenditures of the Canadian National Railways in 1931, was $108,976,265, made up as follows:
Deficit, Canadian National Railways, excluding Eastern Lines	$ 52,255,676
Deficit, Eastern Lines....	8,712,762
.	.	.

Capital expenditures including new equipment	 33,990,106
Debt retirement	 9,791,691
Discount on securities issued	 4,226,030

Of these requirements, $41,282,899 are being furnished by way of advances by the government out of the proceeds of the National Service Loan and temporary borrowings in New York already referred to. The deficits on the Eastern Lines, amounting to $8,712,762 have, in accordance with the provisions of the Maritime Freight Rates Act, been paid as an expense of the government and are included in the statement of expenditures submitted. The balance of the requirements, namely, $58,980,604, including discount, was provided from the proceeds of Canadian National Railway bonds guaranteed by the government. These proceeds came, in part, from an issue (dated February 1, 1931) made in the previous fiscal year and, in part, from the $50,000,000 4} per cent 20-year bonds, to which reference has already been made, sold in New York early in September last., at a cost of 4-79 per cent. Only $38,589,599.15 of this issue \vas applicable to 1931 expenditures, as $11,410,400.85 of the bonds were sold to redeem a temporary bank loan carried over from the previous year. The guarantee of the securities was authorized by legislation of 1931.
The advances made by the government stand as to $29,910,400.85 under authority of the Canadian National Railways Financing and Guarantee Acts of 1931, and as to $11,372,498.86 under the supplementary legislation recently passed by parliament to provide for expenditures up to the end of 1931 in excess of amounts authorized for such purposes.
These advances have been made from the treasury under legislation which anticipates repayment through the sale of securities guaranteed by the government. It may, of course, transpire that such repayment will not be practicable and that the company will find it is unable to assume carrying charges on this debt. It has not been considered advisable, however, to take these advances into our accounts as expenditures, pending the determination of policy with reference to the future financing of the company after the report of the Royal Commission on Railways has been received and considered.
The estimate which is before the house for the operations of the Canadian National Railways for the year 1932, is $61,500,000, to which $6,217,000 is to be added for Eastern Lines deficit, after crediting the 20 per cent reduction in tolls, making a total of $67,717,000. Of this amount, about $49,000,000 represents the estimated deficit after paying interest on funded debt held by the public but without provision for interest on the government's capital in the system. The total shows a

The Budget-Mr. Rhodes
considerable reduction from the requirements in the past few years but it is still a very large figure and constitutes one of the country's major financial problems. Outside of the interest on the national debt of the dominion, it is the largest single item in the country's budget and represents over one-seventh of the money which the government is called upon to raise for all current purposes.
Indirect Liabilities of the Government The amount of railway securities presently outstanding bearing the guarantee of the Dominion of Canada, is $969,683,288, to which should be added 531,235,118 of securities guaranteed for other enterprises, making a total of guaranteed obligations outstanding as of March 31, 1932, of $1,000,918,406, as compared with $954,917,112 a year ago, a net increase of $46,001,294, The total funded debt of the Canadian National Railways to the public now amounts to $1,274,587,745.
Steamship Companies
The steamship companies operated on behalf of the government, which are budgeted for on the basis of actual cash outlay required in the year, received advances from the dominion treasury amounting to $1,360,853, divided as follows:	Canadian Government
Merchant Marine, Limited, $444,285, and Canadian National (West Indies) Steamships, Limited, $916,568.
Harbour Commissions Advances to harbour commissions in 1931-32 totalled $14,148,540. The chief expenditure, amounting to approximately $5,800,000, was made in Saint John where a reconstruction program was necessary on account of the disastrous fire which occurred there. The balance of the expenditure consisted mainly of commitments in connection with the completion of development programs undertaken prior to 1930.
The following statement shows the amounts advanced to each commission in 1931-32, and the total advances to date:
Advances to Harbour Commissions
-	Advances 1931-32	Advances to date
	$ 465.000 2.752.000 1.412.000 534.000 170,685 1.495.000 5,763,855 747.000 809.000	$ 2,626,000 7,593,000 57,389,000 704,000 170,685 25,924,995 9,170,855 2,426,600 21,416,900
		
		
Bridge (deficit)		
		
		
		
		
		
	14,148,540	127,422,035
The Quebec commission does not pay any interest, and consequently its loans are treated as non-active assets. This also applies to the advances made to enable the harbour commissioners of Montreal to meet the deficit on the harbour bridge. The other loans have paid interest and are carried as active assets, although it may be observed that some adjustments may prove necessary in this respect in the near future.
Canadian Farm Loan Board
The loaning operations of the Canadian Farm Loan Board were again financed from the dominion treasury by the purchase of $1,500,000 of the board's 5 per cent bonds at par. In addition $107,603 was paid for capital stock of the Board in accordance with the provisions of the Canadian Farm Loan Act. The total capital furnished by the Dominion government for the board's operations since its inception amounts to $7,216,465, divided as follows:
Initial Capital	$ 5,050,000
Purchase of Bonds	 1,800,000
Purchase of Capital Stock	 366,465

Wheat Marketing Guarantees
Under the authority of section 3 of chapter 58, statutes of 1931, orders in council concerning the marketing of the western grain crops were made. The house will recall the problems which the Canadian Cooperative Wheat Producers, Limited, faced in financing its operations in connection with the 1930 crop. The government, believing that it was in the national interest to protect the credit of the marketing agencies in such a way that the grain might be marketed to the general advantage of growers, had given an undertaking to the seven chartered banks concerned, which then made available the necessary credits. The undertaking was given status by order in council P.C. 2238, dated September 12, 1931. This undertaking has served its purpose, and without cost to the treasury. Based upon present market prices, the expectation is that, when all accounts are settled, the Canadian Cooperative Wheat Producers, Limited, will be able to settle all advances without recourse being had to the dominion's guarantee.
With respect to the 1931 crop, the three semi-public marketing agencies in the prairie provinces found their position a perilous one at the commencement of the marketing season. The assets usually pledged against bank credits were already encumbered, thus restricting the credit available. Representations on their behalf were made to the Dominion
The Budget-Mr. Rhodes

government by the premiers of the three
provincial governments concerned, and, as a result, an order in council was passed on September 12, 1931, authorizing dominion guarantee of credits under certain conditions to the Manitoba Pool Elevators, Limited; Saskatchewan Pool Elevators, Limited; and Alberta Pool Elevators, Limited, calculated against their respective working capital at the commencement of the 1931 marketing season. However, the certificates of the chartered accountants directed to establish the amount of working capital showed that
the proposed basis would not be a satisfactory one, and, therefore, a subsequent order in council was issued establishing specific amounts which the Dominion would guarantee under certain conditions. The amounts were: Manitoba Pool $1,250,000; Saskatchewan Pool $12,000,000; Alberta Pool $7,500,000. This plan has functioned to the satisfaction of all concerned and no liability has developed against the Consolidated Revenue Fund.
The operations of the year are summarized in a condensed cash statement, which now follows:
Condensed Cash Statement, 1931-32 (estimated)
Receipts:-
Cash balances in banks, March 31, 1931
$	44,599,432 02
Loans and advances repaid:-
Provincial Housing Loans	$	150,500 00
Government of Greece	 115,000 00
Soldier Settlement Loans	 783,900 00
*****'

	1,049,400 00
Loan Proceeds:-
National Service Loan....
Conversion Loan	
Temporary Loan, New York
219,185,056 00
4,500,000	00
19,000,000 00
* - - 

 242,685,056 00
Annuities, Insurance, Superannuation Funds-net accretion	 10,130,581 80
Bullion and Specie, reduction in free holdings	 7,883,448 00
Royal Canadian Mint bullion advance aeoount-reduction	 1,084,964 81
Revenues, 1931-32	 334,740,468 00
$	642,173,350 63
Payments:
Reductions in Liabilities:
Post Office Savings Bank withdrawals	$	831,855 58
Post Office Money Orders, etc., redeemed	 734,193 82
Redemption of Debt:
War Loan 1916-31	
Temporary Loan, N.Y	
Public Service Loan, N.Y., 1916-31
Renewal Loan 1922-32	
Misc. Matured Stock and Bonds_
$	12,627,000 00
4,000,000 00
24,924,000	00
1,350,000	00 82,072 04

$	42,983,072 04
Bond Purchase Account	 3,368,870 50
Bonds and Stock acquired for sinking funds	 3,834,185 00
Matured Coupons redeemed	'	 127,782 34
Cost of Loan Flotations-Unamortized	 4,491,521 28
Investments-Active Assets:
Provincial Governments, Relief Act, 1931	
22,431,923	00Canadian National Railways	
41,282,899	00Harbour Commissions	
12,119,540	00Canadian Farm Loan Board	
1,607,603	00Miscellaneous Accounts	Expenditures, 1931-32	
Cash Balances in banks, March 31, 1932
77,441,965 00 912,539 38 454,246,018 00 53,201,347 69


S 642,173,350 63
[Stage Direction]
The Budget-Mr. Rhodes
Continuing the practice introduced last year, the cash statement is followed by the balance sheet. The active assets are made up of cash balances and specie accounts, loans and advances which are realizable or income-producing, and other miscellaneous accounts. These assets are taken as an offset against
the gross liabilities in arriving at the net debt.
Total liabilities as at March 31, 1932, being
estimated at 82,832,355,834, and active assets at $451,238,348, the resulting net debt figure is $2,381,117,486.
The balance sheet follows:
Liabilities, March 31, 1932 (estimated)
Dominion Notes Outstanding	$
Bank Circulation Redemption Fund	
Insurance and Superannuation Funds:
Government Annuities	$	26,643,412 41
Insurance Fund, Civil Service	 7,026,451 72
Insurance Fund, Returned Soldiers	 10,340,486 30
Retirement Fund	 6,888,204 08
Superannuation Funds	 39,488,306 22
[Stage Direction]


Trust Funds:
Indian Funds	$	13,591,800 48
Common Schools Funds	 2,668,449 17
Contractors' Securities Deposits	 560,000 00
Other Trust Funds	 2,163,541 17
[Stage Direction]


Contingent and Special Funds	
Post Office Money Orders, Postal Notes, etc., outstanding
Province Accounts	
Post Office Savings Bank Deposits	
Temporary Loan	
Funded Debt:
Unmatured	$ 2,501,782.733 23
Matured but not presented for payment	 1,000,000 00
Interest coupons matured but not presented for payment
157,300,000 00 6,811,792 41
90,386,860 73
18,983,790 82 1,847,315 00 3,401,154 10 9,623,816 77 23,918,371 39 15,000,000 00
2,502,782,733 23 2,300,000 00
Active Assets, March 31, 1932 (Estimated)
Cash balances in banks	
Specie Reserve	
Advances to banks under Finance Act	
Loans to provinces for housing	
Loans to provinces, Relief Act, 1931	
Loans to Foreign Governments:
Greece	
Roumania	
Loans to Harbour Commissioners:
Chicoutimi	
Halifax	 ,-r	,.
Montreal	
Saint John	
Vancouver....j	
Three Rivers	
New Westminster	
Canadian Farm Loan Board	
Soldier and General Land Settlement	
Seed Grain and Relief Advances	
Canadian National Railways	
Bond purchase Account	
Advances for Working Capital and Miscellaneous:
Advances to Royal Canadian Mint	
Can. Govt. Railways Open and Stores Accounts	
Miscellaneous	*	
Deferred Debits:
Unamortized discount and commission on loans
[Stage Direction]
$ 53,201,347 69
64,600,000 00 32,000,000 00
[Stage Direction]
 96,600,000 00
10,521,187 72 22,431,923 00
[Stage Direction]
 32,953,110 72
6,525,000 00 23,969,720 00
[Stage Direction]
 30,494,720 00
2,626,000 00 7,593,000 00 57,389,000 00 9,170,855 00 21,416,900 00 2,426,600 00 170,685 91
100,793,040 91 7,216,465 00 47,366,985 44 2,391,971 84 41,282,899 00 4,403,676 06
3,223,200 00 15,748,921 60 3,020,994 36
[Stage Direction]
 21,993,11596
12,541,015 28

[Stage Direction]
The Budget-Mr. Rhodes
[Stage Direction]
Non-Active Assets, March 31, 1932
(Estimated)
Canadian National Railways	
Canadian National Steamships	
Harbour Commissioners-
Quebec	
Montreal and Three Rivers	
Seed Grain and Relief Advances	
Soldier and General Land Settlement	
Miscellaneous Advances	
Capital Accounts-
Canals	
Railways	
Public Buildings, Harbour and River Improvements...
Military Property and Stores	
Territorial Accounts	
Railway Accounts (old)	
Consolidated Fund Balance as at debit, March 31, 1932...
[Stage Direction]
26,708,448	24
	 782,464	71
	 16,468,957	95
	 997,987	23
237,033,725 90 441,960,292 77 243,349,535 87 12,035,420 50 9,895,947 68
944,274,922 72 88,398,828 78 672,168,154 95
Net Debt, March 31, 1932
[Stage Direction]
Completing the statistical tables to be sub-	the indirect obligation represented by guarmitted, there are those showing by maturity	anteed securities outstanding in the hands of
dates the direct obligation of the Dominion the public, as follows: in the form of unmatured funded debt and
Unmatured Funded Debt as at March 31, 1932, and Annual Interest Charges
Date of maturity	Rate	Where payable	Amount of loan	Interest
				. charges 1932-33
	p.c.		S cts.	$ cts.
1932-				
	5* 4		34,449,950 00 40,000,000 00	1,894,747 2,5 1,600,000 00
		Canada and New York.		
1933-				
	hi		169,971,850 00	9,348,451 75
1934-				
	31 5		23,467,206 27 33,293,470 85 226,138,350 00	821,352 22 1,664,673 54 12,437,609 25
July 1					
	hi			
1935-				
	5	Canada and New York.	874,000 00	43,700 00
1936-				
Feb. 1		a		40,000,000 00	1,800,000 00 3,976,760 00
	5		79,535,200 00	
1937-				
	5		90,166,900 00 236,299,800 00	4,508,345 00 12,996,489 00
	5§			
1938-				
	3		8,071,230 16 18.250.000	00 10.950.000	00 15,056,006 66	242,136 90 547.500	00 328.500	00 526,960 23
	3			
July 1		3			
	3§			
1940-				
	a		75,000,000 00	3,375,000 00
1941-				
	5		141,663,000 00	7,083,150 00
1943-				
	5		147,000,100 00	7,350,005 00
1944-				
Oct. 15		a		50,000,000 00	2,250,000 00
1946-				
Feb. 1		a		45,000,000 00	2,025,000 00
1947-				
Oct. 1		2i		4,888,185 64	122,204 64
1950-		[DOT]		
	31		137,058,841 00	4,797,059 43
1952-				
	5		100,000,000 00	5,000,000 00
1956-				
Nov. 1		41	Canada		43,125,700 00	2,102,377 87
(a) Tax free in Canada. 

The Budget-Mr. Rhodes
Unmatured Funded Debt as at March 31, 1932, and Annual Interest Charges
Date of maturity	Rate	Where payable	Amount of loan	Interest charges 1932-331957-	(b)	p.c. 41 a 41 4	$ cts. 37,523,200 00 276,688,100 00 285,772,300 00 93,926,666 66 100,000,000 00 2,564,170,057 24	$ cts. 2,063,776 00 15,217,845 50 15,717,476 50 3,757,066 67 4,000,000 00 127,598,186 751958-	(c)	'...	1959-	(d)	I960-	4	
Payable in Canada	 $1,881,461,020 85
Payable in Canada and New York	 131,040,900 00
Payable in New York	 240,000,000 00
Payable in London	 311,668,136 39
2,564,170,057 24
Less bonds and stocks of the above loans held as Sinking Funds	 62,387,324 01
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(b)	51% to Nov. 1, 1932.	======
(c)	Tax free to Nov. 1, 1933, 51% to Nov. 1, 1933.
(d)	51% to Nov. 1, 1934.
Bonds Guaranteed by Dominion Government as at March 31, 1932
Date of Maturity	Issue	Interest Rate	Amount OutstandingSept. 1, 1934	% 4	$ cts. 17,060,333 33 17.000.	000 00 24.734.000	00 24.492.000	00 24.282.000	00 24.636.000	00 700,000 00 50.000	000 00 667,953 04 9,359,996 72 50.000.	000 00 26.000.	000 00 9,400,000 00Feb. 15^ 1935	4* 6	Sept. 1, 1936	Oct. 1, 1940	7	Dec. 1, 1940	7	July 1, 1946	6§ 41 4* 5	April 1, 1948	Sept. 1, 1951	Aug. 1, 1952	July 10, 1953	3	5	Sept. 15; 1954	41 5	Mar. 1, 1955	Canadian National (West Indies Steamships)	4! 41 4S 31 31 31 3	50.000.	000 00 70.000.	000 00 65.000.	000 00 7,896,563 49 3,149,998 66 34,229,996 87 34,992,000 00 8,440,848 00 35.000.	000 00 60.000.	000 00 60,000,000 00 19.000.	000 00 18.000.	000 00 29,452,409 67Feb. 1, 1956	July 1, 1957	July 20, 1958	May 4, 1960	May 19, 1961	Jam 1, 1962	Jan. 1, 1962...	4	Dec. i, 1968	4 \	5	Oct. 1, 1969	5	Nov. 1, 1969	5	Feb. 1, 1970	5	By tenders or drawings...	Canadian National	2	Various dates 1932-54	
Serial-Feb. 1, & Aug. 1, 1932-1938	City of St. John Debs, assumed by St. John Harbour Commissioners	various 5	1,467,164 96 9,750,000 00 60,833,333 33 20,782,491 67 13,252,322 67 119,839,014 33 1,499,979 67 1,000,918,406 414	*«	5	a	5	it	4	it	4	
1764
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Trade of Canada
Turning now to the matter of external trade, Canada has continued to share in the pronounced shrinkage, both in volume and value, that has marked the commerce of the
world. The following is a statement of Canada's foreign trade for the first eleven months of the last fiscal year, as compared with the same period in 1930-31:
(000 omitted)
-	11 months ended Feb. 28, 1931	11 months ended Feb.29,1932	Decrease$ 831,232 744,669 16,038	$ 521,056 536,595 9,951	$ 310,176 208,074 6,087Exports, Canadian produce	
Re-exports, foreign produce	1,591,939	1,067,602	524,337
The figures indicate a reduction in the dollar value of total trade of approximately 33 per cent, which corresponds fairly closely to the average fall in the world trade. Notwithstanding this unfavourable aspect of our external commerce, a very distinct improvement has taken place in the conversion of an unfavourable into a favourable balance. Starting last June, our exports commenced to
exceed the imports and a surplus of exports over imports has continued month by month to date. Taking the last eleven months' figures as a basis, the balance has been favourable to the extent of $25,491,000, as compared with an unfavourable balance of $70,524,000 in the previous corresponding period. Comparative figures are as follows:
(000 omitted)
11 months ended
February 28, 1930 February 28, 1931
February 29, 1932
In the eleven months' period ended February 29, 1932, the latest date for which statistics of trade by countries are available, Canada's imports from the British Empire amounted to 131 million dollars, representing 25'3 per cent of total imports and showing a decrease of 56 million dollars from the previous corresponding period. Our exports to the British Empire are shown at 204
Imports	Exports	Excess of Imports over Exports$	s	$1,135,248 831,232	1,053,246 760,708	82,002 70,524Excess of Exports over Imports521,056	546,547	25,491
million dollars representing 37-4 per cent of total exports, a drop in the period of 71 million dollars.
The imports from the United Kingdom decreased 43 million dollars and exports dropped 44 million dollars.
A summary showing the imports from and exports to the principal parts of the British Empire is as follows:
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The Budget-Mr. Rhodes
Trade of Canada with British Empire First eleven months (000 omitted)
-	Imports 1931-32	Decrease from 1930-31	Exports 1931-32	Decrease from 1930-31$ 94,579 5,357 4,259 938 10,995 1,465 14,247	$ 42,842 1,495* 1,091* 5,347 2,359 1,007 7,526	S 163,152 4,688 8,011 3,433 7,694 6,320 11,266	$ 43,922 1,605 1,554 8,777 3,657 3,987 7,808
Other	 Total British Empire					
	131,840	56,495	204,564	71,310
'Increase.
Our largest trade continues to be with the United States, to which exports in the eleven months ended February 29, 1932, amounted to 227 million dollars and from which imports were 317 million dollars, an unfavourable balance of 90 million dollars to Canada on the interchange. While exports declined 32-5 per cent in the period, our purchases
from the United States have decreased 40-6 per cent.
A statement is submitted to show the percentage of our trade with the British Empire, United States and other countries in the first eleven months of the fiscal year, and, for purposes of comparison to indicate the trend, similar percentages for the previous fiscal year.
Trade of Canada
-	Imports	Exports	Fiscal year 1930-31	First 11 months 1931-32	Fiscal year 1930-31	First 11 months 1931-32%	%	%	%British Empire	22-6	25-3	36-6	37-4United States	64-5	60-9	43-7	41*5Other Countries	12-9	13-8	19-7	211100 0	100 0	100 0	100 0
Having reached the conclusion that the interests of both contracting parties would be promoted by the negotiation of an entirely new convention, Canada gave notice to France, in December last, of her desire to terminate the French convention made in 1922, and to proceed to the making of a new agreement. The existing treaty terminates, therefore, on June 16 of this year and it is the earnest hope of the government that its place will
in the near future be taken by a commercial convention which may be of mutual advantage.
Estimated Revenues and Expenditures 1932-33
Based upon present rates of taxation and reasonably stable conditions, it is anticipated that the revenues in the fiscal year 1932-33 which has just commenced, will amount to
S319,100,000	from the following sources:
Customs Duties	   $100,000,000
Excise Duties	 45,000,000
Excise Taxes	 70,000,000
Income Tax	 48,000,000
Post Office	 32,000,000
Interest on Investments	 11,500,000
Other sources	 12,600,000
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The Budget-Mr. Rhodes
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The ordinary requirements for government services in 1932-33, as provided for in the main estimates, together with certain special and statutory amounts such as for old age pensions and payments to railways under the Maritime Freight Rates Act, are estimated at §369,900,000 and, in addition, $9,600,000 is voted for capital expenditures.
A very considerable contribution to the balancing of the budget has already been made in the reductions of appropriations which have been recommended to the house for the current year. Leaving aside the extraordinary expenditures on wheat bonus and unemployment relief, the expenditures in the fiscal year just ended are estimated at $404,900,000. in comparison with which the estimated expenditures of $379,500,000 for 1932-33 show a reduction of $25,400,000, after absorbing an increase in interest on the public debt of $12,700,000.
The perplexities which ordinarily attend the curtailment of expenditures on governmental services are rendered much greater in the present instance by reason of the reductions which had already been effected in the ordinary and capital expenditures, and particularly by reason of the increasingly smaller proportion of the expenditures which are controllable. Thus in the proposed expenditures for 1932-33, the fixed and, in general, uncontrollable amounts, including debt charges, pensions and ex-soldiers' welfare, provincial subsidies, and similar items, aggregate approximately $236,000,000, leaving only $143,500,000, or 38 per cent, under the classification of controllable. In the fiscal year just ended, the corresponding figure of controllable expenditures was $179,300,000. It will therefore be seen that the reduction which it is proposed to effect this year in the controllable expenditures is $35,800,000, which is the equivalent of 20 per cent. These figures have been cited to illustrate the drastic economies which the government has felt it necessary to institute, having regard to the depleted returns from taxation.
With revenues estimated at $319,100,000 and the usual current expenses of government amounting to $369,900,000, it is clear that increases in the rates of taxation are necessary. Accordingly it is proposed to recommend measures which will, it is estimated, increase the revenues by $55,000,000, thus balancing the current expenditures and leaving a surplus of $4,300,000. If expectations are realized, this surplus would serve to cover a large part of the capital expenditures as well. Even a

slight improvement in price levels, and the general volume of business would, of course, be reflected immediately in the returns from customs and excise taxes, and our budget position would be correspondingly improved.
Without building too greatly on help from this source in the present year, it is the considered view of the government that reductions in expenditures, on the one hand, and proposed additions to the taxation revenues on the other, will, in the final outcome, represent a complete balancing of the budget on the usual current governmental services. While, unfortunately, the estimates of revenues, which are conservatively based having regard to the present conditions of business, do not cover the special expenditures on unemployment relief, nor the more indirect liabilities arising out of the financing of the Canadian National Railways, it is nevertheless, in our judgment, as substantial a step in the direction of providing currently for every responsibility of the government as would be in the public interest to make effective in any one year under existing conditions.
Income Tax
It is proposed to raise the rate of taxation on incomes of corporations and joint stock companies to 11 per cent, to take effect in the 1931 taxation period. Under the act at present, a corporation whose financial year is not coincident with the calendar year is allowed until April 30 of the following year to pay the tax. It is proposed to amend the act to provide in such cases for the return of income and payment of the tax within four months from the close of the fiscal period. This will have the effect of accelerating the collection of the tax from those corporations whose fiscal periods do not end with the calendar year. A further amendment to the Income War Tax Act will repeal the provisions relating to family corporations.
In respect of the tax on personal incomes, it is proposed to repeal the deduction of 20 per cent now allowed from the tax payable under the established schedule of rates. In addition, all taxpayers, including corporations, in receipt of net income in excess of $5,000 will be required to pay a surcharge of 5 per cent of the amount of tax otherwise payable.
The personal exemption, where heretofore $3,000, will be reduced to $2,400, and where heretofore $1,500, will be reduced to $1,200. No change is to be made in the exemption for dependent children. Hereafter the exemption granted in respect of income from annuity

The Budget-Mr. Rhodes
contracts will be $1,200 instead of $5,000. This will bring the exemption into conformity with the Annuities Act as amended in 1931.
The penalty provisions in the Income War Tax Act will be amended so as to provide that in cases where investigation reveals that a taxpayer has deliberately understated his income, the amount of income not disclosed will be added in double the amount and the tax assessed thereon. The decease of the taxpayer will not avoid the tax penalty.
The changes in the exemptions and in the rates of tax payable will * apply to incomes of 1931. The following statement indicates the proposed increase in taxation, in the case of a married person without dependents, at various amounts of income:
Income Tax
Married Person without Dependents .Taxes Payable
Income	Present Tax	Proposed Tax	Increase
$ 2,400 2,500			
		2 00	2 00
2,600	4 00	4 002,700	6 00	6 002,800	8 00	8 002,900	10 00	10 003,000	12 00	12 004.000	16 00	32 00	16 005,000	32 00	58 00	26 006,000	56 00	98 70	42 707,000	88 00	147 00	59 008,000	128 00	205 80	77 809,000	176 00	275 10	99 1010,000	232 00	354 90	122 9011,000	296 00	445 20	149 2012,000	368 00	546 00	178 0013,000	448 00	657 30	209 3014,000	536 00	779 10	243 1015,000	632 00	911 40	279 4016,000	736 00	1,0.54 20	318 2017,000	848 00	1,207 50	359 5018,000	968 00	1,371 30	403 3019,000	1,096 00	1,545 60	449 6020,000	1,232 00	1,730 40	498 4025,000	2,024 00	2,788 80	764 8030,000	2,880 00	3,918 60	1,038 6035,000	3,776 00	5.100 90	1,324 9040,000	4,712 00	6,335 70	1,623 7045,000	5,688 00	7,623 00	1,935 0050,000	6,704 00	8,962 80	2,258 8055,000	7,760 00	10,355 10	2,595 1060.000	8,856 00	11,799 90	2,943 9065,000	9,992 00	13,297 20	3,305 2070,000	11,168 00	14,847 00	3,679 0075,000	12,384 00	16,449 30	4,065 3080,000	13,640 00	18,104 10	4,464 1085,000	14,936 00	19,811 40	4,875 4090,000	16,272 00	21,571 20	5,299 2095,000	17,648 00	23,383 50	5,735 50100.000	19,064 00	25,248 30	6,184 30110,000	22,000 00	29,108 10	7,108 10120,000	25,016 00	33,072 90	8,056 90130,000	28,112 00	37,142 70	9,030 7C140,000	31,288 00	41,317 50	10,029 50150,000	34,544 00	45,597 30	11,053 30
Income Tax

Concluded Married Person without Dependents Tax Payable
Income	Present Tax	Proposed Tax	Increase175,000	42,920 00	56,597 10	13,677 10200,000	51,496 00	67,859 40	16,363 40250,000	69,072 00	90,934 20	21,862 20300,000	87,048 00	114,534 00	27,486 00350,000	105,424 00	138,658 80	33,234 80400,000	124,200 00	163,308 60	39,108 60450,000	143,376 00	188,483 40	45,107 40500,000	162,952 00	214,183 20	51,231 20600,000	202,928 00	266,658 00	63,730 00700,000	242,928 00	319,158 00	76,230 00800,000	282,928 00	371,658 00	88,730 00900,000	322,928 00	424,1.58 00	101,230 001,000,000	362,928 00	476,658 00	113,730 00
Sales Tax
The sales tax will be increased by 2 per cent. Some additional revenue will also be derived from a limited adjustment of the exempt and partially exempt list, in the case of a number of articles not primary products which it is believed should, under present conditions, carry a proportionate share of the tax burden. The chief items to be taken from the exempt list are bakers' cake, and pies, lard compound and similar substances made from animal or vegetable stearine or oil, ice cream, processed milk foods and cereal foods under Customs Items 45 and 46, and usual coverings for goods not subject to the sales tax. Biscuits are to be raised from the half to the full rate.
Special Excise Tax on Imports
The special excise tax on goods imported into Canada will be increased by 2 per cent, making it 3 per cent.
Insurance Tax
The tax upon insurance premiums passed at the last session was not put into effect by proclamation as provided by the statute, owing to difficulties over the jurisdiction of the Dominion and provinces in the matter of insurance. It is now proposed, under the Special War Revenue Act, to impose a tax of 1 per cent of net premiums of insurance companies authorized to transact business in Canada or in any province of Canada, other than life, marine and farm mutual. This tax was in force from 1915 to 1929. British and foreign companies, not so authorized but maintaining deposits with the Dominion, will also 'be assessed 1 per cent of net premiums received in Canada. Canadian policyholders who in-
The Budget-Mr. Rhodes
[Stage Direction]
sure their property in Canada with companies other than those mentioned above, will be charged a tax of 15 .per cent of the gross premiums payable on such insurance.
The stamp tax on cheques, .promissory notes, money orders, etc., will be increased. The pre-cent rate is two cents for each instrument exceeding 85. The new rate will be three cents over $5 to $100 and on instruments over $100, six cents. The tax of 10 per cent, minimum 25 cents, on sleeping ear tickets and of 10 cents on each parlour car ticket, will be reenacted. The tax on cable and telegraphic messages will also be reenacted, but the rate will now be five cents for each message costing more than fifteen cents, and the measure will be extended to include long distance telephone calls at the same rate.
A minor amendment also is proposed to the Special War Revenue Act in connection with the stock and bond transfer tax. The present exemption for inter-dealer transactions in bonds is to be repealed and a regulation substituted which will ensure the application of the tax in all transactions except where dealers in securities are acting as purchasing agents for clients.
The sales tax changes come into force immediately; the stamp tax on cheques, telegraph and telephone and transportation taxes, it is proposed to put into effect as of May 2.
Tariff
Having in mind the near approach of the meeting of the Imperial Conference, it is deemed undesirable to make any tariff changes touching the British preference. This decision of necessity precludes any major tariff adjustments.
With one exception, no tariff amendments are therefore proposed. The exception relates to repair parts for farm implements, for which the special rates granted to March 31, 1932, will be further extended to March 31, 1933^
In proposing these additional measures of taxation, consideration has been given, on the one hand, to the ability of our people to bear the extra burden, and, on the other, to the absolute necessity of placing our financial house in order.
Bearing fully in mind the fact that, in common with the whole world, we have suffered -while not in equal degree at least in substantial degree -as the result of a depression universal in scope and of unparalleled magnitude; realizing also the anxieties and burdens of the people and the manifold difficulties resulting from the trying period through which we are passing; and appreciating how desirable
(Mr. Rhodes.]
it is that we should endeavour to the fullest
possible extent compatible with the public interest to call for as little further sacrifice as possible;-at the same time we would be recreant to our duty if we failed to face our problems with determination and at whatever sacrifice, fully meet our financial obligations, balance our .budget and preserve our national credit in the eyes of an observant financial world.
This course may result in hardship. It may entail sacrifice. But in the long run it will result in less hardship, and will call for less sacrifice than that which would flow from a policy less courageous.
Furthermore, the preservation of our national credit is an indispensable prerequisite to the return of prosperity.
While the world is close knit to-day in matters of trade and finance as never before in its history-and we cannot expect normal or prosperous conditions apart from the general world trend-nevertheless some one nation, or group of nations, -must assume the leadership and point the way. To that end an opportunity unique in history is afforded to the British nations, whose representatives will assemble in Ottawa at the Imperial Economic Conference in July next.
If the delegates who assemble here meet in an atmosphere charged with determination to approach their deliberations from the viewpoint of mutual advantage, there will result measures which will give a marked stimulus to empire trade.
And while these measures are primarily designed to stimulate trade within the empire, they will release forces and establish currents which may well flow beyond our borders to the eventual benefit of the world at large.
As a final word, may I say that I do not propose to indulge in prophecy. But I do desire to record my firm conviction that we are not far removed from events which will herald the dawn of better days; that those qualities of courage, resourcefulness and thrift which characterized our forebears are not lost to the present generation; that our struggles and difficulties of to-day will serve as a challenge to greater effort on the part of governments and people to the end that Canada will be found in the vanguard of those nations who successfully emerge from the greatest testing time in modern history.
I beg to give notice, Mr. Speaker, that when we are in committee of ways and means I shall move the following resolutions:
1.	Resolved, that schedule A to the customs tariff, being chapter forty-four of the revised

The Budget-Mr. Rhodes
statutes of Canada, 1927, as amended by chapter seventeen of the acts of 1928, chapter thirty-nine of the acts of 1929, chapter thirteen of the acts of 1930 (first session), chapter three of the acts of 1930 (second session) and chapter thirty of the acts of 1931, be further amended
by striking thereout tariff item 409q, the several enumerations of goods, respectively, and the several rates of duties of customs, if any, set opposite thereto, and by inserting the following item, enumerations and rates of duty in said schedule A:
Tariff Item	-	British Preferential Tariff	Inter- mediate Tariff	General Tariff409q	Complete parts for repairs, if imported on or before the thirty-first day of March, 1933, under regulations prescribed by the Minister. (i) For the implements of machinery enumerated in tariff items 409c, 409e, 409f, 409g, 409j, 409o, 409p and 439c	Free	10 p.c.	10 p.c.(ii) For the implements or machinery enumerated in tariff item 409b	Free	71 p.c.	71 p.c.(iii) For the implements or machinery enumerated in tariff item 409d	Free	6 p.c.	6 p.c.(iv) For the implements or machinery enumerated in tariff items 409h and 409n	Free	10 p.c.	15 p.c.(v) For the implements or machinery enumerated in tariff items 409i and 409k	Free	17J P-c.	17, p.c.2.	Resolved, that any enactment founded upon the foregoing resolution shall be deemed to have come into force on the seventh day of April, one thousand nine hundred and thirty-two, and to have applied to atll goods mentioned in the foregoing resolution imported or taken out of warehouse for consumption on and after that date and to have applied to goods previously imported for consumption for which no entry for consumption was made before that date.
Resolved, that it is expedient to amend the Income War Tax Act and to provide:
1.	That the reduction of twenty per centum from the rates of tax under the first schedule of the act be repealed;
2.	That the rate of tax applicable to corporations be increased from ten per centum to eleven per centum on the income in excess of $2,000;
3.	That all taxpayers in receipt of net income in excess of $5,000, excluding incomes exempt under section 4 of the said act, shall pay an additional tax of five per centum of the amount of taxes otherwise payable under the provisions of the said act;
4.	That the personal exemption heretofore afforded to the extent of $3,000 be reduced to $2,400 and where heretofore afforded to the extent of $1,500 be reduced to $1,200;
5.	That income arising by way of annuity contracts within the meaning of paragraph (k) of section 3 of chapter 24 of the statutes of 1930 be exempt to the extent of $1,200 in lieu of the exemption heretofore provided of $5,000, but the said exemption of annuity income heretofore provided and arising out of annuity contracts entered into prior to the passing of any act based on this resolution shall continue in full force and effect;
6.	That the provisions relating to family corporations be repealed, such repeal to come into force at the end of the 1932 calendar year or fiscal periods ending therein;
7.	That in respect of fiscal periods not coincident with the calendar year the return of income and payment of the tax, by persons other than individuals, in lieu of being made and paid on or before the 30th day of April in each year as in the said act provided, must be made and paid within four months from the close of the fiscal period and if not so made and paid all provisions of the said act shall mutatis mutandis apply;
8.	That income by way of dividends, rentals, interest, royalties and other like income not disclosed by the taxpayer in his return of income may be added to the other income of the taxpayer in double the amount and the whole taxed under the provisions of the act;
9.	That any enactment founded on paragraphs one, two, three, four, five and eight of this resolution shall be deemed to have come into force at the commencement of the 1931 taxation period and to be applicable thereto and to fiscal periods ending therein and to all subsequent periods;
10. That any enactment founded on the provisions of paragraph seven of this resolution shall be deemed to have come ito force at the commencement of the 1932 taxation period and to be applicable thereto and to fiscal periods ending therein and to all subsequent periods.
Resolved, that it is expedient to introduce a measure to amend the Special War Revenue Act, chapter 179 of the revised Statutes of Canada, 1927, as amended by chapter 50 of the statutes of 1928, chapter 57 of the statutes of 1929, chapter 43 of the statutes of 1930, and chapter 54 of the statutes of 1931, and to provide:-
1. (i) That every company authorized to transact the business of insurance in Canada or in any province of Canada, other than life and marine insurance companies, fraternal benefit societies and purely mutual fire insurance companies insuring principally farm risks,
The Budget-Mr. Rhodes
[Stage Direction]
shall pay for consolidated revenue fund a tax of one per centum upon the net premiums received by the company in Canada on and after the first day of January, 1932.
(ii)	That every insurance company not so authorized to transact the business of insurance in Canada or in any province thereof but which maintains a deposit with the Minister of Finance as security for the claims of all Canadian policyholders exclusively of such company to the amount of at least the amount of the liabilities of the company to policyholders in Canada, shall pay for consolidated revenue fund a tax of one per centum upon the net premiums received by it in respect of insurance on property in Canada, other than marine insurance, effected or renewed in the portion of the calendar year 1932, and of each calendar year thereafter for which it maintains such deposit.
(iii)	That every person resident in Canada who insures or has insured his property situate in Canada, or any property situate in Canada in which he has an insurable interest other than that of an insurer of such property, wilh any British or foreign company or British or foreign underwriter or underwriters, or any association of persons
(a)	which, on the twenty-second day of October, 1931, _ had not a deposit with the Minister of Finance for the purpose and to the amount aforesaid, shall pay for consolidated revenue fund a tax of fifteen per centum of the gross premiums paid or payable by such person for such insurance during the year 1931; and a tax of five per centum of the total net cost to such person of such insurance effected or renewed in each of the calendar years 1921 to 1930, both inclusive, during w'hich such company, underwriter or association did not maintain a deposit with the minister for the purpose and to the amount aforesaid, the amount of such tax payable in respect of any calendar year to be reduced by the amount of any tax heretofore paid to the minister in respect of such insurance for such calendar year: or
(b)	which does not on or before the first day of May, 1932, or at the time such insurance is effected or renewed, if after the said date, maintain a deposit for the purpose and to the amount aforesaid, shall each year pay a tax of fifteen per centum of the gross premiums paid or payable for such insurance during the next preceding calendar year.
2.	That on every cable and telegraph or radio message originating in Canada for which a charge of more than fifteen cents is made, except press despatches, and on every long distance telephone call originating in Canada for which a charge of more than fifteen cents is made the sending company shall pay to the consolidated revenue fund a tax of five cents and may charge the same to the person paying the regular charges for such message.
3.	That every purchaser of a seat in a Pullman or parlour ear shall pay, in addition to the regular price of each such seat, a tax of ten cents and that every purchaser of a berth in a sleeping car or other sleeping accommodation on a railway train shall pay in addition to the regular price thereof a tax equal to ten per cent of the said price, provided that such tax shall in no case be less than twenty-five cents.
4.	That the stamp tax imposed by parts VI, VIII, and IX of the said act on cheques, receipts to banks, money orders, travellers' cheques and post office money orders for

amounts exceeding five dollars, and on bills of exchange and promissory notes, be increased to three cents on every instrument for an amount not exceeding one hundred dollars, and to six cents on every instrument for an amount exceeding one hundred dollars.
5.	That subsection (e) of section sixty-one of the said act. as enacted by chapter 54 of the statutes of 1931, be repealed.
6.	(i) That the rate of consumption or sales tax as imposed by section eighty-six of the said act, as amended by section eleven of chapter 54 of the statutes of 1931, be increased to six per cent.
(ii)	That the following words be removed from the list of articles exempt from the consumption or sales tax set out in schedule III to the said act, as enacted by chapter 54 of the statutes of 1931, that is to say;
"Bakers' cake and pies, not to include biscuits;" "and substitutes therefor" in line seven of the said schedule; "lard compound and similar substances, made from animal or vegetable stearine or oils;" "materials for use solely in the manufacture of any substitute for butter ^ or lard;" "extract of rennet;" "ice cream;" "usual coverings to be used exclusively for covering goods not subject to the consumption or sales tax;" "materials to be used exclusively in the manufacture of usual coverings to be used for covering goods not subject to the consumption or sales tax."
Also under the heading "Goods Enumerated in Customs Tariff Items;" the following figures and words, namely:-
"45. Milk foods, n.o.p.; prepared cereal foods, in packages not exceeding twenty-five pounds weight each;"
"46. Prepared cereal foods, n.o.p.;"
And that the word "lard" where it first appears in line eight of the said schedule be struck out and the words "lard, when produced in Canada" be substituted.
(iii)	That the following words be inserted in the said schedule:
"All articles manufactured or produced by the labour of the blind in institutions established for their care or under the control or direction of such institutions."
(iv)	That the following words be removed from the list of articles exempt to the extent of fifty per cent of the consumption or sales tax set out in schedule IV to the said act, as enacted by chapter 54 of the statutes of 1931, that is to say:-*
"Biscuits of all kinds."
7.	That the special excise tax on imports imposed by section eighty-eight of the said act, as enacted by section fourteen of chapter 54 of the statutes of 1931, be increased to three per cent.
8. That any enactment founded on . paragraphs two, three and four of this resolution shall come into force on the second day of May one thousand nine hundred and thirty-two.
9. That any enactment founded on paragraphs six and seven of this resolution shall be deemed to have come into force on the seventh day of April one thousand nine hundred and thirty-tw'o. and to have applied to all goods imported or taken out of warehouse for consumption on and after th?.t day, and to have applied to goods previously imported for which no entry for consumption was made before that date.
On motion of Mr. Ralston the debate was adjourned.

Public Service-Salary Deduction

[Stage Direction]
The house resumed from Monday, April 4, consideration in committee of Bill No. 19, to provide for the deduction of compensation in the public service-Mr. Rhodes-Mr. Hanson (York-Sunbury) in the chair.
On section 1-Short title.
Mr. HEENAN:: When the resolution was
before the committee, and again yesterday,
I think, the Finance minister stated that this reduction was a contribution by the civil servants to the state, and not a reduction in wages. I was wondering if the Prime Minister-the Finance minister is not in his seat at the moment-could give any assurance to the house and the civil service that the present salaries will be restored at the end of the year. I would also ask a question with respect to those who have been denied their statutory increases for this year. Suppose a man has been denied a statutory increase of $100 for this year. When the statutory increases are restored, will he receive $200?


Richard Bedford Bennett: It is not possible, Mr. Chairman, to answer either of those questions. Unless the economic conditions of the country change the whole matter, of course, will have to be carefully reconsidered. The Finance minister told the committee yesterday that this measure expired at the end of March next and there is a provision in the bill to that effect. It will be recalled that in 1897, when the Liberal government came into power, the Postmaster General did not provide for the statutory increases for those in the Post Office Department, and if my memory serves me that condition continued for something like three years, and there was no subsequent readjustment at that time. It well may be that it will take some time to bring about the readjustment that the hon. member mentions. No promises can be made or assurances given:	The statute means
exactly what it says and nothing more.


Peter Heenan: During the discussion on
the resolution it was brought to light that the men working on our canals at prevailing rates had had their wages reduced, and the Minister of Finance indicated to this side of the house that when the bill was in committee he would consider any situation such as that. I was wondering if the Prime Minister is in a position to say whether or not it is intended further to reduce the wages of these men who have already had a reduction.


Richard Bedford Bennett: Section 6 of the bill provides for regulations being made by the treasury board, amongst others, to determine the amount of compensation for the purposes of this act. If the reduction in salary contemplates the compensation prevailing at the time the reduction of ten per cent becomes effective, then the treasury board will consider that fact. It is difficult to lay down a hard and fast rule with respect to it, and that is the reason the minister has placed section 6 in the bill.


Peter Heenan: Yesterday the question
arose as to the inequalities which would exist if there were a reduction by five per cent in the salaries of those civil servants who are receiving les3 than $1,200. Would the Prime Minister take into consideration the fairness of reducing the rate charged against those who are receiving less than $1,200?


Richard Bedford Bennett: As the statute reads, that would not be possible. As I have said, however, under section 6 it would be competent for the treasury board to determine what should be the true compensation against which the reduction should be made. That is the only answer I can give.


Peter Heenan: In other words, it is possible you may or may not take it into consideration.


Richard Bedford Bennett: No, under section 6.


Peter John Veniot: You can or cannot?


Mr. CHEVRIER:: Through questions asked by the former Minister of Labour I understand from the Prime Minister that statutory increases will not be granted this year. The right hon. gentleman said he would make no promise at the moment as to what might happen to statutory increases later on. May I urge upon the right hon. gentleman that a fearful hardship will be imposed upon those who are now being deprived of those statutory increases. They have expected that in the years to come they would enjoy the benefit of the increases, provided their conduct was such as to warrant the receipt of them. Because somebody did not do something away back in 1897, I ask the right hon. gentleman not to follow the example given at that time. I would be very grateful now if he would say that at least the matter will be taken into sympathetic consideration, and that when the time comes the civil servants may receive better treatment than was given in the year 1897.
1772	COMMONS
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Richard Bedford Bennett: I am sure the hon. member will be the first to agree that under the present economic and financial conditions no promise of any kind should be made as to what will or will not be done regarding statutory increases. Of course any government, whatever it may be, would give every consideration to a question of statutory increases, having due regard to the prevailing conditions. I think that is all any government could fairly do. The hon. member misapprehended my meaning with respect to the year 1S97. I merely said statutory increases were not given in that year, or in the three succeeding years, and I made the statement merely as an illustration to indicate that so far as this particular measure is concerned, the deprivation of statutory increases is nothing novel.


[Stage Direction]
Section agreed to.
On section 2-Definitions: "compensation"; "member of the public service of Canada."
Mr. GARDINER:: 
Richard Bedford Bennett: It is obvious of course,
Mr. Chairman, that the government cannot accept that proposal. The reductions in Great Britain were made under the provisions of a statute which I mentioned to the house on another occasion. Within thirty days from October 1 the minister or ministers were charged with the responsibility of carrying into effect changes by way of reductions that might have been thought desirable or necessary in the public interest. The hon. member for Acadia has said those reductions in some instances were ten per cent and in others 20 per cent. Amongst others the judges received the reduction. Subsequently that action was rescinded. Judges are not servants of the crown; they are the buffers which stand between the crown and the people, when occasion arises, for the purpose of administering justice to all parties who may be litigants, and for the purpose of protecting the people from the crown and from one another. That consideration, which has been elementary with respect to the judges since the Act of Settlement has ultimately prevailed.
I am glad to say a considerable number of judges have communicated not only with the Minister of Justice but with myself indicating their desire to make a contribution of ten per cent of their salaries to the public weal. They have asked that appropriate action be taken in that regard. I may say the same thing has occurred with respect to. the others. With respect to lieutenant-governors of the provinces however I should like to point out that they are not in receipt of salaries sufficient to enable them to discharge the duties devolving upon them by reason of their offices. In consequence of that fact it is very difficult to get any person to undertake the duties of that office. The salary is so inadequate as compared with the necessary expenditures that it is not only undesirable to cut their salaries but a compulsory reduction of the salaries of representatives of the crown is not a matter which could be undertaken under present conditions in this parliament, for reasons which I think are fairly obvious.
I do not think I should mention any names, because it would be wholly improper to do so, but I may say that one, lieutenant-governor said he would have to leave his office if the ten per cent cut applied to his salary. Some of them have. taken office at very con-

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siderable sacrifice to themselves, and are dependent upon their salaries to discharge their duties. With respect to the other exemptions mentioned it will be found that the section reads as follows:
The Governor General of Canada-
Whose communication to this house I read some few nights ago-
The lieutenant-governors of the several provinces of Canada-
And I suppose it is within the knowledge of every hon. member in this house that there has been no revision of these salaries, although there has been some augmentation of the salaries of representatives of the crown in this dominion by reason of arrangements made some years ago. With respect to the provinces that is not so; the salaries of the lieutenant-governors stand at $9,000, except in the smaller provinces.


Peter John Veniot: There are some provinces
where perquisites are voted for the lieutenant-governors.


Richard Bedford Bennett: Not in every part of
Canada; that is the point exactly. In some parts there are government houses, in others there are none. In some cases the province assumes certain responsibilities for the upkeep of the establishment, whether it be rented or furnished by the crown; in other cases it does not. In any event I am only pointing out to the committee that the matter engaged the careful consideration of the government, and we were convinced that if the service is to be maintained and there is to be an executive in each of the provinces, as the British North America Act requires, to give effect to the proposal suggested by the hon. member would be to make it most difficult to carry on and in some instances would bring about resignations.
The reason for there being no reductions in connection with the judiciary I have already mentioned. In respect to the military forces and the police force, I can only say that the experience following upon what was done in Great Britain induces the government to believe that these are not services in which any such reduction should be made by compulsion. But there, too, some officials have already indicated to the government their desire that a ten per cent reduction should be made in their compensation.


William Duff: Mr. Chairman, so far as I
am personally concerned I am opposed to this bill in its entirety. I so expressed myself when the resolution was first before the house, but in view of the fact that a day or two ago
the bill was given second reading, that is, its principle was adopted, I realize that it is useless for me to say very much. However,
I do feel that clause (b) should be amended to leave out all the words after the word "Canada" in the sixth line, as by deleting the remainder of the subsection, "the Governor General of Canada, the lieutenant-governors of the several provinces of Canada, the members of the judiciary, and the members of the military, naval and air forces of Canada, and the Royal Canadian Mounted Police," would come within the scope of the bill. I do not think it is in the interest of the country that these civil servants should be exempted from the ten per cent reduction, while members of this house and of the Senate and the civil service generally are forced to relinquish ten per cent of their remuneration.
As I said a moment ago, I am opposed to this bill in its entirety, but since the house has adopted the principle, I submit we should go the whole distance-nobody should foe exempted from the operation of the bill. I cannot agree with what the right hon. gentleman said about exempting lieutenant-governors, judges or anybody else from the ten per cent reduction. When the resolution was first placed on the order paper I remember reading in the public press a statement by His Excellency the Governor General that he was willing to give ten per cent of his salary towards the revenues of Canada. It seems to me that when we are asking elevator men, charwomen and every other civil servant to take a ten per cent reduction in their remuneration, we should not turn down His Excellency's offer. I submit that in view of that offer and in view of other facts, His Excellency should be placed in the same position as members of the Senate and of the House of Commons and everybody else who is covered by this bill.
My right hon. friend told us that the lieutenant-governors were not getting sufficient remuneration. That may be so, but I should like to know which lieutenant-governor did not ask for the position which he now occupies? Which lieutenant-governor would give it up if there was no salary attached to his office? If any lieutenant-governor mentioned by the right hon. gentleman thinks his official salary not sufficient, let him resign, and let the government appoint other men to the office subject to a ten per cent reduction in salary.
Let me go a step further. We have dealt with members of the judiciary. If, as my right hon, friend says, they have written him and other members of the cabinet expressing
1774	COMMONS
Public Service-Salary Deduction [DOT]
their willingness to take a ten per cent reduction in their salaries, would it not be in the interests of peace, harmony and good government in this country for the right hon. gentleman who is in charge of the bill to exclude them from the exempted classes. Then our lighthouse keepers, our postmasters and every other civil servant who 'has to take a ten per cent reduction would go to bed and sleep better if he knew that the judges too had taken a ten per cent reduction.
We hear a good deal these days about the judiciary having a contract with the government. I say the judiciary has no more of a contract with this government or with the people of the country than I have. I am opposed to the reduction .of $400 in my indemnity. I submit that I am entitled to the same treatment from this .parliament as are the judges and the members of the military forces or any one else who come under these exemptions.
My understanding is that no member of the militia force has a contract with the government any more than any other civil servant, that when they join the force they fill out a certain form and sign it, and if my information is correct they agree to take a lower rate of pay if the government should ask them to do so. So why should our generals and colonels 'be exempted from this ten per cent reduction of salary when you, Mr. Chairman, and I and other .people have to take the reduction? Surely our services are worth at least as much to the country as the services of the gentlemen with the high hats down in the Woods building. Therefore I submit that the members of the military and naval forces should be put on the same basis as other civil servants.
The members of the Royal Canadian Mounted Police are also exempted from this ten per cent cut. What a spectacle we have witnessed in the past few days in regard to that force! In the old days, sir, everybody in Canada looked upon the members of the Royal Canadian Mounted Police as the best body of men in the dominion. We looked up to and respected them, but within the last fe.w days police bodies appointed by the provinces have been blanketed into the Royal Canadian Mounted Police and, in spite of our economic condition, this government has been saddled with the upkeep of these bodies.


Some hon. MEMBERS:: No.


William Duff: I say yes.


Richard Bedford Bennett: The provinces are paying for them, under an agreement. They merely prefer that they should be administered in that way.


William Duff: Is it not a fact that these provincial police organizations were blanketed into the Royal Canadian Mounted Police, and that their salaries are paid by this government?


Richard Bedford Bennett: They were not blanketed in. An agreement has been arrived at between the Dominion of Canada and the governments of Saskatchewan, Alberta, Manitoba, and Nova Scotia whereby the Dominion government become the administrators of the police forces of those provinces, but the provinces pay for them.


Peter John Veniot: Is it not a fact that the federal authorities said to the province of New Brunswick, "We will carry on your police force for a certain amount of money"?


Richard Bedford Bennett: No, it was the other way about; the provinces asked the dominion to carry on the work, and the provinces pay the bill.


James Shaver Woodsworth: The entire cost?


Richard Bedford Bennett: Yes, at a fixed rate of $1,000 per man per annum, if my memory serves me aright, though I speak subject to correction. The Dominion government is responsible for the administration of the provincial body as a part of the Royal Canadian Mounted Police.


James Shaver Woodsworth: But does that
amount paid by the province cover the entire cost of the dominion?


Richard Bedford Bennett: It is based on the assumption that it will cover the cost. The system has not been in operation very long, but that is the assumption.


William Duff: I am not quite clear about this yet. The Prime Minister has not told us whether the provinces pay the total cost of carrying on the work of the provincial police-


Richard Bedford Bennett: Yes.


William Duff: -or if the money is paid into this treasury in a lump sum, while this government pays the individual members of the police force. My understanding is that this government pays the salaries of these men, and the provinces pay a lump sum into the federal treasury.

Public Service-Salary Deduction


Richard Bedford Bennett: The computations based upon an average cost of approximately $1,000 per man per annum; the agreement between the provinces and the dominion is based upon that computation. In addition, of course, there is the service that was being rendered by the dominion police force in connection with preventive and other matters, but that has nothing to do with this case at all. The provinces merely thought it more economical and conducive to sounder administration if the dominion, having one police force, would undertake to control their forces as well so as to make one where there were two formerly. For that the provinces pay a sum based upon the average cost per man per annum which, in our judgment, will be sufficient to save the dominion from any cost whatever in connection with the forces.


William Duff: That does not change my argument at all; the fact remains that those men who were formerly provincial policemen in the different provinces now have become members of the Royal Canadian Mounted Police. I say that if other people are to suffer a cut of ten per cent in salary, these men who have been taken over from the provincial police should have a ten per cent reduction also.
I certainly think everyone in this country should be treated alike. If any part of the civil service is to lose ten per cent by way of salary reduction then I say there should be no exemptions; the judges, members of the militia and naval forces, members of the Royal Canadian Mounted Police, lieutenant-governors and the governor general should all come in the same category and make the same contribution to the federal treasury.


Mr. CARMICHAEL:: I want to add my
endorsation of the amendment now before the committee. Since the Prime Minister has stated that the amendment is not acceptable to the government, however, I am afraid there is very little hope that it will be adopted, since the government commands a strong majority in the house.
I am not in the same position as the preceding speaker, who stated that he was opposed to the bill in its entirety. I voted for the ten per cent deduction for several reasons. I realized that there was a serious situation existing throughout the country. We have just listened to the budget presentation by the Minister of Finance, and I am sure we all realize that the balancing of the budget made very necessary economies such as this ten per cent deduction, and since the measure is to apply for one year only I think most of us
can stand that cut of ten per cent. The amount each will contribute will not be very large, and the cost of living has dropped approximately fifteen per cent, so our loss will not be as great as the benefit we will obtain through the decreased cost of living.
I had in mind also the conditions existing in the west. There are thousands of farmers, business men, school teachers and others in western Canada who would be thankful indeed to receive the salary paid the average civil servant in this city, even with the ten per cent reduction. We have public school teachers out there receiving only a few hundred dollars a year, while others are teaching for just a small government grant and boarding around among the people, in order to continue the work.
But, Mr. Chairman, while I favour the bill in general, I do not favour the exemptions outlined in section 2. The Prime Minister has said that he has received letters from some judges stating that they are willing to take the ten per cent cut voluntarily. In fairness to those judges I think the others who have not so volunteered should be required to contribute ten per cent. I am convinced that no hardship will be worked on any judge if the ten per cent reduction is extended to cover their salaries. The salary of the lowest paid judge in Canada is $5,000 from the Dominion treasury, and that amount is supplemented in various provinces; in my own province, for instance, the judges receive $1,500 in addition. I would make bold to say, also, that we are over-judged in this country.


Richard Bedford Bennett: Hear, hear; but we cannot control that.


Archibald M. Carmichael: By actual count we
have 286 judges in the Dominion of Canada. I think if we compared our judiciary and the total population of this country with the number of judges and the population of the British Isles, we would feel like hiding our faces because of the extravagance we have exhibited in connection with the salaries of the judges in Canada. That being the case, it offers an added reason why we should insist that every one of the 286 judges in Canada should contribute ten per cent of his salary towards helping to meet the urgent situation now confronting us.
I listened with considerable interest to what the Prime Minister had to say with regard to the lieutenant-governors, but I should like to know why the salary of the High Commissioner for Canada has been reduced from $10,000 to $9,000. An item appearing on page 10 of the estimates shows that a reduction of

Public Service-Salary Deduction
ten per cent has been made in the salary of this gentleman, while the salaries of the lieutenant-governors have been left unchanged. It would seem to me that the expenses of this gentleman are just as great as if not greater than those of the lieutenant-governors; if a deduction is fair in the one instance, it would be equally fair in the other.
I cannot see any justification for exempting the members of the military, naval and air forces from the proposed reduction of ten per cent. We have been told that there are 139 persons in the department of National Defence drawing salaries between $4,000 and $4,900, thirty drawing salaries between $5,000 and $5,900 and fifteen drawing salaries between $6,000 and $6,900. A total of 184 persons in that department draw salaries of $4,500 per year or over. A deduction of ten per cent should not cause any hardship to any of these persons.
It is rather difficult to state exactly how much revenue would accrue if this deduction was levied against those at present exempted, but I have made an approximate computation. Judges of Canada draw something over $2,000,000 in salaries, and a ten per cent reduction would amout to about $214,190. If this deduction were applied to the officials of the Department of National Defence, it would mean a saving of over $88,000, and if it were applied still further to the non-permanent active militia and the permanent forces, it would amount to between $600,000 and $800,000. A considerable saving would be made if this deduction were applied to the members of the Royal Canadian Mounted Police, although there is a question as to whether or not there is justification for making the reduction when the salaries are paid by the provinces.
His Excellency the Governor General has made a voluntary offer to accept a ten per cent reduction in his salary, and I think his action deserves the thanks of this chamber. His Excellency is not a Canadian by birth but he has set an example which I think is worthy of the commendation of every hon. member of the house.
If this reduction were applied to the salaries of the lieutenant governors, the judges and the members of the militia and mounted police, there would be an added revenue of over one million dollars. It would be only fair, it would be only equitable, it would be only right that these gentlemen should make a contribution to the finances of this country on a par with that being made by the members of this house and of the Senate.


Richard Bedford Bennett: In answer to the hon.
gentleman I shall first point out that the judges are not civil servants. It was because they are not, that the action taken in Great Britain was altered. That is an important point to remember. Some hon. members may take the view that because their salaries are paid out of the public exchequer, their positions are as indicated, but the fact is that they are neither servants of the crown nor civil servants.


William Duff: Are members of parliament
servants of the crown?


Richard Bedford Bennett: I have observed often
that they are not, and technically speaking I do not think they are. Some of them are high admirals and others occupy other positions.
I shall not inflict upon the committee the argument which has been made so fully in the law journals and to which I made reference the other day, nor shall I refer to the editorial comments made by British papers as to the error of seeking to reduce the salaries of British judges.
With reference to the lieutenant-governors of the provinces, I can only say that the court of last resort in the empire has held that within the boundaries of the provinces these gentlemen represent the sovereign, and to reduce their compensation by this statute would be to act at variance with the long series of precedents which have obtained with respect to matters of this kind. Some hon. members may well say that I have not seemed to be bound by precedents where it is necessary to change them; I admit that quite freely, but I believe it would be wrong to depart from the principle established in this regard. The offer made by His Excellency the Governor General has been accepted by the government; I do not believe the hon. member for Antigonish-Guysborough was in his place the other evening when I read a statement to this effect.
We come to the third of the three classes, the crown, the judiciaries and the forces of the crown. The men who come within this third class are under discipline-they cannot resign even if they so desire. They are not under an ordinary contract, they are enlisted men, and the government contracts that during the term of their enlistment they shall receive a given compensation. It is not a contract in the ordinary sense because the word "enlistment" is used rather than the word "contract." They cannot leave the service without being guilty of desertion and prosecution, and they cannot resign.

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These are the reasons why the three classes, the crown, the judiciary and the forces of the crown, are not made subject to the provisions of this statute.


Mr. BEAUBIEN:: Does that apply to the
mounted police as well?


Richard Bedford Bennett: Yes. The law officers of the crown are very doubtful as to whether or not we have the power to make a reduction, at least with respect to the first and second classes. With respect to the third class, the forces of the crown, presumably we have the power to change the terms of the enlistment, but the government is of the opinion that this should not be done.
The action taken by the government in this instance does not arise out of any desire to do other than what is fair to all parties in the state. But there must be a frank recognition by parliament of the fact that the crown, the judiciary and the forces of the crown are in a position different from that occupied by any of the classes covered by the bill. I shall not, as I said, dwell on the first two. As to the third class, if they were occupying a position such as has been suggested, the matter might be looked at from another angle. But from a question of law, apart from any other consideration, the forces of the crown occupy the position I have indicated and there is not an hon. member of this committee who does not understand that enlistment and contract are different. In the latter case, there is freedom to leave the position you have, while in the other, a man cannot leave his position except by becoming a deserter.


Charles-Philippe Beaubien: What about judges?


Richard Bedford Bennett: Judges may resign.


Archibald M. Carmichael: Is it not a fact that
officers in the militia may also resign?


Richard Bedford Bennett: They are subject to
military law and there are certain provisions under which they may avail themselves of their right to resign, but it is not a right such as that which belongs to those who have free contracts as has a civil servant in the ordinary acceptance of the term. The position of a civil servant is entirely different; in other words he may exercise the free right of resigning. That is a fair way to put the matter.


James Shaver Woodsworth: The Prime Minister has given us certain technical objections to the proposed amendment. We have surely reached the stage when we can look a little beyond technical considerations to some of 41761-112
the realities in the case; there are some things deeper than the technical. As a matter of theory it may be that the crown is supreme, but I submit in all seriousness that the people are sovereign, and that is the important point we need to keep before us to-day. It merely beclouds the issue by, shall I say, dragging in such terms as "the crown," which would indicate that there is something sacrosanct about arrangements as they now stand.
Let me refer particularly to the lieutenant-governors. The position taken a few minutes ago by the Prime Minister was that it was exceedingly difficult to get anyone to occupy lieutenant-governorships. Does this mean that Canada cannot get anybody to represent the crown? Does it mean there are not enough patriotic people who will represent the crown in this country? If so, we are in a sorry way.


Richard Bedford Bennett: That is what it means.


James Shaver Woodsworth: Coming to realities, we all know that to a very considerable extent to-day this position is, I think I may say, formal and social in character. Whatever the constitutional aspect may be, in practice the duties are very largely formal and social.


Mr. GARLAND (Bow River):: The expenses are social.


James Shaver Woodsworth: The expenses undoubtedly are incurred very largely in social functions. Since that is the real fact of the case, the sooner we reach the point where we shall abolish these lieutenant-governorships altogether, the better for everybody concerned, and that idea is coming rapidly to be felt by large sections of the people in Canada. I know of no better way of hastening this consummation than by carrying such an amendment as the one before us, because by doing so we assist very materially in having a still larger number of people reject these honours. Before very long people will come to understand there will have to be changes in the British North America Act, changes in our relationships, but just because of certain technical matters I do not think we ought to be asked to go on forever supporting institutions of this nature. It seems absurd that the postman who comes to our door and who is already underpaid and that many civil servants who are to-day being turned out on the street because of these cuts, should be made to suffer in this way, while people who are occupying what are essentially formal and social positions go scot-free. I do not think that is reasonable



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and I know the same opinion is held by a majority of the Canadian people.
With regard to the mounted police, the full facts have not been laid before us, but I understand the western provinces are adopting this arrangement of the mounted police for purely economic reasons. I very much doubt whether the mounted police are to be paid a smaller amount than the old provincial police received, or whether a central administration from Ottawa can be conducted more economically than administration from the various provincial capitals.


Richard Bedford Bennett: The hon. gentleman knows the reason for the change. It does away with two series of overheads. That is the whole story.


James Shaver Woodsworth: I know that, but that is another point. We have in Ottawa an overhead whereby at least one official of Royal Canadian Mounted Police is receiving a salary of $12,000 or over. I cannot quite understand why a man who is obtaining a salary of $12,000 or over should be retained in that position and not be subject to the cut to which other people in government employ are subject.


Edward Joseph Garland: And he can resign.


James Shaver Woodsworth: Yes, he can resign if he wishes. To revert to the other point, the Prime Minister knows very well that before he came into office there was a good deal of friction between the mounted police in Saskatchewan and the provincial police of that province. The provincial police rather resented the coming into that province of the mounted police. It is very doubtful whether it was necessary for some years to have two distinct police forces there. The Dominion government, however, retained their police force here and now we are told, because there would be a saving of one overhead, we must have a centralized police force.


Richard Bedford Bennett: I do not wish to interrupt the hon. gentleman, but I am sure he desires to be fair. The provinces have asked the dominion to take over the administration of the police and merge the two into one. In no case has this been done at the instance of the federal power; it has been asked by the local or provincial authorities.


James Shaver Woodsworth: I accept that explanation; in fact, I have information to that effect directly from some of the provincial premiers. But that does not alter my argument that the federal government might have withdrawn the mounted police force from, say

Saskatchewan, and allowed that province to carry on, thus saving money to the dominion treasury. The federal authorities did not wish to do that; they wished to retain their police force and keep up this enormous overhead. Under those circumstances the provinces, in order to save money for themselves, consented to give up their own police force, merging it into the larger one.


Richard Bedford Bennett: Under the provisions of the Customs and other acts, we have to maintain a preventive force. That work has now been taken over by the mounted police. Therefore there is a further saving so far as that phase of the question is concerned.


James Shaver Woodsworth: I can understand there may be some saving. I do not want at present to go into the other matter which I should like some time to discuss, that is of the danger of a centralized police force. That underlies and I think more than overcomes the economy that may be secured under the recent arrangement. All I am pointing out at this time is that it is an entirely wrong principle that a police force should be exempt when other people equally worthy and doing equally good work in the service of the country should be subjected to a cut of this character. Only yesterday, I think it was, a watchman was laid off and his job taken over by a mounted policeman. Had a watchman been doing the work he would be subject to the ten per cent cut, but to-day a Royal Canadian Mounted Policeman being on the job, the latter is not subject to the cut. The work is practically the same, and with all deference to the Prime Minister's statement with regard to the forces of the crown, I cannot see why men who are safeguarding government property or acting as ornaments in the art gallery or anything of that kind, should not be subject to a cut just as much as any other civil servant.
The same argument applies to the defence forces. The Prime Minister was not very explicit when he referred to British experience.
I presume that he referred to the riots which took place when there was a reduction in the pay of the navy. I hope he does not imply that if the salaries of our militia were reduced there would be riots in this country, but I think that that was his implication. Surely that is not true! It seems to me that since so many of the higher salaries are being paid to those engaged in the national defence, as the hon. member for Kindersley pointed out, and since they may resign if they wish to do so, there is no particular reason why they should be exempted as is proposed. It

Public Service-Salary Deduction
is all very well to talk of having entered upon certain terms of enlistment. But may I point out that many of the civil servants have enlisted in the civil service of this country ten, fifteen or twenty years ago, giving up lucrative employment elsewhere to do so, and giving up the prospect of promotion elsewhere. They entered the civil service of this country on the implicit understanding that their tenure of office would be secure. To-day a good many of them are being let out, and the rest of them have had their salaries cut down below What they would ordinarily receive under the statutory arrangements. It seems to me that this is all wrong, and I join with others who have protested against it in urging that we should have equal treatment for all classes of those who are receiving payment from this country.


William Duff: Before we leave this question about the judiciary, I am not quite sure whether the judiciary includes the ex-judges as well as the judges. I would ask the government if I am correct in assuming that the judges on pension are not subject to this ten per cent reduction. I notice on pages 22 and 23 of the estimates for 1932-33 a large number of estimable gentlemen who are receiving very large pensions. I will only read the first three names, for instance, on page 22. Sir Charles Fitzpatrick receives a pension ol $6,666.66. I would like to know if his pension is subject to this ten per cent reduction, and if not, why he gets off without making this ten per cent contribution while the Finance Minister and I have to pay it. The same question applies to the next gentleman on the list, who receives a pension of $8,000, and also to the third gentleman, P. B. Mignault, who receives a pension of $12,000 a year. It seems to me that unless the pensions of these gentlemen are subject to this reduction, the act should be amended to include them, for surely a man who is drawing a pension of $12,000 a year and is carrying on a law business in a city of Canada should come under the provisions of this bill just as much as the elevator men and the ligihtkeepers and the charwomen and the members of parliament. Consequently I say that this act should bs amended.
With further regard to my argument as to the blanketing-perhaps I should have said whitewashing-the provincial police into the Royal Canadian Mounted Police, I observe that in addition to the provincial police the land forces of the preventive service were also taken into the Royal Canadian Mounted Police. Now if the land forces 41761-H2i	.
of the preventive service had not been taken into the mounted police in the last few days they would have been subjected to this reduction of ten per cent, but because they have been taken into the mounted police the preventive service officers who work upon the land are not subject to the reduction.


Mr. ERNST:: They get less money.


William Duff: I do not care whether they
get less money or not. The labourer is worthy of his hire, and if they are not getting more pay it is perhaps because they are not worth any more. I am going to argue this like my hon. friend would argue it if he were in court.


William Gordon Ernst: May I congratulate you if
you do?


William Duff: My argument is this: Because the land forces of the preventive service are taken from the department of my hon. friend the Minister of National Revenue and put into the department of my hon. friend the Minister of Justice under the guise or under the heading of the Royal Canadian Mounted Police, they are not subject to this reduction of ten per cent, while the members of the preventive service who still remain under the Minister of National Revenue and whose work is much more hazardous than that of the land forces-I am referring now to the captains, officers and sailors on the preventive boats on the Atlantic and Pacific-have to suffer the ten per cent reduction. The land forces go scot-free and the members of the far more hazardous branch of the service have to suffer the reduction. I say that that is not fair, and I appeal to the Minister of Justice and to the Minister of Finance to see that the act is amended so that both these branches of the service will be treated alike. I should like an answer to my question, Mr. Chairman, with respect to the judges and ex-judges.


Edgar Nelson Rhodes: The ex-judges are in the
same position with respect to their pensions as the judges with respect to their salaries.


William Duff: They do not pay the ten per
cent?


Edgar Nelson Rhodes: No.


Mr. BOWMAN:: I would like to say a
word or two with respect to the proposed amendment as it would affect judges in the province of Manitoba. Under date of the first of April there appeared in the Winnipeg Evening Tribune an open letter from Judge Stubbs, of the city of Winnipeg, to the premier of the province of Manitoba, in which he states that he has been informed by the

Public Service-Salary Deduction
premier himself that the government of the province of Manitoba proposed to tax the county court judges of the province in respect to their surrogate court salaries, which I might say are paid by the province. The proposal as set out in Judge Stubbs' letter was that the salary which Judge Stubbs receives for the performance of his surrogate court duties, namely, $2,500, was to be taxed by $1,350, and that the salaries of the other county court judges who receive $1,500 for the performance of their surrogate court duties were to be taxed by $1,000. The county court judges in the province of Manitoba receive a salary of $5,000 from the dominion government, and $1,500 from the provincial government for the performance of their surrogate court duties, with the exception of Judge Stubbs, in Winnipeg, who receives $2,500 in this latter respect. Judge Stubbs, in a spirited letter, wrote to the premier protesting against this tax and pointing out that so far as the province is concerned the tax amounts to fifty per cent of the salary which is paid to these judges by the provincial government. Some two or three days later Mr. Major, the attorney general for the province of Manitoba, replied on behalf of the government, intimating, while not directly saying so, that the tax would be put into effect. If we add to that tax a further reduction of ten per cent on the $5,000 salary which these judges receive from the dominion government, surely it is not treating the county court judges of the province of Manitoba in the manner in which they are entitled to be treated as judges of our courts.


Charles-Philippe Beaubien: Let them resign, then,
if they are dissatisfied.


James Langstaff Bowman: That is a very smart
reply.


Charles-Philippe Beaubien: It is a true reply, too.


James Langstaff Bowman: You might make the same reply to all the other civil servants whose salaries have been cut.


Charles-Philippe Beaubien: The Prime Minister said the civil servants could resign.


James Langstaff Bowman: My hon. friend is receiving a ten per cent cut in his indemnity; why does he not resign?


Charles-Philippe Beaubien: I will resign any time
my hon. friend will.


James Langstaff Bowman: I suggest that my hon.
friend should not try to make a hero of himself. Quite frankly, I should have liked
to see the judges throughout Canada come forward, as has the Governor General, and submit voluntarily to a ten per cent cut. I

believe they would improve their position in the minds of the public if they were to do that.


Edward Joseph Garland: Let us improve it for them.


James Langstaff Bowman: I have in my hand a
letter dated March 7, 1932, from a county court judge in the province of Manitoba, from which I should like to read one or two paragraphs :
I gather from press reports that the matter of a reduction in judges' salaries will be the subject of some debate, or at least remarks or opinions by members of the house, also that the power of the government to reduce such salaries is apparently in some doubt.
In speaking for myself only I have no hesitation in saying that if a voluntary consent by the judges to a reduction would be of assistance to the government, I would be happy to do my part.
If the matter comes up you will know my ideas on the subject, and have my hearty support and cooperation in any way that will help bridge the difficult period we are going through.


Mr. GRAY:: Will the hon. member give
the judge's name?


Some hon. MEMBERS:: No, no.


James Langstaff Bowman: This letter is from Manitoba. If any hon. member wishes to see the letter he is at perfect liberty to do so. I hope hon. members will agree that I should not give the judge's name.


Ross Wilfred Gray: I am stating what I believe
to be the rule. If an hon. member reads a letter he should give the name of the writer. I ask for your ruling, Mr. Chairman.


James Langstaff Bowman: I have read only some
excerpts.


Ross Wilfred Gray: What is the ruling?


Mr. STEVENS:: There are occasions, when a letter is not of a controversial nature, where it is desirable to withhold the name of the writer. I think the house usually agrees that in such cases the names should not be given. There is nothing controversial about the letter which has been read.


Edward Joseph Garland: As to
whether or not the letter is judged controversial depends on which side of the house an hon. member may happen to sit.


Henry Herbert Stevens: Not at all.


Edward Joseph Garland: I had a
similar experience a couple of years ago. Although the letter was of a noncontroversial nature the minister was one of the first to ask for the name of the writer.

Public Service-Salary Deduction


Henry Herbert Stevens: On this occasion it is from a member of the judiciary. Surely my hon. friend will not insist upon the production of the name, particularly when the hon. member for Dauphin has agreed to show the letter.


James Langstaff Bowman: Mr. Chairman, in the
Winnipeg Evening Tribune of April 4, I find an editorial under the heading "Independence of the judiciary." At this point I should like to read one or two paragraphs from the editorial:
There are further facts to be taken into consideration.
Judge Stubbs is not a member of the civil service of the province or of the dominion. He is a judge. The complete independence of the judiciary has long been recognized in English law. Independence, it was decided long ago, can be achieved only by permanence of tenure of office and absolute security in remuneration.
It is a cardinal principle of our judicial system that judges are appointed for life, and can be removed from office only by impeachment proceedings which are so carefully safeguarded that a judge must be very clearly unfitted for his high office before he can be removed from it. He is not subject to removal because of the displeasure of any government, or even of the crown itself.
Along with the assurance of permanence in his appointment must go absolute security of remuneration. That is at least one-half of the guarantee of his independence, because, if his salary is subject to the whims of a government or a political majority, he can obviously have no real independence. The power to reduce or refuse to pay his salary would constitute practically the same control over his acts and judgments as the power to remove him from office altogether.
I have pointed out this anomaly in so far as it exists in the province of Manitoba. I think hon. members will agree that we would be most unfair if we were to ask judges receiving salaries of $7,500 to consent to a reduction of $1,850, or those receiving salaries of $6,500 for a contribution in any one year of $1,500. For those reasons I cannot support the amendment.


Edward Joseph Garland: Referring to the judges in Manitoba, my hon. friend said they were subject to the tax on their surrogate court salaries. What about the judges in the other provinces?


James Langstaff Bowman: I am not making any comments in that connection. I have already stated my views.


Mr. NEILL:: Mr. Chairman, I support the amendment. I thought the arguments of the Prime Minister were inconclusive. He has said that the judges are not civil servants, but that they act as buffers between the crown and the common people. I should think that would be true only in cases of litigation in
the exchequer court, and hon. members know that that court performs only a very small part of the judicial activities of the judges. In ordinary court cases one would suppose that judges acted as buffers as between man and man, or between law-abiding portions of the community and those seeking profit by crime. I believe we are entitled to draw an inference from an hon. member's remarks, and especially from the remarks of a member as capable as the Prime Minister of expressing himself. The inference we might draw from his remarks would be that if judges' salaries were reduced their function as buffers would be imperilled or lessened, and that citizens would not be buffered as well as they were before. I do not think any judge would care to lend himself to that view. I think the test is on the question of salary. Do the judges receive salaries which could properly be reduced? When we know that members of parliament are receiving a cut which is equivalent in their case to 30 per cent or more, I do not know why judges receiving $5,000 to $15,000 per year should not be cut to the extent of ten per cent. Several hon. members have said that judges have written saying that they would agree to a cut. I submit that that is the answer to the suggestion that we should not tax them. They themselves recognize that they can afford to pay, and that it is proper they should do so. Is that not the answer to the suggestion that their salaries should not be cut? If it is right to accept a proportion of salary from one judge, or from half a dozen, would it not be better to have the contributions uniform? Otherwise we will have a condition which obtained not long ago in connection with a certain member of a legislature in one of the provinces. He made a gesture by rejecting a certain portion of his salary. After he left office the money was not disturbed, until he took advantage of his undisputed rights and asked for the payment of the moneys lying to his credit. I do not say that would be true in connection with the judges or other people who would voluntarily agree to make a contribution, but there would always be that danger, possibly from heirs of a deceased judge. If it is right to do it for some of the judges, or some of them at least think it so, why not make it apply all round?
As regards the lieutenant-governors, as my friend has said, the office of lieutenant-governor is regarded by many people as a high honour, and wealthy men are always glad to take the position. I do not know what the custom is in the east, but in British Columbia our lieutenant-governor does not
1782	COMMONS
Public Service-Salary Deduction
pay income tax-and the income tax is pretty steep out there and is going to be steeper. Possibly the release from income tax would add very considerably to the admittedly small salary that the lieutenant-governor gets in proportion to his expenses. The suggestion has been made that in the case of one man at any rate he would be compelled to resign. Well, Mr. Chairman, I would suggest -and men with more claim to statesmanship than I possess have taken the same view- I would say, let them resign, let us do away with all the lieutenant-governors. I do not apply that to the governor general perhaps, but let us do away with all the lieutenant-governors in this time of financial stress and anxiety. This dominion got along for the greater part of last session without a governor general, and we find that in Ontario they managed to worry along during the recent session without a lieutenant-governor either to open or close the proceedings. No doubt the duty was performed perfectly well by the chief justice of the province. I think it would be a good gesture in these days if we did away with our lieutenant-governors altogether.
As to the army and navy, the Prime Minister in his later remarks pointed out that there was more than a contractual arrangement, that it was a question of enlistment and the rank and file could not resign. That is true. But it could be easily got around by the government making the ten per cent reduction, and if any member of the permanent forces did not approve of it, give him an opportunity to leave the service. So far as making the reduction by " force of arms," so to speak, I do not think that would be right. I speak with some feeling because I was once a victim of something similar at the hands of the ancestors of the government now in power, because it was a Conservative government that cut my pay. I had enlisted with the permanent corps at its certain, agreed wage-a very small one. After some months I was advised that my remuneration had been cut down. Coming from a frugal country that did not strike me as being a fair demand. I put forward the very arguments advised by the Prime Minister to-day, that you cannot enlist a man and then cut down his scale of pay. I went before a board-there were officers galore, the general commanding, colonels, majors and other officers, and I took considerable risk of being put in the guard room for insubordination because I dared to stand on my rights. After a great deal of argument and discussion I was told that I could not get the rate 
of pay for which I had enlisted. But I got around it in another way.
As regards the suggestion that something might happen here if, as in Britain, we should enforce a ten per cent reduction, why was it said if it was not meant? The suggestion was: Look at what happened in Britain in connection with the reduction in the pay of the navy. I do not do anyone any injustice when I say it was found that the men of that particular grade had had their pay cut to an unreasonable extent, and to an extent far greater than the reduction applied to those drawing much higher salaries. There was good ground for the complaint by the men; but after all it was .made in a most orderly way and only as a complaint. If there was not any such implication, why was the point made? The implication there is: "We had better be careful; if we meddle with the pay of the army and navy in Canada some weakness may develop which may imperil our safety.' I do not think that is a pleasant implication, and having been a member of the permanent force, I take it upon myself to say there is no danger of any feeling of that kind being generated even if this cut is put into effect. But if there is any suoh danger, the sooner we find it out the better. If our army and navy are so unreliable that a ten per cent cut in pay for one year in the face of every civil servant in Canada having to take such a reduction, means that weakness will develop, the sooner we find it out the better. But the men of our army and navy have too much loyalty-not in the flag waving sense, but in the real sense of the word-to object to share in a general cut in pay. We have not heard of any letters to the Prime Minister from the rank and file volunteering to contribute ten per cent of their pay, and we do not know whether they have been given a chance to make such offer, but I am sure that no feeling of disloyalty would be engendered by a ten per cent cut-regret of course; but not disloyalty-but if any of them should consider a ten per cent cut improper because they are enlisted men, then give them the opportunity to withdraw from the service. In these days of unemployment I do not think very many would withdraw.
For these and many other reasons, that I cannot now dwell upon, Mr. Chairman, I certainly hope the amendment will pass. The right hon. Prime Minister, said of course he could not accept the amendment. But I do not see any necessity why it should not be accepted in the spirit in which it was put forward by the hon. member for Acadia (Mr. Gardiner).

Unemployment and Farm Relief


Edgar Nelson Rhodes: Mr. Chairman, the committee must rise in any event before six o'clock as this is Wednesday night. As it is quite obvious that we cannot conclude the discussion, I move that the committee rise, report progress and ask leave to sit again.
Progress reported.



ADJOURNMENT-BUSINESS OF THE HOUSE

Richard Bedford Bennett: We propose to take the bills standing on the order paper-the Minister of National Revenue is ready with his bill, then the fisheries bills, and the Secretary of State tells me that his bills are ready to proceed with; then number 13 on the order paper and number 14. That will be the last to be taken up if we finish with the bill now under discussion.


Mr. MACKENZIE KING:: Do I understand that we start to-morrow with the bill we have just had in committee?


Richard Bedford Bennett: Yes. But the order will be subject to change if it is not inconvenient to the house, because the second readings should be proceeded with before we go into committee in order to get those bills out of the way. Then we will take supply in such order as may suit hon. members opposite if we know their wishes in advance so the minister may be prepared with his estimates.


William Lyon Mackenzie King: I desire again to say how much we appreciate the Prime
Minister's offer in that regard. I think we will be prepared to go on with any supply if he will let us know the day before.


Richard Bedford Bennett: To-morrow we might continue with pensions, after which the justice department might be taken up and concluded. Then I could take up external affairs.


[Stage Direction]
At six o'clock the house adjourned without question put, pursuant to standing order.
Thursday, April 7, 1932