1932-05-06

[Stage Direction]
Hon. ALFRED DURANLEAU (Minister of Marine) moved for leave to introduce Bill No. 74, to amend the Canada Shipping Act.
Some hon. MEMBERS:: Explain.


Mr. DURANLEAU:: Mr. Speaker, the object of this proposed legislation is to bring the Canadian law with regard to coastal shipping on the great lakes on a par with the American law. Under the American law it is illegal to carry grain in a British ship, say, from Chicago to Port Colborne, unload it and carry it to another American port in a British ship. Under the Canadian law as it now stands such a procedure is possible in connection with Canadian grain. It actually happens that a very considerable amount of Canadian grain is carried in American ships, from Fort William and Port Arthur to Buffalo unloaded there into other American ships of canal size and shipped to Montreal, Sorel and Quebec for export.
The proposed bill will also contain a provision that in the case of a British shipping corporation, seventy-five per cent of the stock must be owned by British subjects in order to entitle such a corporation to engage in the coastal trade. Some fear has been expressed that this legislation will increase the rates from the great lakes to Montreal, but I desire to say that the shipping companies have given assurance that no increase will be made. I can assure the house that this government
will apply section 938 of the Canada Shipping Act, which gives the power to suspend the coasting laws, should the rates be raised unduly.


Mr. GARDINER:: What does the minister mean by raised unduly?


Alfred Duranleau: If, because of this
legislation, the rates are made too high, we will remedy them.


Mr. BROWN:: Is any assurance being given to the farmers that they will receive the benefit of the competition which might be properly expected?


Alfred Duranleau: At the present time there are 575,000 tons of Canadian shipping, and we believe that will provide sufficient competition to protect all shippers.


John Livingstone Brown: Will the assurance be any better than that given by the manufacturers that prices would not be raised?


Alfred Duranleau: The government intends to protect the shippers should there be any undue elevation of rates.
Motion agreed to and bill read the first time.



PREVENTIVE SERVICE


[Stage Direction]
On the orders of the day:
Mr. MAURICE BRASSET (Gaspe):: Mr. Speaker, I have been informed that the sailors, firemen and other men employed on the ships of the Department of National Revenue located at Gaspe are not to be reemployed this summer. I should like to inquire of the Minister of National Revenue (Mr. Ryckman) as to what provision is being made to take care of these men. After a workless winter, many of these men now find themselves at the point of starvation, and I should like to know if it is the intention of the department to provide them with work.


Hon. E. B. RYCKMAN (Minister of National Revenue):: Mr. Speaker, I am not
acquainted with the particulars of the subject to which the hon. member refers, but if he has reference to the boats of the preventive service I must tell him that this matter is now under the jurisdiction of the Department of Justice and the Royal Canadian Mounted Police. However, I can say that the greatest consideration is being given to the matter of taking care of those who have been in the service, and I'have no doubt that it is
Deportation Cases

the intention of the police to employ those men who can be employed. However, there may be cases where no work can be given and it may happen that many men who have given good service to the crown will have to pass out of the service.


Maurice Brasset: Will any provision be
made for those who are not working?


Edmond Baird Ryckman: I am sure that every
consideration will be given to each particular
case.



DEPORTATION CASES


[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, I should like to ask the Minister of Immigration (Mr. Gordon) when he will make a statement with regard to the arrest and threatened deportation of Daniel Holmes, Konrad Cessinger and Orton Wade of Winnipeg? There seems to be something curious about this case; a good deal is being made of it by the Winnipeg papers. I should like to know under whose authority these men were arrested and on what charge and where they are to be tried.


Hon. W. A. GORDON (Acting Minister of Immigration and Colonization):: Mr. Speaker, I assume that the persons to whom reference has been made are persons being investigated under the provisions of the Immigration Act. Under this act a duty devolves upon the minister and the officers of the department to see that people in Canada who have no right to be here are investigated by a board of inquiry and their right to be in Canada reviewed. If it is found that they are undesirable and have no right to be here, or if for other reasons contemplated by the statute it seems that they should be returned to their country of origin, the appropriate steps are taken. There has been no change in the practice or policy of the department since I have had the honour of administering it, and the same practice has been followed for years. The provisions of the statute have not been changed in many years.


James Shaver Woodsworth: If I may ask a
supplementary question, the minister has really not answered my question. One of these men, I understand, has been some twenty years in Canada, and has a Canadian wife and children. The minister has not said bv whose authority they were arrested or on

what charges or where they are to be tried. In view of the circumstances I think he should give definite answers to these questions.


Wesley Ashton Gordon: These parties are being
dealt with in just the same way as are any others whose cases might come under review within the scope of the legislation. They are not arrested in that sense of the word. They will come before a board of inquiry set up under the provisions of the act and be given full opportunity to make out their case before that board. If it is shown that the officers who investigated the cases are in error or the evidence upon which the proceedings were started cannot for some reason be relied upon, and if they make out their case, they will have no difficulty. On the other hand, if they are not conforming to Canadian laws, they will most certainly be dealt with as the act contemplates. My duty is to see that the statutes are fairly but justly enforced, and I propose to see that that duty is done in so far as I am able to do it.


James Shaver Woodsworth: If I may press the matter-


Mr. SPEAKER:: Order.


James Shaver Woodsworth: The minister has
not answered the question.


Pierre Édouard Blondin: The hon. member has
put two questions to the minister and has received full and complete answers. The time of the house cannot be taken up in interrogations of the minister.
Mr. J. L. BROW'N (Lisgar): May I ask a question of the minister and expect au answer? Where are these men to be tried? Are they to be tried at Halifax where they have been taken, or are they to be returned to Winnipeg where they will be given a chance of a fair trial?


Mr. BENNETT:: That does not require
an answer.


John Livingstone Brown: I think I am entitled to
an answer to that question. How can men be given a fair trial about two thousand miles away from where the alleged offence was committed and where they have no chance to arrange for a fair defence?
RighJ; Hon. W. L. MACKENZIE KING (Leader of the Opposition): I understood the minister to say that the case was being reviewed. Would he indicate how it comes about that the case is being reviewed at Halifax rather than at Winnipeg?

Department of Insurance


Wesley Ashton Gordon: That is not an unusual course; it has been done many times before. The act contemplates that the board of inquiry may hear these cases at any point. With regard to some of the cases, it often happens that we are positive that a man is illegally in this country, and the nearest, most convenient, port where he can be returned to his country of origin is frequently chosen. I have not before me the immediate details of the case to which reference has been made. Perhaps I shall have an opportunity between now and Monday to inquire more closely into it and if further details can be given I .shall be glad to give them.


Mr. H. E. SPENCER (Battle River):: Who comprise the board of inquiry in such cases?


Wesley Ashton Gordon: Under the provisions of the statute a board of inquiry is set up by a certificate from the minister. It is usual to have at every port of entry, that is ocean ports and ports on the boundary from coast to coast, some responsible officer or probably more than one who can constitute a board of inquiry. I cannot of course say, without reference to the departmental files, who the individual is.


Mr. WILLIAM IRVINE (Wetaskiwin):: May I ask the minister if, under the act, a specific charge has to 'be laid against individuals before they are compelled to appear before the board?
Mr. .GORDON: No charge as such is contemplated by the act. A complaint is made to an officer who as defined by the act, may include the municipal clerk of a village, town or city, an officer of the department or a peace officer. A complaint is made and then the inquiry is set on foot. After the case is heard pro and con, a report is made to the minister, and if in the minister's judgment the board of inquiry has come to a proper conclusion, and if the person whose case is being investigated, has rendered himself liable, under the provisions of the statute, to being returned to his country of origin, appropriate action is taken.



IMPERIAL ECONOMIC CONFERENCE

[Stage Direction]
On the orders of the day:
Richard Bedford Bennett: The leader of the opposition asked me yesterday to fix a day for the discussion of the estimates with respect to the Imperial conference. I think the item is under the heading of miscellaneous in the main estimates. If Tuesday will be satisfactory, we
shall take it up on that day. If some other day will better suit the convenience of hon. gentlemen opposite, we can arrange accordingly.


Right Hon. W. L. MACKENZIE KING (Leader of the Opposition):: Tuesday will be wholly satisfactory. I thank my right hon. friend.



DEPARTMENT OF INSURANCE

[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved the second reading of Bill No. 66, respecting the Department of Insurance.
Some hon. MEMBERS:: Explain.


Mr. RHODES:: As the house is aware decisions, some three in number, of the privy council have made it abundantly clear that the business of insurance is within the sole and exclusive jurisdiction of the provinces. While that is so, at the same time the question of bankruptcy and insolvency and also the subject of dealing with aliens and alien companies are within the jurisdiction of this parliament. These circumstances make it necessary that we should have a new act or orientation of acts, if I may use that expression, which will be, as I believe will be the case, beyond question within our legislative jurisdiction. With respect to this bill and the two companion bills which follow, the one under discussion, as the title indicates, is respecting the Department of Insurance. It will be followed by two other bills, one respecting foreign companies and another respecting Canadian and British companies. All, I think, ought to be treated at the same time and I am going to suggest that they be dealt with together in committee of the whole.
These bills have been very carefully discussed in the Senate; there have been numerous public hearings; all parties interested have either been heard or have had full opportunity to be heard, and I may say that the companies themselves are in substantial agreement as to both the principle and the terms of the bills in question. So far as the provinces are concerned, six are quite content with the bills and in fact I think I am expressing their desire correctly when I say it is that the control of insurance, so far as it is within our legislative power, should rest with this parliament and be vested in us. Three of the provinces, while they did not appear before the Senate committee, contented themselves with lodging a formal protest which was of a character to leave it open to them at a subsequent stage, if they chose to do so, to take exception to the legislation. But the framing of the bills has been conducted in such an atmosphere that I hope the result
Insurance Companies

will be substantial agreement with respect to not only the six provinces in question, but the three which have lodged the objection to which I have referred.


Mr. MARCIL:: Will the minister mention the three provinces?


Edgar Nelson Rhodes: Quebec, Ontario, British Columbia, I do not know that any good purpose can be served by discussion which ought to be confined to the principle of the bill, because I take it that there will be no exception on that score, and the very questions which have been addressed to me so far would indicate that we might make more satisfactory progress and proceed more in conformity with the rules if we could go into committee on the three bills where we could inquire into the matter more fully in detail. I therefore content myself at the moment with that statement, reserving the right to a full discussion when we are in committee of the whole.


Mr. EULER:: The minister made the statement that conferences had been held with the provinces and insurance companies and that they had expressed themselves as in substantial agreement with what is proposed to be done under these bills. I was going to ask, and this touches the principle, whether those conferences included foreign insurance companies, and if so, whether they are as well satisfied with what is proposed to be done.


Edgar Nelson Rhodes: When I say companies I mean reciprocals and mutuals, both foreign and domestic. They are in substantial agreement with the measure.


Henry Elvins Spencer: Does the government intend to send these bills to the banking and commerce committee?


Edgar Nelson Rhodes: No. Inasmuch as there have been ample and complete 'hearings before the Senate committee, it was felt that we could with better advantage move the bills, after the second reading, into committee of the whole house. I may say that there will be no disposition to hurry them unduly, and if it is thought wise we can hold them in committee for a day or two for the purpose of canvassing them as fully as may be desired.
Motion agreed to and bill read the second time.



FOREIGN INSURANCE COMPANIES

[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved the second reading of Bill No. 67, respecting foreign insurance companies in Canada.
Motion agreed to and bill read the second time.

[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved the second reading of Bill No. 68, respecting Canadian and British insurance companies.
Motion agreed to and bill read the second time.

Edgar Nelson Rhodes: I beg to move that the Speaker do now leave the chair for the house to resolve itself into committee of the whole to consider Bills Nos. 66, 67 and 68.


[Stage Direction]
Motion agreed to, and the house went into committee thereon, Mr. Tummon in the chair.
The CHAIRMAN (Mr. Tummon):: Bill No.
66.
On section 1-Short title.


Mr. POWER:: Would the minister tell us to what sections of this bill objection has been taken by the provinces? As I understand it, the provinces have no objection to the creation of a department of insurance.


Edgar Nelson Rhodes: I do not understand that the provinces take objection to any section of any of these three bills, but inasmuch as the privy council has decided that the business of insurance is a business exclusively within the jurisdiction of the provinces, until the provinces are satisfied that we are sufficiently within our own sphere and are not encroaching upon theirs, they have put in what is in effect a caveat. That is, they do not take the position that not having objected they are precluded from saying hereafter: We wish to take exception on the ground of your having invaded our sphere of jurisdiction.


Charles Gavan Power: Is not the point simply this? Whether the provinces take exception or not, if any of the powers conferred on the federal Department of Insurance by these acts is ultra vires, any citizen in any province may take exception and the attorney general of the province will become a party to a case which just as likely as not will have to go before the privy council in the near future. Is not that the case?


Edgar Nelson Rhodes: The rights of no individual and no company would be barred. They would still have recourse to the courts if they called into question the constitutionality of this measure.

Insurance Bills
Mr. POWER r As I understand it, the legal advisers of certain of the provinces, Ontario and Quebec particularly, and the minister says British Columbia as well, have taken the position that the federal government has no jurisdiction whatsoever in matters of insurance. Am I stating it too broadly?


Edgar Nelson Rhodes: I think that is putting it a little too broadly. They want to reserve to themselves such rights as accrued to them in virtue of the privy council decision. I think it is fair to say that they do not take exception, certainly not to the extent of pressing it, to the jurisdiction which we are now asserting in virtue of these bills.


Charles Gavan Power: The federal government takes the position that in virtue of the British North America Act it has jurisdiction to deal with bankruptcy and insolvency?


Edgar Nelson Rhodes: Yes, and also with the
question of aliens, and to a lesser degree with the question of trade and commerce. There is no question whatsoever-the provinces have never raised it-that our jurisdiction is ample with respect to bankruptcy and insolvency and dealing with alien companies.


Charles Gavan Power: The question of alien commerce was settled by one decision of the privy council some time ago, was it not? I do not recollect just what the decision was at the moment, but it was to the effect that insurance was a business that was peculiarly a civil contract and that therefore it came under the jurisdiction of the province. Am I not right?


Edgar Nelson Rhodes: So far as the question of
insurance business is concerned, I think the provinces have always been upheld by the privy council.


Charles Gavan Power: Did not the same thing
apply with respect to aliens?


Edgar Nelson Rhodes: No, just the reverse. I do not think our jurisdiction both with respect to aliens and in respect to bankruptcy and insolvency has ever been called into question.


Charles Gavan Power: As I understand it, there is no question as to the jurisdiction of the federal government with respect to aliens, but when the federal government asserted its right to control foreign insurance companies because it had jurisdiction over aliens, I was under the impression that the privy council had decided that that would be extending the right of the federal government too far, that once these aliens were in this country, whether they were foreign insurance companies or not,
unquestionably they fell within the jurisdiction of the laws of the province in which they were. I think I am right in that.


Edgar Nelson Rhodes: I think the real effect of
the decision was this:	While it is admitted
that bankruptcy and insolvency are questions with respect to which we have full jurisdiction, nevertheless we could not, simply because we have jurisdiction over bankruptcy and insolvency, carry it to the point of trying to control the business of insurance as a business, that the latter was within the jurisdiction of the provinces.


Charles Gavan Power: To go one step farther:
I do not wish to reopen any controversy con-ceming insurance companies, but I should like to know if there is anything in these bills authorizing the government to pass such orders in council as were passed on December 31 last, permitting insurance companies to value their securities at other than the values provided by the former Insurance Act. I must admit I have not read the bills now before us.


Edgar Nelson Rhodes: Mr. Chairman, respecting
the matter of our jurisdiction as it concerns the question of aliens I have before me the last decision of the privy council. On the point in question Lord Dunedin has said the following:
Their Lordships have no doubt that the Dominion parliament might pass an act forbidding aliens to enter Canada, or forbidding them so ito enter to engage in any business without a licence and further they might furnish rules for their conduct while in Canada requiring them, e.g. to report at stated intervals.
And so on.


Charles Gavan Power: The minister has not
answered the question with respect to bankruptcy and the order in council passed last December.


Edgar Nelson Rhodes: May I suggest-and I
think my hon. friend will agree with my suggestion-that we would be well advised to consider this bill paragraph by paragraph.


Charles Gavan Power: In which bill is that to
be found? I understood the suggestion of the minister to be that all three bills should be placed before the committee.


Edgar Nelson Rhodes: The bills are in committee, so we will take them up clause by clause, and seriatim.


Charles Gavan Power: I was under the impression
the suggestion was that we would discuss the whole question.
Insurance Bills


Edgar Nelson Rhodes: I thought we would make better progress by taking the bills section by section.


Charles Gavan Power: Will the minister tell me
in which bill this provision is to be found?


Edgar Nelson Rhodes: I beg my hon. friend's
pardon; I had the wrong bill before me.


Charles Gavan Power: It is in bill No. 67.


Charles Marcil: I should like to know if
mutual insurance companies, farmers' associations, and so on pass under the control of the dominion?


Edgar Nelson Rhodes: They are entirely exempt, unless they come voluntarily and register with the dominion Department of Insurance.


[Stage Direction]
Section agreed to.
On section 2-Definitions; "department"; "minister."
Henry Elvins Spencer: I should like to know if
the provinces of Quebec, Ontario and British Columbia are objecting to this legislation, and if so if they have had the opportunity to express their views.


Edgar Nelson Rhodes: They have had ample, full and complete opportunity. I would not go so far as to say that they have taken exception to this legislation. They have, however, placed themselves in a position at a later stage to call it in question if they so desire. My impression is that they will not call it in question, and I think in operation they will find that we are on common ground with respect to this legislation. That is my hope and belief.


Henry Elvins Spencer: It seems to me it is
somewhat difficult to give these bills proper consideration in a large committee like this. I am surprised the minister has not sent them to a special committee of the house. I should like to ask if there has been any public expression against the passage of these bills through the house.


Edgar Nelson Rhodes: Not so far as I am aware. In fact, as I said at the beginning, all parties are in substantial agreement. I am not aware any objections have been taken.


Henry Elvins Spencer: Have there been no objections from policyholders?


Edgar Nelson Rhodes: I am advised there are
none.


[Stage Direction]
Section agreed to.

On section 3-Constitution of department; minister.
Robert Gardiner: Will this legislation
repeal former legislation respecting the Department of Insurance, and if so is there any important change in the legislation formerly in force?


Edgar Nelson Rhodes: There are changes in details, but not in substance.


Robert Gardiner: Are they important?


Edgar Nelson Rhodes: Yes, some of them ar'e.
The changes are made, however, with a view to conformity with the decision of the privy council.


Henry Elvins Spencer: Mr. Chairman, a few
minutes ago the Minister of Finance said there had been no protests with regard to this legislation. I understand a protest has been made to the chairman of the banking and commerce committee, and also to the Speaker of the house by the chairman of the policyholders' association. I should like to know if, on second thought, he recalls any such protests.


Edgar Nelson Rhodes: The superintendent of insurance has advised me that he has no knowledge of them. If my hon. friend has Mr. Harpell in mind my reply is that he had weeks, weeks and weeks of time and full and ample opportunity to appear before the Senate committee. I made inquiries from the chairman of that committee as to whether or not Mr. Harpell had sought to appear before them, and I am informed that he neither sought to appear nor appeared.


Mr. CAYLEY:: Will the minister outline
the duties of the office of the Department of Insurance. Roughly speaking, what will be their duties?


Edgar Nelson Rhodes: There are no new duties.
Under the terms of the legislation which we are now passing it will be the object of the superintendent of insurance to exercise as careful supervision and control as is within legislative competence.


Thomas Merritt Cayley: From now on will all the
companies be registered under provincial departments? They will not have to be registered in the dominion department?


Edgar Nelson Rhodes: For provincial companies
that is a matter for the companies themselves to determine. If they do not choose to register in the dominion Department of Insurance they do not have to.

Insurance Bills


Thomas Merritt Cayley: But they have no choice,
when it comes to doing business in the provinces; they have to register there?


Edgar Nelson Rhodes: Quite so.


Mr. ILSLEY:: Will the Minister of Finance please explain why there are three bills instead of one? Is it not a fact that by the legislation now being passed the present act is divided into three parts? I think the committee should know something about the reason for the steps that are being taken. Perhaps it has been explained, but I was not in at the time.


Richard Bedford Bennett: Mr. Chairman, as my
hon. friend the Minister of Finance succeeded to this department after these matters had been under consideration, I will with his permission explain to the hon. gentleman just what the situation is. As he knows, the privy council's first decision was that the business of insurance was within the exclusive jurisdiction of the provincial authorities and could not be supported alone as being a branch of trade and commerce. Subsequent decisions of the privy council with respect to the powers of provincially and federally incorporated companies outside of the business of insurance altogether induced some companies to believe that possibly the federal powers were more extensive than the first decision indicated. The final decision, upon the matter was given last October, Lord Dunedin speaking for the judicial committee. The effect of that decision interpreted into terms of legislation would be, first, that this parliament has exclusive jurisdiction over insurance companies incorporated by parliament. I think that is fairly obvious to all of us. That is, any company owing its origin to a statute of this parliament is under the exclusive legislative jurisdiction of this parliament, if parliament so desires to impose conditions-as we have-on the exercise of those powers. Secondly, that provincial companies incorporated by the legislature of a province and authorized to carry on the business of insurance, may do so within the province without regard at all to the federal authority either for licensing, or registration, or for any other purpose.


James Lorimer Ilsley: And outside of the province, too, I suppose?


Richard Bedford Bennett: Quite so; because under the decision in the Bonanza Creek case it is perfectly clear that provincially incorporated companies, may, as the hon. gentleman has just observed, transact business in other provinces as well. Therefore, a provincially incorporated company may transact its business in other provinces without the act of this parliament or this insurance department. Thirdly, you have British companies. They are not foreign, inasmuch as they are not aliens within the definition of "aliens" as defined by the privy council commencing with the Cain case, in which the hon. gentleman will recall the Supreme Court of Canada decided in the same sense as the judicial committee did, that we have power to deal with aliens in the form in which we have enacted legislation by this parliament; in other words, the legislation was intra vires. Then there are foreign companies, over which we have complete jurisdiction on two grounds, one, that they are aliens and come directly within the language used by Lord Dunedin as just quoted by the Minister of Finance. The other ground on which we deal with them- is is merely subsidiary of that principle-is that they have no status in this country except such as may be acquired by registration, and inasmuch as the dominion has the power, they then receive from the dominion department a licence-if you care to use that word; I do not think perhaps it is the most desirable to use in view of the language of the courts -or authority to transact their business.
When the legislation came under review the difficulties were shortly put thus: that inasmuch as the act covers all these enterprises, both the domestic company incorporated by this parliament and the domestic company incorporated by a province, the British company and the foreign company, as well as the operations of the machinery of the Department of Insurance, it was believed by all parties-shall I say?-those who represented the companies and the law officers of the crown-that the interests of all would be best served by making a clear line of demarcation between (a) the department and its powers, (b) companies domestic in their character or British and (c) companies that are foreign. The new legislation will not be complicated by all these matters being in one bill. The first bill, for instance, that is now under consideration deals with the insurance department. The jurisdiction of that department obviously must be lessened by reason of the last decision of the privy council, inasmuch as the conduct of business, as such, does not lie within the competence of this parliament to control. But the necessity for the department arises because we have incorporated insurance companies, we have defined their powers, we have indicated the interest rate on which their reserves shall be calculated, and we have indicated the character of their investing powers. It therefore follows that

Insurance Bills
the insurance department should be maintained. As the minister has just said, some of the provinces would very much prefer that provincial companies should attorn to this jurisdiction so as to relieve them of the burden and necessity of constant supervision and inspection. The history of the United States with respect to insurance should be of some assistance to us. Their forty-eight states have forty-eight laws with respect to insurance companies, their inspection and supervision, and this has imposed a very considerable burden of expense on the companies. I am not in any sense endeavouring to promote the federal power when I say it is generally conceded by those who have to do business with insurance companies, that a single unified control, properly directed, with such conditions imposed as this parliament thinks desirable, will promote efficiency and safeguard the interests of the insured. That is the general view at least; whether it is the accurate view or not I am not going to express an opinion.
Then if once we establish the department, its jurisdiction with respect to the companies we ourselves incorporate is complete. With respect to the provincially incorporated or created companies, the jurisdiction is conditional; if they do attorn to this jurisdiction and desire there should be that control, then the department has been in the habit heretofore-and I presume will be hereafter

of exercising those functions. But that does not divest the provinces of their control; it relieves them of the expense. I think the hon. gentleman will understand why some of the provinces would very much prefer that that should be done.
Then you pass into the realm that is more difficult from one standpoint, less difficult from another. The British companies have not the status of our domestic companies, owing their incorporation neither to a statute by this parliament nor by the provincial legislatures, but to a statute in some other part of the British Empire. They come in here with British nationality and they must be subject to different control from that governing the company created by foreign legislation, because you cannot invoke the clause with respect to aliens against British companies. Therefore this third bill endeavours to make a clear differentiation between British companies on the one hand and foreign companies on the other. That is the purpose of the legislation.
I need hardly say to the hon. gentleman who has followed these matters as a lawyer that each phase presents a distinct and clear cut issue. First, the creation of your depart-

ment and the necessity for it. In other words, we cannot divest ourselves of our responsibilities, for no province would have as of right jurisdiction over some phases of the insurance business that we should have with respect to those companies that we ourselves have created. We leave out, as I say, provincial companies, except as they may see fit to attorn to our jurisdiction. The other matters I will not reiterate our position with respect to, but I think it is quite clear why it is desirable to separate these measures and not have an aggregation of sections that deal with different cases, but rather to try to separate them one from the other. I may say that in a committee in another house the fullest public discussion took place and the most eminent counsel representing the provinces and the companies made representations in connection with the legislation. The legislation as it now stands embodies the collective wisdom of the most eminent counsel we have in Canada, together with the suggestions that have been made by the law officers of the crown, on the federal side as Well as on the side of the provinces.
In answer to my hon. friend from Battle River (Mr. Spencer), I may say that yesterday I received a telegram signed by Mr. Harpell, stating that he was representing certain of the policyholders' associations, but my inquiries, which thus far have been casual and which I have not followed up in detail, have brought the information that he did not ask to be heard before the Senate committee that afforded the greatest possible opportunity for representations to be made by any person who might desire to make them. In fact representations -were made both by letter and verbally, by people interested.


James Shaver Woodsworth: I should like to be permitted to congratulate the Prime Minister on his success in getting around some of the difficulties inherent in the British North America Act. This is almost the first time that I recall such a triumph on the part of the government in overcoming the jurisdictional problems so often connected with that act. As I understand the Prime Minister, he says this act does not deprive the provinces of their jurisdiction but relieves them of their responsibility. I hope that some day the Prime Minister will devote himself to an attempt to arrange some modus vivendi by which we can secure the enforcement of the eight hour day and also adopt in this dominion something in the nature of unemployment insurance. It seems to me that if we put our wills to work there should be no

Insurance Bills
particular reason wh}' the British North America Act could not be overcome in other spheres than that of commercial insurance.


William Daum Euler: Being merely a layman and not a lawyer I should like to have a point cleared up, if possible. I understood the Prime Minister to say that despite the decision of the privy council, companies incorporated by dominion statute, British companies and foreign companies, especially mutual companies, are still under the complete jurisdiction of the dominion. Am 1 correct in that statement?


Richard Bedford Bennett: No. Of course, with
reference to companies incorporated by dominion statute, this parliament can impose such conditions as it pleases with respect to the granting of a charter, but the actual business is solely and exclusively within the jurisdiction of the provinces. The last decision makes that clear. For instance, being property and civil rights, the insurance contract between the company and the insured is regulated by the laws of the province in which the contract is made, but the status of the company is entirely determined by this parliament. Then you come to foreign companies. It is perfectly clear, as the legislation will indicate, that a foreign company may register in a province, but we and only we have the jurisdiction to deal with it, as we have the authority to deal with aliens under section 91 of the British North America Act. I believe the particular subsection is 23, though I am only speaking from memory. That power to deal with aliens gives to us, and to us only, the power to deal with foreign companies from that standpoint. Have I made myself clear?


William Daum Euler: Yes, thank you. I just wish to ask this further question: Take a foreign company, for instance, and I think the ones most discussed were the mutual companies of the New England states. I understand the Prime Minister to say that they may still register in any province, and therefore they can go on and do business. Then has the dominion any jurisdiction; can this parliament say "You shall not do business in this province?" Can we, for instance, over-rule the provinces in the matter of registration?


Richard Bedford Bennett: I am afraid my hon.
friend did not follow my remarks, or I did not make myself sufficiently clear. With respect to foreign companies we assert that we have exclusive jurisdiction, and not the provinces. I see my hon. friend from Hants-Kings (Mr. Ilsley) has looked up the British North America Act. Could he give me the subsection dealing with aliens?


James Lorimer Ilsley: It is subsection 25 of section 91.


Richard Bedford Bennett: Thank you. If my hon. friend from North Waterloo will observe the provisions of section 91 he will see that it states that "the parliament of Canada shall have exclusive jurisdiction," just as section 92 confers exclusive jurisdiction upon the provincial legislatures. For the purposes of law a corporation is in the same position as an individual with regard to section 91, and such a company registers under our statutes.


William Daum Euler: Then as a matter of practical application, if a foreign company chooses to do business in any province of Canada must it first approach the dominion, or can it approach the provincial government?


Richard Bedford Bennett: Our submission is that, being an alien company, it must first deal with the dominion.


William Daum Euler: Then if the registration is accepted, or if the dominion agrees that it may do business, the registration is made in the province, and does the company then fall under the jurisdiction of the province in regard to the conduct of the business?


Richard Bedford Bennett: So far as business is concerned, interpreting the judgment as learned counsel have interpreted it, we have no power to regulate or control business, whether transacted by a foreign or by a domestic company. If the foreign company receives status here, as under our law with respect to aliens it must, then of course it is at liberty to deal with the question of the terms upon which it may transact business in the province, under the exercise of power by the province, as is the case with any other company, domestic or foreign. The question of the transaction of business is under the regulation of the provinces.


William Daum Euler: In all cases?


Richard Bedford Bennett: Yes.


Thomas Merritt Cayley: Just a question with regard to the matter of inspection, to which reference has been made. The minister spoke of the question of inspection as it had to do with the forty-eight states of the United States. I wanted to ask this question: Is it possible that we have nine different inspections of all companies doing business throughout Canada, or is it the fact that one inspection is made, and the other authorities accept the report of that inspection?

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Richard Bedford Bennett: I desire to repeat what was said by the minister in bringing forward this bill:	I think some six of our provinces,
realizing the desirability of uniformity, have left the question of inspection entirely with the federal authority. The larger provinces, as well as British Columbia, feel that they may want to carry on this inspection themselves, but they have not finally made up their minds upon that point. I think what the hon. gentleman has in mind is this:	The head
offices of all the insurance companies make out their annual returns, which have to do with all those matters that are common to the forty-eight jurisdictions in the United States, and then the special requirements of each individual state are met by supplementary returns attached to the main return. It is a very complicated matter. For instance, a company domiciled in the state of New York makes its return to that state in conformity with the requirements of the superintendent of insurance there. The state of Arizona, for example, may have additional or not so many requirements. The company merely amends the same report for the purpose of meeting the requirements of the other states. I think the hon. gentleman suggested that a copy might be sent to each authority. That would not satisfy the requirements. In the United States each state imposes its own method upon the companies, and they make supplementary returns to satisfy the requirements of each state.


Thomas Merritt Cayley: I had reference to the
periodical inspections and audits.


Richard Bedford Bennett: This is the way it works out in practice, I think: Inspection is made in the domicile of the company because they have control over the enterprise. They go and search securities and matters of that kind. Other states satisfy themselves in any way their legislation may require, either by having everything verified in form, by having some one attend and make a search, or by any other method which may be desirable. So far as business in the particular state is concerned, they usually make a computation of reserves and insist that there be deposited in the state sufficient security to take care of the reserves computed on the rate of interest provided for by the statutes.


Thomas Merritt Cayley: What is the arrangement
in Canada among the various provincial superintendents of insurance?


Richard Bedford Bennett: Prior to the decision of
October last, our superintendent of insurance and his officials inspected all companies regis-

tered in Ottawa but he exercised no jurisdiction over those companies having purely provincial incorporation. For instance, without going into names, there are several companies in Ontario which have provincial charters; our superintendent of insurance did not inspect them at all in any way but if they came here, then he and his officials had responsibility for their inspection. Have I made myself clear?


Thomas Merritt Cayley: No, you have not. Certain provincial companies have gone beyond the bounds of their own province and are doing business in several provinces, and I should like to know if there is some arrangement among the superintendents of the provinces as to this periodic audit and inspection.


Richard Bedford Bennett: My answer is that "that
is a matter over which unfortunately we have no control-they go and do as they please. In the case of a provincial company incorporated in Ontario and doing business in Manitoba, I cannot say what Manitoba does. That province may or may not accept a provincial audit, but there is no federal audit by our superintendent of insurance.


Thomas Merritt Cayley: I understood that the
province in which the head office is located made this inspection and audit and the other provinces accepted their certificate.


Richard Bedford Bennett: That may be so, but we have nothing to say about it. I am bound to say that I believe that some provinces, in order to save expense, are doing just what the hon. gentleman has said, but in view of the decision last fall of the privy council we have no power or control because the company is provincial in origin and has got into other provinces according to the laws of those provinces. Therefore, the inspection started as provincial and it continues as provincial and we exercise no control. Personally, I think it is very undesirable that there should be any conflict of jurisdiction in these matters, I think a uniform inspection and audit of all insurance companies would be in the public interest. However, that is only my personal view. As the minister has indicated, several of the provinces desire that state of affairs to continue. I understand the hon. gentleman has had experience in these matters and he will realize that where you have a premium rate fixed upon, (a), the earning power of money over a long period of years and, (b), the expectation of death over a long period of years, it is undesirable that the rates of interest should be higher in one province than in another for the pur-

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pose of determining the premium rate and it is more undesirable that different tables should be used to determine the probable mortality. This matter has been settled and it is too late to argue along these lines; all that we can hope for is that the provinces will agree that it is desirable that there should be a unified inspection, audit and control.


William Daum Euler: Perhaps I am dull of comprehension-


Richard Bedford Bennett: The hon. member certainly never has been.	[DOT]


William Daum Euler: -but I should like to know more definitely the mode of procedure with respect to these alien companies, the American companies, to be exact. We will suppose a United States company desires to do business in Canada, perhaps in only one province I take it that its 'approach must first be made to the dominion Department of Insurance. Am I correct in that?


Richard Bedford Bennett: I will use the word "alien" in referring to the companies in order to make it clear. An alien company desires to transact business in Canada-I do not say in a province because that is not my purpose- so it must first of all come here and make good its status. Do I make that clear?


William Daum Euler: What does that mean?


Richard Bedford Bennett: That means that it
registers, puts up its deposit and receives authority to carry on business.


William Daum Euler: Does it put up its deposit with the dominion department?


Richard Bedford Bennett: That is what we have provided for; this is done in order that it may have a local habitation and camp, in the words of the poet. What it shall do with respect to each province is determined by the province itself, we have nothing to say about that.


William Daum Euler: Supposing that at any time either the dominion or the province desires to cancel a licence; suppose, for example, that the dominion desires that a company should no longer do business in Canada, would the dominion have power to cancel a licence to do business issued by a province?


Richard Bedford Bennett: Undoubtedly, if the company in its returns indicated just cause and reason why there should be no continued recognition by the dominion of the status granted.


William Daum Euler: That would automatically
cancel the licences given by the provincial inspectors?
41761-168J


Richard Bedford Bennett: That would be my opinion at the moment; I do not make a definite statement but that would be my gratuitous opinion to the hon. gentleman, it would have that effect. I shall try to make it a little clearer to the hon. gentleman because I do not wish to leave this matter in doubt if at all possible. Inasmuch as a non-Canadian and non-British company desires to come within the boundaries of Canada to do business, our view of the law is that it must register with the Dominion of Canada-I am using the word "register" in the broad sense- and it must meet our requirements by putting up a deposit. Having done that it receives authority, not to do business in a province but in recognition of its status having been created by its conforming with our law. After that, the making of returns merely continues the authority.


William Daum Euler: It cannot do any actual business without getting a licence from some province?


Richard Bedford Bennett: Some of the provinces may not require a licence, and that is a matter over which we have no control in view of the decision. In other words, Prince Edward Island may say: if the company has received a status from the dominion government, we are not concerned about a licence, all we are concerned about is to tax the company.


William Daum Euler: Who has the right of inspection, the dominion or the province?


Richard Bedford Bennett: I am not expressing an opinion, but in my judgment we have the right to know that there has been no alteration of the situation to impair the conditions which existed when we granted the status.


William Daum Euler: Would it not be desirable to have an understanding with the provinces in which this company might do business so that there would be no conflict of authority?


Richard Bedford Bennett: In that regard I can only repeat what I have said in this house so frequently, that I would regard it as desirable. I hope this and three or four other matters will be settled when the provinces and the dominion find time to get together for a discussion. Experience teaches that all constitutions are subject to change and that as the development of the construction of a written instrument proceeds it may be desirable to modify it by the considered and joint action of the parties affected, and I hope that end may be accomplished. That is my view, but others hold another view equally
266S
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as strong. As perhaps is known, an effort was made in the subcommittee to do that, but it did not get very far. However, it may be that in the light of experience that condition may be brought about. I can only tell my hon. friend the conditions which we had to meet and how we have met them. The Minister of Justice (Mr. Guthrie) and his department have given a tremendous amount of effort to this matter. The superintendent of insurance, having a very strong opinion with respect to the necessity of federal and uniform supervision and control, has done the same. The Minister of Finance came into the picture after it had been developed to a very large extent, and subject to the discharge of his other duties, he has had a limited time in which to deal with it. But we have dealt with it just as well as the accumulated wisdom and judgment of the most eminent counsel acting for various interests in conjunction with our own have been able to determine. This legislation represents not any-


William Daum Euler: Final?


Richard Bedford Bennett: -not a final determination of it, nor yet an iron-bound expression of an extreme view. But the leader of the Senate, himself an experienced lawyer, was able, with the aid of counsel and by making a compromise here and there, to secure this legislation in the form in which it now is. It has been a most difficult thing to accomplish.


Thomas Merritt Cayley: What arrangements have
been made regarding the New England mutuals that were mentioned a little while ago? I understand heretofore they did not take out a dominion licence to do business in Canada, but rather preferred to register with the provinces. I should like to know what arrangement has been made as regards accepting deposits from those companies.


Richard Bedford Bennett: I am happy to inform
the hon. gentleman that the arrangement is as follows:	Companies such as those named
and others of a similar character will make with the Dominion deposits equivalent to their Canadian liabilities and subject themselves to the inspection of the Canadian Department of Insurance. I believe they were advised by their own home lawyers as well as by their Canadian representatives that as aliens they were reasonably being asked to accept that position, and they agreed to do so. Therefore they make a deposit equivalent to their Canadian liabilities and subject themselves to Canadian inspection; when I say " Canadian " I mean central, the Department of Insurance of Canada inspection.


William Daum Euler: I apprehend I am out of
order-


Richard Bedford Bennett: No, the whole bill is
under review.


William Daum Euler: This refers really to another matter in connection with these mutual companies. I understand in the budget a tax of some 15 per cent is being imposed on premiums of these mutual companies. Has anything been done with regard to that, or is it proposed to do anything or has any compromise or agreement been reached? It aroused a great deal of dissatisfaction with some of our Canadian insurers.


Richard Bedford Bennett: I think the Minister of
Finance explained that in the transcription of the resolution the language used was not in accordance with the statement that he had made in the house. They are being taxed without discrimination, the same as other licensed companies that come in as foreign companies.


William Daum Euler: It was prohibitory really.


Richard Bedford Bennett: That provision was intended to meet the situation.


William Daum Euler: They are quite satisfied to
register?


Richard Bedford Bennett: Yes.


[Stage Direction]
Section agreed to.
Sections 5 and 6 agreed to.
On section 7.-Superintendent or officers not to be interested in any company.
Edgar Nelson Rhodes: I have an amendment to
suggest to this section for the purpose of _ strengthening it. It will be observed that the section reads:
The superintendent or any officer or clerk under him shall not, directly or indirectly, be interested as a shareholder in any company doing business in Canada and registered or licensed under any of the acts respecting companies specified in the schedule to this act.
The amendment I propose will enlarge that prohibition to include an interest in a trust company or a loan company doing business in Canada or in any province of Canada. I would therefore ask my colleague the Minister of Justice to move this amendment.


Mr. GUTHRIE:: I beg to move the amendment that has just been announced to section 7 of the bill.


Thomas Merritt Cayley: Why was the phrase "any province of Canada" added?

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Edgar Nelson Rhodes: This is to enlarge the protection afforded by the act, that not only shall the superintendent of insurance or any officer or clerk under him not hold shares in any dominion company, but that they must not hold shares in a provincial company or a trust or loan company.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 8-Superintendent to ascertain expenditure under acts during last preceding year.
Edgar Nelson Rhodes: I have an amendment to move to include subsection (3) of section 8. If hon. gentlemen will refer to the note on the reverse page, they will see that this is a subsection which properly has to be moved in this chamber and not in the Senate. I would therefore ask my colleague the Minister of Justice if he'would be good enough to move this as well.


Hugh Guthrie: I beg to move that the following be added to the bill as subsection 3 of section 8:
[(3) Thereupon the superintendent shall ascertain the ratio or percentage -which the total expenditure incurred in the administration of the said acts respecting insurance companies, of the Loan Companies Act, and of the Trust Companies Act, respectively, so found and certified is of the total net receipts of the said insurance companies, the total income of the said loan companies and the total income of the said trust companies, respectively, and he shall cause an assessment to be prepared against each of the aforesaid companies as follows, that is to say:-
(a)	Against each of the said insurance companies of an amount equivalent to such percentage of the said net receipts of each company as the total expenditure incurred _ in the administration of the said acts respecting insurance companies is of the total net receipts of all such companies; and
(b)	Against each of the said loan companies of an amount equivalent to such percentage of the said income of each company as the total expenditure incurred in the administration of the Loan Companies Act is of the total income of all such companies; and
(c)	Against each of the said trust companies of an amount equivalent to such percentage of the said income of each company as the total expenditure incurred in the administration of the Trust Companies Act is of the total income of all such companies;
and such assessment, when certified by the superintendent, shall be binding upon the said companies, and each of them, and shall be final and conclusive.]


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Sections 9 and 10 agreed to.
On the schedule.
Henry Elvins Spencer: In the case of a foreign company, will there be any need for two inspections, one by the federal and one by the provincial government?


Edgar Nelson Rhodes: The dominion authorities
think not, but of course what the provinces may determine to do is another matter.


Henry Elvins Spencer: If only one is made, who will do the work of inspection?


Edgar Nelson Rhodes: If the provincial companies attorn to the jurisdiction of the dominion, why, we must do it.


Henry Elvins Spencer: The provinces will have the right to duplicate it, if they like?


Edgar Nelson Rhodes: Apparently so. That is a matter within the jurisdiction of the provinces.


[Stage Direction]
Schedule agreed to.
Title agreed to.
The CHAIRMAN (Mr. MacDonald, Cape Breton South):: Bill 67, respecting foreign insurance companies in Canada.
Sections one and two agreed to.
On section 3-Register of companies.


Mr. COOTE:: Before this bill goes through, as it is so voluminous and rather important, I should like again to urge that the minister have it sent to the banking and commerce committee. It is impossible to consider it properly in a committee of this size and nature. If it were before the banking and commerce committee, the superintendent of insurance would appear there and explain why the changes have been made and explain also any sections. I think we should not in this house depend upon the banking committee of the Senate. Certainly we should have this bill go before our own committee. I think that is what the standing committee on banking and commerce is for, that is its chief function, and I would again respectfully urge the minister to send the bill to the banking and commerce committee.


Edgar Nelson Rhodes: The house in its wisdom
decided that this bill would be referred to the committee of the whole, and it is here and we are now considering it. So far as the merits go, I may point out to my hon. friend that there was a very complete, very comprehensive, and I may say an exhaustive inquiry into this measure by the Senate committee, where there was ample opportunity for all parties interested and the public as well to be heard, and they not only were heard at length but were represented by very eminent counsel.
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So I think that in the circumstances we are taking the right course, if I may say so, with equal deference to my hon. friend. I would again say to him that there is no disposition to ask this committee to act with undue haste with respect to this matter. If it is thought wise that the bill should be held in committee for a further sitting, I am quite content.


George Gibson Coote: It was not with the idea of hearing witnesses before the committee that I suggested that this bill should go to the banking and commerce committee, but I feel that it could be considered to much better advantage there than by the committee of the whole house. So far as the point which the minister makes, that this bill has been considered by a committee of the Senate, is concerned, I have known bills to receive very careful consideration by a committee of this house and then go to the Senate and there be referred to the Senate's own committee, and very properly so. I repeat, I think this bill could be considered to much better advantage by the banking and commerce committee than by the committee of the whole house. The bill is very lengthy and there is a far better chance for the banking and commerce committee finding out what it really means.


William Daum Euler: I have a certain sympathy
with what my hon. friend from Macleod says. I do not like to delay the work of the committee, but this bill is very voluminous and it is pretty difficult to understand the significance of the various clauses. For myself I think I would be content, and perhaps other members would be, if the minister would give us a fairly full explanation of any vital changes in the bill as compared with former legislation. Does this bill pretty well follow the old enactment? Would the minister point out wherein it differs radically from the former legislation?


Edgar Nelson Rhodes: I shall be very glad indeed to do that as we proceed. I have a number of amendments to move to the bill, and I will explain each paragraph as we go along.


Thomas Merritt Cayley: The minister spoke of the extensive work that was done by a committee of the Senate. But there is no record of that committee's meetings; at least I have not seen any. I understand that the Senate committee went into the matter very thoroughly and sifted every phase, but I am at a loss still to know vrho was present at that committee. Were all the superintendents of the departments of insurance present, especially Ontario, and were all those who were raising protests represented, the. mutual companies, life insurance companies and so forth?


Edgar Nelson Rhodes: As I said at the beginning, six provinces have always been quite content, I take it, to accept the jurisdiction of this parliament in the matter of insurance legislation. As a matter of fact, I may say for the province of Nova Scotia that for years there we have submitted ourselves gladly to the jurisdiction of the dominion in the matter of insurance because, first of all, as a province we divested ourselves of a tremendous responsibility which will be obvious to my hon. friend who has a wide knowledge of insurance matters, and in the second place we saved ourselves a great deal of expense and we were able to avail ourselves, to the benefit of the province, of the knowledge, wisdom, experience, and guidance of the dominion Department of Insurance. With respect to the three provinces which did not accept that position, they were all represented by eminent counsel before the Senate committee.


William Daum Euler: Which were the three?


Edgar Nelson Rhodes: Ontario, Quebec and British Columbia. Mr. Bayly, the deputy attorney general of Ontario appeared for that province and also represented British Columbia. The province of Quebec was represented by Mr. Aime Geoffrion. All the insurance companies were fully represented.


William Daum Euler: Including the foreign companies?


Edgar Nelson Rhodes: Yres.


Henry Elvins Spencer: This is the first time in eleven years that I have known the Commons so ready to give such a blanket acceptance to the work of the Senate. Possibly it is because lately there has been much more activity than usual in the Senate. I think that the Senate should feel very much flattered at the minister's thinking their work so perfect that we should be able to pass these bills here without a great deal of consideration. Certainly the explanatory notes are not sufficient to enable one to understand the significance of the bills, but if the minister is going to speak on each clause, we can give them consideration but certainly not the consideration that they would receive in the banking and commerce committee, and we cannot give them proper consideration if you, Mr. Chairman, simply read the marginal notes. The bill is new and lengthy and important, and certainly we should have some explanation from the minister. 1 feel with the hon. member for Macleod and the hon. member for North Waterloo that it is asking a great deal of this committee to give consideration of this bill when it is so lengthy and contains so much new material.

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Edgar Nelson Rhodes: I should think my hon. friend from Battle River would be the last person to take exception to our following a new course because it is from that section of the house that we always expect new paths to be pursued, and my hon. friend must not expect us always to follow what he believes to be the Tory course. I think we are singularly fortunate in this instance, Mr. Chairman, because before the Senate committee all parties were represented and there were a number of eminent legal gentlemen appearing as counsel who had the time to devote to an intensive study of this measure. Without calling in question or reflecting in the slightest degree upon those who form the banking and commerce committee of this house, they have had a tremendous amount of work to perform this session, with numerous sittings of the committee dealing with very important matters, and were they of even greater intelligence than they are they could not have found the time to deal with this measure, along with all the other work they have had to do, in the complete way in which it was considered by the Senate committee. In the Senate committee it took some three or four weeks of exclusive time and attention, assisted as the committee was by eminent gentlemen learned in the law from the various provinces of Canada. I think that we are indeed fortunate that that was the situation. If this were a matter in respect to which there was contention or there was any danger of the public interest suffering, there might be something to be said for what my hon. friends have suggested, but as a matter of fact the very course that was taken was designed to give the public interest the fullest possible protection, and I think now we are in the very happy position of having a measure before us which has had so much time and attention given to it and which has proved so acceptable to all parties interested, and, I think, to the public at large.


Mr. LUCHKOVICH:: I would ask the minister whether any objection was taken to this bill by any of the provinces when it was being considered by the Senate committee.


Edgar Nelson Rhodes: Mr. Chairman, this bill is the result of the pooled wisdom of all parties interested. While perhaps I cannot go to the point of saying that the provinces are in complete agreement, I can say that six of the provinces agree, and that three provinces leave themselves open, if they choose so to do, at a later stage to take exception to the measure. In the meantime at least they are not opposing the bili.


William Daum Euler: This legislation could have effect and force only if the provinces do not object?


Edgar Nelson Rhodes: No, not at all; on the contrary it will have full force. As a matter of fact I do not assert my view is worth anything in this matter, because this is a subject which will require far more study than I can give it. However, eminent lawyers with whom I have conferred are of opinion that this bill is within the competence of the legislative jurisdiction of this parliament.


Michael Luchkovich: Away back in the year 1916 the province of Alberta took the matter of jurisdiction in insurance to the privy council, and if I remember correctly the verdict was in favour of handing over jurisdiction to the provinces. I was just wondering whether the province of Alberta had counsel before the Senate committee, and whether such counsel did not object.


Edgar Nelson Rhodes: As I have said, Mr. Chairman, the privy council has held in all cases that the business of insurance, as a business, is within the sole jurisdiction of the provinces; there is no question about that; we do not assert anything to the contrary.


William Daum Euler: And this bill does not conflict with that?


Edgar Nelson Rhodes: No, in no shape or form.


James Lorimer Ilsley: The minister has said that six of the nine provinces are in agreement. Of course it is not necessary to point out that the agreement of the provinces does not confer jurisdiction upon the federal parliament.


Edgar Nelson Rhodes: Quite so; that is a legal
position which could be taken.


James Lorimer Ilsley: It may be that the provinces would not take exception to the legislation, but that companies would take exception. In such case the position taken by the provinces would not preclude the action of the companies. Speaking particularly about the part of the bill now under discussion, I must say I do not see anything of a controversial nature. Speaking however as a member of the House of Commons who has not yet had the opportunity of reading any of these bills, I would expect the Minister of Finance at some stage or another to take up the question of jurisdiction, and make a simple explanation to the committee of how the proposed legislation gets around the very sweeping decisions of the privy council. Such an explanation should not be a very difficult matter. If the legislation is intra vires it
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should be a very simple matter to make an explanation to the house. With all due deference to the collective wisdom of able counsel and committee members who have dealt with this legislation it seems to me it is the function of the committee of the whole to secure the fullest explanation before such legislation is passed.
I have before me the last decision of the judicial committee of the privy council given on October 22, 1931, in which it is held that the dominion parliament has no authority to deny to British or foreign insurance companies the right to transact business in Canada, or to make it a condition of transacting business that they take out dominion licences. I think my statement sets out the effect of the decision. I understood the Prime Minister, in his explanation of the proposed legislation, to say that we do have the right to deny the right to licence or the right to be registered in Canada, and to stipulate that companies must be registered in order to do business. Perhaps I would not be occupying the time of the committee unduly if I were to read a short extract from this decision of the judicial committee of the privy council in which Viscount Dunedin expressed the matter very clearly:
What has got to be considered is whether this is in a true sense of the word alien legislation, and that is what Lord Haldane meant by "properly framed legislation." Their lordships have no doubt that the Dominion parliament might pass an act forbidding aliens to enter Canada or forbidding them so to enter to engage in any business without a licence, and further they might furnish rules for their conduct while in Canada, requiring them, e.g., to report at stated intervals. But the sections here are not of that sort, they do not deal with the position of an alien as such; but under the guise of legislation as to aliens they seek to intermeddle with the conduct of insurance business, a business which by the first branch of the 1916 case has been declared to be exclusively subject to provincial law. Their lordships have, therefore, no hesitation in declaring that this is not "properly framed" alien legislation.
My submission is that the Minister of Finance ought to explain to this committee of the whole how and in what respects the legislation before the house is properly framed alien legislation, and in what respect it is different from the legislation which was declared ultra vires by the decision from which I have read-that is, so far as alien or foreign companies are concerned. When we come to British insurance companies about the same considerations apply, although they are not aliens. It was sought to control British insurance companies and subject them

to the necessity of taking out dominion licences on the ground that they were immigrants.


Michael Luchkovich: The hon. member
has said that the legislation was declared ultra vires; I think it was the jurisdiction which was declared ultra vires by the privy council.


James Lorimer Ilsley: No, it is always legislation
that is declared ultra vires; my hon. friend will see that in both instances it was legislation which was declared ultra vires. The decision goes on to say:
As regards British subjects, who cannot be styled aliens, once the false definition is gone, the same remark applies as to alien immigrants. This is not properly framed law as to immigration, but an attempt to saddle British immigrants with a different code as to the conduct of insurance business from the code which has been settled to be the only valid code, that is, the provincial code.
I should like to have an adequate explanation as to how the proposed legislation gets over the effect of the privy council decision of 1931. That decision certainly held ultra vires a provision that alien companies must take out licences as a condition, under which business might be carried on. Looking over the present legislation, I cannot see that it is different from that which has been declared ultra vires.


Edgar Nelson Rhodes: I would be the last person to attempt to give an explanation, which would be acceptable either to this committee, the House of Commons or the country, and which would make clear to all persons the position of legislation with respect to insurance. A very eminent lawyer, a friend of mine, said he knew of no instance where lawyers disagreed so widely or violently as they did with respect to the question of jurisdiction in insurance. I would not attempt either for my hon. friend or for the committee to enlarge upon the explanation which was offered with extreme clearness by the Prime Minister in response to a query by the hon. member for North Waterloo. I think he made it very clear. There has been no attempt in this legislation to get around any decisions of the privy council-none whatever. I submit we are seeking only to put in the form of legislation that which is within our absolute competence. We are not attempting to invade the field of the provinces with respect to insurance, or contracts of insurance. I think that has been made abundantly clear several times to-day. It is admitted we have absolute jurisdiction with respect to the question of aliens, alien companies and bankruptcy, and that is as far as we go in this legislation.

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Charles Gavan Power: I do not think there is any indication of wrong doing on the part of the government, or any attempt to get around a decision of the privy council. I should like the minister to remember, however, that the decision of the privy council, as I understand it, was to the effect that the legislation as drafted was ultra vires.


Edgar Nelson Rhodes: That is the old legislation.


Charles Gavan Power: I think perhaps the last one, too. The last decision was more or less to the effect that it was conceivable that the federal government could draft such legislation as would be intra vires. I may be wrong in that, but that was my conception.


Edgar Nelson Rhodes: That is right, I think.


Charles Gavan Power: I think the question of my hon. friend from Hants-Kings (Mr. Usley) is directed to the manner in which the government and its legal advisers have endeavoured to meet the decision of the privy council by drafting legislation somewhat different from that which has already been discarded as a result of that decision; that is, as to how they went about it, what particular phraseology was used in order to try to meet the decision. I think such information would be interesting.


Edgar Nelson Rhodes: We have in these bills
eliminated a number of sections which appeared in the old act.


Charles Gavan Power: The phraseology has been
changed, I understand.


Edgar Nelson Rhodes: And we have eliminated section after section. I shall be very happy to point these out as we proceed.


William Daum Euler: And you have inserted new sections. Those are the ones we should like to know about.


Edgar Nelson Rhodes: Very few.


Thomas Merritt Cayley: While I think this matter
has been thoroughly dealt with by the committee of the Senate, I regret the records of that committee are not available. If the federal authorities have jurisdiction over alien companies, how is it that alien companies have operated in this country heretofore without registering with the federal insurance department?


Edgar Nelson Rhodes: The dominion has taken
the position that they were operating illegally.


James Lorimer Ilsley: The privy council said not.


Edgar Nelson Rhodes: The provinces said so.


William Daum Euler: If in future an alien company proceeds to do business in Canada without getting status from the insurance department, would that department enforce its regulations?


Edgar Nelson Rhodes: We contend such a company would be doing business illegally and we could preclude them from continuing.


Charles Gavan Power: But I doubt very much if
once they are in this country you can keep them from carrying on ordinary business. It is just as if you tried to prevent an immigrant coming into the port of Halifax or the port of Quebec; if he passes all the tests and is properly in Canada, there is nothing to prevent him buying a piece of bread or a cup of coffee-of carrying on the ordinary business which an ordinary civilian can carry on. Insurance is a business that comes under the civil laws of the provinces. Once you have allowed a man in he is to all intents and purposes on exactly the same footing as a citizen of this country so far as carrying on the ordinary details of business is concerned.


Edgar Nelson Rhodes: Not entirely. I think there is not any question that we can stop an alien from coming in. We agree up to that point.


Charles Gavan Power: Yes.


Edgar Nelson Rhodes: My friend says that an
alien company having come in it can do just what it likes. That is not in conformity with the decision of the privy council by any means. I think I cited this decision once before:
Their Lordships have no doubt that the Dominion parliament might pass an act forbidding aliens to enter Canada or forbidding them so to enter to engage in any business without a licence, and further they might furnish rules for their conduct while in Canada, requiring them, e.g. to report at stated intervals.
After the alien company is in here we would have absolute jurisdiction to deal with the question whether it was solvent or insolvent.


Charles Gavan Power: I am not prepared to go
that far.


Edgar Nelson Rhodes: That is the opinion of the law officers of the crown and of eminent counsel. I do not think exception has been taken to our contention that we have a very large measure of control over alien companies.


Charles Gavan Power: I am under the impression that the provinces did take exception. Mr. Tilley, represented Ontario and Mr. Geoffrion, represented Quebec; they are both eminent counsel.
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Mr. BURY:: An analogy has been made
between the entry of an immigrant and a foreign company. How can a foreign company enter Canada except by registry? It has no existence of the same nature as a person. A person is a physical being who walks over a gangway into the country. Surely a company can only get its admission and establish itself in the country in the same way as an immigrant establishes himself- by some act which constitutes its legal entity inside the country. That seems to me to be the first object of the bill. After the foreign company has become a legal entity, which it can only do by fulfilling the requirements in the bill, it still remains for certain purposes under the jurisdiction of the Dominion parliament.


William Daum Euler: They might appoint a Canadian citizen as their agent.


Ambrose Upton Gledstanes Bury: But in the character of a company it would have to be registered inside the dominion.


Michael Luchkovich: If the legislation that the member for Hants-Kings spoke of had been accepted by the provinces, would it in the eyes of the privy council have been intra vires instead of ultra vires?


Edgar Nelson Rhodes: That is a matter of law, but I think the answer would be the same either from the member for Hants-Kings or myself. It would not be competent on the part of the province by mere acquiescence to change the interpretation which the privy council had given the statute.


William Daum Euler: It would not bind the individual.


Edgar Nelson Rhodes: That question arose with respect to the Industrial Disputes and Investigation Act. There the privy council decided the jurisdiction to be in the provinces after the act had been in operation by the federal authorities for many years. To-day that act is still functioning by virtue of the provinces having implemented it by statutes of their own.


Mr. BEAUBIEN:: Suppose I have a policy in an alien company that is doing business to-day under a provincial licence, but doing it illegally by not having procured the status that the Prime Minister said it should procure from the federal government, would I be all right?


Edgar Nelson Rhodes: My hon. friend in that case would be taking his chances.


Charles-Philippe Beaubien: Then if I insure my house with an alien fire insurance company, which is not registered and has not attained the status of which the Prime Minister spoke a little while ago, have I any protection at all as a policy holder in that alien company?


Hugh Guthrie: You have all the protection the company affords; but if a loss occurred and you put in a claim, you might have to prosecute your claim in the country where the head office of that company was established; you might find there was no deposit in this country to secure you. But you have a perfect right to insure.


Edgar Nelson Rhodes: So long as the alien company does not solicit business.


Thomas Merritt Cayley: Two provinces have already licensed foreign companies. Would there be any protection for policy holders in cases of that kind?


Edgar Nelson Rhodes: If the province has not required a deposit the individual insured wih have to take his chances.


Charles-Philippe Beaubien: Suppose this legislation is passed and these alien companies come here and establish their status through the federal government and then go to the province and obtain a licence to carry on business, as they are compelled to do by provincial legislation. If I take out a policy in such a company doing business in Manitoba, what protection will I have as a policyholder? Do these companies make deposits with the federal government in order to obtain that status, or how am I protected more than I am protected today?


Edgar Nelson Rhodes: After this legislation is passed an alien company will not be permitted to do business in this country unless and until it makes the necessary deposit with the Department of Insurance.


Charles-Philippe Beaubien: Does that deposit consist of a certain percentage of the business done every year in Canada, or how is it arrived at?


Hugh Guthrie: The deposit is based on the business done in Canada.


Charles-Philippe Beaubien: Would the deposit be sufficient to protect the policyholders?


Hugh Guthrie: Yes. That does not apply to the mutual companies, whose deposits-which are specially provided for in these bills-are not solely applicable to Canadian business but are part of the general business in other

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[DOT]countries as well. That was a provision that was agreed upon; I believe the provinces and the dominion agreed that the mutual companies should make a deposit here, but in the event of the bankruptcy of that mutual company that deposit would form part of the general assets of the company in whatever country it was doing business; it would not be exclusively for the benefit of Canadian policyholders.


Edgar Nelson Rhodes: The proviso just referred to will be found in section 14, at page 7 of the bill.


Henry Elvins Spencer: One of the reasons given by the minister why this bill should not go to the banking and commerce committee was that the committee is very busy at the present time. I may say that the work the committee had in hand is just about finished, and I do not know that there is anything on the agenda for us to proceed with, so we would be very willing indeed to take on this new work. I am never against the government if I think they are taking a forward step, but in this case I think they are taking a backward step. The minister has informed the committee that the Senate committee went through these bills very thoroughly, and he does not think it necessary to send them to the banking and commerce committee of the House of Commons. I find that in the first four pages of this bill several amendments have been submitted by the minister; if the same ratio applies throughout we will have no less than fifty-seven amendments, so I think the minister has shown in this way that the Senate has not done its work as efficiently as he has suggested.


Mr. NICHOLSON:: Is it not a fact that if this bill were sent to the banking and commerce committee, under the general terms of the hearing that was held by the Senate committee, all those representatives of insurance companies, provinces and so on, who came here and spent so much time reaching a compromise, would have to be heard all over again? Are we not morally bound to accept the compromise which has been arrived at, unless we are prepared to have a rehearing of the whole case by a committee of this house? I wras very much interested in the matter and consulted with the solicitors for the companies in which I am a policyholder, and I think I am fairly stating the fact when I say that the whole measure represents a compromise between the provinces, the companies and all concerned, in order that the situation may be met as adequately as possible. I feel that we should not refer this question to the
banking and commerce committee unless we give these people an opportunity to return and state their case all over again.


Mr. CAMPBELL:: To what exent, if any, is the principle of the power of the federal government to tax insurance premiums paid to outside companies involved in this bill?


Edgar Nelson Rhodes: That is a matter for the budget; it is not affected by this'bill in one way or the other.


Thomas Merritt Cayley: Reference was made to section 14 with regard to the securities guaranteeing the policyholders. I have been reading that section, and I find it very difficult to understand. Would the minister just tell me in plain language what securities these mutual or foreign companies are obliged to deposit?


Finlay MacDonald: We are only on section 3 as yet.


Edgar Nelson Rhodes: Section 14 was mentioned in response to a question from an hon. gentleman opposite. If my hon. friend will permit me to do so I would prefer to give that explanation when we come to that section.
Mr, SPENCER:	In reply to my hon.
friend from East Algoma I would like to point out that the two houses of parliament act quite independently and do not lean on each other at all. Recently the Senate conducted an inquiry into the Beauharnois matter, and I noticed that wherever they saw fit they went into the matters that were under investigation by a committee of this house only a short time ago. I think it would not be in the interests of parliament if one house decided not to take any particular step because of certain investigations made by the other house. It is only right that the two chambers should be entirely independent, and I do not think we should simply pass this bill because the matter has been discussed by the Senate.


George Brecken Nicholson: I do not want to infer that we are bound to accept what the Senate has done; I merely point out the arrangement which I believe was arrived at between the provinces, through their very eminent counsel, the insurance companies and the federal government.


George Gibson Coote: I do not want to press this
point too far, but I think the fact that there are so many amendments to be proposed to this bill, as mentioned by the hon. member for Battle River, certainly indicates the wisdom of allowing it to go to the banking and commerce committee of this house. I
Insurance Bills

am a little afraid that the banking committee is losing caste, if I may use that term. Not long ago the Prime Minister said in effect that the banking and commerce committee was not competent to inquire into questions of banking, currency and credit in Canada, and to-day I think the Minister of Finance rather inferred that the committee was not as competent to deal with this act as the banking committee of the Senate. I do not think we should allow these aspersions, if I may call them that, to be cast upon our banking and commerce committee. It would expedite the business of the house and of the session if these three bills were sent to our select standing committee on banking and commerce.


Edgar Nelson Rhodes: I will ask the Minister of Justice to move an amendment to section 2, the interpretation clause.


Hugh Guthrie: I beg to move that
paragraph (n) of section 2 be amended by striking out the words "issued under the provisions of this act."


Edgar Nelson Rhodes: This amendment has been suggested by the Department of Justice and I think it is to get away from the question of the business of insurance. As a matter of fact, policies are not issued under the provisions of this act, they are issued by the companies by virtue of their powers.


Charles Gavan Power: It means that the government admits it cannot control the business of the issuing of policies.


Edgar Nelson Rhodes: That is within the jurisdiction of the provinces.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
On section 4-Registration required.
Mr. McKENZIE (Assiniboia):: I was wondering why the words "save as hereinafter expressly provided" were included. The section would read all right without them.


Edgar Nelson Rhodes: If my hon. friend will look at section 65 he will see that certain exemptions are provided for; this section has reference to that section.


[Stage Direction]
Section agreed to.
On section 5-Filing of document copy of charter.
George Gibson Coote: Paragraph (c) reads in part:
(c) a statement in such form as may be required by the minister of the condition and affairs of the company on the thirty-first day of December next preceding, or up to the usual balancing day of the company.
	.
Is it intended to supersede or override the order in council passed last year authorizing insurance companies to value their securities at a previous date rather than at the date of the issuing of the statement?


Edgar Nelson Rhodes: That would come under
section 25.


[Stage Direction]
Section agreed to.
Sections 6 and 7 agreed to.
On section 8-Companies licensed under Insurance Act deemed registered.
Henry Elvins Spencer: I would suggest that the chairman read all the explanatory notes given for each section.


George Gibson Coote: Line 17 of this section reads, "such company shall have assets in Canada, for the purposes of this act." Does that mean that the assets must be held in Canada, and when a company is holding bonds, does it mean that a place will be designated where those bonds are to be kept in Canada, or does it mean that the company must have money invested in Canadian securities?


Edgar Nelson Rhodes: The company must have securities lodged either with the minister or with a trustee approved by the minister.


James Lorimer Ilsley: A few minutes ago we were discussing a section which was held to be beyond the powers of parliament. It provided that it should be unlawful for any alien company within Canada to solicit or accept any risk unless under licence of the minister granted pursuant to the provisions of the act. Section 4 of the present bill reads:
No company shall transact the business of insurance in Canada (save as hereinafter expressly provided) unless it is registered^ and holds a certificate of registry from the minister.
Why does the minister say that this section is within the powers of parliament while the old section was not? What is the difference in principle between saying that an alien company shall not transact the business of insurance unless under a licence issued by the minister, as was the language of the old act, and saying that no company shall transact the business of insurance unless it is registered and holds a certificate of registry from the minister, as is the language of this bill? The old section was clearly beyond the powers of parliament because it attempted to dominate the business of insurance, to use the words of the decision of the privy council. Does not this section attempt to dominate the business of insurance carried on by foreign companies in almost the same way? What is

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the difference between the former alien company legislation and the present alien company legislation? I think the committee should have some explanation in this connection, as it is a question which suggests itself to anyone who studies the matter. The two provisions seem to be almost identical in principle; they both seek to prevent an alien company from doing insurance business in this country without a licence or without registration.
Mr. RHODES; If my hon. friend will look at the second paragraph of the preamble he will get an answer in part to this question. The powers referred to were enforced under the combined provisions of sections 11 and 91 and others of the old act. Section 91 and others have been dropped from the new bill, and there is no attempt being made to regulate the conduct of business.


James Lorimer Ilsley: What did the old section 91 purport to do?


Edgar Nelson Rhodes: It covered how policies were to be drafted, the payment of premiums, service in the militia, provisions with respect to lapsed policies and other matters which had to be put into the policy. That provision is dropped with respect to alien companies.


[Stage Direction]
Section agreed to.
Sections 9 to 13 inclusive agreed to.
On section 14-Assets to be maintained in Canada by other companies.
Thomas Merritt Cayley: Would the minister explain this?


Edgar Nelson Rhodes: This in effect represents
a concession made, for the purpose of securing unanimity, to the New England mutual im-surance companies, who stated that the very nature of their business, being mutual companies, precluded their segregating their assets and earmarking them as confined to Canadian business, because the cost of their business covering both sides of the line had to be spread evenly over the whole list of their risks. While I do not go so far as to say that the Department of Insurance take the position that they have made out a reasonable case, the effect is that this is the result of a decision reached by mutual agreement.


Thomas Merritt Cayley: Then they are granted
certain additional favours, are they not? The section reads:
Every company, other than a fraternal benefit society, registered under this act to transact any class of insurance business, other than life insurance, shall at all times maintain
assets in Canada in respect of such class of business of an amount at least equal to the liabilities of the company in Canada.


Edgar Nelson Rhodes: I do not quarrel with the
statement made that this is the result of a compromise. Perhaps the position taken by the companies is not sound; they may be able to segregate their assets, but let me point this out to my hon. friend: if in time it is ascertained that the New England mutuals are not affording full and exclusive protection to their policyholders by depositing securities earmarked for Canadian business, they in the long run will suffer by reason of the fact that they will have their business diminished, and they may in time reach the point where they will have to have their assets in Canada earmarked for their Canadian business.


Thomas Merritt Cayley: The minister spoke of a
compromise. Did it include other companies than the mutual ones referred to? Were they quite agreeable to this?


Edgar Nelson Rhodes: Of course the mutuals and reciprocals would be the only ones that would be immediately concerned with this, but no doubt each of the companies would have to make some concession. It may be said that the provision as it now stands meets with the approval of all the companies.


[Stage Direction]
Section agreed to.
On section 15-Securities permissible.
George Gibson Coote: Would the minister explain
just what deposits these companies are required to make? Is this simply an initial deposit to enable them to carry on business in Canada? If anything further than that is intended, at least a percentage of the deposits should be made out of Canadian securities. Some of the securities specified in the section are foreign.


Edgar Nelson Rhodes: The answer to my hon.
friend's question will be found by reading sections 12, 13 and 14, which have just been passed, providing the basis upon which the assets in Canada are maintained and allocated.


Thomas Merritt Cayley: The provision reads "maintain assets in Canada." Does that mean that they must have them on deposit with the department?


Edgar Nelson Rhodes: Have them physically on
deposit in Canada, either with the minister or with trustees approved by the minister.


William Daum Euler: The Minister of Justice a
moment ago made, I think, a remark to the effect that the mutual companies did not make deposits in the same way as do the regular companies.
Insurance Bills


Hugh Guthrie: This is the clause.


William Daum Euler: I was going to base my
question on that statement. Are the foreign mutual companies placed in exactly the same category as the Canadian mutual companies with regard to the amount of deposits they have to make?


Edgar Nelson Rhodes: If my hon. friend will look at subsection (2) of section 8, he will get the answer to his question.


William Daum Euler: They are on the same basis, are they?


Edgar Nelson Rhodes: No. It reads:
-shall not be required to make the deposit required to be made under the provisions of the next preceding section in respect of a certificate of registry-
And so on.


William Daum Euler: The Canadian mutual companies, I take it, have to make a deposit. Do thfe foreign mutual companies have to make a similar deposit, or what distinction is there, if any?


Edgar Nelson Rhodes: The Canadian mutual company has to make an initial deposit of S50.000 with the superintendent of insurance. The foreign mutual is not required to make that deposit unless it chooses voluntarily to do so. With that exception the securities that have to be deposited are precisely the same in both cases and cover the amount of business they write.


William Daum Euler: That leads to another question. Why has the Canadian company to make a deposit of $50,000 while the foreign company is excused?


Edgar Nelson Rhodes: I cannot give any better
answer to my hon. friend than to say-


William Daum Euler: It has always been done.


Edgar Nelson Rhodes: It has been done, and
apparently is part of that give-and-take arrangement which resulted in all parties agreeing to this bill.


William Daum Euler: It looks like discrimination.


Edgar Nelson Rhodes: Yes; I quite agree with
my hon. friend.


Thomas Merritt Cayley: I might just read this explanation that I find:
To have made a deposit with the dominion authorities would have been unfair to our other members located in the States because it would constitute a segregation of a part of our assets for a particular group of our policyholders, creating an obviously unmutual situation.


Edgar Nelson Rhodes: That is their position, but I do not know whether it could not be attacked.


Thomas Merritt Cayley: It does not sound healthy. Coming back to section 14, I see there have to be certain words stamped on the policy in red ink. What is the object of that?


Edgar Nelson Rhodes: That is designed for the
full information of the policyholder, who shall know, when he gets his policy, by reading the lines in red ink-[DOT]


Thomas Merritt Cayley: He knows his danger.


Edgar Nelson Rhodes: The words are printed in
red ink across the face of the policy. That indicates to him that although this mutual company has deposited securities, they are not earmarked exclusively for the Canadian business, but are to be pooled for the common advantage of the company as a whole.


Thomas Merritt Cayley: That is, he is accepting this policy at some risk?


Edgar Nelson Rhodes: Yes. He certainly is not
in as good a position as the man who insures in a Canadian company where the assets are earmarked in Canada for his protection.


Thomas Merritt Cayley: What is the difference between a company and an exchange?


Edgar Nelson Rhodes: If my hon. friend will look at the interpretation clause on page three of the bill, he will see that exchange is defined as follows in paragraph (i):
"Exchange" means a group of persons formed in any foreign country for the purpose of exchanging reciprocal contracts of indemnity or inter-insurance with each other through the same attorney, where the principal office of the exchange is in a foreign country.


George Gibson Coote: I should like to ask the
minister whether there is some provision elsewhere in the bill as to the class of securities which, under section 12, companies must maintain in Canada,


Edgar Nelson Rhodes: My hon. friend will find the answer to his question in section 20, subsection 2, as follows:
The assets which may be so vested in trust for the purposes of this act shall be bonds, debentures, stocks and secured loans of the classes authorized in that behalf in schedule I to this act, having regard to the class or classes of insurance business in respect of which the assets are so vested in trust.
Then at page 29, under schedule 1, my hon. friend will find the assets which may be vested in trust for the purposes of this act, including :

(a) the debentures, bonds, stocks or other securities of or guaranteed by the government of the Dominion of Canada or of or guaranteed by the government of any province of Canada; or of or guaranteed by the government of the United Kingdom of Great Britain and Northern Ireland, or of any dominion, colony or dependency thereof; or of or guaranteed by the government of any foreign country, or state forming a portion of such foreign country; or oi' any municipal or school corporation in Canada, or elsewhere where the company is carrying on business; or guaranteed by any municipal corporation in Canada;
And so forth. Then under (b) are included the bonds of any corporation secured by a mortgage; debentures; the preferred stocks of any corporation which has paid regular dividends upon such stocks for not less than five years preceding, with certain provisos; common stocks, with certain provisos; real estate mortgages.


[Stage Direction]
Section agreed to.
Section 15 agreed to.
On section 16-Further deposit if value declines.
William Daum Euler: Who makes the valuation, and on what basis is it made? Can it be made arbitrarily by the government as was done in the case of the securities of insurance companies?


Edgar Nelson Rhodes: No, the valuation is made by the superintendent of insurance.


William Daum Euler: On the basis of the market value?


Edgar Nelson Rhodes: He follows the market values as published from day to day in the security lists, which are a matter of common knowledge.


William Daum Euler: I was hoping that the valuation would not be made on the same basis as the arbitrary valuation made by the government, by order in council, of the securities of insurance companies.


Edgar Nelson Rhodes: We will discuss that point a little later on, perhaps.


George Gibson Coote: Are any steps taken to notify the public if 'the minister withdraws the certificate of registry under subsection 2?


Edgar Nelson Rhodes: Certainly the public would be notified by the insertion of an advertisement in the Canada Gazette.


[Stage Direction]
Section agreed to.
Sections 17 to 24 inclusive agreed to.
On section 25-Valuation of security.
George Gibson Coote: I asked the minister before whether the provisions of this act will override the order in council passed last year.
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Edgar Nelson Rhodes: I think it would be a correct answer to say to my hon. friend that the order in -council had reference only to the transaction as it resulted last year. It would have no bearing on the valuation of securities for the purpose of another year. For the purpose of another year we would have to conform to the provisions of this act.


George Gibson Coote: The order in council applied only to the one annual statement?


Edgar Nelson Rhodes: To that one annual statement, yes.


George Gibson Coote: Under subsection 2 it would look as if the government -might authorize the same thing in any year.


Edgar Nelson Rhodes: It would be quite competent for the government -to authorize similar procedure to take effect another year if it were thought desirable.


Robert Gardiner: Would the minister explain just why it was necessary to value those securities in -that way at a time like this, giving a false impression to the public as to the value of the securities held?
Mr. RHODES! I am satisfied in my own mind as to the necessity of the procedure. I do not know whether I can make it clear to my hon. friend, but I will try.
Contracts of insurance carry on into the future, covering a period of years. We must assume that normalcy or something approaching it will prevail sooner or later, -and that the absurdly low valuations which now obtain for securities heretofore known as impregnable, gilt-edged, will not continue. If a company had to meet all of its obligations tomorrow, such a procedure would not be justified, but inasmuch as it does not need to meet all of its obligations to-morrow, but has to meet them perhaps ten, fifteen or twenty years hence, it has been universally regarded as -proper and fitting not to value the stocks at their market price under panic conditions, to meet obligations which will mature in what might be called fairly normal conditions. The action taken by the government last year was precisely similar to the action taken with respect to insurance companies in every state of the American union. Precisely the same thing was done during the war. If it had not been- dome at that time several insurance companies would have become insolvent, whereas after the war, and when . things h-ad -come back to what we thought were normal conditions, the securities of these companies rose to a point which afforded not only security but an ample margin of safety for the policyholders. I do not believe I can
Insurance Bills

add anything to the statement that I have just made, except to say I do not think it is in the interests of the company alone that such action should have been taken under the conditions prevailing; it is in the interests especially of the policyholders of the future.


Charles Gavan Power: The real reason for it is that a large number of persons are interested in the company and some of these companies are large corporations. That is about the only justification. If a private individual attempted to value his assets on a basis other than their real market value ithe bank would throw him out; but a large company which owes millions or hundreds of millions in obligations, the failure of which would involve difficulties for a very large number of persons, is allowed, by common consent, I suppose, to get away with it.


Edgar Nelson Rhodes: I do not subscribe to the point of view expressed by my hon. friend from Quebec South. Many of these companies are purely mutual and are the property of the policyholders. The question of profit to individuals or corporations does not arise at all. I think I can illustrate in part what I have in my mind by referring to bonds of the Dominion of Canada. In Canada to-day there are bonds selling in the eighties, but we are perfectly certain that when those bonds mature the holders will receive one hundred cents on the dollar. That same statement is true with respect to assets of a similar character held by insurance companies. To-day they are worth, we will say, eighty cents; but when they mature they will be worth one hundred cents on the dollar.


William Daum Euler: Stocks never mature.


Edgar Nelson Rhodes: So, when the assets of these companies are called upon in future years, at such time securities will be worth an amount sufficient to provide the necessary funds to meet the obligations of the company.


William Daum Euler: I find it very difficult
to believe it is ever right to say a thing is worth what it is not. That holds true in connection with securities held by the insurance companies. There is force in the remarks of the Minister of Finance when he speaks of government bonds which we hope will be paid in full at maturity. That may apply also to bonds of some very good com' panies. I say to him, however-and I think every hon. member will appreciate this-that there are gilt edged bonds of first class companies in this country which have depreciated exceedingly in value, and it is doubtful

whether they will ever again reach the values they had when they were purchased. I think my statement in that regard is correct. While I might make some exception with regard to bonds which come to maturity and are supposed to be paid at par, it is entirely different when we consider common stocks, which never come to maturity. I say, without fear of successful contradiction, that many of the common stocks of Canada which at one time were regarded as high class securities and good value will never again go to the prices at which they were purchased. That statement applies to preferred stocks as well. That being so, I cannot approve of a practice, well intended as it may have been, which says a thing is worth something more than its true value. Such a practice must result in destroy-mg confidence, if the condition I speak of actually comes about.
While I am on my feet may I say that I have not had the opportunity of reading the bill, and I doubt whether hon. members have read it. The funds of insurance companies and especially those of life insurance companies, are trust funds. I do not think it should be possible, and it should be illegal, for them to invest in common stocks, which, after all, are highly speculative. A few years ago a peculiar anomaly existed in the Insurance Act. Fire insurance companies, which are not custodians of trust funds, were precluded from investing in anything but mortgages and bonds. Those were the only classes of securities in which fire insurance companies could invest, although the moneys in their possession were not trust funds. If a fire insurance company went to the wall the worst that could happen to the policyholders would be the loss of premiums; they could reinsure in other companies. In connection with life insurance companies, however, there is a different situation. In those companies there are the funds of widows and orphans, or prospective widows and orphans. If those funds are lost in common stock investments the result is serious. I do not know whether there is any provision in the bill bearing on the matter, but I suggest the government would do well to bring in a regulation making it impossible for life insurance companies to invest in common stock.


Edgar Nelson Rhodes: The views of my hon. friend are entitled to, and so far as I am concerned always receive, the utmost consideration and respect. I do not, however, entirely agree with him in his assumption that the power of valuation is responsible for the placing of values which leave false impressions, in other words false valuations. If it were a question

Insurance Bills
of valuation for the purpose of meeting an obligation at the moment, I would say he is correct; but such is not the case. Under panicky conditions one places valuations upon securities bearing in mind the fact, as I said before, that the obligations of the insurance companies are to be met in years to come. If we loaded down insurance companies with obligations which would require them to hold securities to such an extent as to be able to meet panic conditions, we would be placing a dead weight upon them which would prevent them from engaging in the insurance business at all, and thereby we would deprive tens of thousands of people of opportunities for protection. A long period of years would elapse before companies could pile up resources sufficient to meet such a strain.
I should like to direct a few remarks to the second point mentioned by my hon. friend, namely as to whether or not insurance companies ought to invest in common stocks. I am not disposed to quarrel with my hon. friend; the point he has raised is arguable. In my own mind I am disposed to agree with him. In this connection we are in a position to indicate how necessary it is that policyholders have the protection of a governmental department. When the old insurance bill was before parliament the superintendent of insurance suggested a limitation upon the amount of money insurance companies could invest in common stocks. Parliament, in its wisdom-and I am not finding fault-overrode his judgment, and opened up a situation under which insurance companies could invest largely in common stocks. To the extent that insurance companies have been prejudiced and their financial positions jeopardized by their having invested too largely in common stocks, parliament must take its full share of responsibility. Upon a later occasion the superintendent of insurance sought to protect the policyholders, and to prevent large investments by insurance companies in common stocks.
I might point out to my hon. friend that in this bill we have included a very drastic provision as regards the practice which has hitherto obtained. I do not think it would be possible-certainly not at this stage-for us to say that a company shall not have investments in common stocks. My hon. friend must recall that not long ago we were confronted with a condition which disclosed that some of the life insurance companies have extensive financial investments in common stocks. Were we under present conditions to force those companies to dispose of their holdings, we would not be doing either them or their policyholders a good service.


William Daum Euler: Yes, but it should not go on in the future.


Edgar Nelson Rhodes: Quite so. If my hon. friend will look at page 32 of the bill he will find a limitation to be imposed upon insurance companies as to the amounts they may invest in common stocks.


Charles Gavan Power: I am not prepared to agree with my hon. friend from North Waterloo that there is anything detrimental in investments in common stocks, as such. Many common stocks are first charges upon the assets of companies, and offer as good and as safe a field for investments as do debentures, bonds or preferred stocks of other companies. I am not prepared to go as far as my hon. friend from North Waterloo and urge upon the minister the advisability of any limitation whatsoever upon investments in common stocks. I would urge upon him, however, at all times, or whenever statements have to be made by a company, to let the public know the true position of such company. No argument of the minister, much as I respect his views, will induce me to believe that for the government of Canada to issue a certificate that a company holds assets to the value of so many million dollars, when in fact it holds assets materially less, is good practice.


Thomas Merritt Cayley: Will the hon. member tell me how he would establish the value of an asset for which there is no market?


Charles Gavan Power: At least for the assets for which there are markets-common stocks, bonds, debentures and preferred stocks-iwe should force the companies to place values upon them which they have in the stock and bond markets of the world.


Thomas Merritt Cayley: I do not think my hon. friend understood me. This is a peculiar time when many stocks are not being traded, and I fail to understand how a value could be established.


Charles Gavan Power: Most of the stocks which these companies hold are stocks being traded on the markets of the world, and were purchased at very high values. The minister has referred to a return to normalcy. So far as the values of those stocks are concerned, we are closer to normalcy to-day than we were at the time of their purchase. I agree with the hon. member for North Waterloo that in many cases there is no possibility, during the lifetime of the present generation, of obtaining the values which were placed upon stocks when they were purchased.

Insurance Bills


Edgar Nelson Rhodes: I do not wish to enter into a debate with my hon. friend from Quebec South (Mr. Power) whose opinions I respect very much, but when he says that stock prices to-day represent normal value, let us admit for the sake of argument that his contention in that respect is right. I say there are still bonds of the municipalities, the provinces and the dominion, and of other countries, including Great Britain itself, which are selling away below par. He would not say that that is normal?


Charles Gavan Power: No, I am not sure the hon. Minister of Finance is right. If some of my hon. friends in the comer were perchance to come into power they might cut the interest on these bonds. I have heard some of them say that the wages of capital are too high, and I am rather inclined to agree with them. I do not know but what we might perhaps support such a contention.


George Gibson Coote: Hear, hear.


James Lorimer Ilsley: They certainly would inflate the currency.


Charles Gavan Power: Yes, and if so-


Edgar Nelson Rhodes: If they inflated the currency we might not require this valuation.


William Daum Euler: In our sister dominion of
Australia the interest on the national bonds has been arbitrarily reduced.


George Gibson Coote: By law.


William Daum Euler: Yes.


Edgar Nelson Rhodes: This is not in point, but I think my hon. friend's information is not quite correct. The Australian government called upon the holders to take a lower interest rate, but they only did that in regard to their nationals, not foreigners.


James Shaver Woodsworth: If I understand
aright, for some time past the superintendent of insurance has had the power to value bonds and debentures, but this is quite a new departure that we should include power to evaluate stocks and other securities. It would seem to me that this proposal is in a class by itself. As I understand, one particular insurance company got into trouble by investing very large amounts in stocks, and under the special legislation secured by the government last year for the "peace, order and good government" of the country that particular company was able [DOT] to make returns in such a way that it failed to show the real position of its investments. What was done last year under that special legislation is now to be made possible under this proposed

legislation; and although it is general in character, I take it in reality it is to help out one particular company. I do not know how the superintendent of insurance, cautious though he may be, is going to be in a position to say where stocks will be a few years hence. It is all very well for the minister to take the ground that one of these days we shall return to something like normalcy. As he knows very well, some of the most eminent economists are of the opinion that there is going to be no such return. In that event there is misrepresentation of the real affairs of the company. I would urge that the minister be satisfied with the present legislation and eliminate the words "stocks and other securities", leaving the act in this regard as it was before.


Edgar Nelson Rhodes: I cannot agree with my hon. friend from Winnipeg North Centre (Mr. Woodsworth) that the provision arises because of the position of one insurance company. On the contrary, it was required in the general interests of all the companies, and I may say it was welcomed by all of them in precisely the same way as it was in the United States, where the same practice obtained. The practice obtained in Canada during the war. My hon. friend is labouring under the assumption that this authority rests with the superintendent of insurance. If he will examine the bill he will see that the authority rests in the minister. That may not afford any degree of additional protection so far as my hon. friend is concerned, and I do not present it for that purpose, but simply to emphasize ministerial responsibility and to remind him he should be accurate in his facts.
As, Mr. Chairman, it is not proposed to go on with these bills this evening, and as we have private bills between eight and nine o'clock, I move that the committee rise, that Bill No. 66 be reported, and that with respect to the other two bills the committee report progress and ask leave to sit again.


George Gibson Coote: With regard to the discussion as to the market price of Dominion of Canada bonds, I think the policy of the present government is responsible for their low price on the market to-day. If we had a Progressive government in power we would restore the prices of those bonds. I should not like the committee to remain under any wrong impression as to the reason for the low price of our bonds at the present time.
Bill No. 66 reported.
Progress reported on Bill No. 67 and Bill No. 68.
At six o'clock the house took recess.

26S3
Supply*-Justice-B .C.M.P.
After Recess
The house resumed at eight o'clock.



SUPPLY' DEPARTMENT OF JUSTICE

[Stage Direction]
The house in committee of supply, Mr. Stirling in the chair.
Royal Canadian Mounted Police: pay of force (including salaries of two constables, Ellesmere Island district, at $2.25 per diem, to insure department against loss through death), $1,740,595.75.
Maintenance (including subsistence, billeting, travelling expenses, forage, fuel and light, clothing, repairs and renewals, horses, ammunition, stationery, etc., medical, hospital, etc., transportation and freight, building repairs and renewals, establishment of new detachments, contingencies and criminal investigations), $1,964,000.
To compensate members of the Royal Canadian Mounted Police for injuries received in the performance of duty, $10,000.
To assist in the enforcement of federal statutes (expenditure chargeable to this vote shall be in connection with such federal police duties as may be defined by the governor in council, upon recommendation of the Minister of Justice), $75,000.
To provide for special services in connection with the enforcement of the Opium and Narcotic Drug Act, $50,000.-Total, $3,839,595.75.
['For my purpose it does not make any difference whether he is naturalized or not. He has been here long \nenough to establish a certain residence, and he ought not to come under the Immigration Act. If he has committed any offence against the criminal code, by all means let him be tried, Convicted and deported if we can deport him. I am not arguing against deportation for cause; but let him have a trial; let us not use the Immigration Act, which is designed to keep certain people out of the country, as a means of putting them out. That is not a fair way of dealing with the situation. It is quite true that a man may get inside the gate in some surreptitious way, and it may be found after he has been here a year or two that he has made false representations, or was not what he represented himself to be. The Immigration Act is designed to take care of people of this class and provide for their being sent back if they have been here a month or two or a year or so, but when a man has been here for a number of years it seems to me that he ought to come under our regular procedure. The very next clause of the Immigration Act, clause 42, says that the minister-\n-may order such person to be taken into custody and detained at an immigration station for examination and an investigation of the facts alleged in the said complaint to be made by a board of inquiry or by an officer acting as such.\nThat means that if he comes in by way of Halifax he will be detained at Halifax and examined there by a board, but it certainly does not mean that after a man has come to this country and has lived for twenty years in Winnipeg he is to be taken back and examined at an immigration station at Halifax. There is no authority in the act whatever for such a procedure as that, none whatsoever. If he has to be detained at an immigration station there is an immigration station at Winnipeg where he might have been detained.\nFurther than that, in the case of one of these men, he has a Canadian bom wife and a Canadian born child in Canada. Now what does the act say with regard to them? Subsection 6 of section 42 says:\nIn any case where deportation of the head of a family is ordered, all dependent members of the family may be deported at the same time; and in any case where deportation of a dependent member of a family is ordered on account of having become a public charge, and in the opinion of the minister such circumstance is due to wilful neglect or non-support by the head or other members of the family morally bound ito support such dependent member, then all members of the family may be deported at the same time.\nI presume that this section means that this Canadian born woman with her Canadian born child may be summarily deported to Poland or Russia or Germany, or from whatever country\n\nPrivilege-Mr. Mackenzie King\nthis man may have come. If he is not deported with his wife, it means that she and her child are to be left in Canada and her husband sent overseas-a family absolutely broken up. Those members of the house who a few years ago objected so strongly to divorce, might I think, very well have something to say about a forcible divorce of that kind, where the head of the family is taken away and the dependent wife and family are left in this country.\nFurther, the minister says that every opportunity will be given for appeal. Let me read the notice to be sent to the person ordered to be deported:\nIf you claim to be a Canadian citizen or to have acquired Canadian domicile, you have the right to consult counsel and appeal to the courts against deportation.\nThese people, I believe, are not naturalized, hence they do not come under the first paragraph of this section. I go on:\nIn all other cases you may appeal to the Minister of Immigration and Colonization against any decision of the board of inquiry or officer in charge whereby you are ordered to be deported unless such decision is based upon a certificate of the examining medical officer that you are affected with a loathsome disease or a disease which may become dangerous to the public health. The formal notice of appeal will be supplied to you by the immigration officer in charge upon request and upon deposit of the sum of twenty dollars for the cost of your maintenance and the sum of ten dollars for the maintenance of each person dependent upon you until the minister has decided upon your case.\nIt is that second part of the section which applies to these particular people, and unless they can produce the twenty dollars and the ten dollars for each dependent they have no chance even for an appeal. That is a very serious state of affairs. You take a man quickly away from where he lives without giving him any opportunity to obtain ready cash, and move him two thousand miles from where his friends are located, and it is almost impossible for him to make an appeal to the minister. The result is that he is clapped on board ship and is on his way across the Atlantic without even a -chance for an appeal. I know that the Minister of Justice cannot think that that is a fair sort of trial. He must realize that an appeal of that kind is a mere sham. I would urge upon him, as Minister of Justice and as a member of the government, to see to it that these -people, whatever their crimes may be, are given a fair trial in Canada.']
James Shaver Woodsworth: Does this include
the salaries of the commissioner and the assistant commissioner whose appointment was recently arranged for?


Hugh Guthrie: It includes the salary of the commissioner, but there will be a slight increase in respect of the deputy commissioner who is to be appointed under the bill recently passed.


James Shaver Woodsworth: What is the salary
of the commissioner?


Hugh Guthrie: It is $12,000.


James Shaver Woodsworth: Does the commissioner receive any pension?


Hugh Guthrie: No, not while he is drawing a salary.


James Shaver Woodsworth: There is another
matter about which I should like to ask, which we had up in the house to-day, that is with regard to men who are threatened with deportation. I think the Royal Canadian Mounted Police are concerned in this matter as well as the Department of Immigration. I have the following wire dated May 2 from Abrahamson and Greenberg, Confederation Life Building, Winnipeg:
Daniel Holmes (Chomicki), aged thirty-four, in Canada with parents and brothers and sisters twenty years, with Canadian wife and child, no police record; and Konrad Cessinger, 41761-169J
single, unnaturalized, in Canada five years, no police record; and Orton Wade, believed Canadian born, arrested by R.C.M.P. authorities within last twenty-four hours. Authorities refused to produce to us warrants and deliberately misled and delayed us in obtaining redress. Advised by assistant commissioner Field, R.C.M.P., that all three men left by train east to-night for deportation purposes. Immigration commissioner Smith denies all knowledge of the matter and says same not dealt with by his department. Neither Mrs. Holmes nor anyone else advised prior to departure of above mentioned persons. We would appreciate it if you would make inquiries regarding this as we consider it an outrage and a breach of the regulations laid down in the Immigration Act. Would urge that this be introduced on floor of house as this should not be allowed to remain as a precedent for the R.C.M.P.
I notice that in the last two Winnipeg papers to reach Ottawa quite considerable prominence is given to this case. From what I can learn it would seem that these men are suspected of being closely connected with the communist organization, but no charges were laid against them, and when their counsel instituted habeas corpus proceedings they were unable to carry them through because the men had already left. According to the press, legal opinion seemed in doubt as to whether habeas corpus proceedings could be carried on, because the men had left the province.
As I am advised by this wire, these men have been in the country for quite a long time -one for twenty years. According to one of the Winnipeg papers he had tried to secure naturalization but was unable to do so. This makes the case look peculiar. Further it seemed to me a strange proceeding, when I telephoned the Immigration department, that I should be told by the official immediately in charge that he could give me no information at all about the matter but that I would have to ask the minister. When I interviewed the minister over the telephone I was told that the matter had not yet come to his attention. The circumstances are rather curious, and as I am inclined to think the matter must rest very largely with the mounted police, I am bringing it up to-night. I take it from what the Minister of Immigration said this afternoon that this must be considered typical of other cases. This case concerns me, however, since it has to do with Winnipeg men.
I do not think we in this house are concerned with whether or not these men are communists. That is not the reason I am raising the question. If they are communists, and if the decision given by the court of appeal stands, I presume it is possible to bring them up for trial as communists and to
Supply-Justice-R.C.M.P.

deport them. But my contention is that there should be a trial. I do not think men should be deported from this country simply after an investigation by the Immigration department. As residents of this country for a considerable number of years certainly they ought not to be deported without a full, fair trial.
I should like to ask the minister several questions. First of all, were any specific charges laid against these men? Again, under whose authority were they transferred from Winnipeg to some eastern point? I should like to know where they are now and before whom they are to be tried. It seems to me that an important principle is at stake. If I understand anything at all about British legal practice, even the worst criminal has a chance to make his defence and is given a fair trial. I cannot understand this procedure at all. I hope the Minister of Justice, under whose direction the Royal Canadian Mounted Police seem to be acting, can throw some light upon the matter.


Hugh Guthrie: Under the act the Royal Canadian Mounted Police, among other things enforce federal laws, and they act under the instructions of any department that may seek their services. In the case just stated by the hon. member for Winnipeg North Centre, the instructions to the police would come from the Department of Immigration. The police respond when they are informed by the department that their services are required. I have nothing to do with the instructions given; in fact I had not heard of these cases until today.
The immigration laws of this country are on the statute books, and have been unaltered for many years. I have never heard of their being abused, although they have been criticized. An action taken under the immigration laws is not like a trial of either a civil or a criminal action. When my hon. friend says that these men must have a trial, the trial which he speaks of is an investigation which will take place under the provisions of the law of this country which we are all supposed to know and to obey. The men were taken into custody at the request of the Department of Immigration in Winnipeg, and I understand that the board of investigation which is to consider their cases will meiet in Halifax, when a number of cases are to be considered. When the board is constituted it hears the case and then makes its report to the department; the minister of the department reviews the finding of the board, and if he finds that the Immigration Act of Canada has been contravened he can, in certain cases, order

deportation. I pass no opinion whatever upon these cases, because I know nothing about them save what I have heard yesterday and to-day. I think I can assure my hon. friend that the law has been carried out, at least by the police. They are very careful and exact in practically everything they do; there may at times bd exceptions, but, generally speaking, they are a force upon which we can depend to the utmost, and we are always inclined to believe their proceedings to be very regular.


James Shaver Woodsworth: The Minister of
Justice will understand that I am not in any way blaming the mounted police for carrying out their instructions. I do not know sufficient about these cases to be able to say whether or not the men in question have violated the immigration laws, but it is ratheT unusual that I should be unable to obtain any information from the Immigration department.


Hugh Guthrie: I think the minister would give every detail sought by my hon. friend if he asked for it. I know he is not backward in furnishing information.


James Shaver Woodsworth: I appealed to the
officer immediately in charge and he told me I could get the information only from the minister. When I apply to the minister he tells me he does not know anything about the case.


Hugh Guthrie: At that time he probably did not know very much about it, but I feel certain I can obtain the details from the minister, and I will help my hon. friend if he desires.


James Shaver Woodsworth: What I am particularly interested in to-night is not the guilt or otherwise of the men, but (the procedure adopted in these cases. The minister is an able lawyer; I am only a layman, I should like to know from him if men can (be arrested in Winnipeg, without any charge 'being preferred against them and transferred to Halifax to be tried.


Hugh Guthrie: If, in the opinion of the Immigration department, men liable to deportation are not desirable subjects of this country, they may be taken into custody pending an investigation of their case. There have been many such investigations, but it does not fallow that in every case deportation has followed. I assume the investigation is fairly conducted under the provisions of the law; I have not heard of any cases of hardship, nor have I had complaints of maladministration. of the act. I assume in these cases

Supply-Justice-R .C.M.P.
the law has been -complied with. If the men to whom my hon. friend refers have committed acts which render them liable to deportation, I have no doubt the provisions of the law will be carried out. If they have not, I do not -think they have -much to fear, outside of perha-ps being put to some inconvenience.


John Livingstone Brown: I h-ave received -a wire from Winnipeg in connection with these cases, and the statement is -made that the arrests were carried out under the warrant of AY. J. Egan, who, of course, is the Deputy Minister of Immigration. It -may be that the procedure adopted is in harmony with the- immigration law, bu-t it -certainly is not in harmony with what we understand to be the principle of British justice. There men have been arrested in Winnipeg and spirited away to Halifax; sentence has virtually been pronounced upon them in -that -they have been taken from their homes in Winnipeg and sent down to Halifax for deportation. -Surely the minister will agree that it would foe infinitely more in harmony with justice to have had -these men detained in Winnipeg until an- investigation -could be made. They will have n-o opportunity of bringing witnesses to their defence in Halifax; the only evidence offered at Halifax will be that submitted by their accusers. In the very nature of things these men will not be able to secure witnesses. I -aim not disposed to defend those who violate the laws of our land; -people who -come here from Great Britain or from European countries should come prepared to obey our laws. Holmes, one of the men in question, came to Canada -twenty years ago, married -a Canadian- girl -and has a child. Surely if he has not previously co-me under the -cognizance of the police he should be entitled to that measure of fair play which wo-uld hold him in AVinnipeg inste-ad of his being sent to Halifax to have his -case reviewed there.
Mr. -GUTHRIE: There may be a good deal in what -nry hon. friend says, bu-t he is one of the old -and experienced members of this house and I have heard no cam-plaints against this law since it was put upon the statute book.


Mr. BROAVN:: It is only when abuses occur that such matters are brought to our attention.


Hugh Guthrie: The act gives the department the right to hold boards of inquiry where they see fit, and I gather from what the Minister of Immigration- has said that this board is being held in Halifax to suit the convenience-


Mr. YDUNG:: AATiose convenience?


Hugh Guthrie: The convenience of the department, I take it, and the shipping company. This board is to hear other -cases besides the one under discussion. AL1 these matters are -taken into -consideration when deportation proceedings are being conducted. In the past, boards have been held at Quebec and other points in Canada. Generally speaking, I agree that it is a good thing that a man should be heard in his own province, but that is not the law at the present time in regard to immigration. The minister is only carrying out the law as it appears on the statute books.


Charles-Philippe Beaubien: There is nothing in the law that tells him to take a man direct to Halifax to be tried there.


Hugh Guthrie: He has -the discretion to fix the place.


Charles-Philippe Beaubien: The minister has made the statement that the men would be given a fair trial before being deported. Does he really think that -a -man can get a fair trial when he has -been arrested in Winnipeg and taken to Halifax aw-ay from all his friends?


Hugh Guthrie: I am assuming that a man can get a f-air trial in any -part of Canada.


Mr. VENIOT:: No, he can not.


Hugh Guthrie: If any serious reason is urged by these men to show that they cannot get their evidence, or -that they have not money to obtain evidence, it is taken into account by the board. There is no railroading of cases; there will be a fair investigation and a fair finding.


Charles-Philippe Beaubien: Supposing a man wants to bring a witness from AVinnipeg to justify his being in Canada,


Hugh Guthrie: Does my hon. friend say that he cannot do that?


Charles-Philippe Beaubien: I admit he can do it, but why should the officials of the Royal Canadian Mounted Police put the country to the expense of bringing witnesses such a distance when the trial might just as well be held where the man has resided for many years and has friends who can testify on his behalf?


Hugh Guthrie: It might be cheaper to gather them all in one place.


Charles-Philippe Beaubien: I am speaking of the witnesses necessary to give the man a fair trial. Does the minister contend that the country is to be put to the expense of bringing witnesses from AATnnipeg, where the man
Supply-Justice-R .C.M.P.

has resided for some time and where people know him best, to Halifax in order that he may have a fair trial? Surely the minister cannot justify that on the program of economy laid down by the government.


Hugh Guthrie: This discussion started on the ground of the man's having a fair trial. Now when that is disposed of, the question is raised as to the expense. I do not know what arrangement the Department of Immigration makes in regard to expenses, but I can guarantee the investigation will be fair and the man will not be under any expense.


Mr. NEILL:: Is it not a fact, if a man is charged with a criminal offence under the ordinary criminal code and it is desirable for some reason to transfer the trial to another area, what is called a change of venue, that permission for the change must be granted by a supreme court judge? If I am right in saying that such is the practice, it would suggest that the accused's rights are safeguarded in that particular way. Would it not be a good thing if the same course obtained in such a matter as that now under discussion?


Hugh Guthrie: It might be. I am not justifying taking men out of their own provinces for the purposes of these investigations. Under the provincial law, a change of venue is usually subject to the judgment of some provincial court; they decide these matters, but there is nothing of that in the Immigration Act.


John Livingstone Brown: I fully realize it is not the Minister of Justice who is involved in this case; it does not come under his department. It is the Department of Immigration that is it fault, if there be any; but this seems to >e the only opportunity we have at the moment- of bringing up the matter. I think the minister will agree that if this procedure is sanctioned by the immigration law, it is pretty nearly time that law was changed.


Hugh Guthrie: That may be.


James Shaver Woodsworth: As having a bearing on this, I might mention a similar case before the public at present. This is from the Ottawa Citizen of May 5:
Mystery surrounds the whereabouts of Arvo ^ aara, editor of the Finnish Daily Vapaus at budbury, and Martin Parker, translator. The two men were arrested when police raided the newspaper office yesterday, bundled into a large automobile with five plainclothesmen, and the car left immediately, heading south.
To-day the Royal Canadian Mounted Police at Ottawa said the raid was carried out by the provincial police, while the Ontario provincial police headquarters here said that they "had no report."

"Have you any idea where the men were taken?" Inspector Alfred Cuddy of the provincial police, was asked to-day.
"Not the slightest. We have no report on them," he replied.
Apparently these men were spirited away from Sudbury. Somebody near me suggests they were kidnapped. I do not say that, but it is extraordinary if men can be taken in this way, seemingly without any charge being made. I am not defending this man Yaara, who is a communist and who may have got into trouble, as I understand he did several years ago, but I think he ought to have reeeiyed a trial. The Minister of Justice may tell me not to take the newspapers too seriously, but apparently it is only through the press that we can get information concerning these matters. This is a Montreal despatch of May 6, which appears in this evening's Ottawa Citizen:
Arvo Vaara, communist editor of the Finnish Daily Vapaus of Sudbury, who was arrested in a police raid on the newspaper, will be deported, Col. W. H. Price, Ontario attorney general, said here before sailing abroad the Canadian National liner Lady Somers for a vacation in the West Indies.
He replied in the affirmative.
"Will he be sent from Montreal by any of the liners leaving to-day?"
Mr. Price said that he did not think so as it would likely take several days to have the deportation papers arranged.
"This man was in trouble three times for statements derogatory to His Majesty," Mr. Price added. "Now he has been going too far again and we are certainly not going to put up with violence."
Mr. Price added that it was essential to protect Canadians and that reds who incited to violence would be sent out of the country.
I have no objection to deporting any foreigner who incites to violence. I suppose that is the only course for the country to take. But what I should like to ask is this: Has the man had his trial? On whose authority does Mr. Price say that he is to be deported? Mr. Price, as an official, may have very good grounds for knowing something about this man, but the accused has not yet had a trial, or if he has had one, it was very short, because apparently he was arrested only yesterday. Now he is in Montreal and I presume he may be on his way to Halifax. Before we can learn anything about the matter, the attorney general says that the man is to be deported. I do not know what kind of attorney general they have in Ontario who sentences a man before he has a trial. I do not know if that is what the minister calls a fair trial, but when such things are happening we ought to have a fuller explanation of the situation than we have yet had

from the Minister of Immigration or the Minister of Justice. Can the minister give us any information about this despatch? '


Hugh Guthrie: I again tell my hon. friend that he takes too much for granted from the newspapers. If he asks what authority Colonel Price had for saying this, that or the other thing, I do not know what he did say. All I know about this is what I read in the Ottawa papers this morning. I understand what took place at Sudbury occurred under instructions of the Attorney General of Ontario and was carried out through the provincial police, although I have been informed that some of our police were called in to assist. We have not as yet any report on the matter.


James Shaver Woodsworth: What will be the
procedure now?


Hugh Guthrie: I would gather from
the newspaper report that Colonel Price thinks this is a proper case for deportation. If it is, he will have to follow the provisions of the Immigration Act, which provides for an investigation and a report to the minister before a man can be deported.


Robert McKenzie: In the first
remarks the minister made, he spoke about a board of inquiry at Halifax that was to inquire into this case. Will he give the committee more information about the board? Are its members permanent officials of the department? How and by whom are they appointed or selected?


Hugh Guthrie: Some of them are permanent officials. I think they are all selected by the minister. I have not the Immigration Act before me, and I am not familiar with it.


Robert McKenzie: Do they go from place to place as they are required?


Hugh Guthrie: I fancy they go from
place to place as they may be required, but there are at the various ports permanent officials who are asked to act in these cases.


Mr. GERSHAW:: 
Hugh Guthrie: 
Mr. GARLAND (Bow River):: May I for
a moment revert to the subject under discussion a few moments ago, the question of the seizing of individuals by the police and their removal, with an expedition almost unequalled outside of Russia, I take it, down to some distant province or port in this country. 1 would ask the minister first of all whethei action of that kind does not deprive the individual of the opportunity of having his counsel apply for and effect habeas corpus Secondly I would ask the minister, if he can, to justify the action that has been taken. I do not think as a matter of fact that I have yet heard even an attempt to justify it. The minister did suggest that under the Immigration Act anyone who felt aggrieved might be able to take appropriate action to have investigation. I have at the moment no complaint to make of the administration of the act in the past. I have on several occasions had to deal with the Department of Immigration, both to have men deported at
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their own request and to have deportations stayed. Two years ago I succeeded in having four families deported, at their own request, from the mining areas in Alberta. Last year I succeeded in having some six deportations stayed, but in every one of the six cases the deportation proceedings were commenced while the persons were still in the place where they had resided in Canada. They had an opportunity to appeal to their local lawyer, and he in turn was able to get in touch with the [DOT] local member. I went down to the town of Drumheller myself to look into some of these cases, and consequently was in a position to make recommendations to the department. But in the present case the men are said to have been spirited away to a distant province without any pretence of a trial, a proceeding which is absolutely unbecoming in a democracy. Frankly, by tradition and education, I am anti-communist. 1 believe in democracy. I like the conception of constitutional government. I think it is an ideal that we might well aspire to protect. But if this is the kind of thing that is going to be done in the name of democracy, you have no real democracy at all; you are vitiating it and destroying the very principle on which this house was established. I condemn with all the power I have the action of the department in this case, deporting men to a distant part of the country and depriving them of the privilege of having resort to their personal friends without expense to the country and trouble to the individual himself. I really think that the government should seriously reconsider the whole matter and have these people returned to the places where their crimes, if any, are alleged to have been committed. Who knows that they will get a decent investigation? I do not know, I have heard people condemn the Russian Ogpu, their secret service, for the way they secretly hurry people away to Siberia and give explanations afterwards. That was the way these men were dealt with

the action was first taken and the explanation given afterwards. To persist in a course of that kind is to destroy the democracy concerning which so many proud protestations have been made.


Mr. DUFF:: I think I am correct in saying that a part of this vote is to take care of the provisions of the act that we passed in this house a few days ago under which the land preventive service all over Canada was transferred from the Department of National Revenue to the Department of Justice under the Canadian mounted police. I would ask the minister if these men who will now be mounted 
policemen looking after the preventive service will have to give their full time to the work in which they are engaged and for which they are paid.


Hugh Guthrie: 
William Duff: I am very glad indeed to have the minister's explanation. Although the minister has truly stated that this vote does not include the cost of the preventive service, I do not think I am out of order in discussing a matter which I should now like to bring before him.
Either the Minister of Justice or the Minister of National Revenue made the statement when the bill to which I referred was before the house that some 350 men of the preventive land service were being taken from the Department of National Revenue and transferred to the Department of Justice, and that they were full time men. I would say to him, and to his deputy who is sitting in front of him and listening to my remarks, that they had better revise the list which the Minister of

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National Revenue passed over to the Department of Justice, because it is a well known fact that among the men who were transferred there are a number who during the past year have not given their full time to the work of the preventive service. I made several complaints to the Minister of National Revenue but received no satisfaction. In view of the fact that there has been a transfer of preventive service officers to the Department of Justice and the Royal Canadian Mounted Police, I hope and trust that there will be a different state of affairs. I should like the minister and his deputy to go very carefully through the list, make inquiries from inspectors in the different provinces, and see that every man in that splendid service, for which everybody in Canada has great respect, namely the Royal Canadian Mounted Police, formerly the Northwest Mounted Police, is a full time man, a man who will be a credit to the service and the minister's department. Among the 350 who were transferred I know of several who in the past have not given full time to their duties; they have been engaged in other work, although drawing full time pay in respect of their regular employment.


Hugh Guthrie: Is my hon. friend referring to the period since April 1 of this year, since the men were taken under the control of the Royal Canadian Mounted Police?


William Duff: No. If my memory serves me correctly-and I think it does-in taking over the land force of the preventive service either the minister or the Minister of National Revenue made the statement in the house that 350 men were being transferred from the preventive service of the Department of National Revenue to the minister's department to come under the control of the Royal Canadian Mounted Police. My point is that of those 350 men there are some who did not give full time to the preventive service. I should like the minister or his deputy to communicate with their officials in the different provinces and ascertain the full circumstances. No matter what the religion or politics of the men may be, as long as they are a credit to the service I have no objection to the Minister of National Revenue arranging with the Minister of Justice to make transfers from one department to another. But I repeat, that in the past some of those men have not been giving full time to their work, and I think the Minister of Justice should see that every man who has been taken over from the Department of National Revenue and placed in the Royal Canadian Mounted Police should give full time to his work. I have no doubt the minister will give the matter his attention. Have I made myself clear?


Hugh Guthrie: Yes.


William Duff: I realize that the vote for the preventive service is not included in this item, but with the indulgence of the committee I should like to speak to another point.


Hugh Guthrie: About $1,500,000 of the
preventive service vote will come under the Royal Canadian Mounted Police.


William Duff: 
Hugh Guthrie: I think I can assure my hon. friend that the men taken from the preventive service into the Royal Canadian Mounted Police must measure up to the mounted police standards. They will be full time men; in the meantime they are taken in on trial. Unless they measure up they will be let out. I assure the hon. member they will devote their whole time to their work. They must ibe energetic and measure up to the Standards by which the Royal Canadian Mounted Police have made themselves a pattern for other forces. The other day in the house, I mentioned the matter of selections, and although I know nothing personally about them I have learned that in the province of Nova Scotia recommendations were made by the chief preventive officer, Mr. Logan. I think my hon. friend will have confidence in his selections.
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William Duff: Whom did he select or recommend?
Mr. 'GUTHRIE: I do not know the names of the men. The other night the hon. member for Hants-Kings asked me a question concerning two men. Although he is not in his place, I will say that if there was any discrimination it was at the instance of Mr. Logan who made the selections. I think my hon. friend will have confidence in Mr. Logan's choice.	.


William Duff: I do not know what Mr. Logan did in regard to his choice of men. Let me say to the minister, however, that if Mr. Logan is responsible for letting out a man named McLaughlin he has made a very grave error. Mr. McLaughlin came from Hants county, and has been in the preventive service for ten years. He was moved from Hants to Lunenburg county. If the minister would make inquiries he would find that everybody would say he is a suitable official. He took no part in politics, and [DOT]=r>
far as I know he did nothing that would make Mr. Logan recommend that he 'be not retained in the service. I cannot understand, if Mr. Logan was given a free hand to choose the men from Nova Scotia who should remain in the force, that he would recommend that McLaughlin be let out, because, as I said a moment ago, McLaughlin was one of the best men in the force in Nova Scotia, and it is a shame and a mistake that he has been let out. He is a family man, he gave up his business in his own county and was transferred to Lunenburg, where he rendered splendid service. There is not a single complaint against him. He is sober, he is industrious, and certainly he did not deserve the treatment he has received, whether from Mr. Logan or somebody else.


Hugh Guthrie: I will certainly make
inquiries in regard to officer McLaughlin and let my hon. friend know.


William Duff: Will the minister tell me about the marine end?


Hugh Guthrie: An arrangement has been made' that Commander Oland be loaned from the naval department to take charge of the marine work until it is thoroughly organized.
Mr. \\ OODSW ORTH:	If we may come
back to the other case, which I do not think we have very satisfactorily settled:	I find
that according to the Winnipeg Free Press of Wednesday, May 4:
Writs of habeas corpus were issued Tuesday, directing Assistant Commissioner Field, of the R.C.M.P., to produce the bodies of Holmes and 
Wade before the court of the King's Bench on Thursday, when he is also required to show the authority under which the men were deprived of their liberty.
Mr. Justice Gailt made the order in the ease of Holmes, with Mr. Justice Donovan making a similar order for the production of Wade. Both cases will be argued Thursday, S. Greenberg, -local barrister, is representing the men.
Up to the present police have refused to disclose the whereabouts of the three men. All that is known is that they are on board an eastbound train, and apparently an effort is being made to deport them from Canada before any effective legal steps can be taken to prevent their departure.
Now, this is what I was trying to get at a little while ago-the action of the mounted police in preventing any information as to what was being done with the men, their refusing to produce any warrants, their hurrying them away secretly and rapidly, and so effectively preventing them enjoying the safeguards which most of us considered were available under such circumstances. Apparently the writ of habeas corpus can be served only within the province, and these men were spirited away outside the province, and thus the very purpose for which the law exists was defeated. There is my point. I do not think the Minister of Justice, who has undoubtedly been brought up in the spirit of the law and the spirit of British traditions, can condone anything of that kind. If we are to develop a police force here who are to be given a free hand to violate the very spirit of British traditions, to make it impossible for men to avail themselves of the safeguard which British law has thrown around British citizens, then we are in a very serious plight, indeed.
May I mention for a moment the effect that this action will have upon the hundreds of thousands of our non-English speaking people throughout the west? It is twenty-five years ago since in connection with some work I was engaged in I went to live, among the foreign born. I tried my best to give them some knowledge of our Canadian "ideals," as we used to term them in those days; I tried to show what was involved in our British traditions and British history; I tried to tell them in those days-it was not so difficult for me then as it would be now-that we were living under a reign of liberty, and that every man was sure to be safeguarded in his freedom and if accused was sure to reoeive a fair trial.
Well, the communists came and told those people that there was no sort of fair play in this country, that there was no chance of their attaining any true liberty under this British flag, and so on. You condemn the communists for this, but let me warn you that actions of

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this kind are doing more than all the communists in this country can do to undermine faith in British institutions. How can we go back to those people and tell them that this is a land of liberty when the action that has been taken will remind them of the actions of the soviet government at the present time in regard to political offenders, or those which were taken under the old Czarist regime against such offenders? That is what they will tell you.	What can we answer? I
should like to think that no matter how black a man's character may be he is assured of a fair trial in this country. We have a right to insist .on that. This parliament surely has something more important to do than merely to pass estimates. As the supreme court of the nation we have the right to consider whether this is a case that involves substantial injustice.
I think of the man's wife, a Canadian born woman, of his child, I believe some thirteen years of age, also born in Canada. What are they to think when in this fashion their husband and father is spirited away from them without their having been given any chance to go to his help? He may be pretty bad, but I know in some cases murderers are given more consideration than that and are treated in a more humane way. It seems to me we are simply becoming hysterical and panicky. Conditions may be bad enough, but these conditions are not being produced by the few members of the communist party who may be in this country, they are not being produced by the foreign bom here who may not be satisfied and are agitating for a better state of society. These conditions are due to our economic system. The way to better them is not to get panicky and hysterical and deprive people of the rights we thought we all had under the British constitution. I ask the minister whether he thinks it is in keeping with justice that the Royal Canadian Mounted Police should be able to foil the counsel of these men and prevent habeas corpus writs being issued in time to save their clients from being whisked away to Halifax?


Hugh Guthrie: I can only say, Mr. Chairman, that I do not believe the mounted policemen perpetrated what is alleged in the newspaper read by my hon. friend from Winnipeg North Centre. I believe they acted strictly in accordance with the law and with their instructions.


James Shaver Woodsworth: It is much worse if they did that.


Hugh Guthrie: I say "in accordance with the law." And if a man acts in accordance
with the law why should you say "it is much worse?" That is the way he should act, that is the way we expect him to act, and that is the way, I submit, that these men acted. This newspaper statement that my hon. friend has read is written for the purpose of exciting popular feeling, or for the sale of the newspaper, or something of the kind.


James Shaver Woodsworth: I quoted from the Winnipeg Free Press.


Hugh Guthrie: I do not care what the paper is my hon. friend quoted, I will guarantee that when the facts come before me-they have not yet-they are not in accordance with the newspaper report.


Edward Joseph Garland: And I will guarantee they are.


Hugh Guthrie: I do not know that in this matter I can assist my hon. friend in any way. His desire, he said, was for information. I shall be very glad to direct the attention of my colleague who is not here to-night to the views of my hon. friend as he has expressed them. But he started this evening's program by stating that of course this was a matter in the Immigration department. I can only tell him that that is correct. There is the law, and the Minister of Immigration stated today that he was acting in accordance with the provisions of the law of this country. I cannot go any further than that, and I won't, because the law should bind us all.


James Shaver Woodsworth: Just on that point, do I understand the minister to say that there exists a law in this country which permits the Immigration department or any other department to deprive a man of the safeguards which he might have under habeas corpus proceedings?	.


Hugh Guthrie: I will undertake to say
that there is a law which enabled the mounted police and the Minister of Justice to do just what they did in this particular case.


Edward Joseph Garland: Technically the minister may have an. edge of correctness in his argument, but I should like to direct his attention to the very considerable alteration in the method of dealing with these cases that has taken place quite recently. Actions of this kind, to my knowledge, have never taken place until this year. Formerly, in every case in which deportation proceedings were instituted, either for the causes alleged in this case or for other causes, such as becoming charges on the municipality or on the public purse, deportation proceedings
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were commenced in the district in which the person resided. This is an entirely new procedure.


Hugh Guthrie: I think not.


Edward Joseph Garland: I want to know why this was done in this case and in the case of the Sudbury people, about which I only know what I have seen, and what I presume thg minister has seen, in the newspapers. The two cases appear to be similar; there seems to have been a spiriting away from the locality in which the arrests were made, and I am informed that there was a similar case in Edmonton. It seems amazing that in this year 1932, either this ministry or the Department of Immigration should become so terribly obsessed with fear as to be driven to this hysterical method of trying to cope with what they appear to regard as a gigantic national danger. I do not see that they are getting anywhere by magnifying cases of this kind into major national problems. I tell you frankly, Mr. Chairman, words fail me; I cannot possibly find the proper language with which to describe these actions. But there is one thing I think the minister should tell us: Why, in these cases should the whole course of procedure be altered from the regular, constitutional, civilized methods of British justice which have been followed in the past? The minister says there is a law which permits the Immigration department to take this action. That law has never before been invoked to this degree, at least not to my knowledge. If the minister knows of any similar cases I should be glad to hear of them. As the hon. member for Winnipeg North Centre has said, the action taken has deprived men of the opportunity of securing a decent trial and obtaining justice in their own locality.
May I make a suggestion, because I think the minister is quite sincere and does not want to contravene the popular conception of British justice. Let the minister have these men returned to Winnipeg; let their counsel have an opportunity of invoking habeas corpus proceedings, if they can secure the writs. Let the men have a fair trial, and let the law take its proper course. That is the least we can ask the minister to do, especially in the case of this man who is married to a Canadian woman.


William Daum Euler: When I heard the hon. member for Winnipeg North Centre recite the facts of this matter as given in the newspapers, with regard to the taking of these men from Winnipeg and from Sudbury to Halifax in order to be tried, it seemed to me a most

amazing statement. I do not think anyone will accuse me of in any way encouraging sedition or violence, or of being a communist; but it is not even the appearance of justice to arrest a man at his place of residence and take him to a point two or three thousand miles distant in order that he may be tried, thus depriving him of the ordinary opportunity that should be given every man to defend himself. It may not be true that this was done; there may be an explanation which the minister cannot give to-day. But knowing the minister as I do I am sure he does not approve of what was done, if indeed it was done as it has been described in the newspapers and by the hon. members who have spoken. The minister says he is quite certain that the law has been observed and that any action taken is within the law. If this is true, and this is the law, I suggest to the minister and to the government that it is time the law was changed. I think it only fair-and this should be secured by law-that when a man is arrested for any reason whatever, whether it be on a charge of murder or any other heinous offence, he should, at least, have the right of trial in his own community, unless it is impossible for him to receive a fair trial there.
I should like to refer also to the subject mentioned by the hon. member for Antigonish-Guysborough, that is, the preventive service. Perhaps this question would be better asked of the Minister of National Revenue; it is difficult to say where the question of the transfer of the preventive service should be discussed. I heard the minister say a moment ago that the land forces of the preventive service, formerly attached to the Department of National Revenue, were to be transferred to the mounted police. We knew that. I was not aware, however, that the sea forces were also to be transferred. I presume that explains a statement made the other day which seemed to me inaccurate. The minister stated that some 350 men of the former preventive service were being taken into the mounted police and that some 250 men were being let out. My recollection is that there were not 600 men in the preventive service when I was in the Department of National Revenue.
I should like to ask whether, with the taking over of these men of the preventive service, there now will be within the mounted police a special branch to which shall be assigned those special duties formerly carried out by the preventive service of the Department of National Revenue, or whether the officers of the preventive service are merely incorporated

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[Stage Direction]
into the great general body of police, so that on one occasion a member of the force may act in a certain capacity and on another occasion in an entirely different capacity. Will there be a separate unit within the mounted police so that the men may become experts in particular lines and thus be able to carry out their duties to the very best advantage?
Hugh Guthrie: They will form part of
the main body of the police, but a special investigation department will be maintained for the purpose of handling customs and excise cases.


William Daum Euler: Then I would like to ask the minister whether there is some basis of cooperation between that particular branch of the mounted police and the customs branch of the Department of National Revenue. It must be quite evident to all members of the committee that the customs branch of the Department of National Revenue will necessarily come in contact with instances of smuggling, of undervaluation and of all the other violations of the Customs Act, and that of necessity, in order to have the work properly carried out, there should be close cooperation between that branch of the mounted police and the customs branch of the Department of National Revenue.
Perhaps the minister will bear with me if I deal with another point before he answers that question. In incorporating these men of the preventive service into the mounted police -and I am in accord with that action, because for the information of the committee I might say that when I had the honour to be in charge of the department we were considering the very course that has now been followed- what disposition is being made of the assistant chiefs? Under the old system the country was divided into districts. There was the maritime district, the Quebec district, the Ontario district, the prairie provinces, each with a sub-chief at the head. What has become of the assistant chiefs of what was formerly known as the preventive service?


Hugh Guthrie: Some of those chiefs have been taken into the force and some have been let out. This has been done on the recommendation of the officers called divisional chiefs. They made the selections.


William Daum Euler: I am speaking of the
divisional chiefs now.


Hugh Guthrie: Four of those chiefs have been taken into the force.


Mr EULER:: May I ask in what capacity?


Hugh Guthrie: They will be chief preventive officers of their own divisions.


William Daum Euler: With greatly reduced salaries,
I suppose?


Hugh Guthrie: With a reduction in salary of about one-third.


William Daum Euler: Would the minister tell me what connecting link, if any, remains between the Department of National Revenue and this particular branch of the mounted police?


Hugh Guthrie: There is a very close connection between the mounted police and the Department of National Revenue. The department will still administer the Customs and Excise Act and will still maintain an investigation branch, which will be kept closely in touch with those members of the mounted police who are specially detailed to look after customs and excise cases. The commissioner himself has arranged that connection between the two departments. I can assure my hon. friend that the Department of National Revenue and the Royal Canadian Mounted Police are to be kept in the closest touch at all times.


Mr. YENIOT:: Do I understand that the
sea forces of the preventive service are to come under the mounted police?


Hugh Guthrie: Yes.


Clarence Joseph Veniot: Can the minister tell the
committee why that was done? Was it because of any experience that the mounted police might have had with sea forces?


Hugh Guthrie: The main object was to
take over the whole preventive service and to avoid what might be called divided responsibility. I think the mounted police are just as competent as the Department of National Revenue.


Peter John Veniot: I do not think they are for preventive service on the high seas.


Hugh Guthrie: We are to have the services of Commander Oland of the naval service in formulating a plan for the proper maintenance of this service and the proper carrying out of the duties which pertain to it.


Peter John Veniot: I do not think any commander can give better service in the prevention of smuggling than that given already. To put a man at the head of these forces who knows nothing of the system employed by the smugglers will tend only to lessen the efficiency of the preventive service by sea. I know nothing of the Pacific coast, but I do know that the preventive service by sea in the maritime provinces has reached an efficiency which no commander of the naval
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forces can improve; he might make it worse. For these reasons I must voice my opposition to the mounted police or even the naval service having anything to do with the prevention of smuggling by sea. I understand it is intended to use aeroplanes in this service. I do not know upon whose recommendation this is being done, but I feel certain that the use of aeroplanes to prevent smuggling by sea will be one of the biggest fiascos ever seen in Canada. Smugglers are not in business to be caught; they do much of their work at night, and with their intimate knowledge of the bays, coves and isolated sections of the coast of the maritime provinces all the aeroplanes in the world would have no effect. In these days of economy I think the department should go slowly in adopting systems which cannot help but prove to be failures.


Hugh Guthrie: The department is looking very carefully into the question-


Peter John Veniot: When it puts the mounted police in charge of the sea service?


Hugh Guthrie: If the hon. member will
permit me to finish: we are looking very carefully into the question of having an air service to assist in the work down there. I may say to my hon. friend that I have not had painted to me that wonderful picture of law enforcement which he has painted. We hope to improve the present marine service of the customs department; we are retaining ninety per cent of the personnel, and we think we will have all the necessary experience at hand. In the meantime we are putting in charge a very experienced man in the person of Commander Oland. I may be wrong in my anticipation of improvement, but I hope I am not, and I believe that after this service has been in operation for a year or so my hon. friend will say we have brought about a wonderful improvement. I am sony to see the dark picture he paints for us in connection with the bays and coves; I did not think it was as bad as all that, But I will guarantee that the service will be better.


Peter John Veniot: It is just as bad at the border, because the smugglers there work at night. The efficiency of the preventive forces, either by land or by sea, should not be judged by the number of seizures made. It is the prevention of the violation of the law by smugglers wrhich shows the true efficiency; with an efficient force, the smuggler is afraid to land and goes elsewhere. The result of the system carried out by the Customs department has been to drive these smugglers to the 
United States. When they discover that the force is efficient enough to prevent them from landing their goods in Canada, they go to the United States and do their smuggling into that country.


Hugh Guthrie: We will try to get the
force efficient enough to prevent that.


Edward James Young: Reverting to the case of the men who are being deported, the minister expressed doubt as to the accuracy of the newspaper reports, but I should like to ask him this question: Will he, as Minister of Justice, undertake to see that these men are not deported until the facts are laid before him, and if after he has examined the facts he finds that the newspaper reports are substantially correct, will he see that these men are taken back to Winnipeg for trial?


Hugh Guthrie: If my hon. friend had heard all the discussion on this matter I think he would lealize that he is asking a rather foolish question. This whole matter comes under another department and under an act of this parliament with which I have nothing particularly to do. I have listened patiently to all the complaints, and I shall be glad to bring them to the attention of my colleagues. Perhaps this discussion should not have taken place on these estimates, but I am glad to have had the views of hon. members. If it is the opinion of hon. members that amendments should be made to the Immigration Act, 1 shall offer no opposition. But, as I said before, the act is as it has been for the last twelve years, and all this is taking place in accordance with the provisions of the act.


Edward James Young: This being Friday night, the Minister of Immigration is not in the house; neither is the Prime Minister. It will be Monday before we shall be able to question either of them, and in the meantime these men may be deported.


Hugh Guthrie: There is to be a complete and fair investigation. After the investigation takes place, the cases are submitted to the Department of Immigration, at which time parties can be heard before the minister. In many cases the minister hears similar representations. No railroading is being done except in the newspaper columns. Should my hon. friend want to make representations when these cases come back to the department, I can assure him that he will be heard. If these men desire to have their counsel appear for them, I assure my hon. friend that they will be heard.

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Edward Joseph Garland: If there was no railroading, why were the}' taken to Nova Scotia?


Hugh Guthrie: That was done to suit the convenience of the department and its officials. The board is not being held for an isolated case; probably half a dozen cases will be heard. One of the reasons for its being held in Halifax is because the ships sail from that port.


William Daum Euler: It is very hard on the men charged.


Hugh Guthrie: I grant you. A crime
charged against a man is investigated in that man's province; that is, when we are speaking of criminal charges. These men may not be charged with any criminal offence; possibly they will not.


John Livingstone Brown: All the worse.


Hugh Guthrie: But if they are here in
breach of the provisions of our law, they may be deported. They may be thoroughly undesirable people, and as such they are liable to deportation. There may be no charge of a criminal nature in connection with them.


John Livingstone Brown: That makes it all the
worse.


Hugh Guthrie: ' But the law is there, and if it is there it should be enforced. The way to get rid of a bad law is to enforce it.


Edward Joseph Garland: If the law
can be enforced to any such wild extremes as this, I have never before heard of anything of the kind being done. Will the minister give me some illustrations ? I have already cited to the committee cases in which I was personally interested and affected, and in which the investigation took place in the province concerned. I cannot understand the minister's point of view.


Mr. SPEAKMAN:: I quite realize that the Minister of Justice is not the responsible minister, and also that it is unsafe to become too much excited over newspaper reports. But at the moment, until we have other information, we can proceed only on the assumption that there is some foundation of fact in the statements that have appeared, coupled with the telegram which has been received. During the last ten years, while I have been a member, I have been endeavouring to instil into people from other lands who are in my province and in my riding, those principles which I consider to be sound, of the Canadian spirit, the British institutions which I have always
felt were fine, noble, the best we have in this imperfect world. In particular I have been holding them up in comparison with the customs in other lands and the ideas of men who come from other countries, and have been doing my best to make of these men real Canadians. One of the things I have always held up has been just that which has been cited, that any man in this country, whether a citizen by birth or naturalization or simply a resident who has come within our borders, is assured, no matter who he is or what he has done, of fair treatment and a fair chance. I am not defending those men; I do not know them. If they have done anything wrong- and I assume they may have-I am the last man to condone the wrong, any more than I would condone a murder or approve any crime. But I would also be the last man to stand by and see even a murderer lynched or hurried to conviction without a fair trial. Where a man is charged with commission of a crime if the accused cannot provide counsel or has no funds, the court, in its meticulous care that British justice be upheld, will furnish counsel for him. If what has happened is as has been stated, the minister is right in saying that no law has been broken, but he is not right when he says that in doing that, they were simply obeying the law. There is a great difference between obeying the law-that is in doing something that the law commands-and simply staying within the limits of the law.


Hugh Guthrie: I referred to the actions of the mounted police.


Alfred Speakman: Quite so. I make no criticism of the police themselves. They were acting under orders and had no option but to do as they were told; the better policemen they were, the more meticulously would they obey orders, whether they were right or wrong. I am speaking of the authority under which they acted. The minister did not refer to the police obeying the law; he referred to the Minister of Immigration obeying the law. The Minister of Immigration certainly acted within the law; he did not do anything against the law, but the law did not force him to do as he did. It gave him or his department discretion as to where the trials should take place and what action should be taken. The discretion has been within the law. The law itself my be all right, yet good law may be abused. Actions may be within the law but still be not fair or equitable.
I am chiefly interested from this one aspect, that of the effect which the report of such action, if true or if left uncontradicted, will have upon people from other countries among
2fi96
Supply-Justice-R.C.M.P.

whom I, with others, have been working in an endeavour to clear from their minds soviet, bolshevist conceptions and make them good Canadians. I have assured them that no matter how poor they might be in this world's goods, no matter how ignorant they might be or to what extent they were unacquainted with our language or our customs, once they came into this country they would receive the same treatment and be accorded the same justice as the richest British-born that could come into the land. If action has been taken as has been stated, and if it goes without contradiction, what can I say to those men? They know, and everybody in this house knows, that no educated man of influential family, of position, of wealth, with influential friends, would be treated in such a way. We know that; they all know that. If other men are treated differently, then all that has been said by many of us, doing our best to stem the tide of faulty opinions and principles, is of no avail. The work we are doing has been hampered; our high ideals have been swept overboard. It is true the minister is not the one responsible, but in the eyes of the world what is he? He is the Minister of Justice; he and his department represent justice in this land. I would appeal to him, in his capacity as the dispenser of justice in Canada, to see that justice is done in this case.


James Shaver Woodsworth: May I submit just one or two other considerations? As I understand the matter, the Immigration Act is designed to state what class of people shall come into this country, and to give the minister power to deal with any individuals belonging to prohibited classes that have got by and that should be deported because they are unfit to be immigrants. Clause 41 of the Immigration Act gives a list of certain persons to be deemed to belong to the prohibited or undesirable classes. It is intended to keep that class of people out of the country, but I submit that this law was never designed or should never be used to try people for crimes after they have been for a considerable period in Canada. One of these men, according to my information, has been twenty years in this country. He ought not to come under the jurisdiction of the immigration authorities. He has been here long enough to establish a certain domicile.


An hon. MEMBER:: He should be
naturalized.


James Shaver Woodsworth: For my purpose it does not make any difference whether he is naturalized or not. He has been here long 
enough to establish a certain residence, and he ought not to come under the Immigration Act. If he has committed any offence against the criminal code, by all means let him be tried, Convicted and deported if we can deport him. I am not arguing against deportation for cause; but let him have a trial; let us not use the Immigration Act, which is designed to keep certain people out of the country, as a means of putting them out. That is not a fair way of dealing with the situation. It is quite true that a man may get inside the gate in some surreptitious way, and it may be found after he has been here a year or two that he has made false representations, or was not what he represented himself to be. The Immigration Act is designed to take care of people of this class and provide for their being sent back if they have been here a month or two or a year or so, but when a man has been here for a number of years it seems to me that he ought to come under our regular procedure. The very next clause of the Immigration Act, clause 42, says that the minister-
-may order such person to be taken into custody and detained at an immigration station for examination and an investigation of the facts alleged in the said complaint to be made by a board of inquiry or by an officer acting as such.
That means that if he comes in by way of Halifax he will be detained at Halifax and examined there by a board, but it certainly does not mean that after a man has come to this country and has lived for twenty years in Winnipeg he is to be taken back and examined at an immigration station at Halifax. There is no authority in the act whatever for such a procedure as that, none whatsoever. If he has to be detained at an immigration station there is an immigration station at Winnipeg where he might have been detained.
Further than that, in the case of one of these men, he has a Canadian bom wife and a Canadian born child in Canada. Now what does the act say with regard to them? Subsection 6 of section 42 says:
In any case where deportation of the head of a family is ordered, all dependent members of the family may be deported at the same time; and in any case where deportation of a dependent member of a family is ordered on account of having become a public charge, and in the opinion of the minister such circumstance is due to wilful neglect or non-support by the head or other members of the family morally bound ito support such dependent member, then all members of the family may be deported at the same time.
I presume that this section means that this Canadian born woman with her Canadian born child may be summarily deported to Poland or Russia or Germany, or from whatever country

Privilege-Mr. Mackenzie King
this man may have come. If he is not deported with his wife, it means that she and her child are to be left in Canada and her husband sent overseas-a family absolutely broken up. Those members of the house who a few years ago objected so strongly to divorce, might I think, very well have something to say about a forcible divorce of that kind, where the head of the family is taken away and the dependent wife and family are left in this country.
Further, the minister says that every opportunity will be given for appeal. Let me read the notice to be sent to the person ordered to be deported:
If you claim to be a Canadian citizen or to have acquired Canadian domicile, you have the right to consult counsel and appeal to the courts against deportation.
These people, I believe, are not naturalized, hence they do not come under the first paragraph of this section. I go on:
In all other cases you may appeal to the Minister of Immigration and Colonization against any decision of the board of inquiry or officer in charge whereby you are ordered to be deported unless such decision is based upon a certificate of the examining medical officer that you are affected with a loathsome disease or a disease which may become dangerous to the public health. The formal notice of appeal will be supplied to you by the immigration officer in charge upon request and upon deposit of the sum of twenty dollars for the cost of your maintenance and the sum of ten dollars for the maintenance of each person dependent upon you until the minister has decided upon your case.
It is that second part of the section which applies to these particular people, and unless they can produce the twenty dollars and the ten dollars for each dependent they have no chance even for an appeal. That is a very serious state of affairs. You take a man quickly away from where he lives without giving him any opportunity to obtain ready cash, and move him two thousand miles from where his friends are located, and it is almost impossible for him to make an appeal to the minister. The result is that he is clapped on board ship and is on his way across the Atlantic without even a -chance for an appeal. I know that the Minister of Justice cannot think that that is a fair sort of trial. He must realize that an appeal of that kind is a mere sham. I would urge upon him, as Minister of Justice and as a member of the government, to see to it that these -people, whatever their crimes may be, are given a fair trial in Canada.


[Stage Direction]
Item agreed to.

William Lyon Mackenzie King: While the Minister of Justice who is -acting as leader of the 41761-170
house is dealing with -complaints with reape-ct to what appears in tthe -press, I should like to make mention of -another matter which affects vitally the privileges of this house.
I have before me a copy of the Ottawa Journal of this evening, and the headline across the -page reads:
Roche, MacTavish, Tremblay to be retired. New Civil Service Commission, two or three members, is advice of committee. Report contains severe criticism of service governing body. Praise is given Charles H. Bland. Post offices under $3,000 class taken away from commission.
The news column itself sets forth what purports to be -the findings of the special committee to which were referred certain matters pertaining to the Civil Service Act and its administration. -I have just been asking one of the members of the committee as to whether or not the committee has made its report, and he advises me that it has not. How near this report which appears in to-night's paper may be -to any draft which has been before the committee I a,m not in -a position to say, but there is internal evidence, I submit, which will be apparent when the report is brought down, -to suggest th-a-t in some way the Ottawa Journail has obtained either a draft of the report that has been before the committee or something very similar to it. Naturally I cannot say who is responsible at all for the re-presentations respecting the -committee's findings as they appear in this -article, but I think a statement should -come from the government immediately repudiating the report and repudiating any action on the part of any journal which purports to deal with matters which -are -before -committees of this house o-r publishes reports of its committees before hon. members themselves ha-ve been given any information. It is a gross injustice to -the persons whose -names are -mentioned in the report, and it is a breiach of the privileges of this house tha-t a report on a matter that is before -a committee of the House of Commons should be presented in this form to the public before hon. members themselves have received the fullest information. I would- like -the hon. Minister of Justice who at the moment is leading the house to express his views with re-g-ard to this matter.


Hugh Guthrie: I-f -this is a proper time to 'bring this -matter up, Mr. Chairman, and- I do not think it is-


William Lyon Mackenzie King: A m-atter affo-q-ing -(he -privileges of either house of parliament can be raised -at any -time.


Hugh Guthrie: In committee?


William Lyon Mackenzie King: At any time.

Supply-Justice-R.C.M.P.


Hugh Guthrie: I am not objecting on that ground. When I read the article it struck me that it was a very improper one to appear in any newspaper-it is not only in the Ottawa Journal; a very similar article appears in the Ottawa Citizen also. If it is only a newspaper reporter's forecast of what a committee is going to report, I do not imagine that anyone can take very serious objection to it, and if the newspaper reporter has made a correct guess I do not think anybody can take very serious objection. But if it is based on information handed out by a member ol the committee, then I think serious objection can be taken, and I shall certainly draw the attention of the Prime Minister to the matter at the very earliest opportunity.


Mr. W. G. ERNST (Queens-Lunenburg):: As a member of the committee I take the opportunity just to say a word. I do not think I shall be committing any breach of confidence when I say that the article in question was brought to the attention of the committee this afternoon and the committee were unanimous in stating that no member of the committee had given such information to the press. In the words of a former prime minister, it is at best an adventurous prognostication.

The committee resuming:


Charles-Philippe Beaubien: Before the item carries-


The CHAIRMAN (Mr. Stirling):: The item is carried.


Hugh Guthrie: I will answer the question if I can, Mr. Chairman.


Charles-Philippe Beaubien: I presume that most
of the members of the preventive service in Manitoba were absorbed into the Royal Canadian Mounted Police.


Hugh Guthrie: Practically all of them.


Charles-Philippe Beaubien: I have in mind a man
getting, say, from SI,700 to 81,800 a year. How would the change affect his salary?


Hugh Guthrie: A man with SI,700 a year would probably lose about $300 a year. He will be paid now according to the police rates.


Charles-Philippe Beaubien: I assume the staff has
been cut generally. Suppose a man in the preventive service on that ground alone was not absorbed into the mounted police. That service has been cut to a certain extent, I suppose?
TMr. Mackenzie King.]


Hugh Guthrie: What has been cut?


Charles-Philippe Beaubien: The preventive staff.
They have not all been absorbed?


Hugh Guthrie: No, but in Manitoba I
believe practically all have been.


Charles-Philippe Beaubien: Suppose a man who was
in the preventive service was not absorbed when the Royal Canadian Mounted Police took over the Service-a man whose record is good but who has passed the age limit for appointment to-the civil service; is there any provision under which the age limit may be waived?


Hugh Guthrie: No, there is no provision other than that they are entitled to draw out the gratuity that has accumulated during their service.



INDIAN AFFAIRS

[Stage Direction]
To provide for expenses connected with the administration of Indian affairs, ' including salaries, supplies, relief, medical attendance, hospitalization, dwellings, agricultural activities, surveys, roads, bridges, irrigation, dyking, education, etc., and a grant of $100,000 approved by parliament in the session of 1926-27, $3,873,000.
Mr. DONNELLY:: The last time this item was under discussion I asked the minister some questions in connection with the greater production farm at Regina. At that time he told me the farm had been handed over to some individual or individuals to be cared for. Can the minister tell us the size of the farm, the amount of land under cultivation, whether the farm has been rented, or on what terms it has been handed over?


Hon. T. G. MURPHY (Superintendent General of Indian Affairs):: Mr. Chairman, I
have not the accurate information as to the number of acres, nor have I a copy of the agreement or arrangement made with the former manager of the farm. The farm was rather large, consisting of several hundred acres. The arrangement is that it will be taken over this year on a share of crop basis, but other than that I cannot give details of the arrangement.


James J. Donnelly: I have asked for production of papers, and I should have liked to have the information before the item passed. I think I should have had it before this item was called.


Thomas Gerow Murphy: The hon. member asked
a question the other night; I gave my answer, and he took no exception. Had he asked for

Supply-Indian Affairs
details I should have been only too pleased to secure the information for him. I shall be quite ready, however, to obtain any information he may desire, and send it to him.


James J. Donnelly: I have asked for the
production of papers, and I think production should have been made before this item came up for discussion.
Mr. MURPHY': How long has the request for information been on the order paper?
Mr. DONNELLY': A week or ten days.
Mr. MURPHY': Undoubtedly the information is being secured from the inspector who made the arrangement. The necessary time has not elapsed for the information to come from Regina.


Mr. WEIR (Macdonald):: I should like to ask a question concerning a condition existing in one of the reserves in Manitoba. Perhaps the minister may be in a better position to answer if I state the circumstances. The merchants at certain Indian reserves in Manitoba have been doing business with the Indians, and to-day they find themselves holding several accounts for which Indians are responsible, and which the merchants are unable to collect. Is there any method by which the department becomes responsible for accounts incurred by Indians? I am referring particularly to the Swan Lake Indian reserve.


Thomas Gerow Murphy: Any goods bought by the Indian department through properly appointed and qualified officials will be paid for by the department. But as to accounts incurred with a dealer by individual Indians the department does not hold itself responsible for payment. There was a practice, which to some extent has been discontinued, whereby an Indian agent would sign an order or agree that a merchant might charge to an Indian certain goods and he, the agent, out of the proceeds of the Indian's crop would endeavour to pay the merchant. I believe a difficulty has arisen in the particular case to which the hon. member for Macdonald has referred. I may say representations have been made to the department with regard to accounts owing to merchants and dealers by Indians in the Swan Lake area. Some of the accounts have been submitted to me to dhow that the goods were charged and in most instances the accounts bore the signature of the farm instructor. These goods, however, were charged not to the Indian department but to the individual Indian. In such cases the merchants must have understood, through general prac-41761-170|
tice, that the goods would be paid for out of proceeds from the Indian's crop, and not by the department.


William Gilbert Weir: Does the minister mean the Indian's crop was not sufficient to pay for these goods?


Thomas Gerow Murphy: Apparently so, yes. The
agent would endeavour to pay the account, but I do not suppose he would take all the proceeds of the crop to pay an account, and leave the Indian with nothing. It is evident that during the last few years the Indians have found themselves in the same position as many white people who have been unable to pay their store accounts.


William Gilbert Weir: The department assumes no responsibility for accounts in that position?


Thomas Gerow Murphy: No, the department assumes no responsibility. The agent, however, acting as an official of the department, uses his best efforts to get enough money from the Indian to pay the account.


Mr. VALLANCE:: Can the minister answer a query in the form of a telegram I sent to him yesterday regarding the supplying of flour to Indians in Battleford? The purchasing agent asked for tenders, and my information is that tenders were received, a local miller in the town of Battleford being lowest. For some unknown reason his tender was rejected. I should like to know if the minister has any information in the matter.


Thomas Gerow Murphy: The telegram to which the hon. member has referred was placed before me either last evening or this morning. The hon. member has stated that the tender was rejected; the telegram however did not so state, but merely mentioned the circumstances. Is the hon. member correct when he states the offer was refused?


John Vallance: All I am referring to is the telegram. Having a copy of the telegram, the minister has knowledge of what it contains. Is the statement in the telegram correct, that an effort was being made to transfer the filling of the order to someone other than the lowest tenderer? That is what I want to know.
Mr. MURPHY': That is a different statement.


John Vallance: The same thing.
Mr. MURPHY': A moment ago the hon. member said the offer had been turned down, if I heard him correctly. My information, after taking the matter up with the officials of the department, is that in the spring of the
Supply-Indian Affairs

year certain flour was bought by the department for the use of destitute Indians, and a contract was entered into. But in the case to which the hon. member refers, it is not departmental buying. In other words, a portion of the interest fund 'which is sent to the agent for distribution among the Indians apparently is being used to purchase flour for them. This flour is not being purchased with departmental funds. From the telegram the hon. gentleman sent me, the agent apparently has asked for tenders from different milling companies. I have no knowledge as to whether an order has yet been placed with the firm to which he refers, or with any other firm.


John Vallance: The minister surely will not claim that his department is not responsible for what the agent does? The agent is an official of his department, and whether he is spending Indian money or departmental money, he is still acting as an officer of the department.


Thomas Gerow Murphy: Quite so. Nor am I using the words which the hon. member is putting in my mouth.


John Vallance: The minister said it
was not a departmental matter.


Thomas Gerow Murphy: I said the flour was not
being purchased with departmental funds, and therefore it was not departmental buying.


John Vallance: But the minister controls the funds of the Indians.


Thomas Gerow Murphy: Possibly I can make it
clearer in this way. A certain amount of money is held in the consolidated revenue fund which belongs to that particular band of Indians, and interest at five per cent is allowed upon if. That money is transmitted to the agent for distribution among the Indians.


John Vallance: At whose request?


Thomas Gerow Murphy: It is not a matter of
request, it is a matter of right.


Charles-Philippe Beaubien: Every year?


Thomas Gerow Murphy: Certainly. Or they might ask that it be left here to accumulate; but apparently the money has been sent to him for distribution. It may be that the Indians themselves requested the agent to purchase the flour for them out of this fund rather than have it all distributed to them in cash. Apparently-and I use the word because the department issued no instructions to the agent with regard to it-he asked for quota-

tions from different firms to supply this flour. Whether he has placed an order with any firm, as I have told the hon. member, I have no information to give him.


Frederick William Gershaw: How is the grain or
wheat from these Indian reserves sold? Some of the larger milling companies have stated that they are sometimes in a position to give a better price than the department obtain, and yet they are never given an opportunity of bidding.


Thomas Gerow Murphy: The Indian agent, as the hon. member knows, does practically all the business for the Indians under his charge. One of his duties is to see that the Indians' grain is sold to the best advantage, and I presume he sells it to the elevator companies at the best price obtainable.


Frederick William Gershaw: It sometimes happens
that the milling companies are able to give a better price for the wheat than are the regular grain dealers, but the larger companies have stated that they never get an opportunity to buy.


Thomas Gerow Murphy: That business is not transacted departmentally, and I am informed that the agent does not report to the department as to whom he sells the wheat or what price he obtains for it, although, as I stated a few moments ago, his duty is to see that the wheat is sold to the best advantage in order that the individual Indian may receive the most for his crop.


William Duff: Is the minister able to give
the name of the medical officer who looks after the needs of the Indians of the Chapel Island reserve in the county of Richmond, Nova Scotia?


Thomas Gerow Murphy: I will endeavour to give
the hon. member an answer in a moment. I observe that the hon. member for Acadia (Mr. Gardiner) is now in his seat. On May 2 he asked that certain information be brought before the committee in regard to the purchase of coal for certain agencies in Alberta. I am now in a position to inform the committee that in 1930-31, agent Gooderham secured quotations for the fuel requirements of Namaka, Gleichen and Cluny from William McConnell, of Gleichen, and the Midland Coal Company of Drumheller. In that year coal was purchased from Mr. McConnell, who submitted the lowest tender, at the following prices: $7.50 per ton, f.o.b. agency; $8.50 per ton, f.o.b. farm No. 3; $9.50 per ton, f.o.b. farm B. In 1930-31, coal was purchased again from William McConnell, he having submitted

Supply-Indian Affairs
the lowest prices, at the following figure; $7.50 per ton, f.o.b. agency; $7.50 per ton, f.o.b. farm No. 2; $8.50 per ton, f.o.b. farm No. 3; S9.10 per ton, f.o.b. farm A; $9.50 per ton, f.o.b. farm B. Here I desire to draw to the attention of the hon. member and of the committee the fact that the answer given to a question asked by the hon. member for Bow River was incorrect, as the official of the department who compiled the figures gave the amounts of the highest tender for the year 1932-33 instead of the figures of the lowest tender, an error which I now correct.


Robert Gardiner: Has the minister the
names of the other persons who were asked to tender, with the amounts of their tenders?


Thomas Gerow Murphy: I have given the hon.
member the names of those who were asked to tender.


Robert Gardiner: Was only Mr. McConnell asked to tender?


Thomas Gerow Murphy: Possibly the hon. gentleman did not hear me. A few moments ago I said that the Midland collieries of Drum-heller were also asked to tender.


Edward Joseph Garland: Were they
asked to tender in 1931-32 also?


Thomas Gerow Murphy: Yes.


Edward Joseph Garland: And who
else?


Thomas Gerow Murphy: That is all, just the two.


Robert Gardiner: What was the tender
of the Midland Coal Company of Drumheller?


Thomas Gerow Murphy: For the year 1930-31 the
figures were as follows:
	McConnell	Midland
Agency	.. $7 50	$7 65Farm A	. . 9 50	9 65Farm No. 3.. . .	. . 8 50	9 101931-32	Agency	.. $7 50	$7 65Farm No. 2.. . .	.. 7 50	7 65Farm A	.. 9 10	9 25Farm 13	. . 9 50	9 65Farm No. 3.. ..	. . 8 50	8 65
On May 2, when these estimates were being considered, the hon. member for Bow River asked the following question:
Mr. Garland (Bow River): Since the mine is producing 3,085 tons of coal, and, as the minister states, he hopes to produce a greater quantity next year, why is his department purchasing coal from outside at more than twice the amount? Is that economic? Is it common sense? If the Canadian National Railway system was run on that basis it. would be broke long ago.
To which I made the following answer:
Mr. Murphy: As I stated, the mine has been open only a few months, and it may be that the department was not in a position at the time-I speak again subject to correction-to supply its needs. In other words, the tenders were called for for the season 1931-32, prior to the opening of the mine. But now that we are in a position to meet those requirements, there is no reason why the coal [DOT]should not be supplied to the agency from the mine provided it is suitable coal for their requirements.
I asked my officials to wire the agent Yflg why tenders had been asked for when Hi had a coal mine of our own, in order to see if I was generally correct in my statement, and the following telegram was sent:
Question raised in house as to why department did not use coal mined from reserve for agency purposes instead of purchasing by tender. Is Blackfoot coal not suitable for agency pur- , poses? If it is, can it be used in the future? Explain fully. Rush reply.
To this the following answer was received:
A. S. Williams,	_
Acting Superintendent General Indian Affairs, Ottawa.
Tenders for agency coal awarded last August. Blackfoot coal mine not open until October. Coal from Blackfoot suitable and could be used in future if mine under supervision. Without supervisor we cannot rely on supplies.
G. H. Gooder.
I think I was generally correct in the statement I made in the house on May 2, when I said this mine was not in active operation when the agent asked for tenders for this coal. It is true that in answer to a question by the hon. member for Bow River certain figures were given showing that a certain amount of money had been spent on that mine in the two previous years. I may explain that that money was spent in the purchase of tools for the operation of the mine, and that active mining operations as such had not been carried on, the Indians simply doing a certain amount of drift mining in that area.


Edward Joseph Garland: There is still something to be explained in connection with this matter. The quotations mentioned by the minister, running from $7.50 for the year 1931-32, are still $1.10 higher than the tenders received by the Royal Canadian Mounted Police for only twelve tons of coal delivered at the barracks. Here is evidence that $1.10 more was paid than the coal could have been procured for if tenders had been called for by advertisement. That will require some explanation. With regard to the coal mine on the reserve, that mine has been open and in operation for some four years. In 1929 the mine produced 260 tons; in 1930 it produced
Supply-Indian Affairs

600 tons, or twice the requirements of the agency, and in 1931 it produced 3,085 tons. The minister explains the fact that the agency invited tenders-of course from certain selected individuals-in August last by the statement that coal was not being supplied by the mine on the reserve. The minister says that at -that time the mine on the reserve was not open and operating, but may I submit to the minister that the Midland coal mine was not open at the time either? Most of the domestic coal mines in Alberta are closed during the summer months, and in all probability at the time tenders were called for most of the mines in the Drumheller valley were not operating. The department must have had knowledge that this mine in the reserve would be producing approximately 3,000 tons that year, and it would know about the time it would require the coal. The Indians were available for labour, and in my opinion they could have supplied themselves from their own mines. When the minister is answering this question, I wish he would state if it is the general custom of the Department of Indian Affairs not to invite tenders by advertising but simply to invite one or two selected individuals to make a tender.


Thomas Gerow Murphy: I have now before me the answer given to the question asked by the hon. member for Bow River with regard to the production of this particular mine. As I stated a moment ago the production in 192930 was very limited, the Indians doing a certain amount of drift mining. As the department has no one in charge of that mine at all times, the figures given are only approximately correct. In 1929 there was mined 200 tons; in 1930, 600 tons and in 1931, 3,085 tons. The wire from the agent which I quoted a moment ago shows that this mine was not operating this year until about October. Prior to that time the agent had called for tenders to cover the requirements of the reserve, not for individual Indians particularly but for the agency buildings.


Robert Gardiner: On whose authority?


Thomas Gerow Murphy: I do not think any particular instructions were given this year. The agent would simply carry out the practice he had followed in other years and at a certain time of the year ask for tenders.


Robert Gardiner: When was the coal
delivered in 1931-32?


Thomas Gerow Murphy: Some bills are dated
January 5, 1931, for deliveries in December, 1930; some are dated February, 1931, for

delivery in January; some are dated March, 1931, for February deliveries. I have no bills for 1931 or 1932 showing deliveries last winter.


Robert Gardiner: When were the tenders
called for the 1930-31 supply?


Thomas Gerow Murphy: Tenders were called for
on August 29, 1931, and on September 26, 1930.


Robert Gardiner: In the year when the
mine was likely to be operated by the agency, why were tenders asked for so much earlier than in the previous year?


Thomas Gerow Murphy: As I said a moment ago,
no special instructions are sent out to agents with regard to the purchasing of supplies; these matters are in their hands and they carry on as a matter of business. The agent selects the time to ask for tenders.


Robert Gardiner: Can the minister give
any information as to the business qualifications of this agent?


Thomas Gerow Murphy: I am informed that he is
considered to be one of the best agents we have. His father carried on the duties of Indian agent before him.


Robert Gardiner: What kind of coal was
delivered in 1931-32, and from what mine?


Thomas Gerow Murphy: Double screened lump
coal.


Robert Gardiner: From what mine?


Thomas Gerow Murphy: Neither the tender forms,
the abstract or the accounts give that information.


Mr. POULIOT:: Has an Indian agent been appointed recently at Cacouna?


Thomas Gerow Murphy: I have not received any advice of an appointment at that place.


William Duff: Will the minister give me
an answer to my question?


Thomas Gerow Murphy: The position at Chapel
island is vacant at present.


William Duff: How long has it been vacant?


Thomas Gerow Murphy: I am not certain as to the exact length of time, but I believe a matter of a few weeks.


William Duff: The complaint which I received is that it has been vacant quite a while. I understand that this is because there is no Conservative doctor near the reserve If there is a Conservative doctor close to the reserve I have no objection to his being appointed at a time when the Conservative

Supply-Indian Affairs
party is in power, but if this position is being left vacant because there is no Conservative doctor near the reserve, then in the interests of the Indians a Liberal doctor should be appointed. My understanding is that this vacancy has existed for some months, in fact ever since a certain gentleman was appointed to the Senate. Previous to that time Senator Macdonald was the medical man in charge of this reserve, and in my opinion he was the proper man to have the job under a Conservative government, he being a good Conservative. The only other doctor there was the man who held the position before 1930, and who, no doubt quite properly, was discharged after this government came into power. It seems to me, if there is no Conservative doctor near, in the interests of the Indians, this other man should be reappointed immediately. I should like the minister to tell me exactly what the position is in regard to the matter.


Thomas Gerow Murphy: I anticipated that when I asked the hon. member to defer his question, I would have all the information that he desires. If he will kindly wait a little longer until I get another official here, I shall be able to give him fuller information. I have a certain general knowledge of the matter, but I desire to answer his question as accurately as possible, and I shall obtain the services of the other official as soon as I can.


William Duff: It is not necessary to do that. I am quite satisfied with the minister's explanation as far as it went, and I want him also to take what I say. I said it in good faith and I think I was fair enough to say that if there was a Conservative doctor there, he should be appointed immediately. I understand there is not a Conservative doctor within a good many miles; therefore the only doctor there being a Liberal, he should be appointed without delay. The cost will not be very much, and rather than have the Indians suffer from want of medical attention, I think my hon. friend will agree with me, if my statement is correct, that doctor should be appointed immediately.


Thomas Gerow Murphy: I am informed that the services are being performed at the present time by a doctor who is being paid on accounts, so the Indians are not suffering from lack of medical attention.


William Duff: What doctor is that and where does he live?


Thomas Gerow Murphy: Doctor Digout.


William Duff: That is the man I should like to have appointed; he is a Grit.


Mr. RALSTON:: There is another case of an Indian doctor in Shelburne county. Doctor L. P. Churchill was the Indian doctor there for a number of years and he was replaced comparatively recently by the appointment of Doctor C. A. Herbin. I asked the minister, early in the session, on whose recommendation the change was made. When the answer came down it was, according to page 389 of Hansard, "on instructions issued by the superintendent general." As reported on page 434 of Hansard, I pointed out that this was not an answer to the question, and I do not think I have had any answer since. I want to ask my hon. friend on whose recommendation the change was made.


Thomas Gerow Murphy: The question as put by the hon. member, I think he will agree, was one based upon an assumption. It was not a direct question.


James Layton Ralston: Well, I am asking the minister the question: was it made on a recommendation ?


Thomas Gerow Murphy: If my memory serves me correctly, yes.


James Layton Ralston: On whose recommendation?


Thomas Gerow Murphy: I am sorry that at the present moment I cannot recall, but I am quite willing to answer the question; I have no abjection to doing so.


James Layton Ralston: I am sure of that. I only want to point out that it has not been answered. The question was, on whose recommendation the appointment was made, and the answer, "on instructions issued by the superintendent general," is not very informative nor, I think, is it a proper answer. I should like to indicate to the minister the situation with regard to this appointment. Doctor Churchill is an ex-service man, with, I think, three years' service overseas and the military cross. He was born in the county of Shelburne; he has lived there all his life. The gentleman who has replaced him, Doctor Herbin, has lived in the county some five years and has no overseas service. I want to ask the minister the reason for the dismissal of Doctor Churchill and the appointment of Doctor Herbin.


Thomas Gerow Murphy: This position occupied
formerly by Doctor Churchill and later by Doctor Herbin is not one which carries a salary. The accounts are paid on what is know as the "call system;" that is, the agent calls in any doctor to provide the medical services for the Indians in question. It is not a regular salaried position.
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James Layton Ralston: I have not the answer yet. My question was: Why was it that Doctor Churchill's services were dispensed with and Doctor Herbin was appointed? To say that the position does not happen to be a salaried one is not any answer.


Thomas Gerow Murphy: I think, if I may say so with all deference to my hon. friend, it is a proper answer. May I illustrate it in this way: My hon. friend in the course of his own private life may call in the services of a certain physician for his family at a particular time, and at a later date he may call in the services of another physician. Would he say, simply because he called in another doctor, that he dismissed the first one?


James Layton Ralston: I asked simply why the change was made.


Thomas Gerow Murphy: That was not the original question. I think I answered that a few moment ago, when I said that the recommendation had been received by the minister.


James Layton Ralston: What was the reason given for the recommendation? The minister does not act simply on a recommendation, without some reason being given for it.


Thomas Gerow Murphy: I stated to the hon. gentleman that I was unable to recall who made the recommendation, but I fancy I carried out the practice which has been in vogue for many years, namely, that if a responsible minister receives a recommendation from a member of this house or from someone else in whom he has confidence, to do a certain thing, it is frequently done.


Robert Gardiner: How frequently?


Thomas Gerow Murphy: Most frequently, may I say, and I make no apologies for taking such action. If a colleague of mine in the government or a member in this house, whom I know personally and in whom I have confidence, makes a recommendation to me, then I am prepared to act upon his recommendation.


James Layton Ralston: Will the minister make inquiries as to the increased expense to the country caused by accepting that recommendation, or will he accept it without such inquiry?


Thomas Gerow Murphy: As possibly the hon. member is aware, the affairs of the Indian department will be administered this year for an amount some 81,800,000 less than two years ago.


Peter John Veniot: That is no answer.


Thomas Gerow Murphy: Will the hon. gentleman just contain himself for a moment? Not only in this case but in all similar cases throughout Canada instructions have been issued that those who are providing medical services for the Indians at various places must have their accounts kept to a minimum, and if I am not mistaken, a certain amount has been set which they must not exceed. I can assure the hon. member that those accounts, along with those for this particular doctor's services, will be very carefully examined and kept to a minimum.


James Layton Ralston: The minister is not quite fair to himself or to the committee. Nobody asked for a long statement with regard to the general expenditures of the department. I asked a simple question. The minister stated that it was his practice, for which he made no apologies, to accept the recommendation of anyone in whom he had confidence with regard, generally speaking, to a change of office or the administration of his department. My simple question was whether he made any inquiry as to the relative expense which would result to the public from accepting that recommendation as compared with maintaining the position as it stood before the recommendation came in. I do not think there can be any misunderstanding about that question. It has nothing to do with the million dollars at all.


Thomas Gerow Murphy: I am quite willing to accept the lecture of my hon. friend as to the length and kind of answer I should give although I have not taken exception to the length or type of question which he has asked, and if my answer does not please him I can only express my regret. I am answering to the best of my ability and giving him the information which I thought he desired. I have nothing to withhold.


James Layton Ralston: I am waiting for the answer, after all that.


Thomas Gerow Murphy: So far as I am aware, no particular inquiry was made in this instance as to whether the charge for the service would be increased or not. I gave the general answer which I thought would be more satisfactory to my hon. friend, that the expenses in this case as in all others would be kept to a minimum.


James Layton Ralston: My hon. friend presumed to give the general practice and was laying down a rule which I have not heard stated before in this house. I was interested to know how it was that that practice applied and whether in applying it the minister makes any inquiry at all into the relative cost of accepting

Supply-Indian Affairs
the recommendation as compared with the cost before the recommendation was made. In this case no such inquiry was made, I understand. Is that correct?


Thomas Gerow Murphy: Yes.


James Layton Ralston: I want to point out, Mr. Chairman, in connection with this appointment, that assuming one call is made on each Indian in the district during the year from the residences of these two men, it would cost this country, with Dr. Churchill making the calls, in view of his place of residence, S478 a year, whereas with the gentleman now appointed on this recommendation, and as I said before, not an ex-service man, it will cost $957 a year. In other words, there is an increase of nearly $500 in expenses to the department assuming that one call on each Indian is made during the year. That amounts to the statutory increase for the year of nearly seven or eight civil servants, which we found it impossible to give because of the fact that this country was so short of funds. I point out to my hon. friend now that, take it on any basis you like, the increased cost of administering his department in this case is one hundred per cent, if only one visit is made to each Indian during the year. The minister cannot justify this appointment on any ground, and if he has made other appointments on the same basis, one million dollars will be needed.


Thomas Gerow Murphy: The hon. member has stated that if such and such happens, the expenses of this particular service will be increased about one hundred per cent. I submit in all fairness that the hon member has no justification for making that statement. How he can inform the committee that the expenses of this particular service are going to be increased by some eight or nine hundred dollars this year passes my comprehension. I told him in my general answer a few moments ago that in a number of cases, if not in all- and if it has not been done in all cases it will be-instructions have been given by me that these services throughout Canada must not exceed a certain amount based upon the expenses that have been incurred in previous years. I thought in stating that I was giving the hon. member the information he desired. I was not seeking to evade his question at all.


Peter John Veniot: The medical attendance
must be so and so and no more, whether the Indian dies or not.


Thomas Gerow Murphy: No, that is not what I said.


Clarence Joseph Veniot: That is the only inference.


Thomas Gerow Murphy: The hon. member may infer that but that is not what I said.


Peter John Veniot: It is the only inference.


Thomas Gerow Murphy: I submit differently. The service will be provided for these Indians as it has been in the past, but the expenses for the service must not exceed a certain amount per year.


Peter John Veniot: How are you going to regulate it?


James Layton Ralston: I will tell the minister how I arrived at the figure. It is quite simple. There are forty Indians in that county, and twenty-two of them live in the town of Shelburne, where Doctor Churchill lived. They would be called on at S3 a call, on the basis of my hon. friend's charge. Doctor Herbin lives at Lockeport, and a call from Lockeport on an Indian in Shelburne will cost $19, or at the rate of one dollar per mile. That is how the difference is made up. But my hon. friend is so keen to carry out this practice and accept recommendations, that he will displace an ex-service man who has given good service overseas and who has lived in the county all his life, in favour of a man who has lived there only five years and is not an ex-service man; and he will make that change without any inquiry as to the relative cost. In order to complete the comparison I will give my hon. friend a table of costs right straight through for visiting all the Indians living in Shelburne county who will be attended by this doctor.
Here is the return my hon. friend gave. I will give the number of Indians resident in each particular place, and the number of miles from Lockeport, and the number of miles from Shelburne. There are nine Indians at Barrington, thirty-six miles from Shelburne. One call on each Indian from Shelburne would be S324 a year. There are four Indians in Sable River, twenty-two miles from Shelburne. One call on each Indian would be $88 a year. There are twenty-two Indians in Shelburne town. At three dollars a call by Doctor Churchill, who lives in Shelburne, that would be $66 a year, or a total of $478 for Doctor Churchill to call on each Indian in the county once during the year. On the other hand, Doctor Herbin lives at Lockeport, away off from the largest number of Indians, who live at Shelburne. Lockeport is nineteen miles from Shelburne, where there are twenty-two Indians, and at a charge of one dollar per mile, for Doctor Herbin to call on these twenty-two Indians once during the year would cost $418. To call on the four
Supply-Indian Affairs

Indians at Sable River, eleven miles from Lockeport, would cost $44 a year. To call on the nine Indians at Barrington, fifty-five miles from Lockeport, would cost S495 a year, or a total of $957 for Doctor Herbin making one call during the year on each Indian. So I point out to my hon. friend that it is a pretty expensive practice that he has adopted of accepting recommendations from his colleagues or from people whom he considers responsible. Apart from the increased cost of administration I protest most vigorously against the replacement of a man of Doctor Churchill's standing in the community, and an ex-service man, by Doctor Herbin, who has been there a comparatively short time, and for no reason whatever so far as the minister has given any. But we can well imagine what the reason is, and it is costing this country a lot of money to carry out this parctice.


Thomas Gerow Murphy: Again may I point out
to the hon. member that he is basing his statement on figures which he himself has set up.


James Layton Ralston: I beg my hon. friend's
pardon; I am basing my statement on figures in the minister's own return.


Thomas Gerow Murphy: The hon. gentleman will please not interrupt; I did not interrupt him.


James Layton Ralston: I rise to a point of order, Mr. Chairman. It is that my hon. friend cannot make a misstatement of that kind. I am basing my statement on a return brought down by the minister himself.


Thomas Gerow Murphy: I think the hon. member
with his long parliamentary experience knows that he is not stating any point of order, but let that pass. I stated that he was basing his figures on an estimate of his own. While it is true that the department has a certain scale of fees for certain services rendered, nevertheless these doctors have all been advised, or if they have not all yet received the advice they will in the near future, that their accounts for the year must not exceed a certain amount. I may say for the information of the hon. member that a certain doctor was appointed by myself after this government took office, and as the accounts he sent in were too big his attention was drawn to it; still they came in too big, and his services were therefore dispensed with and another doctor was appointed in his place. When the hon. member makes the statement that this change is going to cost some $900 as compared with some $400 for the previous year, he is making a statement that can be substantiated 
only when the returns for the year are in, showing what the services actually cost. When the hon. member makes a definite statement that the costs will be so and so, and that it will cost the country so much more, he is making a statement which, I submit, is unfair. He is basing his statement upon figures before him and not upon accounts rendered.


James Layton Ralston: I am basing my statement upon a return made by the minister. I am pointing out some glaring instances which my hon. friend cannot get over, and which returns this year or next year or any other year will not alter. To call a doctor in the town to treat an Indian in Shelburne, where Doctor Churchill resides, would cost only $3, but to call Doctor Herbin would cost $19. Any information the minister can bring down will not change the figures. The minister says there is some limit placed upon the fees charged by the doctors. What limit was placed upon Doctor Herbin when he took office with regard to his salary or emoluments?


Thomas Gerow Murphy: If the hon. member had
been listening carefully he would have heard my statement that instructions had been sent out to the different doctors throughout Canada-if they have not yet received them, they will-to the effect that their accounts must not exceed a certain amount for the year. I am not at the present time in a position to say whether or not instructions went out to the doctor mentioned by my hon. friend. The figure will be set at such and such an amount, and this country will not have to pay the sum mentioned by my hon. friend, or anything like it.


James Layton Ralston: Will the minister be good enough to tell me, when his estimates are again under consideration, whether a sum has been set for Doctor Herbin's services, and if so when, and the amount?


Thomas Gerow Murphy: I am informed that the
figure has been set at $20 a month.


James Layton Ralston: I wish to put on record
a question I asked and the answer thereto as it appears in Hansard for the present session at page 389:
Is the present incumbent on salary, if so, how much, and if paid on a fee basis what is the scale?
The answer is:
The present incumbent is employed on the "call system" and is paid for services rendered on the basis of the department's schedule of fees quoted in part as follows: Visits-within 3 miles, $3 per call; outside 3 miles, $1 per mile one way, to cover transportation, professional attendance and supply of ordinary

Supply-Indian Affairs
remedies to all patients attended on trip; office consultations, $2 to include supply of ordinary remedies; surgical operations, as detailed in the schedule, etc.
In that answer there is not one word about a limit of any kind or description.
Mr. DONNELLY; It seems utterly ridiculous to limit the amount paid to k doctor each month. Is the government going to prevent the Indians from being sick or if they are sick will the government let them die without calling in a doctor? I did some work for the Indians two years ago, and I had some experience in this practice of cutting down fees. The department did not wish to spend too much. I have been called out to see Indians suffering from pneumonia, and then the Indian agent would tell the person in charge of the patient when I could be called in again. The result was that probably I would never hear from them again, or would be called to write out a death certificate. If the Indians are going to be sick they have to send for a doctor; the government or nobody else can say when they are going to be sick, how often they are going to be sick or how often they may need a doctor.


Peter John Veniot: Oh, this government can.


James J. Donnelly: Oh, can they? The
whole thing seems ridiculous.


Charles-Philippe Beaubien: Can the minister tell
me why the services of Doctor J. B. Cloutier of the Roseau River Indian reserve were dispensed with? Was it for the reason expressed by the hon. member for Antigonish-Guysborough, namely that when a Conservative government takes office all the Grits are thrown out?
Mr. MURPHY; I did not hear the hon. member's question.


Charles-Philippe Beaubien: Why in the month of
January 1931 were the services of Doctor J. B. Cloutier dispensed with?


Thomas Gerow Murphy: I am informed Doctor
Cloutier was paid on the call system.


Charles-Philippe Beaubien: I believe that is correct.


Thomas Gerow Murphy: As I said a minute ago,
wffien I received a recommendation from a colleague or from some one in whom I had confidence that the services should be performed by a certain doctor or individual, I acted on that recommendation. While I have not the particulars before me, I assume that was what was done in reference to Doctor Cloutier.


Charles-Philippe Beaubien: Will the minister tell
me that one of his colleagues in the house from the province of Manitoba has told him that another doctor should replace Doctor Cloutier? Would he show me any correspondence to that effect from one of his colleagues in the government, or from one of the back benchers, in which class the Minister of Agriculture has qualified himself? Did such a man give him a letter, or ask him to dismiss Doctor Cloutier?


Thomas Gerow Murphy: I have stated as clearly as my English would allow that I acted on the recommendation of a colleague, or one in whose judgment I had confidence. I have no letter from a colleague or a member of this house before me to-night in regard to that particular individual. I have confidence, however, in the judgment of a great many men who are not members of this house, and are not my colleagues.


Charles-Philippe Beaubien: I think the minister
would have fewer questions to answer if he did not take the recommendations of his friends who are not in the house, who have no first hand knowledge, and who probably make accusations which cannot be proven. Is it correct that the Indian agent when buying supplies or necessities for the Indians asks different people to give figures, or written tenders?


Thomas Gerow Murphy: Generally speaking that is correct, but in isolated sections there may be only one source of supply.


Charles-Philippe Beaubien: I am not speaking of
isolated sections. It seems that certain merchants in certain towns are on preferred lists. The Indian agents ask those people to tender or to give a figure on supplies needed by the Indians. Can the minister inform me, so I may pass the information on to the merchants in my district, what procedure a man has to take to be on the preferred list?


Jean-François Pouliot: Mr. Chairman-


Charles-Philippe Beaubien: I should like to have
an answer.


Thomas Gerow Murphy: Yes. The agent buys
supplies for the Indians in isolated communities from those w-ho can supply or are close at hand. Certain of the larger supplies, such as bacon, tea and so on, are bought in wholesale quantities. With regard to some particular friends of his who desired to supply goods to the Indians, possibly my hon. friend had better inform them that when he can make representations such as he desires no doubt they will be carried out.
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Charles-Philippe Beaubien: I think the minister will admit that instructions are sent out to the Indian agents to ask certain people to give a price on certain commodities needed for the Indians. Do those instructions come from the minister, or from his deputy, or from a local political organization? I want to get into the ring myself; that is all I am looking for.


Thomas Gerow Murphy: I think the hon. member
has answered his own question, he seems so familiar with a procedure which possibly he has followed himself in the past ten years I fancy that the method that is being followed now is practically the same method as has been followed for the past ten years.


Charles-Philippe Beaubien: For the minister's information, I may saj' that I have been a member of this house since December 26, 1921, and I have yet to ask for the dismissal of one person on political grounds. I hope he will remember that and let the officials in my district alone. No politician has the right to take the bread out of the mouth of any man, whether he be blue or green.


An hon. MEMBER:: Or red.


Charles-Philippe Beaubien: Or red.


James Layton Ralston: Will the minister be good enough to give me the papers in connection with the removal of the Indian doctor at Shelburne? I moved for them some time ago, but they have not yet been brought down.


Thomas Gerow Murphy: I shall be pleased to have them laid on the table as soon as possible.


James Layton Ralston: Including the letter which limits the amount of pay Doctor Herbin is to get.


Thomas Gerow Murphy: I do not think I stated
a letter had been sent to this particular person.


James Layton Ralston: I understand so.


Thomas Gerow Murphy: I stated I was informed
that a sum had been set not to exceed S20 a month, or $240 per year.


James Layton Ralston: The doctor does not know it yet?


Thomas Gerow Murphy: He may.


James Layton Ralston: He will get a rude awakening.


Charles-Philippe Beaubien: Will the minister also
let me have the correspondence in regard to the dismissal of Doctor Cloutier of the Roseau River Indian reserve?


Thomas Gerow Murphy: Any correspondence which can be properly brought down I will certainly have laid on the table.


William Gilbert Weir: How does it
happen that these individual Indians have accounts with the merchants of. the various towns, if supplies are bought under tender by the agent?


Thomas Gerow Murphy: Tenders are asked for by the department when the goods are purchased. If an individual Indian desires to purchase goods from a certain merchant, the agent simply takes upon himself the responsibility to pay the account, if he can obtain sufficient money for the purpose out of the proceeds of the crop.


William Gilbert Weir: I have in mind an Indian purchasing something on his own account, apart from the agent altogether. In that case what portion of the money does he get under his personal control?


Thomas Gerow Murphy: He may purchase his goods wherever he likes, the same as any other individual, provided he has the cash.


William Gilbert Weir: Does he get some from the reserve?


Thomas Gerow Murphy: He gets it either out of the proceeds of his crop, his treaty money, or the interest on his band fund.


Jean-François Pouliot: If an appointment is made by the Civil Service Commission of one of the four candidates for the Cacouna Indian agency, will the minister be ready to accept it at once, or will he postpone its acceptance?


Thomas Gerow Murphy: It will be a matter for
consideration.


Peter John Veniot: On September 5, 1930,
Howard Brothers, supplying Indians, were notified by the superintendent or Indian agent at Fredericton to discontinue doing so. Will the minister let me know at a later date on whose recommendation the Indian agent was so instructed; and if tenders were asked for?


Thomas Gerow Murphy: I shall be pleased to give the hon. member any information I can obtain in regard to the matter.


Edward Joseph Garland: In connection with the question of the purchase of coal on the Blackfoot reserve, I should be glad if the minister can explain to the committee why it is that in the case of fuel supplies for the agency tenders were invited from only two firms-one of them, Mr. William McConnell, not a coal dealer at all, while the other, the

Privilege-Mr. Mackenzie King
Midland Collieries, is a long distance from Gleichen and from the reserve itself-when there are actually in the town no less than three regular coal dealers.


Thomas Gerow Murphy: I have no first hand knowledge as to whether Mr. McConnell is a coal dealer or not, and no doubt the hon. member has fuller information than I have, but I have before me some of his account forms, which are headed; "William McConnell, Coal and Grain, Oils, Greases and Gasoline". This would convey to my mind at least that he is a dealer in coal. The Midland Collieries, I am informed, is one of the largest operators of coal mines in Alberta.


Edward Joseph Garland: Why are special persons only invited to tender? Is that a proper practice to follow?


Thomas Gerow Murphy: It has been the practice in the department, I am informed, for many years.
Progress reported.



PRIVILEGE-MR. MACKENZIE KING

Richard Bedford Bennett: Mr. Speaker, I understand the right hon. leader of the opposition (Mr. Mackenzie King) during the sittings of the committee raised some question as to a report that appeared in this evening's papers. I am bound to say that my attention was directed to this report, and probably about the time the right hon. gentleman was speaking in the committee I was speaking to the chairman, He told me that the committee has not completed its report, that it is still meeting, that no report has been agreed upon, and that no information was given to the press by the chairman or the secretary of the committee. Obviously I have not interviewed the various members of the committee, for reasons that are apparent. I should like to assure the house that the information was not given to the press by either the chairman or the secretary of the committee, and the report is not yet completed.
That is the information I have received since the house met at eight o'clock, and I immediately convey it to the house because I think this house is entitled to receive information with regard to the report of any committee before it is given to the press.
On motion of Mr. Bennett the house adjourned at 11.05 p.m.
Monday, May 9, 1932.