1932-05-16

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

Mr. LAFLECHE:: How many requests, in connection with unemployment works, were refused in the county of Riehmond-Wolfe?


Mr. GORDON:: All requests for unemployment relief work forwarded to the Department of Labour by the provincial authorities of Quebec were approved and duly authorized by the governor in council.
[Mr. Irv.'ne.J


SOLDIERS' PENSION CASES
Mr. FRASER (Northumberland):: 1.	Will the government provide immediate means to expedite hearings of soldiers' pension cases before the pension tribunal and the presentation of appeal cases to the Court of Appeals?
2.	If so, what improvements to the present machinery for dealing with pensions have been or will be immediately put into effect?


Mr. BENNETT:: This question is not in proper form: "Will the government provide," so and so. It is not a proper form of question.


Mr. SPEAKER:: Question No. 23 will be dropped for revision.



QUESTIONS PASSED AS ORDERS FOR RETURNS


Mr. VENIOT:: 1.	What salary was paid to each employee of the fish hatchery in Restigouche county, New Brunswick, for the years from 1925, to December, 1931?
2.	How much was paid to each person for securing salmon spawn during the period above named?
3.	AVhat amount was paid each year for car hire, giving names of persons to whom amounts were paid and amount paid each?


ROYAL CANADIAN MOUNTED POLICE
Mr. LAFLECHE:: 1.	How many are on the force of the Royal Canadian Mounted Police, and what are their names ?
2.	What are the dates of their appointment?
3.	Where do they reside?
4.	What salary is paid to each?
5.	What are the names of those who recommended each of them?


PENITENTIARIES AND PRISONS
Mr. ROBERGE:: 1.	How many prisoners are detained in the Canadian Penitentiaries, prisons or reformatory schools?
2.	How many prisoners are there of eaeh nationality?


MR. ALPHONSE GARON-POLITICAL PARTISANSHIP INQUIRIES
Mr. POULIOT:: 1.	Did Mr. Alphonse Garon preside as commissioner in an inquiry held in connection with Johnny April, postmaster of Gironde, county of Temiscouata, Quebec?
2.	If so, fa) on what date was this inquiry held; (b) how many witnesses were heard; (c) who swore them in; (d) on what date did said Alphonse Garon forward his report to the department; (e) what amount was paid by the department to said Alphonse Garon as fees and expenses in connection with this inquiry?
3.	Was the postmaster above mentioned dismissed on the report of said Alphonse Garon?

Questions as Orders for Returns
4.	Did said Alphonse Garon preside over this inquiry as commissioner previous to being sworn as such?
5.	If so, (a) by virtue of what authority were the witnesses sworn in; (b) did the department request said Alphonse Garon to return his fees and expenses, and order a new inquiry?
1.	Did Mr. Alphonse Garon preside as commissioner over an inquiry held in connection with Joseph Michaud, postmaster of La Riehardiere, county of Temiseouata, Quebec?
2.	If so: (a) on what date was this inquiry held; (b) how many witnesses were heard; (c) who swore them in; (d) on what date did said Alphonse Garon forward his report to the department; (e) what amount was paid by the department to said Alphonse Garon as fees and expenses in connection with this inquiry?
3.	Was the postmaster above mentioned dismissed on the report of said Alphonse Garon ?
4.	Did said Alphonse Garon preside over this inquiry as commissioner previous to being sworn as such?
5.	If so: (a) by virtue of what authority were the witnesses sworn in; (b) did the department request said Alphonse Garon to return his fees and expenses, and order a new inquiry?
1.	Did Mr. Alphonse Garon preside as commissioner over an inquiry held in connection with David Lebel, postmaster of Montagne Ronde, county of Temiseouata, Quebec?
2.	If so: (a) on what date was the inquiry held; (b) how many witnesses were heard; (c) who swore them in; (d) on what date did said Alphonse Garon forward his report to the department; (e) what amount was paid by the department to said Alphonse Garon as fees and expenses in connection with this inquiry?
3.	Was the postmaster above mentioned dismissed on the report of said Alphonse Garon?
4.	Did said Alphonse Garon preside over this inquiry as commissioner previous to being sworn as such?
5.	If so:	(a) by virtue of what authority
were the witnesses sworn in; (b) did the department request said Alphonse Garon to return his fees and expenses, and order a new inquiry?
1.	Did Mr. Alphonse Garon preside as commissioner over an inquiry in connection with Mr. Antoine Landry, postmaster of Notre Dame du Lac, county of Temiseouata, Quebec?
2.	If so: (a) on what date was this inquiry held; (b) how many witnesses were heard; (c) ivho swore them in; (d) on what date did said Alphonse Garon forward his report to the department; (e) w-hat amount was paid by the department to said Alphonse Garon as fees and expenses in connection with this inquiry?
3.	Was the postmaster above mentioned dismissed on the report of said Alphonse Garon ?
4.	Did said Alphonse Garon preside over this inquiry as commissioner previous to being sworn as such?
5.	If so:	la) by virtue of what authority
were the witnesses sworn in; (b) did the department request said Alphonse Garon to return his fees and expenses, and order a new inquiry?
1.	Was Francois Michaud heard as a witness in an inquiry held in connection with political partisanship in which Joseph Michaud, postmaster of La Riehardiere, county of Temis-couata, was the person charged?
2,	Was the said Francois Michaud appointed postmaster to replace Joseph Michaud?
1.	Did Eugene Lepage lodge a complaint against David Lebel, postmaster of Montagne Ronde, county of Temiseouata, Quebec?
2.	Was said Eugene Lepage heard as witness in an inquiry held, in connection with political partisanship in which David Lebel was the person charged?
3.	Was the said Eugene Lepage appointed postmaster to replace said David Lebel?
1.	Did J. T. Yoisine lodge a complaint against Antoine Landry, postmaster of Notre Dame du Lac, county of Temiseouata, Quebec?
2.	Did said J. T. Yoisine bear witness in an inquiry held in connection with political partisanship in which said Antoine Landry was the person charged?
3.	If so, was it on the evidence of said J. T. Voisine that the commissioner based his report against said Antoine Landry?
4.	Was said J. T. Voisine appointed acting postmaster to replace said Antoine Landry?
1.	Did Alexandre Lebel lodge a complaint against Andre Beaulieu, postmaster of Raudot, county of Temiseouata, Quebec?
2.	Was said Alexandre Lebel a witness in the inquiry in connection with political partisanship brought against said Andre Beaulieu?
3.	Was said Alexandre Lebel appointed postmaster to replace said Andre Beaulieu?
4.	Did the Postmaster General receive a petition signed by a number of persons to the effect that only one man, Alexandre Lebel. *wanted to change the site of the post office?
1.	Did Mrs. Emile Ouellet, widow, lodge a complaint against Omer Sirois, then postmaster of Riou, county of Temiseouata, Quebec?
2.	Was said Mrs. Emile Ouellet appointed postmistress to replace said Omer Sirois?
3.	Was she appointed after a regular inquiry?
1.	On what date did Alcide Beaulieu, postmaster of St. Benoit de Packington, county of Temiseouata, Quebec, resign?
2. Who replaced him?
3. On whose	recommendation	was his
successor appointed and on what date?
1.	Was Mrs. Emma Rioux. alias Mrs. Joseph Rioux, widow, heard as a witness in an inquiry held in connection with political partisanship in which Johnny April, postmaster of Gironde, county of Temiseouata, Quebec, was the person charged?
2.	Was said Mrs. Rioux appointed postmistress replacing said Johnny April?
1.	Did Pierre Fortin lodge a complaint against Joseph Morneau, postmaster of Ivry, county of Temiseouata, Quebec?
2.	Was said Pierre Fortin appointed postmaster to replace said Joseph Morneau?
3.	Was he appointed after a regular inquiry was held?

Unopposed Motions for Papers
1.	Did Isidore Ouellet lodge a complaint against Narcisse Ouellet, postmaster of Lamy South, county of Temiseouata, Quebec?
2.	Was said Isidore Ouellet appointed postmaster to replace said Narcisse Ouellet?


Mr. CAHAN:: Some of these questions relate to the Post Office Department, but they involve civil service as well. I would suggest that Questions Nos. 6 to 19, both inclusive, stand as orders for returns.


Mr. MACKENZIE KING:: In regard to Question No. 19, I rather think the Secretary of State included it inadvertently. I suggest that it had better stand.


Charles Hazlitt Cahan: That is so.



UNOPPOSED MOTIONS FOR PAPERS


Mr. POULIOT:: For a copy of all orders in council in eon-uection with aid to farmers, since August 1,


Pierre Édouard Blondin: In the absence of the hon. member for Temiseouata (Mr. Pouliot), this motion will stand.
Motion stands.



ALVENA, SASK., POST OFFICE

Mr. TOTZKE:: For a copy of all correspondence, reports, evidence, petitions, and other documents in connection with the dismissal of George Slusar postmaster at Alvena, Saskatchewan and the appointment of his successor.



UNEMPLOYMENT RELIEF

Mr. VENIOT (for Mr. Ralston):: For a copy of all correspondence, letters, telegrams, and other documents since August 8, 1930, to date, passing between the Department Labour, and any cabinet minister or any official, and the government of Nova Scotia, and any minister or official of that government' or any person or persons, regarding all or any matters affecting or touching upon unemployment relief or other matters in connection with Lonsdale Lantz highway diversion or old Halifax road.



CHARLEVOIX FERRY BOAT SERVICE

Peter John Veniot: For a copy of all correspondence, letters, telegrams,^ petitions and other documents in connection with the contract to be awarded by the Trade and Commerce department, for the ferryboat service between Ile-aux-Coudres and Les Lboulements, in the county of Charlevoix, since the 1st of January, 1932, together with the evidence taken in writing of all the witnesses heard at the hearing held by Mr. F. E. Bawden, of the Trade and Commerce department, at Baie St-Paul, in the month of May, 1932, and his report upon such matter to the minister, and the decision arrived at by the minister.
[Mr. Pouliot.l


Richard Bedford Bennett: I think the universal
practice has been not to bring papers down with respect to matters that are pending and about which decisions must be arrived at by the minister. This is with respect to contracts to be awarded by the Department of Trade and Commerce and involves the consideration of evidence and decision to be arrived at by the minister. The motion might stand until such time as action has been taken, after which the papers can be brought down.


Pierre Édouard Blondin: The objection is well
taken and the question will be dropped.


Richard Bedford Bennett: It can stand; that will
save printing.


Pierre Édouard Blondin: Motion stands.



HUDSON BAY RAILWAY


[Stage Direction]
On the orders of the day:
Mr. W. D. COWAN (Long Lake):: I wish
to ask a question of the Minister of Railways. It is based on an article which appeared in the Journal on Saturday under the following heading:
2,000,000 bushel wheat shipment for north route.
Saskatchewan pool announces Churchill will get big business during the summer.
Did the Minister of Railways receive any official notice of such shipment? If so, did he receive it in time to enable him to make the necessary arrangements? Has he any idea how many cargoes such a shipment would make?


Hon. R. J. MANION (Minister of Railways) :: Due to the item in the press regarding Churchill, I expected that someone would ask as to details and, therefore, I may state that the item mentioned is based on fact.
As I advised the house some weeks ago, the Department of Railways and Canals has been doing everything possible to encourage a proper test during the coming season of the Churchill route, and about ten days ago a representative of a responsible grain company called upon me and made a verbal proposal to send 2,000,000 bushels of grain to the Churchill elevator on condition that the government would not make any charge for elevation or storage. I requested that he put his proposal in writing, which he did, and the matter was then discussed with the department of Trade and Commerce, the Board of Grain Commissioners and the officers of my own denartment. As a result of these

Wheat Pool
discussions a satisfactory agreement has been drawn up between the Department of Railways and Canals and the grain company mentioned permitting the grain company to ship 2,000,000 bushels of grain forthwith to the Churchill elevator, the understanding being that they ship out from that port at least 1,000,000 bushels during the coming season. The grain company undertake also that in the event of other exporters shipping through Churchill they will lend such exporters any reasonable shortage to fill their boats and not charge a premium in excess of one-half cent per bushel for such loan. The borrower, however, must show evidence satisfactory to the Board of Grain Commissioners that he has provided for the full shipment that he is making.
The grain elevator has a 2,000,000 bushel storage capacity and a 500,000 bushel work house capacity. Therefore, even with the elevator storage space completely filled, grain can still be moved through the elevator directly from cars to ships. The permission, therefore, to the grain company mentioned for the use of 2,000,000 bushels storage space does not in any way prevent other shippers from using the port.
In order to prevent congestion of grain at Churchill and at the suggestion of the Board of Grain Commissioners, a permit system, similar to that in effect at Vancouver, will be put on, and grain will be allowed into Churchill only under these permits, as and when vessel tonnage has been provided or storage space available. The railways and the exporters are all familiar with the operation of this permit system, which has now been used for six or seven years in connection with the port of Vancouver.
I am informed that 1,250,000 bushels has been already purchased by the grain company, and a movement to the Churchill elevator will probably begin within the next fortnight. The operation of the Churchill elevator within the next ten days has been arranged for, and I see no reason why this whole movement cannot be made without any trouble whatsoever.
The government has been making every effort to have the insurance rates out of Churchill lowered, and I think that I may safely say that there is likely to be a slight lowering of the insurance rates out of Churchill this season; at least we are very hopeful of this because of certain information which we have received. The fact that the charges for elevation and storage are eliminated, as they were last year, naturally cancels a good deal of the excess insurance, though, of course, 41761-185	[DOT]
it will be understood that the port of Churchill ultimately will have to operate on the same basis as other ports of the dominion.
May I add in conclusion that every effort is being made by my department, and such efforts have been going on continuously, to have the Churchill route given a fairly complete test in every way during the season of 1932.
The hon. member asked about the number of cargoes. I should judge that 2,000,000 bushels would be in the neighbourhood of eight cargoes.



WHEAT POOL


[Stage Direction]
On the orders of the day:
Mr W G. WEIR (Macdonald): I wish to ask a question of the government, based on the remarks of the Prime Minister some days ago, with respect to the guarantees given to the banks on the borrowings of the Canadian wheat pool. The Prime Minister, on March 8, Hansard, page 906, in referring to the assistance given to the western provinces to purchase seed grain, said:
It may interest this house to know that we took steps last year to acquire, through the aid of Mr. McFarland .... sufficient quantities of wheat to take care of that situation at a price which I should say is at least ten cents lower than the rate to-day prevailing.
On March 10, Hansard, page 978, with reference to the order in council passed, agreeing to guarantee the wheat pool accounts to the banks, the Prime Minister interjected:
I think there is no liability at the moment.
The Prime Minister will also recall that a delegation waited on him a year ago in this regard and submitted a memorandum. The question I wish to ask is this: First, has the government in this connection taken into consideration the money, approximately $500,000, that is due to the growers of durum wheat delivered to the pool during the crop year 1930-31? Secondly, is the government in a position to state whether or not it will recommend that this money be paid out to the growers?
Richard Bedford Bennett: Mr. Speaker, the hon. gentleman was
good enough to furnish me with copies of his questions, which are not usual questions to be asked on the orders of the day. The two questions asked can be readily answered. First, the government has nothing whatever to do with the matter, and, second, the government cannot make recommendations about a matter which is none of its business.

Income War Tax Act



WHEAT SHIPMENTS TO RUSSIA

[Stage Direction]
On the orders of the day:
Mr. J. S. WOODSWORTH (Winnipeg North Centre):: Mr. Speaker, could the Minister of Trade and Commerce (Mr. Stevens) give the house any information with regard to the shipments of wheat from Vancouver to Vladivostock? I should like to know if this wheat is being paid for in goods or in gold.


Hon. H. H. STEVENS (Minister of Trade and Commerce):: Mr. Speaker, I have no knowledge as to how this wheat is to be paid for. I simply know that certain grain traders have sold wheat for export to Vladivostock, presumably to replace wheat in the northern section of Russia which had been marketed in excess of what they were warranted in doing. It is my information that this wheat is to be used partly for seed purposes and partly for food. The whole matter is a trade arrangement between private traders and Russian authorities.



INCOME WAR TAX ACT AMENDMENT


[Stage Direction]
Hon. E. N. RHODES (Minister of Finance) moved that the house go into committee to consider the following proposed resolution:
That it is expedient to amend the Income War Tax Act to provide that the members of the judiciary, and the members of the military, naval and air forces of Canada and of the Royal Canadian Mounted Police, other than enlisted men, shall be liable to pay a special income tax of ten per cent upon their salaries received during the fiscal year 1932-33, in addition to any other tax payable under the act.
Richard Bedford Bennett: Mr. Speaker, I explained to the leader of the opposition (Mr. Mackenzie King) that the Minister of Finance (Mr. Rhodes) would proceed with this resolution in order to get it into committee and through first reading, but that full opportunity would be given to the former Minister of Justice (Mr. Lapointe) to discuss the matter at some future date.
Motion agreed to and the house went into committee, Mr. LaVergne in the chair.


William Lyon Mackenzie King: I take it that this resolution is to be read in conjunction with Bill No. 19. Am I right in assuming that the object of the resolution is to provide for some contribution to be made by those who are mentioned to help defray the expenses of government in a manner similar to that being

done by members of the public service from whose salaries a ten per cent deduction is being made.


Mr. RHODES:: My right hon. friend is quite correct. A grave question existed as to whether or not we had the right to deduct from the salaries of the classes mentioned, but, as I understand it, there is no question of our having the right to tax. By this method we are accomplishing that which is being done by Bill No. 19 with respect to other members of the public service.


William Lyon Mackenzie King: Are we to take it that the government has changed its point of view as to the desirability of a contribution being made by those who come within the categories here set forth. As I understood the former discussion the question was not so much one of the legal authority to ask for a contribution from those here enumerated but rather that it was thought that persons belonging to these particular classes should not be called upon to make a contribution.


Edgar Nelson Rhodes: There was a question in the case of the judges as to whether or not this ought to be done. As was intimated on a previous occasion by the Prime Minister (Mr. Bennett), we have received evidence that members of the service and, in certain instances, members of the judiciary wish to make a contribution similar to that being made by other members of the public service.


Mr. HANSON (York-Sunbury):: Will the minister advise the committee just what is meant by the words "in addition to any other tax payable under the act"? I should like to understand the position of those officials who are already contributing to the Income War Tax Act.


Edgar Nelson Rhodes: As will be made clear when the bill is introduced, this resolution provides for a reduction equivalent to the deduction of ten per cent being made in the case of other members of the public service. This tax will be in addition to any amounts paid as income tax, as provided for by the statute already existing.


Richard Burpee Hanson: Some of these individuals already pay a tax and some do not, that is the point.


Edgar Nelson Rhodes: If they do not pay a tax they will not be affected by this provision.


Mr. DUFF:: Mr. Chairman, I think the committee already knows my views with regard to this whole matter. I am opposed to any reduction in the salaries of judges or any other

Income War Tax Act
officials but I do think that if a reduction is to be made it should be made under the provisions of Bill No. 19. The government in its wisdom has seen fit to introduce a special resolution to amend the Income War Tax Act which covers members of the judiciary, the military, naval and air forces, and the Royal Canadian Mounted Police, but, in my opinion, there are other classes which should come under the provisions of this resolution or of Bill No. 19. The first class to which I refer is the lieutenant-governors, which should contribute just the same as the lightkeepers, the judges and members of the Royal Canadian Mounted Police. To use a Scotch expression, there should be no stepbairns in our family. In my opinion, this class should suffer in the interests of the dominion just the same as the judges, the charwomen, the lighthouse keepers or other members of the public service.
If the Minister of Finance (Mr. Rhodes) does not see fit to amend Bill No. 19, I submit that this resolution should also cover those judges who have been retired and who are now receiving pensions. Many of these judges are receiving large pensions and they should suffer a ten per cent reduction during 1932. I tried to look up the figures but was unable to locate them and consequently my information may not be accurate, but I understand one judge is receiving a pension of $12,000 per year, and is still doing business with the law firm with which he is connected. If I remember correctly, other judges are receiving pensions of 89,000 per year and are able to carry on in their legal practices. Other judges are receiving other amounts. Whether the Minister of Finance, in his judgment, thinks this action should be taken under this resolution or under Bill No. 19, every man or woman in this country who is receiving any money from the public treasury should be treated in the same manner; no distinction should be made. I am opposed to the whole principle of the proposal; in my view it is a mistake to make any deductions from salaries of judges, members of parliament, charwomen, lighthouse keepers, or anyone else receiving money from the government, but if the reduction must be made, everyone should be treated alike, and judges who are receiving large pensions should come under this resolution or under Bill No. 19.


Edgar Nelson Rhodes: The hon member for
Antigonish-Guysborough has made his position very clear to-day as he has done on previous occasions; he has left no doubt in our minds as to what is in his with respect to this matter. I must repeat: This is not a salary 4X761-1851
reduction; I must insist respectfully on using the word "deduction." We are asking for a contribution for one year. My hon. friend should not treat this as if we were reducing salaries. While I have no doubt, as always happens in a measure of general application, there will be individual cases of great hardship, on the whole I believe that those who are affected by this resolution, as well as those who come under the provisions of Bill No. 19, are prepared in these very difficult times to join with other elements in the country in making reasonable contributions to the federal treasury.
I must respectfully take issue with my hon. friend when he attempts to place the nine representatives in Canada of His Majesty the King upon the same basis as other civil servants; I think they stand in a class altogether different. While the question may be arguable, I do not think it is a subject upon which we should enlarge, especially under these circumstances and at this time.
With respect to the question which was raised by my hon. friend, let me say this: We have touched no pension and if we attempted to make a deduction from the pensions of judges, we would be discriminating against them rather than discriminating in their favour, as he apparently has in mind we are doing because we have not attempted to make deductions in the case of judges. My hon. friend has instanced the case of one judge who is in receipt of a pension of $12,000 a year, and states that that judge is in addition engaged in private practice. My hon. friend must not attempt to prove a general rule by a single instance. That judge, under the terms upon which he went to the bench, is entitled to that pension; he has a right to it in virtue of the statute provided in that behalf. But I must point out to my hon. friend that that judge who is in receipt of his pension of $12,000 a year makes his contribution as an income tax payer. Unless and until we came to the time in Oanada when we were prepared to reduce pensions, it would be manifestly unjust to single out the judges for adverse treatment in that respect.


William Duff: Just upon that point, not only in the present debate but also in previous ones, the Minister of Finance stated that this was not a reduction in salary; that it was a contribution by the civil servants of this country to get over a situation for which perhaps none of us is to blame. I was always of opinion that a contribution was voluntary; a contribution was never something which was forced from one. If you, sir, want to give
Income War Tax Act

$500 to build a new church in your constituency, you give it voluntarily; but if somebody, for instance the legislature of Quebec or the federal parliament, passes a law compelling you to do that, then I cannot understand how the Minister of Finance can call that a contribution. Surely he does not mean to say that the poor women who come here at five o'clock in the morning and whom I meet returning home every day when I come here at seven o'clock in the morning, are willing contributors to this reduction of ten per cent. In view of the fact that the government has been compelled to introduce this legislation with regard to judges, the Minister of Finance cannot say that the judges are willing to contribute ten per cent of their salaries. Moreover, the Prime Minister has told us-and I hope I am not misquoting him; perhaps I shall say we inferred from his statement- and he cannot take objection to what I am saying-that he was communicating with the judges in an endeavour to get them to agree to this reduction. Surely, when the Minister of Finance now says that this is a contribution he is at least stretching the resolution a little; I shall not say that he is stretching the truth, because my hon. friend would not do that. But I say that it is not a contribution from judges, lighthouse keepers or anyone else.


Mr. COTNAM:: A donation.


William Duff: It was not a contribution so far as the hon. member for North Renfrew was concerned; he was not consulted.


Ira Delbert Cotnam: A donation.


William Duff: If my hon. friend gives a
donation for a church or school or anything else in his constituency, he does that of his own free will. But his leader did not ask him, until after the bill was introduced, whether he was willing to agree to give S400 out of his indemnity.


Walter Davy Cowan: Oh, yes.


William Duff: If we are going to have in this country government by caucus, and if, as my hon. friend says, the Prime Minister consulted his followers, then the least he might have done before introducing the resolution was to have sent word to the Liberal caucus. In spite of the exclamation by the hon. member for Long Lake, I am doubtful whether the Prime Minister, before deciding to reduce indemnities, ever consulted him or any other hon. member on that side of the house.
The Minister of Finance has said that the ex-judges have a right to their pensions. I agree with him, and I agree that pensions

should not be reduced. Have I made that clear enough? I am opposed to a reduction in these pensions; I am opposed to the judges having a reduction in their salaries; I am opposed to my good friend the Minister of National Health getting a reduction of ten per cent in his indemnity or salary. I am also opposed to any man or woman, or even the page boys in the house, having a reduction made in salary without their consent.
The Minister of Finance said that the nine gentlemen who have the honour and distinction of being lieutenant-governors of the provinces are in a class altogether different; they are in a class different from that of the senior member for Halifax, who should have been the lieutenant-governor of Nova Scotia. Why should the lieutenant governor of that province-and I have the greatest respect for him-be in a different position from that of the senior hon. member for Halifax? My hon. friend has to suffer the reduction of $400 in his indemnity in order to assist the country. Why should the lieutenant-governor of Nova Scotia not be in exactly the same position? There is no argument against it. Let us treat all alike, and I again say in the old Scotch words: "Let there be no stepbairns in our family," if we are going to carry out this foolish principle of reducing by ten per cent the salaries of those in this country who are drawing money from the federal treasury.


Mr. LUCAS:: With reference to some of the remarks which the Minister of Finance made a few minutes ago-and I wish to take them at their face value-with regard to this being, not a reduction in salary, but merely a contribution, there is another class of people who might make a substantial contribution at this time and that is those who hold tax free bonds. I realize that they bought them under what they consider a solemn contract, but as the country is at present going through a period of distress, surely it would not be asking too much that those people might also make a contribution of ten per cent at this time. I would ask the Minister of Finance whether he would not consider, not breaking those contracts with those people, but simply asking them for a contribution in order that they may be given the privilege of doing their share in helping to bear the present heavy load.


Edgar Nelson Rhodes: I am sorry, Mr. Chairman, that my hon. friend takes the view at this time of all times, if it were ever justified, that we in Canada should become responsible for a policy of repudiation, for that is what it would mean.

Income War Tax Act


William Thomas Lucas: I did not suggest repudiation in any way.


Edgar Nelson Rhodes: I say that as a matter
of ethics and as a matter of right we ought not to begin to discuss a matter of that kind. But if we put it on the lowest possible basis, that of self-interest, I know of no one thing which, if we attempted to do it, would recoil on our heads to greater disadvantage than that very thing. We might gain for a moment but we would lose in the long run by a very substantial sum. We must do all we can to maintain the credit and the financial integrity of this country, and if we emerge from present conditions with the financial credit and integrity of this country unimpaired we shall have done something wonderful for Canada.


James Shaver Woodsworth: I did not intend to say anything at this stage, but I cannot allow that point of view to go unchallenged-the point of view that there is something absolutely sacrosanct about finance, that we cannot touch it in any way at all, that wealth must be safeguarded and the government must stand behind it. Yet, Mr. Chairman, the lives and welfare of the people of this country are immensely more valuable. I was at a little meeting the other day when one poor woman who was getting relief said that she was allowed only fifty cents a week for the upkeep of a child. She was absolutely without any resources but what came through relief and, as I said, she received only fifty cents a week on which to maintain her child. I cannot face facts like that and then have the Minister of Finance tell us that we must maintain our credit at whatever cost. I tell you that it is too great a cost at which to maintain it when the lives of our children and the welfare of our homes are in the balance. I have said again and again, as far as these bonds are concerned, that during the present times they are worth practically twice what their face value indicates owing to the deflation that has taken place, and yet notwithstanding that, we are told that we must not tax them even ten per cent. I think the people of this country are beginning to realize the rank injustice of this kind of thing and feel that wealth should be willing to suffer as well as the ordinary people of this country.


William Duff: With regard to the salaries of the lieutenant-governors and the pensions of the ex-judges, may I draw the attention of the Minister of Finance to the fact that there is one million dollars which these ex-judges all over the country are receiving in pensions.
There is a place where the minister and the government could save $100,000 by applying the ten per cent cut. My hon. friend was very anxious to try to impress upon the committee that the lieutenant-governors were in a different position from anyone else. Does he know that there is a lieutenant-governor whom he intends at the moment to allow to draw his full salary this year and aiso to draw his pension as an ex-judge? Does my hon. friend think that that is fair in view of the fact that every other civil servant practically has received a reduction of ten per cent in salary? Surely my hon. friend will agree that that is not fair or right. As I say, I am opposed to the whole reduction. I am opposed to you, Mr. Chairman (Mr. LaVergne) being treated as you have been in this reduction. You are losing about twenty per cent altogether. If the Minister of Finance has such a high regard for these lieutenant-governors, and I have too, surely they should be the men to set the rest of us a good example. If poor little me is willing to lose my four hundred dollars, surely the lieutenant-governor and ex-judge to whom I am referring should not accept both his full salary as lieutenant-governor and his full pension as an ex-judge.


Richard Bedford Bennett: You are wrong on that
The minute he takes office as lieutenant-governor he does not get his pension. You should be sure of what you say.


William Duff: I wish my right hon. friend
would be a little more courteous in his interjections.


Richard Bedford Bennett: That is a fair interjection.


William Duff: Why is my right hon. friend
so much worried about the lieutenant-governors and the ex-judges? The information I am giving to the committee I have taken from the estimates themselves. They show that a certain judge is getting his full pension. Why is his name in the estimates if be is not getting his pension? I did not put it in the estimates, and surely my right hon. friend the Prime Minister cannot blame me because this item is in the estimates. He had better blame somebody else instead of interjecting as he did. I will not stand for such treatment, and I tell him so right now.


Edgar Nelson Rhodes: I had not the case in point brought to my attention heretofore, but I have been advised that in the case in question the pension is not being received, but that the pension is placed in the estimates in the event of the possible resignation of the

Income War Tax Act
lieutenant-governor. But let us assume that my hon. friend's statement is correct and that this lieutenant-governor is in receipt of his pension as a retired judge. Under the statute he is entitled to that pension. I must submit that again my hon. friend from Antigonish-Guysborough is attempting to argue from the particular to the general. He cannot have the general policy as to whether we shall or shall not attempt to interfere with the salaries of lieutenant-governors determined by the question whether one particular lieutenant-governor is in a peculiar class. I submit that that is not a proper method of approach.


Mr. SANDERSON:: Perhaps the government are to be commended to a certain extent for making a right-about face on this matter of exemptions from the ten per cent cut. During the debates that took place in committee on this ten per cent cut, it was pointed out by the Prime Minister and the Minister of Justice, and to some extent but not quite so forcibly, by the Minister of National Revenue, that it was impossible to include the judges in the ten per cent cut. I will be fair to the Minister of Justice and say that when he spoke in this house on March 6 last, as reported on page 831 of Hansard, he argued at length that the judiciary should be exempted from any cut in regard to salary, but before he sat down he said that perhaps a tax could be imposed. Apparently, Mr. Chairman, the government led by the right hon. the Prime Minister, were bound and determined a month ago that the judges should be exempt from the ten per cent cut as well as the army and navy officers and the Royal Canadian Mounted Police. But now they make a right-about turn, and they do not do it very gracefully. I see no reason why these positions should not have been included in the bill in the first place, but now the government is bringing them in, not by the front door, not even by the side door, but in a camouflaged way by the back door, by an additional ten per cent income tax. I do not altogether object to that. I stated before in this house, and I state again, that I have always been of the opinion that there should be no exemptions from this ten per cent cut *-judges, army officers, naval officers and Royal Canadian Mounted Police-and I am still of that opinion. The government should never have attempted to make these exemptions. I should like to quote the remarks of the Prime Minister concerning the exemption of officers of the permanent force. Hansard contains his argument as to why those officers should not receive the ten per cent cut in their pay. At this point may I say I am not

particular as to whether it is called a deduction or a tax. Hansard for April 6 of this year, at page 1776, contains the following statement by the right hon. gentleman:
We come to the third of the three classes, the crown, the judiciaries and the forces of the crown. The men who come within this third class are under discipline-they cannot resign even if they so desire. They are not under an ordinary contract, they are enlisted men, and the government contracts that during the term of their enlistment they shall receive a given compensation. It is not a contract in the ordinary sense because the word "enlistment" is used rather than the word "contract." They cannot leave the service without being guilty of desertion and prosecution, and they cannot resign.
Those were the words of the Prime Minister, and with all due respect to him I say he was wrong in his facts in regard to contracts made with officers of the permanent force. I am about to quote from the attestation paper which every officer and man who enlists in the permanent force must sign. Questions appear on this paper to which answers must be given, and an affidavit has to be taken before a justice of the peace or a magistrate. Question No. 17 on this document is as follows:
Are you willing to enlist or reengage under such conditions as to pay and service as may be authorized and laid down from time to time by the governor in council?
The answer to that question must be "Yes," or the applicant would not be taken on the force. I say that in the first place there was no reason why the officers of the permanent force should not have been included in the ten per cent cut. However the Prime Minister and the members of the government are at all times very loath to admit that they have erred in judgment. There is no doubt, however, that they did err in connection with the exemptions they allowed from the cut. Now, in a roundabout way they are introducing legislation to provide an additional ten per cent income tax. I am not familiar with enforcement of the law in connection with this imposed tax, and although I cannot make a definite statement, I think I can see where a good deal of litigation may arise from the imposition of the additional ten per cent income tax on salaries of judges, army officers and members of the Royal Canadian Mounted Police.
I do not know whether the Minister of Justice and his law officers have seen daylight enough to know that the proposed cut is legal. There is no doubt however that the proposed legislation is by no means direct, and may turn out to be a great expense to the government and the country. There was

Income War Tax Act
never any satisfactory argument advanced by the government in regard to the exemption. Not one government follower, with the exception of three or four members of the cabinet, got up and defended the ten per cent cut, so far as exemptions were concerned. Hon. members across the floor say they were consulted in regard to the ten per cent reduction in indemnities. I do not agree with the hon. member for Antigonish-Guysborough in regard to the ten per cent cut in the salaries of civil servants, or the indemnities of members of the House of Commons and the Senate. I think, perhaps, owing to conditions throughout the country the cut was necessary. I do say however that once this government attempted class legislation and the exemption of certain classes auch as judges, army officers and Royal Canadian Mounted Police they were playing a very dangerous game. This is no time for class legislation; there should have been no exemptions in the first place. Now, with no grace and not admitting that they erred in judgment, the government brings in the legislation which is before us.
To the Minister of Finance I pay the tribute that I never heard him defend the exemptions. He listened carefully to the remarks made by hon. members on this side of the house, and did not attempt to defend the government's attitude. On the other hand, the Minister of Justice attempted a defence, and at all times the Prime Minister on a high and mighty plane said that we must leave these gentlemen alone, and that their salaries must not be cut. Now, however, we find that legislation is brought in for an extra ten per cent income tax. The legislation we had before us earlier in the session was hasty, and discriminated in favour of certain classes. That is a bad thing for any government and any country.


Mr. GUTHRIE:: Mr. Chairman, as I have
been invited to make a statement in regard to one aspect of the measure, perhaps I should do it now. The hon. member for South Perth need not be at all alarmed as to any situation which may arise from the passage of the measure before us. On behalf of the officers of the Royal Canadian Mounted Police and I think also the officers of the militia and the navy, I am glad to say they have agreed to this measure. On their part there has been no inclination to escape their share of the burden to be borne under the proposed reduction of salaries. I am free to say there is not that uniformity of opinion among the judges, but a great many of them have expressed the view that judges should not be
exempted, and that they should bear their portion of the burden.
There is a great distinction between a measure to reduce salaries and the present proposal to increase taxation by ten per cent in an effort to equalize the situation. On a former occasion I stated that in my view to reduce the salaries of judges would not be a proper procedure. I still hold that view. On the other hand I believe this parliament has the power to tax the salaries of judges, if it determines so to do. The measure now before us is merely to impose upon the salaries of army officers, naval officers, mounted police officers and judges a tax-not a reduction-but a tax which will equalize the situation as between them and other seivants and officials of the government of Canada. I anticipate no difficulty whatever in working out the proposal as outlined in this resolution. So far as I can see the measure will produce no hardships, beyond those which would be felt in the ordinary course of events by the ten per cent reduction. I think the committee may be assured that the equalization sought will result satisfactorily.


Mr. MacINNIS:: Mr. Chairman, I should
like to ask the minister who are specifically excluded by the words, "other than enlisted men"?


Edgar Nelson Rhodes: The tax applies to all the officers who hold commissions.


Mr. BROWN:: I do not propose to offer
any opposition to this resolution or to the bill to be based upon it, but a principle has been introduced that I think would be a far more interesting subject of discussion for the keen-minded lawyers of this house-the principle involved when a special group of people are singled out for a special tax. I think the government might as well have accepted the situation in the first bill and brought these classes under the ten per cent deduction, as now to single them out for a special tax. I should like to hear this principle defended by our legal friends.


Mr. NEILL:: I endorse the remarks of the hon. member for Antigonish-Guysborough (Mr. Duff) as to lieutenant-governors, but with that exception I do not agree with him. I think the suggestion put forward by the minister in charge of this bill that the lieutenant-governors should not be asked to pay this ten per cent tax because they are direct representatives of the king is inappropriate. Were they paid out of the imperial treasury that
Income War Tax Act

argument might obtain, but as it is we in. Canada who pay the salaries, I do not see why it would not be in order for us to make this deduction. It would be in keeping with their own wishes, I should think, as they are nearly all wealthy men, and as there are very few of them their wishes might have been ascertained. They are almost the only people in Canada who enjoy the privilege of being exempted from income tax.


Some hon. MEMBERS:: No.


Alan Webster Neill: In British Columbia they are exempt.


Richard Bedford Bennett: That is a provincial tax.


Alan Webster Neill: We will limit it only to the provinces then. It is admitted that only men of wealth can take those positions, and consequently exemption from income tax is a very substantial addition to their salaries. Having received that discrimination in their favour, I do not see why they should object to being put on the same plane as others. I think they should like to be treated the same as anyone else-I will go that far.
To come to this particular resolution, I think the minister did not quite catch the remark of the hon. member for Vancouver South (Mr. Maclnnis). I think he wanted to know what was involved by the words "enlisted men"; who were exempted. Of course, those of us who have been in the army know that these words cover not only privates but all non-commissioned officers. Before I proceed, will the minister tell me why he exempted these enlisted men from this provision?


Edgar Nelson Rhodes: The enlisted men are in a different position from the officers. They sign up for a specific time at a stated rate of pay, which is small, and they are not competent to resign.


Alan Webster Neill: As the hon. member for South Perth (Mr. Sanderson) has stated, the claim that the men enlisted for a specific rate of pay during the currency of their enlistment- which I would certainly agree to being good law is no longer tenable, because, as he stated, there is a question on the attestation paper, number 17, by which they specifically agree to enlist for such pay and allowance as may be authorized and allowed from time to time.
I am advised that that was put in some six or seven years ago to meet just such a case as we have before us; and as enlistments are for only a three-year period, all enlisted men now in the service must have subscribed to 
that question number 17. Therefore by the terms of their enlistment they agreed to take such pay as was then current or might afterwards be arranged. They cannot resign, it is true, but a.t the end of every three years they have the opportunity of not reenlisting, and at any time they can buy themselves out for a moderate sum. I know that, because I did it myself. I am not objecting to these enlisted men being exempted because of the amount of their pay, which, as the minister says is not large. I am objecting to their being exempted because they are soldiers or enlisted men. It is an unsound principle. If he said, as he should say, in Bill No. 19, that all below a certain salary shall be exempt, I would be heartily with him. Let me compare two classes of men. I am not going into details unless they are asked for, but I have them here. I have worked it out that ordinary married soldiers get by way of pay and allowances well over $100 a month-as a matter of fact Sill, but I may have overstated some of the allowances. In addition, they have the chance of promotion, which is very considerable, for the first step up means an increase in pay of something like 25 per cent and then it goes rapidly on from there. They also have the prospect of a pension to which they are not asked to contribute. That is a substantial increment. Compare the position of those men with that of a class that come more home to myself, the men who are working on government lighthouse tenders, government patrol boats, and lifeboats. They get $90 a month, from which is deducted ten per cent, leaving $81. Let me take a married man in this case also. A man working on one of these boats has to keep his wife and family on shore, so that he has to maintain a house and pay rent, and of course provide food and medical attendance for his wife. He gets no pension, and the prospect of promotion is so very small that it is negligible. He is taxed ten per cent, while any of these enlisted men, with these considerable advantages over this man, get well over $100 a month and are not taxed.
To illustrate my argument. Under section 5 of the bill the government have realized that it is not quite fair to tax the lowest paid employees ten per cent, and they have provided that as to those getting less than $1,200 a year, their contribution of five per cent under the superannuation act shall be paid by the government out of the consolidated revenue fund. So the government recognize that there is something that calls for help when men get less than $1,200 a year-a salary that one might describe as being wholly needful to

Income War Tax Act
provide necessities rather than luxuries. This paying of their superannuation fees for them, works out just the same as if those getting $1,200 and under were not subject to more than a five per cent deduction in their salaries. Why, instead of putting in that complicated machinery the government has not said that those people getting $1,200 and less would be taxed only five per cent, I do not know, but that would be only fair and just. As a matter of fact, I would make the lower salaries totally exempt. But it is unjust, it is unfair, it is illogical that men on the boats, who are not eligible to pay to the superannuation fund and who get this miserable $90 a month, $25 of which goes to their mess, leaving them only $65 to maintain their families, should be subject to a deduction of ten per cent, while those men getting not more than $1,200 a year who happen to pay superannuation get off with a deduction of five per cent. If the soldiers come under the $1,200 category, and as they do not pay to the superannuation fund, then by all means exempt them only five per cent. Or better still, put them all on the same basis, and simply say: If a civil servant is getting less than $1,200 he will be subject to a deduction of only five per cent. Then there could be no complaint. As it is, I do not think it is right that these enlisted men who are secure in their positions, which are well paid as such positions go, and who have the prospect of promotion and the certainty of pension, should be exempt while men who are receiving less money and less in the way of privileges should have to pay ten per cent, as in the cases I have mentioned. Of course, this particular clause in Bill No. 19 has not yet come before us, and I can onfy hope that the government will see its way to amend it as I have indicated. Hon. ministers opposite, however, heard all the arguments that were made when the resolution was in committee and they have brought in the bill as it stands, so that it does not look as if they intend to change it. I submit that it is not fair; it is not just nor equitable as between these two classes I have mentioned, the soldier and the other man on the boats- men who have greater responsibilities and less privilege and who are taxed ten per cent.


Edgar Nelson Rhodes: I do not propose to enter
into a discussion with my hon. friend as to whether we should or should not change our point of view with respect to enlisted men. I would point out to him, however, that this particular provision of Bill No. 19 is not properly before us, and I do not wish him to think me discourteous in not referring to it.
The hon. gentleman has a wrong conception of what we are attempting to do. He has the idea that we are using a roundabout and circuitous method of making the reduction of ten per cent and then paying five per cent towards superannuation.


Alan Webster Neill: To a few.


Edgar Nelson Rhodes: He says that we should
have made a five per cent reduction in those cases. I will give him a practical illustration of how that would work out as between the man who gets superannuation and the man who does not. Take the man with a salary of $1,000; he has no superannuation. If we made , a deduction of ten per cent he would get $900, and then if he had to pay five per cent superannuation that would mean that he would pay $50 more, so that he would be receiving $850 for this year; whereas the man not in receipt of superannuation who had a reduction of ten per cent would receive $900, and not having to pay five per cent he would be actually in receipt of $50 more than the other.


Alan Webster Neill: But the other man gets value for it.


Edgar Nelson Rhodes: Oh yes; I expected the
hon. gentleman to reply at once, "Yes, but the other man has superannuation." That is quite true; but that will not buy him bread and butter this year. That is the point.


Mr. YOUNG:: I support the hon. member
for Comox-Alberni. I have letters from country postmasters who are receiving salaries of $10, $20, $30 and $40 a month, and they are subject to the ten per cent cut, while the man who receives $1,200 is subject to five per cent. But there is another matter to which I wish to call attention. This morning I received a letter from a postmaster who tells me that he gets a salary and allowance for rent, the two together amounting to $28 a month, and he has the ten per cent cut on both salary and rent. Is it the intention to apply the act in that way, or is this a clerical error?


Edgar Nelson Rhodes: I respectfully suggest to
my hon. friend that it might be better to ask that question when we are considering Bill No. 19.


Edward James Young: All right.


Edgar Nelson Rhodes: There is, in the bill which we have not yet reached, provision covering the point raised by the hon. gentleman. I
Income War Tax Act

should appreciate it and it would be far better if the committee would consider the two separately.


Mr. SPEAKMAN:: I am glad to hear that
because I have received letters too-


Mr. CHEVRIER:: Mr. Chairman-


The CHAIRMAN:: The hon. member for
Ottawa has the floor.


Edgar-Rodolphe-Eugène Chevrier: I do not intend to discuss this point at present, because I think the attitude of the minister is right-that the question of superannuation and retirement should stand until we reach Bill No. 19. But since the minister has answered or endeavoured to answer the hon. member for Comox-Alberni, may I put it this way. What is the difference between an employee who pays to the superannuation fund and whose salary is $1,200 and the employee who pays to the retirement fund and whose salary is $1,200? In the one case he is exempted to the extent of five per cent and in the other he is not.


Edgar Nelson Rhodes: The hon. gentleman has
himself suggested that the proper time to deal with that question is when we are considering Bill No. 19. I shall be happy to discuss the point then.


Alan Webster Neill: The minister has not told me why he is exempting the enlisted men.


Edgar Nelson Rhodes: I have nothing to add to what I said on the previous occasion.
Resolution reported, read the second time and concurred in. Mr. Rhodes thereupon moved for leave to introduce Bill No. 92, to amend the Income War Tax Act.
Motion agreed to and bill read the first time.


Edgar Nelson Rhodes: If it would suit the purposes of the house I would move that the bill be read the second time and that we go into committee, so that we might advance it that stage. I would then move immediately that we report progress. It can be done only by unanimous consent.


Some hon. MEMBERS:: Carried.


[Stage Direction]
Motion agreed to, bill read the second time, and the house went into committee thereon, Mr. LaVergne in the chair.
Progress reported.


[Stage Direction]
The house resumed from Wednesday, April 6, consideration in committee of Bill No. 19, to provide for the deduction of compensation in the public service^-Mr. Rhodes-Mr. LaVergne in the chair.
On section 2-Definitions.
William Lyon Mackenzie King: Mr. Chairman, what is the necessity of dealing with this bill? As I understand it, the government has made a deduction from the salaries of the members of the public service for the last two months; the government seems to have had authority to do that, so what is the necessity for putting through a bill? If the government could make the desired deductions for two months, it could surely do so for twelve.


Edgar Nelson Rhodes: My right hon. friend submitted a question on a previous occasion which involved the same objection.


William Lyon Mackenzie King: Only one month was affected at that time.


Edgar Nelson Rhodes: I can only repeat the
reply which I made on that occasion, that inasmuch as the house by adopting the second reading of the bill had given effect to the principle, we felt that rather than cause inconvenience to members of the civil service by not giving cognizance to the provisions of this bill, it would be better to anticipate the power conferred by final passing of the bill.


Armand Renaud La Vergne: Shall the section carry?


Mr. GARDINER:: Upon the last occasion when this bill was before the committee, I moved an amendment to this section, and with the consent of the committee I should like to withdraw that amendment.


Mr. VALLANCE:: I think the committee
should know just what this amendment was.


Armand Renaud La Vergne: The amendment read:
That clause (b), section 2, be amended by striking out the words "other than" in the 18th line and also by striking out the words "and includes" in the 23rd line and by inserting the words "and includes" after the word "Canada" in the 18th line.
Amendment withdrawn.


[Stage Direction]
Section agreed to.

Public Service-Salary Deduction
On section 3-Ten per cent deduction.
John Livingstone Brown: I should like to revert to
the question asked by the hon. member for Weyburn (Mr. Young) when we were discussing the other bill. I have a particular case in mind of an employee receiving 81,920 salary as well as being provided with a house in which to live. Another employee, doing the same work, receives $1,920 in salary and S300 as a living allowance. Will the ten per cent reduction apply to the 8300 living allowance?


Edgar Nelson Rhodes: The question would have
to be determined as to whether or not that? allowance is regarded as part of the salary paid. If it was decided that it was, then the allowance would be taxed. There are other cases where the allowances have not been so regarded, and those would not be taxable. There are also cases which might be termed borderline cases, and if the hon. gentleman will look at section 6 he will see that provision is made for the treasury board to deal with just such cases. As a member of that board, I can assure my hon. friend that it will be our endeavour to deal sympathetically with these cases and to avoid as many cases of injustice as is possible.


John Livingstone Brown: I am giving the details of a particular case.


Edgar Nelson Rhodes: The only answer which I can give to my hon. friend is the answer which I have given, namely, the decision must be made as to whether the allowance is or is not regarded as a portion of the salary.


Edward James Young: In the case which I outlined a moment ago, will it be necessary to make an application to the treasury board for a decision?


Edgar Nelson Rhodes: If that particular case comes within the classification where rents have been regarded as a portion of the compensation paid to the postmasters, then the amounts allowed for rent would be subject to deduction. The treasury board will act on those borderline cases where it is not clear as to whether or not the additional compensation is a portion of the salary.


Edward James Young: The treasury board will act only when an application is made for a decision.


Edgar Nelson Rhodes: The treasury board would
act in individual cases where it was apparent hardships would accrue.


Peter John Veniot: When attention had been drawn to the particular case.


John Livingstone Brown: The case I have in mind is in the Department of Agriculture, so I assume the man involved would report to the minister?


Edgar Nelson Rhodes: Quite so. I think the committee will appreciate that there will be a general principle applicable to a considerable number of eases, and that being so those cases will be brought within that principle. There will be individual cases which will not come within any one group or class, and those will be dealt with on their merits.


Alan Webster Neill: Surely the minister can give a decision now to such an obvious question as that asked by the hon. member for Weyburn (Mr. Young)? The hon. member states that individual postmasters are being asked to pay ten per cent on the amounts paid for rentals of buildings.


Edgar Nelson Rhodes: I do not think I can change my answer. The whole question will be as to whether or not such rentals have hitherto been regarded by the department as forming a portion of the salaries paid to the individuals in question. I would have to have the individual cases before me to find out what treatment had been meted out in that regard.


Edward James Young: If it is salary, why is it called rent?


Edgar Nelson Rhodes: There are numerous cases where allowances are made, which allowances are regarded as a portion of the compensation paid.


Peter John Veniot: All applications for the position of caretaker of a public building state that free housing and free light are provided as well as the salary.


Edgar Nelson Rhodes: In numerous cases the allowances paid are regarded as a portion of the compensation.


Peter John Veniot: Yes.


Mr. BEAUBIEN:: During the debate on the address in reply' to the speech from the throne the Prime Minister (Mr. Bennett) read a letter which he had received from a lady civil servant stating how willing she was to accept this deduction. I should like to read a letter which I received from a postmistress of a small post office,-I will not give the lady's name- and ask the minister to give consideration to such classes. The letter reads:
My salary is only $16.58 per month and now the ten per cent taken will leave it at $14.92.
In these small communities, postmasters are really getting very little revenue while they are rendering a great service to the public,

Public Service-Salary Deduction
because, after all, a post office in a small district renders valuable service, and these postmasters or postmistresses are accustomed, in order to accommodate the public, to give out mail at all hours. In many cases they are women who have no other means of support; I know of several of that class in my constituency. Surely the government does not think it fair and is not going to take the ten per cent from that class. I do not want to delay the measure, but I would ask the Minister of Finance, before this bill goes through, to give further consideration to those people. I know there are difficulties in connection with the deduction in the rent allowance, but I think the whole question should be considered and those people who are drawing very small remuneration for the service they are rendering should be exempt from any reduction.


Alfred Speakman: I want, just for a
moment, to refer to the question of rental allowances. My reason for doing so is that so many hundreds come under this provision and the department should make a definite ruling covering all those people and not leave the question to one of individual cases. I have received many communications, not only from individual postmasters, but from officials of the provincial bodies, and their complaint is a very real one, because they already have had the deduction made in their remuneration, which falls under three different classes: the salaries which they receive; the rental allowance which is paid to them, and certain allowances out of which they pay for heating, lighting and assistance, all of which are subject to the ten per cent reduction. Some of them own their own quarters for which they receive rental allowances, but many of them are renting buildings for post office purposes, paying the rent and then being in receipt of a rental allowance to cover the amount in lieu of the government providing the necessary accommodation. They have already had the deduction made in the rental allowance, while they have not been able to obtain a reduction in the rent they have to pay; they are paying the same rent as before which in some cases equals and in many cases exceeds the amount they formerly received in the way of rental allowances. They are unable to reduce the cost of maintenance and upkeep, heating, lighting and the paying for assistance, but the ten per cent reduction has taken place in the allowance given to them for those purposes. I have examined into the matter with some care in some twenty or twenty-five cases and I have found the actual reduction 
amounts to over 20 per cent upon their salaries, because the reduction applies to the rental allowance, where they still had to pay the same rent, furnishing the other ten per cent out of their own pocket, out of their salary, and it applies to the heating, lighting, assistance and other things, the cost of which was not reduced in any way and where again they had to make up the difference out of their salary. The actual result, which I am sure was not the intention of the government, was, as I say, that the reduction in their salary amounted on the average to over 20 per cent.
' As hundreds come under that class it is obvious that they should not be dealt with as individual cases, and after individual application on the part of those postmasters, but that the whole situation should be examined into and a definite rule laid down in respect of rental allowance, allowances made for maintenance and upkeep of building and for the provision of the assistance which is necessary. At the same time I may point out that they have already had those deductions made; they have already received their cheques minus that amount and they are complaining with, I think, some justice. A great deal of discrimination is involved. Let us take the case of the men who are working in a government-owned building. They receive no rent allowance; they pay no rent and of course they suffer no ten per cent reduction in that regard. Therefore there is a discrimination in their favour as against those who are renting a building owned by someone else or those who own their own building. There are these three classes, and the government might lay down a general rule in respect of each of them.


Alan Webster Neill: Now.


Alfred Speakman: Yes. As the reduction has been made, where it has been made improperly, it should be reimbursed. If a definite ruling is made covering those three general classes, the minister will find that the number of individual cases to be dealt with as such will be very materially reduced, as there are many hundreds who would come under that ruling. It is obvious that so far there has been a great degree of unfairness.


Edgar Nelson Rhodes: If my hon. friend will look at clause 6, as I have no doubt he has done, he will see by paragraph (b) the following provision that the treasury board may make regulations:
(b) determining in any ease of doubt the amount to be treated as the amount of compensation of any member of the public service of Canada for the purposes of this act.

Public Service-Salary Deduction
While I cannot speak for the treasury board,
I would have no hesitancy in announcing now that in the cases of those postmasters who are given a rental allowance which involves their renting premises, that rental allowance would not be subject to deduction.


Alfred Speakman: It has been so far.


Edgar Nelson Rhodes: If it has been, I am prepared to give an undertaking now that when the regulations are laid down by the treasury board, there will be a rebate in those cases. Furthermore, in devising these regulations, we shall do so to the best of our ability in an endeavour to see that no injustice arises and even where the rent allowance has been made in the case of premises which are owned and occupied by the postmasters themselves, we shall try to have a just regard for the equities of the situation. In the absence of regulations, because of course they cannot be laid down until the bill is passed, I cannot go further than that, but I hope I have made myself sufficiently clear.


Alan Webster Neill: Hear! hear!


Alfred Speakman: I am well pleased with the minister's statement and I have no doubt the people concerned will be equally so. I brought the matter up now in reference to paragraph (b) of clause 6 simply from this point of view; it would seem under clause 6 it was the intention to consider individual cases and I was merely suggesting that that was not necessary. There are many of these cases that can be covered by definite regulations which would deal with a whole class, thus rendering it unnecessary to treat them individually. I am glad to receive the minister's assurance.


John Vallance: When I rose at the
same time as the hon. member for Red Deer, I desired to ask the same question of the minister. I also have received very extended communications from the Postmasters' Association, I suppose because of the fact that they appeared before the civil service committee. I have had interviews with their representatives and considerable correspondence since on this very question, and I can assure the minister that they will read his statement with a great deal of pleasure.


Peter John Veniot: May I take a few moments of the time of the committee to deal with this question of rentals? So far as the post office is concerned, judging from the experience that I have had as the head of that department for a number of years, considerable complications arise in the matter of the rental allowed. For instance, there is the rental allowance paid to the postmaster, and based on revenue, where the post office is stationed in his own residence. Then there is the more important post office in the rural districts where the postmaster is allowed a certain allowance for a building outside when his own building is not a suitable place for the post office and where the allowance does not come up to the amount asked by the owner of the building. In such a case his allowance is supplemented by a vote from the Department of Public Works. What are you going to do in a case of that kind? Here you have an allowance to the postmaster based on the revenue from his office, and under the law and the regulations the Post Office Department cannot increase that allowance because it is based on revenue, but the Department of Public Works supplements that allowance with, say $50 annually. What are you going to do in such a case? My suggestion to the minister would be not to have the ten per cent deduction apply to any rental allowance except where, under the Civil Service Act, it is stated in the advertisement when vacancies are advertised that the allowance is to be taken as part of the salary. If that principle was adopted of not touching these rental allowances at all, I think that the minister would find that the deduction would be applied in a more equitable manner.
While I am on my feet, might I draw the attention of the minister to this other matter? In the Post Office Department there is what is called a forwarding allowance. That is to say, in a certain number of districts the mail from outside comes to a central office, and there it is re-sorted and distributed to the outlying small post offices, and the postmaster is allowed what is known as a forwarding allowance, which, of course, adds to his remuneration. I would suggest that the minister when dealing with the rental allowance might also deal with the forwarding allowance, and not have the ten per cent deduction apply to the forwarding allowance. These matters I think could be covered by the regulations. If the minister would make a note of this matter, it might be dealt with by the treasury board as they deem best.
The last time this bill was up I mentioned the case of those who are receiving their maximum salary for the class in which they are working, and who would be receiving a bonus of five per cent, if I might use that term, because the government is absorbing five per cent of the amount they contribute
2950	COMMONS
Public Service-Salary Deduction
to the superannuation fund. But there is also the ease of those who have not reached their maximum, and who are reduced ten per cent and are also deprived of their statutory allowance for the year 1932-33. I think it would be unjust if they were not given something corresponding to the bonus received by those who have reached their maximum allowance. I would like the minister to take that into consideration. It applies, of course, to the whole service throughout the country, especially the inside service.
There is another question. I brought it up when the bill was up before and perhaps the minister would tell me something about it or it if will be taken into consideration. I refer to those who are contributing to the retirement fund, comprising about 550 or 575, instead of to the superannuation fund. They do not get the benefit of this bonus which those who are contributing to the superannuation fund get! As I understand it, and I think I am right, those who contribute to the retirement fund pay in five per cent of their salary and the government contributes nothing, whereas those contributing to the superannuation fund pay in five per cent of their salary and the government adds whatever is necessary to maintain the superannuation fund. The minister will see the discrimination between the two classes, that a bonus of five per cent is granted in the case of those contributing to the superannuation fund and nothing in the case of those contributing to the retirement fund. I leave those suggestions with the minister because I do not wish to delay the passage of the bill.


Edgar Nelson Rhodes: I am grateful to my hon. friend from Gloucester not only for what he has said but for the reasonable manner in which he has said it. To answer his last suggestion first, there would appear to be an injustice between those who pay into the retirement as compared with those who pay into the superannuation .fund, although it is perhaps not quite so great as would appear at first blush, because in the case of the man who pays into the retirement fund he gets back that money as a matter of right, plus interest, whereas in the case of the man who pays into the superannuation fund, for the first ten years he pays in and does not get it back as a matter of right, and when he does get it back, he does not get it plus interest. Nevertheless, I have given very serious consideration to this matter and rather than have it appear that there is any injustice I may say to my hon. friend that I have already prepared and have under my hand an amendment which I propose to move at a later stage, when we 
come to the section in question, which will bring to those who pay into the retirement fund the same benefits as are provided in the bill for those who pay into the superannuation fund.
With respect to the other point raised by my hon. friend, as to the salary being paid by the Post Office Department and the rental allowance by the Public Works department-


Peter John Veniot: Supplemented by the Public Works department.


Edgar Nelson Rhodes: Quite so. I do not anticipate any difficulty because of the fact that there are two different departments contributing, as it were, to the remuneration of one individual because the regulations will be applicable to all departments of government, and will be so arranged I think as to take care of the case raised by my hon. friend.


Peter John Veniot: What I am afraid of is that the ten per cent deduction might also be applied to the fifty dollars, or whatever it may be, which the Department of Public Works pays as a supplementary allowance, and I want to avoid that.


Edgar Nelson Rhodes: I understand my hon. friend's point, and I think it might well be considered when the regulations are laid down.


Mr. CARMICHAEL:: Mr. Chairman, I
presume when regulations are laid down almost any case in doubt can be dealt with. Clause (2) of section 3 of the bill is as follows:
The deduction at the rate aforesaid shall be made from the instalments of compensation as the same become payable.
The first subsection states that the deductions are to be made during the fiscal year ending March 31, 1933. I was not opposed to the ten per cent deduction; I favoured it, and was opposed to any exemptions. The question arises in my mind, however, that if we operate strictly within the inteipreta-tion of the language in the section the deductions can be made only within the prescribed time of one year on such amounts as are paid out during that year. Members of the House of Commons received foi the months of February, March and April the sum of $1,740, without any deduction. The amount received for two of those months namely SI,140 would not be subject to a deduction, because the payments fall previous to the time specified in this bill. I realize that the objection can be overcome by regulations, and that a lump sum of $400 could be deducted at the end of the session. I doubt very much however if that is complying strictly with the language of the bill.

Public Service-Salary Deduction
However that is not my chief point. It is quite likely that the 1933 session will commence and some payments will be made within the prescribed time of the one year's reduction. There has been some talk, in fact, that there may be a fall session. If such be the case and there should be payments made in October, November or December, and then again in January, February and March would such payments coming under the 1933 sessional indemnity be subject to the ten per cent deduction as outlined in this bill?


Edgar Nelson Rhodes: I am pleased the hon.
member for Kindersley has raised the question which I believe was considered previously in committee. The indemnities to the members of the House of Commons and the Senate are in an entirely different position from salaries to other persons. It is true that we can draw at the rate of $20 per day during the session, but if the session extends a period of fifty days, under statute the indemnity for that session is $4,000. It was our intention that the deduction should be made upon the indemnity for this session and this session only. That is to say, we intend that the members of the House of Commons and the Senate shall receive the sums of $3,600 by way of indemnity for this one session, and no more. I have before me an amendment which I will ask the Minister of National Revenue to move, and I believe it will clear the point beyond question. The amendment is as follows:
That section 3 be amended by adding the following as subsection (3): Notwithstanding the provisions of subsections (1) and (2) of this section the said deduction from the indemnity of members of the Senate and the House of Commons of Canada shall apply to such indemnity only for the session of parliament which commenced on the fourth day of February, one thousand nine hundred and thirty-two.
That would seem to answer the question of my hon. friend as to what might happen in the event of a fall session.


Mr. RYCKMAN:: I move accordingly.


Alan Webster Neill: I have an amendment to
section 2, and I do not know whether it should come before the one moved by the minister.


Armand Renaud La Vergne: Mr. Ryckman moves:
That section 3 of Bill No. 19 intituled "An act to provide for the reduction of compensation in the public service" be amended by adding the following as subsection (3):
(3) Notwithstanding the provisions of subsections (1) and (2) of this section the said deduction from the indemnity of members of the Senate and the House of Commons of
Canada shall apply to such indemnity only for the session of parliament which commenced on the fourth day of February, one thousand nine hundred and thirty-two.


Mr. STEWART (Edmonton):: Is not the
duration of the legislation fixed in the bill?
I understand it is to expire on March 31, 1933?


Edgar Nelson Rhodes: Yes.


Charles A. Stewart: Until the
minister proposed the amendment it never occurred to me but^that the legislation would apply to senators and members of the House of Commons as well as to civil servants. Would the fact that the session might be convened before the date of the expiry of the act have any effect upon sessional indemnity?


Edgar Nelson Rhodes: No; if this amendment
carries it would mean that unless there was fresh legislation there could be no deduction from the indemnities of members of the Senate and the House of Commons at subsequent sessions.


William Duff: If I read the amendment
correctly it means that $400 will be deducted for the present session from the sessional indemnity of members of parliament. I contend that that is not right. In view of the fact that the session began on February 4. and about half of it took place during the months of February and March before this legislation came into effect, I submit that S400 cannot be deducted from the sessional indemnities of members of the House of Commons and the Senate. The legislation before us is for the fiscal year 1932-33. If parliament had assembled on April 1, then the minister would be quite right in deducting $400 from sessional indemnities. In view of the fact however that this house assembled on February 4, two months before the fiscal year 1932-33 commenced, I submit that this government cannot deduct the sum of $400 from the indemnity of members of the House of Commons or the Senate.
Let me carry my argument a little farther. During twenty-six days in the month of February members of the House of Commons attended their duties. There were thirty-one days in March and thirty days in April. For the sake of argument let us go to the end of May-and I hope we will not, because I hope prorogation may take place at the end of this week-


Charles-Philippe Beaubien: Make your speech short
then.


William Duff: I am trying to save money for my hon. friends from Toronto, and I think if they will allow me to continue I will save it.
2952	COMMONS
Public Service-Salary Deduction
In view of the fact that half of this session took place in the fiscal year 1931-32 the only amount that the government can deduct from the sessional indemnities of members of the House of Commons and the Senate is that proportion based on the number of days in February and March as compared with the number of days in April and May. I say neither the Minister of Finance nor the government can deduct the whole $400 from the indemnity for the session. I say to my hon. friends on this side-because probably they are holding up prorogatiSn more than hon. members opposite-that every day we stay here we are losing $1.


Edgar Nelson Rhodes: Is that all?


William Duff: Yes, $1 more; because I contend that under this legislation all the government can subtract from our indemnities is that proportion of the number of days in February and March as they relate to the number of days we spend in parliament after that time. In other words to make it a little clearer, and without getting down to exact amounts, we will suppose that we spend the months of February and March in the year 1931-32, and we spend two months of this session in the year 1932-33. Under those circumstances all that the members of the House of Commons and the Senate can lose is the sum of $200, not $400.


An hon. MEMBER:: Right.


William Duff: I am glad some one agrees
with me. This difference of $200, or whatever portion it may be, must be deducted if we assemble here either in the fall or next January or February. But all the government can deduct from members of parliament under this bill is that portion of the $400 as it relates to the number of days from February 4 to March 31 and from March 31 until we prorogue.


Edgar Nelson Rhodes: In reply to my hon, friend from Antigonish-Guysborough, the government do not propose to do anything in this matter other than carry out the will of parliament. Now, if the House of Commons and the Senate in their wisdom see fit to pass this amendment, it will be perfectly competent during the present session for the deduction to be made to the extent of $400. With all deference to my hon. friend, I do not follow him in his argument; I do not think it makes the slightest difference because the session happens to run into two fiscal years. It is not a question of allocating payment of members of the House of Commons or of the

Senate on a monthly basis. It is a question of indemnity for the session, and this amendment is very clear in its terms that the deduction is made for the session. So far as the legal point of view of my hon. friend goes, I would not attempt to argue any matters of law with him-


William Duff: Hear, hear.


Edgar Nelson Rhodes: -because in many respects he is as good a lawyer as he is an admiral.


Some hon. MEMBERS:: Oh, oh.


Edgar Nelson Rhodes: I say that in a complimentary way.


William Duff: I take it as such.


Edgar Nelson Rhodes: We know that there are
what are called sea lawyers. My hon. friend is very much better than any sea lawyer. But I say to him in all seriousness that the law officers of the crown have no doubt as to the legality of the method under which we are proceeding, and if I may submit my own humble judgment, it is that there need be no difficulties nor worries along the lines indicated by my hon. friend.


William Duff: The Minister of Finance says this $400 is to be deducted for this session. If that is true, part of it should have been deducted before the fiscal year started on April 1. I can understand that that is why the minister has found it necessary to introduce this amendment. My argument is quite sound. Of course, as the minister says, parliament is supreme, and if it wants to enact legislation which is entirely contrary-let me see if I can get the proper legal terms-if parliament wishes to enact legislation which is retroactive, of course it can legalize the deduction of $400 from the small balance of our indemnity that is coming to us at the end of the session. But I do say that the government should not do this. If we are to pay $400, that amount should not be deducted from that portion of our indemnity in respect of that part of the session that came within the last fiscal year. There is no question that parliament will assemble before March 31, 1933, whether in special session next fall, or in regular session next January or February. I submit that legally and morally all that should be deducted should be from the balance which is due us after the first of April. For instance, we drew $560 in February and $620 in March-$1,180.	That would leave
a balance of $2,820. I contend-and my good friend the Minister of Finance is one of the best constitutional lawyers in the British Empire, and on the other side there is another

Public Service-Salary Deduction
legal gentleman, the hon. member for Cumberland (Mr. Smith), one of the greatest lawyers in the maritime provinces, indeed, his fame has spread even to British Columbia, they must agree with me that from the legal standpoint I am correct. It is not fair, it is not right that we should be put on a different basis entirely from anybody else who is contributing or suffering this deduction; for that is what it amoimts to when we are asked to pay $400 this fiscal year when fifty per cent of our work was done during the fiscal year 1931-32.


Charles-Philippe Beaubien: It is a good point.


William Duff: It is a good point, and I am right. I submit that my hon. friend should not introduce this legislation just for the purpose of hitting at the poor members of the Senate and the House of Commons. Let us be put on the same basis as everybody else, let us take our proportional reduction this session, and next year-if we meet before the 31st of March-by all means deduct ten per cent from what is due us at that time. Of course, as the minister says, parliament can do this if it wants to, but for heaven's sake let my hon. friend from Digby-Annapolis (Mr. Short) and other Nova Scotians in the house stand up for what is right and proper. Don't let them sit there and accept any amendment the government brings in just to get a few hundred dollars from members of parliament.


Mr. SHORT:: We want to help the government.


William Duff: It does not make any difference whether it is $400 or $4,000, if my hon. friend wants to help this government let him do it as the hon. member for Southeast Grey (Miss Macphail) did a few years ago, let him decline any indemnity.


Harry Bernard Short: I might do that.


William Duff: I repeat, from both the legal and the moral standpoint all we should pay is a proportional part of the $400 on the indemnity that is due us from February 4 to March 31, plus the time we have served since then.


Harry Bernard Short: Why not pay in a lump sum and be through with it.


Edgar Nelson Rhodes: I know my hon. friend is speaking in all seriousness,-


Some hon. MEMBERS:: Oh, oh.



REVISED

Edgar Nelson Rhodes: -but he is entirely mistaken in confusing yearly pay or monthly pay with the indemnity of a member of parliament. The indemnity is for the session. This amendment is submitted, not with any view to making it retroactive at all, but solely for the purpose of making clear the original intent, which was that the contribution for this one session should be $400. I cannot resist bringing to my hon. friend's attention what I am sure he has had brought to his notice on previous occasions, that if the painful necessity arises of taking two inches off a dog's tail, the operation will be much less painful if it is done by taking one cut rather than two.


[Stage Direction]
Amendment agreed to.
Alan Webster Neill: I desire to move the following amendment:
To insert after line 4 the 'words "receiving $1,200 or more per annum," and after the word "thereof" in line 5 the words "and if under $1,200 per annum, five per cent of the amount thereof."
The object is simply to put into one issue, so to speak, the question of reduction of salaries of $1,200 and under. The effect would be that all those in receipt of a salary of $1,200 and under would be subject to a deduction of five per cent only. It would clarify the situation and save disputes, some of which have already begun as between the superannuation fund and the various retirement funds. The minister has indicated that he has already had to propose an amendment to meet objection by one of the members sitting to my right. There are several of these retirement funds and in some cases they differ considerably as between one and another. There will be endless disputes as to the rights of individuals. I would also say, in answer to the minister, that these deductions for superannuation are not penalties exacted from the civil servant; he gets value in return. In every case the government pays a sum equivalent to what he has contributed, and the man on retirement, or his dependents on his death, will get the benefit. So that if a man out of his $1,000 spends $50 in contributions to the superannuation fund, it cannot be argued that he is being penalized because, as I have said, he is getting value. As the act reads to-day, with that later clause, No. 5, it discriminates against a class of persons drawing small salaries, who do not happen to be privileged to contribute to the fund. The minister cited the case of two men, both getting $1,000, one paying to the superannuation fmid-and having a similar amount contributed by the government-the other not



EDITION

[Stage Direction]
.	COMMONS-
Public Service-Salary Deduction
paying into the fund at all, and he said that the effect would be that the man who did not have to contribute the $50 to the fund would have that much more to buy groceries with. That is a very subtle argument-
Edgar Nelson Rhodes: It is the fact.


Alan Webster Neill: -but the minister cannot
possibly defend it. The answer is that the man who pays into the fund knows that the future of his wife and his family is provided for to that extent, while the man who is not allowed to contribute to the fund is conscious of that lack of protection against future events. There is always that Nemesis he must bear in mind. Out of his meagre salary he has to pay $80 or $100 for insurance, whereas the other man makes a deal with the government, who contributes fifty per cent of what he has to pay into the superannuation fund for similar protection. So that they are on a par. It does not matter what the man does with his $50, whether he contributes to a fund or buys insurance. The man who is not contributing to the fund is just as sensitive about the needs of his wife and family after his death and, as I say, unassisted insurance costs more so he has to take $80 or $100 and buy insurance. It cannot be argued that this is at all fair. I see the minister consulting the Minister of Justice, and he will no doubt rise to a point of order and say that I am affecting the revenues of the crown and therefore out of order. I put it to him, however, whether it is not fair that all should be treated alike. He has in the act admitted that some of those under $1,200 should pay only five per cent, and I submit that it should be made universal. If he thinks $1,200 too high, then he might make it $1,000; but let him treat all alike. Give them their money, deduct five per cent, and let them do as they please. The minister can rest assured that people who are receiving $85 and $90 a month are not going to spend that money on luxuries, but on necessities, and they should not be deducted ten per cent under any circumstances.


Armand Renaud La Vergne: It has been moved by Mr. Neill that the section be amended by inserting after line 4 the words "receiving $1,200 or more per annum," and after the word "thereof" in line 5 the words "and under $1,200 per annum, five per cent of the amount thereof." I think the amendment is out of order under rule 552, inasmuch as it affects the revenue.


Edgar Nelson Rhodes: I was going to raise that
point of order. As a matter of procedure, the amendment is out of order because it affects the revenue. On its merits, while I do not

mean to suggest that there is nothing in the contention of my hon. friend, I submit that the case which I cited has a very real point. It may not be a complete answer to the hon. gentleman's contention; nevertheless I do not think that the injustice is so great as he seems to think.


Alan Webster Neill: Will the minister consider
what I have said when he comes to section 5? I am not arguing the point of order, for he is probably correct. But the principle is there, and principles are bigger than points of order. The minister has half admitted the justice of my contention, and in his own soul he knows that it is not fair to deduct the ten per cent from the salary of these low paid men.


[Stage Direction]
Section agreed to.
Section 4 agreed to.
On section 5-Basis of superannuation benefits not reduced.
Edgar Nelson Rhodes: I move that this section be amended by inserting after the word act in the fourth line of subsection 1 the following words:
"or from the compensation of any officer, clerk or employee employed in a penitentiary who may be eligible on retirement to receive a gratuity or retiring allowance under the provisions of the Penitentiary Act."
And (2): By substituting the word "any" for the word "either" in the last line of the said subsection.
And (3): By inserting after the word "act" in the second line of subsection 2 of the said section the words: "or under the provisions of part II of the Civil Service Superannuation and Retirement Act."
His Excellency the Governor General has been informed of the subject matter of this amendment, has given his approval, and recommends it to the favourable consideration of the house.


Charles A. Stewart: Will the
minister explain the provisions of the amendment?


Hugh Guthrie: The Penitentiary Act
provides that certain officials, guards and the like,, on retirement from the service, are entitled to a gratuity based on the number of years' service and on . their record in the penitentiary service. It is thought that this should not affect any possible amount that is paid them after years of service when they have earned that sum.
Mr. RHODES,:	This meets the point
raised by the hon. member for Gloucester, and subsequently by the hon. member for Ottawa, with respect to the five per cent in the case of those who are under the retirement fund. The minister has already explained the effect in regard to penitentiaries.

Public Service-Salary Deduction


Edgar-Rodolphe-Eugène Chevrier: On March 4, at page
824 of Hansard, the minister stated that there were 16,408 employees who received $1,200 a year or less. I asked him how many contributed to the superannuation fund and he replied:
Under the new Superannuation Act, 5,550; under the old Superannuation Act, 3,000; under the retirement fund, 550.
There must be some error in that, because as I understand it there is the present Superannuation Act, then there is the Retirement Act, and then there is the old superannuation fund, to which I suppose there are now about 550 contributors. I am delighted that the minister has seen fit to amend the bill to bring in those who pay under the retirement act. There was no reason why those classes should not enjoy the benefits of the five per cent being granted to those receiving less than $1,200 per year. There does not seem to be any reason why those who are still paying under the old fund and who by this time must be nearing retirement age should not also have the benefit of the five per cent when their salaries are less than $1,200. I submit that once the minister has opened the door in the case of the retirement act, it should be done in the case of those who are paying under the old system.


Edgar Nelson Rhodes: I am rather surprised that my hon. friend, who is usually so well informed on civil service matters, is so seriously mistaken in his facts. As a matter of fact, instead of there being three thousand under the old superannuation act, there are but three, and those three have paid up their superannuation in full. Any amendment made to this act would not affect them in the slightest degree.


Edgar-Rodolphe-Eugène Chevrier: My understanding was that under the old fund there could not be that many because most of them would have spent more than thirty-five years in the service and would be now entitled to their seven-tenths. The mistake has occurred in the figures.


Edgar Nelson Rhodes: I think the mistake did occur in the original issue of Hansard, but I corrected it the next day on the orders of the day. Perhaps my hon. friend did not see that correction.


Edgar-Rodolphe-Eugène Chevrier: I am quite satisfied that the amendments now proposed cover those coming under the retirement fund.


Alan Webster Neill: On April 6 when this matter was under discussion, the hon. member for Kenora-Rainy River (Mr. Heenan) raised the question to which I referred a few moments
ago in connection with one man receiving under $1,200 per year paying ten per cent, while another man paid only five per cent. As is reported on page 1771 of Hansard, the hon. member said:
Would the Prime Minister take into consideration the fairness of reducing the rate charged against those who are receiving less than $1,200.
The Prime Minister replied as follows:
As the statute reads, that would not be possible. As I have said, however, under section 6 it would be competent for the treasury board to determine what should be the true compensation against which the reduction should be made. That is the only answer I can give.
The Prime Minister was referring to the specific case raised by the hon. member for Kenora of some civil servants receiving under $1,200 per year having a ten per cent deduction while others had only a five per cent deduction. I think we are justified in assuming that he was referring to that particular case when he said that under section 6 it would be competent for the treasury board to determine what should be the true compensation against which the reduction should be levied. Are we entitled to infer that the treasury board could find that the true compensation would be such a sum which made allowance for payment into the superannuation fund or into something else, such as insurance, which might he held to be equivalent? It may not seem to be a strong case, but I should like to know if the minister shares the view expressed by the Prime Minister in connection with section 6?


Edgar Nelson Rhodes: I have not the passage
before me to which my hon. friend referred, but I do not think it would be competent for the treasury board to determine what was the compensation.


Alan Webster Neill: Read the language.


Edgar Nelson Rhodes: I do not think that that
could be done under section 6. I remember the hon. member for Kenora raising the point of double deductions, but I do not think the treasury board would have power to act.


Alan Webster Neill: If the minister will look at
Hansard he will see it is a definite case of five per cent versus ten per cent.
. Mr. RHODES:	I saw the language used
by the Prime Minister and I can only say that if the word "compensation" is taken from its context and used literally, then the Prime Minister was in error.


Alan Webster Neill: He is never in error.
2956	COMMONS
Public Service-Salary Deduction


Edgar Nelson Rhodes: I have no doubt that what he had in mind was that the treasury board could not fix the amount of compensation.


Alan Webster Neill: Is there any gleam of hope for these men of whom I am talking?


Edgar Nelson Rhodes: Yes, and there is a gleam
of hope so far as any member of the public service is concerned. The treasury board will deal fairly with these matters, they will temper the wind to the shorn lamb.


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Section 6-Regulations by treasury board.
Charles A. Stewart: I am rather glad to see that the treasury board is taking responsibility for the regulations, but I desire to mention a matter which affects the board very much. Last year the government saw fit in the interests of economy to grant an allowance of $2,000 per year to the speakers of both houses and ministers and others affected in lieu of private automobiles. While I may have some doubt as to the economy to be effected, I must say it is very helpful to see the ministers walking instead of riding in private automobiles. I am sure it will be good for their health and in these days the saving of $400 which will accrue will be very handy. But the speakers have suffered a deduction of $1,000 on their living allowances in addition to the general ten per cent reduction, and to this extent they are being discriminated against. Will the treasury board have authority under section 6 to deal with matters of this kind? I think it would be worth *while looking into.


Edgar Nelson Rhodes: When the item in the main estimates is up for discussion I shall be very pleased to discuss the saving which has accrued to the public treasury by the granting of an allowance to ministers rather than the employing of private cars. I think I will be able to demonstrate that the country is saving a very substantial sum of money as it is costing less than one-third of what it cost under the old system. However, although a minister may walk, members of his family do not and the bills for taxi hire are very substantial. I shall not go into this matter in detail as it has nothing to do with the present bill. The treasury board would have no discretion in such a matter. But it may be that there has been an improper proportion maintained as between the speaker of the house and the ministers. I shall not enter into that discussion here, but I may say to my hon. friend that these items are dealt with 
by a specific vote in the main estimates and that is where they ought to be discussed. Clause 6 of the bill would give the treasury board no discretion to deal with the matter in question.


Charles A. Stewart: I am merely pointing out to my hon. friend that there is a discrimination as between the speakers and the ministers


Edgar Nelson Rhodes: That may be so.


Charles A. Stewart: -and it applies under this bill. I am not going to enter into a discussion to-day about whether it is wise to have our ministers walking and taking the $2,000. I am simply drawing the attention of the minister to the fact that in the deduction there appears to be discrimination as between the ministers and the speakers.


Peter John Veniot: I think there is also a discrimination against the deputy speaker on the same ground as that suggested by my hon. friend. The Minister of Finance and the hon. member for West Edmonton referred to the allowance of $2,000 in lieu of private automobiles, and the minister said that he would be glad to discus it at a future date. If the session had not been so near an end, I would have been rather willing myself to accept the challenge.


Edgar Nelson Rhodes: I did not wish to raise the point of order; that was not in my mind. It would open up a subject which should not be opened up.


Mr. SPENCER:: I take this opportunity under clause 6 to draw to the attention of the Minister of Finance how unfair I consider this ten per cent cut must be to postmasters in country districts. I have had sent to me several complaints from country postmasters who are receiving small salaries and who will come under this ten per cent cut. Without unduly taking up the time of the committee, I should like to put the matter shortly before the minister. I have before me an instance where the postmaster is receiving the princely sum of $116.24 a month. After deducting a small amount for life insurance, another for an assistant whom he has to have because the trains come and go in the middle of the night, various amounts for rent, interest, heat and lighting, fire insurance and even a small sum for taxes, he has left $36.67 a month. He says that this sum will not meet living expenses, much less allow him to put by for his old age, and as he says.
You are aware we are not civil servants when it comes to a question of superannuation.

Supply-National Defence
He reminds me that it is impossible to dispense with an assistant because the trains come and go in the middle of the night. Another postmaster from the same part of the country writes me as follows:
I am getting $91.32 salary now after being cut down 15 per cent in 1930 and a further cut of ten per cent in 1931 and if I get another ten per cent now it is going to be impossible to carry on.
I am paying $20 per month rent and about $15 for fuel, $4.80 for light and $51.52 hardly pays for food and clothes for our family of five.
I just wish to put before the minister cases which are typical of postmasters in small country towns, in order to show the heavy burden it will be with their small salaries to bear this ten per cent deduction.


Edgar Nelson Rhodes: I have no doubt there are individual cases such as the ones brought to the attention of the committee by the hon. member for Battle River. The difficulty is, in applying a rule in general, to avoid some cases of hardship. I do not see any way in which it can be done.


[Stage Direction]
Section agreed to.
Section 7 agreed to.
Preamble agreed to.
On the title.
William Lyon Mackenzie King: May I draw
the minister's attention to the title of the bill as it appears. It is called:
An act to provide for the reduction of compensation in the public service.
The word "deduction" is used throughout the bill and I think that word is intended.


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


Charles Hazlitt Cahan: I think the leader of the
opposition will agree that the mere substitution of "deduction" for "reduction" does not read very well. I think it should be "deduction from."


William Lyon Mackenzie King: Yes. In the
minds of some there appears a danger of this becoming a reduction in salary rather than just an amount deducted for this year,


Edgar Nelson Rhodes: The word "deduction" is
used in clause 5 and of course in the short title.


Charles Hazlitt Cahan: I move that the words
"reduction of" be struck out and the words "deduction from" be substituted therefor.


[Stage Direction]
Amendment agreed to.
Title as amended agreed to.
Bill reported, read the third time and passed.

Edgar Nelson Rhodes: I would in the ordinary
course like to proceed with order No. 16, that is the two insurance bills, but some hon. gentlemen, whom I do not now see in the chamber, would wish to be here and furthermore I should like the superintendent of insurance to be present when these bills are under discussion. That being so, I do not desire, until this evening, to proceed with these bills.


William Lyon Mackenzie King: The Prime
Minister spoke of proceeding with No. 20 in regard to radio broadcasting.


Edgar Nelson Rhodes: I shall send for him.


Henry Elvins Spencer: The hon. member for
Wetaskiwin (Mr. Irvine) and some other hon. members, wanted to discuss the insurance bills. The hon. member for Wetaskiwin will not be in the house until nine o'clock. Will it be convenient for the minister to delay consideration of the bills until that time?


Edgar Nelson Rhodes: I am quite content not
to proceed with them until he returns. He was one of those whom I had in mind. I did not know he would not be in the house until nine o'clock.



PRIVATE BILL


[Stage Direction]
Bill No. 93, to incorporate the W. S. Newton Company.-Mr. Kennedy (Winnipeg South Centre).

William Lyon Mackenzie King: What is the next
order?


Edgar Nelson Rhodes: We could go on with supply.


William Lyon Mackenzie King: I thought the resolution with regard to the radio commission was to come up to-day.


Edgar Nelson Rhodes: The Prime Minister is not in at the moment.


An hon. MEMBER:: He is coming now.


Richard Bedford Bennett: I am hardly ready to go on with the resolution with respect to the radio commission, as I am waiting for a certain piece of information. We will take it to-night.



DEPARTMENT OF NATIONAL DEFENCE

[Stage Direction]
The house in committee of supply, Mr. LaVergne in the chair.
Radio services-for the maintenance and operation of the Northwest Territories radio system, $167,000.
Sup-ply-National Defence
Mr. COOTE:: I would like the minister to explain the reduction in this vote.


Hon. D. M. SUTHERLAND (Minister of National Defence):: In this service the
changes in personnel are costly. None will be made this year. In other years there has generally been a considerable amount spent for new buildings, but there will be no expenditures of that kind this year.


George Gibson Coote: So far as the actual radio Service is concerned there will be no reduction?


Donald Matheson Sutherland: All the stations that we have had heretofore will be operated.


[Stage Direction]
Item agreed to.
Adjustment of War Claims - National Defence-militia services, $82,000; naval services, $500.
Peter John Veniot: This has nothing to do with the adjustment of claims of individuals for reparations, I presume.


Donald Matheson Sutherland: No, this item has to deal with deferred separation allowances and gratuities of members of the forces.


[Stage Direction]
Item agreed to.
Naval service-to provide for the maintenance of the ships and establishments of the naval service, including the Royal Canadian Navy, the Royal Canadian Naval Reserve and the Roval Canadian Naval Volunteer Reserve, $2,462,000.
James Shaver Woodsworth: I think we should
have some explanation of the operations of our navy in the last few months. What do these ships do from month to month? Even since parliament assembled we had our navy interfering with activities in several foreign ports. What instructions are given to the navy? I should like the minister to explain this item.


Donald Matheson Sutherland: I do not know
whether the hon. gentleman has a particular incident in mind. As to the general operations, training goes on both on the east coast and on the west coast, and in the winter months it is customary for the boats to proceed to warmer waters and carry on the training there. That is general with all navies. In the summer, of course, our ships are in our northern waters, on the west coast up around the island, and on the east coast they spend part of their time in the St. Lawrence.


James Shaver Woodsworth: Is the purpose of
these ships simply to afford some sort of training? I had the idea that they were really patrol boats of a sort. That was the im-

pression given to us several years ago when the original expenditure -was under review. Now it seems these boats have been transformed into training ships, that they carry on training in the warmer waters as well as around our own coasts. Are these training ships or patrol boats?


Donald Matheson Sutherland: Certainly they are
training ships, and there was never anything else intended. There are four destroyers, and the destroyer is essentially a combatant boat, for offensive or defensive purposes as required. The training cannot be done in our northern waters in winter, and it is customary in all nations for the boats in winter time to go to warmer waters. Some of the British boats, for instance, go to the Mediterranean in winter, and the Atlantic squadron is around the West Indies. It costs no more to have our ships move into warmer waters than to have them stay here and train.


James Shaver Woodsworth: What guns do these destroyers carry?


Donald Matheson Sutherland: They vary. The two new destroyers, the Skeena and the Saguenay, are armed with 4-5 guns, if my memory serves me. I can say that they are armed as strongly as any destroyers in the world. As the hon. member may know, the Saguenay and the Skeena are the last word in destroyers. They came into commission last year, having been under process of construction a couple of years before. The other two, namely the Vancouver and the Champlain, are older boats, dating from the war period. The armament on them is not as heavy as on the other two. However, we have four very capable boats.


[Stage Direction]
Item agreed to.
Topographic survey, $20,000.
George Gibson Coote: I should like to ask a question concerning this item. Were any of the royal air -force men engaged last year on the topographic survey work?


Donald Matheson Sutherland: I cannot be absolutely sure about that. The air force work in connection with that vote would possibly consist in the taking and development of pictures. The actual pay for the air men would not come under -this vote.


George Gibson Coote: 
Donald Matheson Sutherland: That does not come under this vote, and I should prefer to take it up when we are discussing the item for aviation.


Henry Elvins Spencer: How has it been possible to cut $25,000 from this item? Other years we have been told that a reduction could not be considered. What surveys are being dispensed with?


Donald Matheson Sutherland: A certain number of professors at the Royal Military College and some civilian professors have been affected by the ten per cent cut. Then, there is a reduction in incidental and contingent expenses. The reduced amount however will not affect the efficiency of the school.


Alan Webster Neill: Are we not over-voting these sums? Have we not already passed a portion of these votes?


Donald Matheson Sutherland: No. Up until to-day only item No. 87 had 'been passed.


Alan Webster Neill: But from time to time we have voted interim supply?


Donald Matheson Sutherland: I think two-twelfths have been voted.


Alan Webster Neill: We are now voting the full sum. The minister will find himself in the tower if he is not careful.


Richard Bedford Bennett: The resolution provides for it.


Alan Webster Neill: We had better go back to the other votes.


Richard Bedford Bennett: The others are the same; they are covered 'by the resolution.


[Stage Direction]
Item agreed to.
Permanent force, $4,844,000.
James Shaver Woodsworth: I should like to
make a few remarks with regard to this item, especially in view of the Disarmament conference now being held at Geneva. I am well aware of the fact that Canada has no very large armaments, and for that we ought to be thankful. At the same time, we do maintain a certain force, and at least once a year I think we ought to stop to consider whether or not we are in line with the developments which some day may possibly carry the world away from armaments.
I think once before this year I drew attention to a statement made by the Minister of Justice at a session of the Assembly of the League of Nations held at Geneva on September 9 of last year:	He said:
The armaments of Canada are practically negligible. We maintain only such military, naval and air forces as are necessary for the
maintenance of law and order within our own border. Canada has no need for greater armaments.
For some years past some of us have been maintaining that it was not necessary to have an armed force to repel invasion. We have been inclined to say that the armed force in Canada existed for the sake of keeping down any disorder which might arise within our own borders. When we made that statement it was hotly challenged, and the reply was made that our armed force did not exist for that purpose, but that we had armaments as an insurance against war. Now we find that in the course of a very admirable speech at Geneva, to which I had the privilege of listening, and which created a very good impression, so far as the attitude of Canada toward militarism was concerned, the Minister of Justice, who led the delegation, said very definitely that our naval, military and air forces are no larger than are necessary to keep order within our own borders. I think it is most serious if we have to spend these millions of dollars simply to keep our own Canadians in order. It is most unfortunate if the definite statement has to be made that we have such unrest in Canada that it is necessary to have the warships-which, we have been told by the minister are very efficient- to keep our own people in order.
A few days ago I read in a Vancouver paper that one of our cruisers came from Victoria to the docks at Vancouver in order to be present on May day in case of emergency. To my mind that is a serious reflection upon our country and our administration. The same applies to the army. Some of us have protested against the extension of our mounted police force, because in reality I understand it is a military unit. I think it was the Prime Minister who stated the other day that there was no military drill, no bayonet drill or riot squad drill such as had been described by Regina papers. I am absolutely at a loss to know why such an item should appear in the newspapers, and why there should be put into the mouth of the officer in charge the statement which appeared in the press.


Richard Bedford Bennett: I did not discuss the
Regina situation at all; it was the Ottawa situation I dealt with.


James Shaver Woodsworth: Oh, I understood-


Richard Bedford Bennett: It must have been some other member; it was not I.


James Shaver Woodsworth: I thought the Prime Minister was dealing with the Regina situation.
Supply-National Defence


Richard Bedford Bennett: No, I dealt with the one in Ottawa.


James Shaver Woodsworth: Then I am mistaken in the matter. Someone else made the statement-possibly it was the Minister of Justice -that there was no riot squad or riot drill. I am very glad to team that the Royal Canadian Mounted police are not engaged in bayonet drill. Undoubtedly however we have other forces engaged in bayonet drill, which are ready at any time to repress disorders in Canada. I know it is necessary to maintain peace, order and good government in this country; otherwise civilized life would become impossible. I protest however that this is not the way to bring about peace, order and good government. We have what might be termed a law-abiding people. I cannot very well conceive of an exhibition of greater patience than has been shown by our people during this last year or two in the fane of very great hardships. I think it is an insult to them to have it said at Geneva-although it was said perhaps with the very good purpose of trying to show how small our armament was and how much we were in favour of general world peace-I submit it is no less than an insult to say that we spend millions of dollars a year in order to keep up a force to maintain order in this country. I would urge that instead of these large amounts being spent in this way on military equipment and the maintenance of a military force, we spend a little bit more in helping our people in this time of stress. It is noit merely the labour people whom I have been trying to represent specially in this house, but tens of thousands of other citizens who cannot understand why this government should go on adopting these repressive measures and failing to introduce constructive measures to relieve the prevailing distress. I think I am fair in asking the minister responsible: Was the Minister of Justice correct in stating-perhaps that is an awkward question to put, and I do not intend it in any nasty way-


Armand Renaud La Vergne: It is six o'clock.
At six o'clock the committee took recess.
After Recess
The committee resumed at eight o'clock.



DEPARTMENT OF FINANCE

[Stage Direction]
Salaries, including appointment of Miss M. Guthrie, B.A., as a secretary to executive, at $1,980, $412,542; contingencies, $38,000 inspector general of banks-salaries and contingencies, $23,340.
James Shaver Woodsworth: Even a number of our banks are now feeling the necessity of having trained economists on their staff. Is there any thought at all that the Dominion government will some time have a man regularly equipped for the purpose as adviser to the Finance' deipartment?


Edgar Nelson Rhodes: I can only say that from
the knowledge and experience I have acquired in the limited time I have been in the department I think the country is extremely well served in the character and ability of the permanent officials of the Department of Finance with whom I have icome in contact. They are men singularly well informed and unusually devoted to their duties. They are there on all occasions, putting in long hours without reference to either clock or calendar. They are always on service, and I must say that I take delight in this opportunity of paying tribute to the quality of their service and the spirit in which they serve.


James Shaver Woodsworth: What I had in
mind was a little different from what the minister seems to have in his mind. I am not in any way suggesting that the employees of the Finance department are not faithful and capable men. What I do suggest is that we are faced with a very difficult situation to-day. Everyone recognizes that a great many of the older methods of conducting public finance are not altogether suitable to the present needs. Anyone who has kept at all in touch with the. discussions which have been going on in England in the last few years, or with those that have been going on between bankers on the continent or at Geneva, must recognize that a great many governmental people are alive to the need for very close study of the entire economic situation. I take it that the very fact that the men in the department are working long hours and are quite efficient in dealing with the ordinary routine business explains why they are precluded from giving that study which somebody ought to give to the larger economic affairs of the country. My thought was that if even a bank finds it necessary, or at any rate advisable, to have at least one economist on its staff, it might be well that the Finance department of this country should undertake to engage at least one trained economist on its staff who could devote himself to a study of the general economic situation as it exists to-day, and to a study also of some of the proposals which are put forward from time to tame for the improvement of conditions. In this house we have taken up the question of inflation as a possible method of correcting

Supply-Finance
some of the evils with which we are faced at the present time,, and from time to time there has 'been a suggestion that we ought to stabilize our currency. I do not know that we have anyone in the department who is able to devote himself to a study of this kind of thing. If we are to develop into the position where at some time we shall have a central bank, and if we are not only going to carry out a system of rediscounting but going into open market transactions, it seems to me it would be very essential to have somebody who would be able to advise as to possible extensions for modifications of the Finance Act with respect to the best means by which we. could possibly adopt a system of central banking. It is only a year from now until the Bank Act comes up in due course for revision, and I have no doubt a great many proposals will be made then. It seems to me, therefore, that instead of waiting for pressure from outside, it would be a good thing for the department to engage its own experts. If we cannot obtain them in Canada, let us go elsewhere; but I suggest that the department should have experts who would be able to devote special attention to the new needs which are arising at the present time.


Edgar Nelson Rhodes: If we got into the realm
of banking, finance, currency and that sort of thing, it would be difficult for one to place one's finger on any particular individual who would be regarded as expert, to the exclusion of others. As a matter of fact, there are as many different points of view as there are individuals who make a study of the subject. Without minimizing the suggestion offered by my hon. friend, may I say to him that if it transpires, in the judgment of the government, that the staff of the Department of Finance, as it at present exists, requires enlargement, so far as I am concerned, I shall be one of the first to give heed to what he has said.


James Shaver Woodsworth: The minister will
understand, I think, that if there is some difficulty in obtaining from the realm of experts men who would be able to advise, it is much more difficult, surely, for the minister, however capable he may be, to bring to the task that specialized knowledge which I suggest is necessary.


Edgar Nelson Rhodes: There is no one more ready than the minister himself to admit very freely his limitation in all the spheres to which the hon. gentleman refers.


Frederick George Sanderson: I take it we are dealing with item 7 on page 8 of the estimates, which covers salaries and contingencies of the
department of the inspector general of banks. I notice that there is a decrease of 16,600 in this item, and I should like to know how this decrease is made up and just what the duties are of the inspector general of banks and his officials.


Edgar Nelson Rhodes: I would refer my hon. friend to section 56 of the Bank Act, which outlines fully the duties of the inspector general of banks.


Frederick George Sanderson: That does not give me very much information. Surely the minister can tell me in a few words just what are the duties of this official.


Edgar Nelson Rhodes: Subsection 8 of section 56 reads as follows:-
The inspector, from time to time, but not less frequently than once in each calendar year, shall make or cause to be made, such examination and inquiry into the affairs or business of each bank as he may deem to be necessary or expedient, and for such purposes take charge of the premises of the assets of the bank or any portion thereof, if the need should arise, for the purpose of satisfying himself that the provisions of this act having reference to the safety of the creditors and shareholders of each bank are being duly observed and that the bank is in a sound financial condition, and at the conclusion of each such examination and inquiry shall report thereon to the minister.


Frederick George Sanderson: How often are the head offices of the banks visited?


Edgar Nelson Rhodes: Visits are made as provided for by the act, not less than once a year, but the inspector general keeps in close contact with the banks; the frequency of his visits would be dependent upon the condition prevailing in any particular bank. Some banks might require more careful consideration than others. The frequency of inspection is governed entirely by the circumstances.


Frederick George Sanderson: During the last
calendar year has the inspector general visited the head offices of all the banks in Canada?


Edgar Nelson Rhodes: Yes.


Frederick George Sanderson: And he has made a report to the Minister of Finance?


Edgar Nelson Rhodes: Yes, he has complied with the act in every particular.


Frederick George Sanderson: Has the inspector
* general visited the head offices of the banks of Canada more than once during the last year?


Edgar Nelson Rhodes: That is a question which I cannot answer offhand with any accuracy. I think I can safely say that the inspector general
29(32
Supply-Finance

has visited the head offices of the banks in his inspectorial capacity to the fullest extent as required by the act. I know he is keeping in very close touch with the situation with respect to every one of the chartered banks of Canada.


Frederick George Sanderson: I take it that the Minister of Finance during the short time he has been in office is satisfied with the inspection made by this official and his staff?


Edgar Nelson Rhodes: My answer would be in the affirmative, with the reservation that it is based upon the knowledge I have been able to glean during the limited time I have been at the head of the department. I do not wish my latter statement to minimize in the slightest my fullest confidence in the character of the inspection and of the inspector general himself.


Frederick George Sanderson: I may say I am entirely satisfied with the answer of the minister, but he has not answered my question as to how the reduction in the item is made up.


Edgar Nelson Rhodes: The major portion of the reduction is due to salary deduction, and partly to the fact that an over-estimation had been made of the expenses normally required.


Frederick George Sanderson: Is the major portion due to the ten per cent cut?


Edgar Nelson Rhodes: In round figures, the amount of the salary deduction is $1,600, and the balance is made up by an over-estimation of the expenses required for the office.


Frederick George Sanderson: The difference between $6,600, the amount of the reduction, and $1,600, the amount of the ten per cent cut, is $5,000. My only object in drawing this matter to the attention of the committee is to point out that in this time of stress and strain the morale of the people would not be helped by a reduction in the staff of this department. I am quite sure the committee would be willing that this staff should be maintained, or increased if necessary.


Edgar Nelson Rhodes: I am quite in accord with the views expressed by the hon. member for South Perth. I think this department should be the last place in which to practise economy, if to do so would mean an impairment of its efficiency. However, I may say to my hon. friend that we have been governed entirely by the judgment of the inspector general, and I am satisfied that there will be no impairment of efficiency.


Mr. REID:: Why has the interest rate on currency issued to banks been reduced' from four and a half per cent to three per cent?


Edgar Nelson Rhodes: It -was reduced for a time, but it has since been increased. The reduction was made for several reasons, one being to conform to the discount rate in force in London and New York. The reduction had a more particular reference to the fact that at the time of the launching of the national service loan we wanted to make it as easy as possible for the banks to accommodate customers who were subscribers to the loan.


[Stage Direction]
Item agreed to.
Miscellaneous-grant to the Montreal Association for the Blind, $4,500.
James Shaver Woodsworth: I do not want to object to the grant in this case, but I should like to urge upon the minister that the government take some definite action with regard to providing more adequately for the blind. This is for one group. I am thinking of the larger problem which we have in Canada. The blind have petitioned again and again that they be given some sort of pension; that their special disability be recognized and that they be put on a basis where they can depend upon drawing a regular amount. I believe Manitoba has agreed to assume its share if pensions for the blind are put upon the same basis as old age pensions, and it would seem reasonable there should be an extension along this line. We have recognized in the case of the burnt-out men that they had special claims and I think, on the whole, there is no other class of people who receive greater sympathy from the public generally than the blind who are so helpless.


Edgar Nelson Rhodes: I am sure we all feel sympathetic towards the blind, and I know there is not a single hon. member who would not wish to lean backward in his endeavour to make their lot easier in this life, if that were possible. So far we have been dealing with old age pensions in agreement with the provinces. I hope the time is not far removed when we shall be able to take on the burden entirely as a federal matter, and at that time, or before if the opportunity should present itself, I may say I shall be glad to give sympathetic consideration to the suggestion made by my hon. friend.


[Stage Direction]
Item agreed to.
To provide for expenses of the comptroller of the treasury's office; also, when approved by treasury board, on the recommendation of the comptroller of the treasury, for unforeseen expenses and emergency expenditures in connection with the public service, a detailed list of such treasury board approvals to be laid before parliament within fifteen days of the next session, $300,000.

Supply-Finance
George Gibson Coote: Would the minister explain the amount that is asked for under this appropriation?


Edgar Nelson Rhodes: The hon. member will recall that we have introduced a new practice and that now we have a comptroller of the treasury. The new Consolidated Revenue and Audit Act provides, amongst other things, a system of centralized expenditure and commitment control under the jurisdiction of the comptroller of the treasury. This act came into force on April 1 last, and now all expenses in accounting offices are accountable to the comptroller of the treasury.


John Livingstone Brown: Does this mean an increase in the accounting work, or is it offset by a saving?


Edgar Nelson Rhodes: I cannot give my hon. friend the exact figures, but I am satisfied that the work of the comptroller of the treasury will, in the course of a year, save two or three times over the total cost of the vote for his office, not only in efficiency and more accurate control, but in various other ways. This new system will be very much to the advantage of the public treasury.


Charles A. Stewart: Is it the intention to move all the accounting officials from the various departments?


Edgar Nelson Rhodes: They have all been transferred and are under the control of the Department of Finance.


Charles A. Stewart: Have they
actually been taken out of the various departments and placed under the comptroller of the treasury?


Edgar Nelson Rhodes: No.


Charles A. Stewart: Is the intention to have that done?


Edgar Nelson Rhodes: As the circumstances require. They are all under the comptroller of the treasury, although many of them are, for the time being, remaining in their several departments; but the organization itself is now centralized directly under the comptroller of the treasury.


Jean-François Pouliot: I suppose the fact that all the accounting is centralized will facilitate answers to questions?


Edgar Nelson Rhodes: I think, on the whole, we have shown remarkable efficiency in answering questions and responding to returns this year.	.


Jean-François Pouliot: Yes, especially this year.


Edgar Nelson Rhodes: In the history of parliament, there has been nothing comparable in number and volume with the answers and returns which have been required in the last two years, and I may say that the hon. member for Temiscouata has not been over-modest in this regard.


George Gibson Coote: Are we to understand that this appropriation is largely to pay salaries under the comptroller of the treasury?


Edgar Nelson Rhodes: Largely for salaries. For
example, last year we had in the main estimates an item amounting to $80,000 for unforeseen expenses; in the supplementary estimates, an item of $25,000 for administration of the Consolidated Revenue Act, and another item of S25,000, unforeseen expenses, further amount required. Then there were numerous items taken out of unforeseen expenses and emergency expenditures in different years. Those will all be lumped together in this one item for the comptroller of the treasury.


Charles A. Stewart: I am heartily in sympathy with the move, but is it not a fact that there is still a number of accountancy officers in various departments and paid out of the civil government votes for those departments?


Edgar Nelson Rhodes: As I informed my hon. friend a moment ago, many of these officers are physically in the several departments, although they are now under the control of the comptroller of the treasury. Many of them will be paid from the civil government votes for the several departments this year, but at the end of this fiscal year all these civil votes will appear under the vote for the comptroller of the treasury.


Charles A. Stewart: That is just the information I was seeking. I was under the impression that a large number of these officers were still paid out of the civil government votes of the several departments in which they are stationed. But after this year all these officers will be paid out of this vote?


Edgar Nelson Rhodes: Yes.


George Gibson Coote: I should like to put two or three questions to the minister with reference to the national service loan. Was it sold to investment houses, and if so, at what price? What commission was given to them for handling it?


Edgar Nelson Rhodes: The national service loan was handled by a voluntary committee located in Montreal, under the Chairmanship of Sir Charles Gordon, president of the Bank of Montreal. Their services were entirely
Supply-Finance

voluntary and no salaries were paid, mot even expenses for that matter. The loan was sold only to the individual subscribers. There was no sale other than to those who purchased the bonds.


George Gibson Coote: I should like to know whether the government got the same price as the public paid. There is usually commission: paid to somebody for floating these loans, and I was anxious to know at what price the loan was sold to the public and what rate the government got.


Edgar Nelson Rhodes: The banks and recognized dealers received a commission of three-quarters of one per cent. That covered the whole cost of their services.


Frederick George Sanderson: What did the total cost of that commission amount to, computed at three-quarters of one per cent?


Edgar Nelson Rhodes: I will give my hon. friend the exact figures:
Commission to the banks, $979,638.21; commission to the dealers, $819,468.50; cost of the bonds, $72,964.08; express, $24,962.73; interim certificates, $12,594.40; insurance, $75.74; office contingencies, $25; plates, $13,378.64; postage, $1,716.24; printing and stationery, $13,012.85; publicity. $80,077.96; salaries, $14,204.66; sundries, $36.85; telephone, $211.14; travelling expenses, $807.17.-Total, $2,033,174.17.


Frederick George Sanderson: The commission paid to the banks was $900,000 odd, and to the dealers $800,000 odd. Is that right?


Edgar Nelson Rhodes: Yes. The commission was in proportion to the amount they respectively sold.


Frederick George Sanderson: And the commission totalled $1,700,000 odd?


Edgar Nelson Rhodes: It totalled $1,799,000 odd.


George Gibson Coote: What was the total of the bonds sold and the net amount which the government received?


Edgar Nelson Rhodes: 


Charles A. Stewart: Is $80,000 all that was spent on advertising by the government and by the committee?


Edgar Nelson Rhodes: That is all we paid for. The banks and the bond dealers bore their expenses out of their commission.


Henry Elvins Spencer: I take it that the small committee were the only people who gave their services-nobody else?


Edgar Nelson Rhodes: Quite so.


George Gibson Coote: Will the. minister be good enough to tell me the amount of the bonds actually sold, that is the face value of the

bonds, and the net amount received by the government? The minister stated that the total of the national service loan was $221,000,000 odd. Was that the face value of the bonds or the net amount received by the government?


Edgar Nelson Rhodes: I am sorry I have not the computation before me, but if my hon. friend will subtract $2,033,174.17 from $221,198,200 he will have the amount of money that came to the treasury.


George Gibson Coote: $221,000,000 odd is the amount of the bonds sold?


Edgar Nelson Rhodes: Yes, less the commissions I have mentioned.


Henry Elvins Spencer: Did the bond dealers and banks have exactly the same opportunities for selling these bonds?


Edgar Nelson Rhodes: So far as I know, yes.


Henry Elvins Spencer: And the same commission?


Edgar Nelson Rhodes: Precisely.


Henry Elvins Spencer: No special list for either the bond dealers or the banks?


Edgar Nelson Rhodes: No, they had equal
opportunity.


George Gibson Coote: Would it not be possible to get from the department a statement of the bond dealers that received this commission of $819,000 odd?


Edgar Nelson Rhodes: Yes. I shall be very glad to get that information for my hon. friend as soon
as I possibly can.


Frederick George Sanderson: Would the minister also get the commissions paid to the different
banks?


Edgar Nelson Rhodes: Quite so. My recollection is that those figures have been published, but that does not make any difference. I will see that my hon. friend from Macleod and my hon. friend from South Perth get the information they desire.


George Gibson Coote: I appreciate the action of the Finance minister in giving us this information. I did not know that his estimates were coming up at eight o'clock and I was a few minutes late in coming in. Would he be willing to give us a little information in regard to the gold withdrawals which took place last year between September 21 and October 19, when the order in council was issued prohibiting the export of gold, and also state what measures were taken to preserve our gold supply during that time?

Supply-Finance


Edgar Nelson Rhodes: Certainly. If my hon. friend will be good enough to send me a note I shall endeavour to give him that information tomorrow.


George Gibson Coote: This is information which
the public has expressed a desire to have. If the minister would give us that information to-night, I would appreciate it.


Edgar Nelson Rhodes: I cannot possibly do that.
Mr.' COOTE:	If the minister is not in a
position to do it-


Edgar Nelson Rhodes: I cannot possibly do it
to-night, but as soon as I reach my office to-morrow I shall try to get it.


[Stage Direction]
Item agreed to.
To provide for the administration of the Royal Canadian Mint, including salaries, contingencies, retiring and other allowances, and general expenses, $182,400.
William Lyon Mackenzie King: Will the minister please explain the increase?


Mr. YENIOT:: IV ould the minister agree
to let item 247 stand?


Edgar Nelson Rhodes: Certainly.


Peter John Veniot: There is a resolution on
the order paper under which this subject might be discussed.


Edgar Nelson Rhodes: Certainly.
Item stands.
To provide for salaries and expenses of the tariff board. Payments may be made notwithstanding anything in the Civil Service Act or regulations thereunder, $120,000.


Edward James Young: Is this a revote?


William Lyon Mackenzie King: What is that
board?


Edgar Nelson Rhodes: I hope ere long my right
hon. friend will see the board in operation.


William Lyon Mackenzie King: Can the minister tell us exactly why the board has not been appointed up to the present time?


Edgar Nelson Rhodes: That is a very difficult
question to answer in specific terms. I am exceedingly anxious, however, that the board be set up at an early date.


William Lyon Mackenzie King: There is nothing left for it to do now.


Edgar Nelson Rhodes: Oh yes, there is.


Charles A. Stewart: I can see
no need for the board, especially in view of the system of the present government in regard to tariffs. They make tariffs overnight, and no tariff board is necessary.


Edgar Nelson Rhodes: I should think my hon.
friends would be most anxious to have the board set up, so that it may help them to steady the government, and prevent it from doing any more mischief.


Charles A. Stewart: I should be only too glad to have it, if that end could be accomplished.


William Lyon Mackenzie King: I understand
the board has power to deal with only such matters as the government may refer to it. That is my recollection of the legislation.


Edgar Nelson Rhodes: I cannot say, offhand.


William Lyon Mackenzie King: I believe the
minister will find that to be correct.


George Gibson Coote: Will the government make
use of the tariff board before bringing down any further increases in the tariff?


Edgar Nelson Rhodes: I should not like to commit the government categorically to an undertaking of that character. I am sure the government will utilize the services of the board to the fullest possible extent, compatible with public service.


John Livingstone Brown: I am wondering if the ten
per cent reduction will apply to the salaries of the tariff board appointees?


Edgar Nelson Rhodes: Mr. Chairman, we have
not any salaries with which to deal, so far. I do not wish to argue upon hypothetical questions, because I find it difficult enough to answer the real ones.


William Lyon Mackenzie King: Is there any
possibility of this board being appointed be-bore the Imperial economic conference?


Edgar Nelson Rhodes: I would say, yes.


William Lyon Mackenzie King: A possibility?


Edgar Nelson Rhodes: Yes.


William Lyon Mackenzie King: A probability?


Edgar Nelson Rhodes: I think so-but that is as
far as I can say.


William Lyon Mackenzie King: A certainty?


Edgar Nelson Rhodes: I would not say that. I
would not say definitely that there is a probability.


[Stage Direction]
Item agreed to.
Loan to harbour commissioners of Montreal with interest at a rate to be fixed by the governor in council, for such period and upon such terms and conditions as the governor in council may determine, and to be applied in payment of deficits resulting from the operations of the Montreal harbour bridge, $528,500.
Supply-Finance
Peter John Veniot: I should like to ask a question which may come under the Department of Marine. Has the harbour commission for the port of Saint John made application this year for authority to go on with further work? Perhaps I had better leave the question until a later time.


Edgar Nelson Rhodes: I am afraid I cannot give
my hon. friend an accurate answer.


Peter John Veniot: All right.


Edgar Nelson Rhodes: My hon. friend knows that the vote which was provided by parliament last year, following the disastrous fire, was very substantial. Speaking from memory my impression is that a great part of that vote is still unused. At the moment I know of no application from the harbour board which has not been dealt with. I believe my hon. friend would do well to ask that question of the Minister of Marine.


James Shaver Woodsworth: There are deficits
resulting from the operation of the Montreal harbour bridge. We have known of the enormous amounts that the bridge has cost, over and above the original estimate. I think it is common knowledge that things are in a very unsatisfactory condition generally. I should like to ask the minister if the government has considered the desirability of having some sort of commission or committee investigate this whole affair before continuing to loan large sums of money to the Montreal harbour commissioners. I do not wish more boards of inquiry travelling around the country than are necessary, but this is a matter which ought to be straightened out, and it might very well have been done at this session. I would urge that the minister take into consideration the necessity of cleaning up the whole matter and letting the public know at least something about where their money has gone in the last few years.


Edgar Nelson Rhodes: The question whether or
not there ought to be a royal commission of investigation into the affairs of the Montreal harbour bridge is one entirely apart from the question whether or not we should meet our statutory obligations. In conjunction with the province of Quebec and the city of Montreal in proportion to their share of commitments, we must comply with the act of parliament providing for any deficiences which may arise between receipts and expendi-tureSj as a result of the guarantee of securities in respect of that undertaking. As my hon. friend knows, we have already been called Upon, by reason of our guarantee, to make good the deficit, as have also the province of
fMr. Rhodes.]
Quebec and the city of Montreal. The direct question whether there will or will not be a commission of inquiry is one which at the moment I am not in a position to answer.


Robert Gardiner: Would the minister be
good enough to give the information as to the various items which go to make up this item?


Edgar Nelson Rhodes: Certainly. This appropriation is for the amount which it is estimated the revenue of the Montreal harbour bridge will fall short of the interest payable up to and including November 1, 1932. As my hon. friend knows that is on an issue of some $19,000,000 of harbour commissioners' bonds guaranteed by the dominion, and issued for the capital cost of the bridge. The estimate is made up as follows:	The annual interest
on $19,000,000 dominion guaranteed five per cent bonds is $950,000, less current cash, $18,600. Surplus, operating revenues over operating expenses, $245,400; contributions from province and city under agreement, $300,000, making a total of $564,000, which deducted from the sum first mentioned leaves $386,000. Then we must add the estimated cost of exchange on the $950,000 interest payable in New York. This estimate has been made up on a fifteen per cent basis. This of course can be only a computation. We cannot tell from day to day or week to week what the premium may be upon funds in New York.


Charles A. Stewart: How much
will it amount to?


Edgar Nelson Rhodes: It will be $142,500, but to the extent that is enlarged or diminished, to that extent will it be greater or smaller.


Charles A. Stewart: So if exchange were at par you would actually have a deduction of about $145,000?


Edgar Nelson Rhodes: Yes; at par the figure would be $386,000.


Charles A. Stewart: Does that mean the bridge at the moment falls short of earning operating expenses and interest to the extent of nearly $900,000?


Edgar Nelson Rhodes: No. The operating revenue over operating expenses is $245,400. If the hon. gentleman will subtract that figure he will get the deficit, because, as he has recalled, $300,000 of this is made up of contributions by the province of Quebec and the city of Montreal by virtue of their guarantees..


Charles A. Stewart: Then the
deficit is between $600,000 and $700,000, with the city and the' province contributing?

Supply-Finance


Edgar Nelson Rhodes: In round figures.


Charles A. Stewart: So far as the actual deficit after applying the surplus over operation and maintenance is concerned, you say it is $900,000?


Edgar Nelson Rhodes: I have just told my hon. friend that the fixed charges amount to $950,-
000.	That is not taking into consideration the question of premium upon American funds. The actual operating revenue in excess of operating expenses at the moment is $245,400. If he will just subtract one from the other he will find the answer to his question.


Robert Gardiner: How much of this $300,000 are the province and the city contributing; and what is the amount of their respective guarantees?


Edgar Nelson Rhodes: The province of Quebec
and the city of Montreal are each obligated to the extent of payment of interest amounting to $150,000 a year. The guarantee of the dominion is for the excess.


George Gibson Coote: Is all the amount asked for here?


Edgar Nelson Rhodes: As the Prime Minister points out, we cannot escape our guarantee. In other words, if the province and the city fail to implement their respective guarantees, we would be obligated for the whole; but inasmuch as the province and the city are meeting their obligations, we pay the excess.


George Gibson Coote: Is it expected to take $528,000 to pay our share of the guarantee?


Edgar Nelson Rhodes: Our share of the guarantee at the moment, according to our estimate, is $386,000, but the excess making the figure 8528,000 arises out of the premium on New York funds. That is all over and above the amount of the guarantees provided by the province and the city.


Robert Gardiner: What are the respective contributions by the province, the city and the dominion? And what will be the percentage of any losses to be borne by them respectively?


Edgar Nelson Rhodes: Under the agreement entered into by the commissioners with the province of Quebec and the city of Montreal, the province and the city have each agreed to pay one-third of the annual deficit up to $450,000 for forty years; that is a maximum of 8300,000 a year.


Henry Elvins Spencer: If the deficit was greater than $300,000 they would not pay more -than one-third of their maximum commitment?


Edgar Nelson Rhodes: Quite so.


George Gibson Coote: What was the estimated cost in the first place, and what the actual capital cost?


Edgar Nelson Rhodes: The capital cost of the
bridge to December 31st, 1931, was $18,639,263. I do not know what figure was stated as being the estimated cost so far as this parliament is concerned, because I was not here and have not refreshed my mind on the point. However, I find that in the preamble of the legislation passed by the Quebec legislature in 1926, in virtue of which the province gave its guarantee, the estimated cost of construction was given as $10,000,000.


George Gibson Coote: What is the exact amount of the bonds outstanding on account of this bridge; is it the same as the capital cost?


Edgar Nelson Rhodes: It is $19,000,000.


George Gibson Coote: And the rate of interest?


Edgar Nelson Rhodes: Five per cent, payable half yearly.


George Gibson Coote: Were the bonds sold at par?


Edgar Nelson Rhodes: I have not that information before me, but I am advised that not only did they sell at par; a portion of the last issue sold at a small premium.


Robert Gardiner: What was the total contribution by the dominion to the cost of the bridge?


Edgar Nelson Rhodes: There is no contribution
at all towards the cost of the bridge, only the guarantee. Has my hon. friend in mind how much money we have paid in virtue of our guarantee?


Robert Gardiner: What is the total amount that we will be obligated for by virtue of our guarantee?	-


Edgar Nelson Rhodes: We are obligated upon the whole issue of $19,000,000.


Robert Gardiner: What is the total for
the guarantees by the province and the city?


Edgar Nelson Rhodes: The city of Montreal and the province of Quebec have agreed to guarantee the interest so far as there may be a deficit in earnings to the maximum amount of $300,000 per year.


Robert Gardiner: Some weeks ago I put
certain questions on the order paper, and these were passed as orders for returns. I do not wish to ask the minister to hold this item up until such time as that information is tabled, but I should like to get it at the earliest pos-
2S68
Supply-Finance

sible date. I would support the suggestion of the member for Winnipeg North Centre that a very thorough investigation be made into the whole question of this excess expenditure. I think this information is due to the house and to the country.


Edgar Nelson Rhodes: The delay in responding
to the orders for returns is due entirely to the circumstance that we are dependent upon the harbour commissioners of Montreal, from whom we must expect the information to be able to give a satisfactory response to the motion made by my hon. friend. I am sure the Minister of Marine will only be too happy to endeavour to have the harbour commission expedite the forwarding of the information. I do not desire to press this item; if my hon. friend wishes it to stand I am quite content, but I understand that the information I am giving him now is correct as to why the return has not been tabled.


Robert Gardiner: Who audits the accounts of the harbour commission?


Edgar Nelson Rhodes: The books of the Montreal harbour commission are audited by their own auditors. Of course, we have a right to send in our auditors to check up the accounts of the commission.


Robert Gardiner: When the legislation
dealing with the Montreal and other harbour commissioners was being put through the former Minister of Finance informed the house that the audit board had jurisdiction to audit their accounts. Has the board made any investigation into the accounts of the Montreal harbour commission?


Edgar Nelson Rhodes: I am informed that the
board, some two years ago. made an andit of the accounts of the Montreal harbour commission at the instance of the then Minister of Finance. So far as I know, there has been no government audit since that time. I may add that an audit has since been made by Price, Waterhouse & Company.


Robert Gardiner: Is any information
available to the house regarding the results of any audit, either by the audit board or by Price, Waterhouse & Company?


Edgar Nelson Rhodes: I am not personally familiar with the matter to the extent of being able to give my hon. friend information of my own knowledge, but as I understand it, the audit of Price. Waterhouse & Company disclosed that the accounts were in order. There are audits and audits, but so far as the ac-

counts themselves were concerned, the audit in question disclosed that they were in order I have no doubt that a copy of the report could be obtained for the hon. gentleman.


Robert Gardiner: Is that all the information the minister can give-that the accounts were in order?


Edgar Nelson Rhodes: That is all I can give at
the moment, because I have not seen either the accounts or the report itself.


Robert Gardiner: Has it ever been determined why there was such a tremendous increase in the cost of the bridge in comparison with the estimates?


Edgar Nelson Rhodes: I have no knowledge of
the matter, either officially or personally. It has been intimated to me that the bridge was made considerably heavier and the amount of metal that went into it was greater than contemplated when the original estimates were prepared. I only pass on that limited amount of information for what it is worth.


Robert Gardiner: What is the attitude of the government towards this question? Has the government made a real effort to discover why the bridge cost so much more than was originally expected?


Richard Bedford Bennett: I was Minister of Finance during the period to which the hon. gentleman refers. Price, Waterhouse & Company were asked to make a report, which they did, and it indicates that from the books of the commission it was apparent that the vouchers were there for the expenditures that had been made, not in detail, but for the purpose of enabling them to certify that sums had been expended as received. That is as far as it went. As to why the structure cost the additional sum beyond the original estimate, there is no definite information before this house, and, frankly, I can see great difficulties in obtaining it in detail. It is not difficult to obtain this information, for instance, that the inspection cost several hundred thousand dollars. One of the inspectors was a gentleman who resided in Chicago and who visited the property twice; the voucher was there for the money he received. That is what I mean when I say that the report was vindicated.


Robert Gardiner: I have this last question. Will the government make an effort to inquire into this matter?-because it is really a question that should be looked into, and the reasons should be made known if reasons can be found.

Supply-Finance


Richard Bedford Bennett: With respect to that, two gentlemen who could -contribute largely to information in that regard are dead, if not a third. That fact has been apparent for some time. There is, however, shall I say, a possibility of information being obtained as to why, in one branch of the work, so much more money was spent than anticipated. But even in that regard I cannot speak with any degree of certainty. I received the report-I was in the Finance department-and it is in the hands of the Marine department, to which it is addressed, the Minister of Marine being the minister responsible for the commission. But nothing short of -an inquiry that goes far beyond the question of the mere production of vouchers for debits and credits would in any sense answer the question asked by the hon. gentleman, and certainly it is not a matter that -could be easily answered affirmatively or negatively at the present time.


James Shaver Woodsworth: I do not like to press the question I asked a little while ago, before -the Prime Minister -came in, but I do urge that in view of the tremendous amounts involved and the heavy burden on the people of Canada, we have some right to have a further inquiry into this matter. I -cannot quite think that in a matter of this kind our knowledge must be entirely dependent upon one or two men who may be dead. It seems to me that if a proper inquiry were instituted, information could be obtained. Rather than the Dominion government and the people of Canada having to -carry this enormous burden, which apparently we shall have to shoulder from now on, it seems to me that we have a right -to have the situation cleared up. I would point out to the Prime Minister that there is a good deal of feeling throughout the country with regard to this matter, and since there have been a large number of -other investigations, it is considered very generally that this matter ought to be investigated. The present government is in -a good position to carry out the investigation.


Richard Bedford Bennett: Possibly the hon. gentleman would say that I would not be loath to conduct an investigation. But one does not desire to conduct investigations merely for the purpose of mud-slinging if it serves no useful -public purpose. Now this is the fact. The Dominion has guaranteed interest on $19,000,000 worth of bonds and payment of their principal, and these securities are held largely in the United States of America. The coupons are presented in New York every six months for payment. Practically the whole of them come in, as the hon. gentleman can readily understand, through New York offices, the 11761-187
principal -and interest -being both payable in United States funds. Whether we like it or not, that interest must -be met every six months, because a default in that regard is a default of this country whose guarantee is endorsed upon the coupons of the -bonds. The operating revenue of -the bridge should increase with the increasing growth of Montreal, and it is also not improbable that by reason -of the provision for a tramway to cross th-e bridge there will be some added revenue. At the present moment a bus service operates on the bridge and it is intended -to extend the tramway. As I understand it, that is the position at the moment.
The explanation given for the increased cost is twofold. First, the acquisition of large blocks of real estate for the approaches to the structure was made at a greater cost than was anticipated and, second, it was necessary to use heavier steel than was anticipated. I understand that the weight -of metal absorbed in the construction of this bridge was several hundred tons more than was originally estimated.


An hon. MEMBER:: Hundreds of thousands.


Richard Bedford Bennett: I understood it was
hundreds of thousands of pounds or thousands of tons. The costs of fabrication, of inspection and legal expenses were -much greater than was at first expected.
If my memory serves me correctly, the last bonds were not sold until 1930, and the price obtained was over par; they had been deposited as security and then they were sold with the guarantee of this country at a time when bonds were commanding very excellent prices. I say frankly to the hon. gentleman that if, as and when there is any likelihood of the exact .causes of the greatly increased price becoming known by any reasonable investigation, that investigation will be made. However, it must be realized that this is a most difficult thing to do, especially when there are produced vouchers for weights of metal and explanations are forthcoming as to why the cost per pound was greater than anticipated. A special make of steel was needed in the construction of -the heavy members of the bridge. All this information is contained in the report made by Price, Waterhouse & Company, who stated that beyond that they, as auditors, could not go.


George Gibson Coote: Has -the minister an auditor's statement to show that this i-s the correct amount of the deficit on the operation of the bridge and, if so, who were the auditors?

2970	COMMONS
Supply-Finance


Edgar Nelson Rhodes: I am sorry I have not that information a,t hand, but I shall be glad to obtain it for my hon. friend.


George Gibson Coote: Does not the minister think that he should have an auditor's statement before he advances this money? We should be sure that we are not paying any more than we are called upon to pay by the terms of the guarantee.


Edgar Nelson Rhodes: I agree that it is incumbent upon the Department of Finance to make sure that the accounts are correct before payment is made.


Richard Bedford Bennett: I may say to the hon.
member for Macleod that when payments are made the coupons are actually taken over by the government to form part of the assets which we hold for some future occasion, they constitute a charge against the undertaking.


George Gibson Coote: The point I was presenting to the minister was that we should ascertain the actual deficit on the bridge.


Richard Bedford Bennett: That is done by the harbour commission.


Charles A. Stewart: If I remember correctly, an estimate was made of the expected traffic across the bridge, and it strikes me that $245,000 is not much below what should be expected at this stage in the history of the structure. If I remember correctly the estimate for 1932 was $500,000, and that was why the city of Montreal and the province of Quebec came forward with their guarantees.


Edgar Nelson Rhodes: The estimate made before construction was that the annual revenue from the bridge would be 1250,000.


Charles A. Stewart: That was for the first year, but it should increase.


Edgar Nelson Rhodes: That called for a contri-oution from the city of Montreal of $116,666, and a like contribution from the province of Quebec and from the commission itself. As my hon. friend knows, the commission has not been able to implement its guarantee.


Charles A. Stewart: It is only natural that there should be a considerable diminution in the traffic, as there has been in all projects of this character.


Charles Hazlitt Cahan: The approaches to the bridge on the other side of the river from Montreal are a provincial work. Their construction has been delayed in such a manner that the traffic which ordinarily would be expected to use the bridge has not found it convenient to do so.
Mr. STEWART 'Edmonton): That was my information.
[Mr. Coote.J


Edgar Nelson Rhodes: I have no information before me which would answer the question asked by the hon. member for West Edmonton.


Charles A. Stewart: If I remember correctly, it was expected that in 1932 the bridge would earn something like $500,000 in tolls. Last year it earned $245,000 but, as my hon. friend has pointed out, more traffic would have used the bridge had it been in position to receive it.


Henry Elvins Spencer: I do not think the figures given by the minister are quite satisfactory to the committee. When the Prime Minister was leader of the opposition I remember his drawing the attention of the house to the vast amount of money spent on this bridge. I understand the first estimate was that it would cost some $6,000,000, and the amount eventually rose to $19,000,000. When the Prime Minister first took over his present office he again drew the attention of the house to this extraordinary expenditure, and I was in hopes that an investigation of some sort would be made into this matter. It seems to me that the reasons given for not holding an investigation are not as satisfactory as they should be. It has been said that three men who might have given some information with regard to this bridge have died, but that does not seem to me to be a good reason why we should not be able to find out where this great expenditure has gone. The Department of Finance has the right to send in auditors to check up, and this information should be available for the benefit of the committee. The Prime Minister has said that a special steel was needed for this bridge, but surely any engineer capable of being put in charge of a huge undertaking like this should have known the kind of steel that would be required, before the first estimates were made. Such an engineer might have been forgiven for being out a million or two, but there is no excuse for an increase from $6,000,000 to $19,000,000. Even if everything is above board, surely those who have made such huge mistakes and have cost the country so much should be penalized for their bad judgment.


Richard Bedford Bennett: I omitted to mention that a considerable sum was absorbed in interest during construction. Shortly after this government came into power we asked Price, Waterhouse & Company to make a report. I think it is in the office of the Minister of Marine. I believe we can get it and lay it on the table. It will show anyway how the sum of $19,000,000 was reached.

Supply-Finance


Henry Elvins Spencer: No doubt the Prime
Minister has looked over that report. I should like to ask him if, in the light of his own great ability, he is satisfied, from reading the report, with the way in which the money was spent.


Richard Bedford Bennett: 
Henry Elvins Spencer: Is the Prime Minister
satisfied to let the matter rest there, or does he intend to try to find out more?


Richard Bedford Bennett: He has already said what he is trying to do.


Mr. MITCHELL:: In the $19,000,000, what was the relative amount spent on real estate and that spent on the bridge itself? Was the contract let on the cost plus basis of the construction?


Richard Bedford Bennett: As to the first question.
I would not trust my memory to give the answer. The document which I shall endeavour to have brought down will give that.


Humphrey Mitchell: Can the right hon.
gentleman give the approximate cost?


Richard Bedford Bennett: I do not care to trust
my memory. The auditors' report will show exactly what was spent for real estate and the cost of the bridge. On the second point, the commissioners themselves acquired the real estate, but they let a contract for the construction of the metal.


Edgar Nelson Rhodes: I have the details covering some thirty or more items which go to make up the cost of $18,639,000. I do not know whether the committee desires that I should read them or not, but if necessary I shall do so.


Humphrey Mitchell: What we are entitled to is an idea of the original estimate, the cost of the real estate and of the building of the bridge. Then we would be able to compare that 'with the amount expended on real estate and on the bridge in the $19,000,000.


Edgar Nelson Rhodes: As I have already stated, I have no record of the original estimate. The figure named in the preamble to the Quebec act was $10,000,000. What the figure was which was stated in the house, I cannot say.


Richard Bedford Bennett: Hansard says $6,000,000.


Charles A. Stewart: The sum
of $6,000,000 was not the estimated cost of the bridge, but the amount which the government was committed to originally in the guarantee.


Richard Bedford Bennett: Mr. Meighen asked how
much the bridge would cost, and the hon. member for Richelieu said "six million."


Charles A. Stewart: I do not
know how he could have mentioned that amount. There is no need to send for Hansard. There is no doubt that the bridge was to cost $10,000,000.


Richard Bedford Bennett: 
Charles Hazlitt Cahan: I know something about the bridge. As a representative of a Montreal constituency, I have taken considerable interest in the matter. The bridge as constructed is entirely different, so far as its proportions, supports and expenditures are concerned, from the one originally contemplated.
The pillars upon which the bridge rests are very much larger and more expensive, and the steel in it runs to hundreds, even thousands of tons more than originally planned. I have been told that the cost of the steel alone was between $2,000,000 and $3,000,000 beyond what was first contemplated. I took the trouble to ask the auditors-I suppose I had no right to do so-with regard to the audit and they said that there was not a single expenditure for which the voucher was missing in the audit. Every voucher was there, showing in the aggregate the cost of the bridge as reported. If you wish an investigation, it is not one by auditors, because everything is in order to satisfy the most careful audit possible. The question is whether some of those expenditures in connection with real estate and otherwise, were simulated or not, if I may use that term, but I have made personal inquiry, not as a member of government, and I have not so far found the slightest fact which would indicate that such is the case.


Robert Gardiner: The statement of the Secretary of State opens up a new question altogether in so far as this bridge is concerned. His statement is to the effect that the present bridge is not to be compared with what was estimated when the legislation passed this house. He states that the piers upon which the bridge is built are much heavier and more expensive than was contemplated when the legislation passed the House of Commons and the agreement was entered into. He also states that the steel in the bridge is much greater in tonnage than the estimate. It
Supply-Finance


Charles Hazlitt Cahan: It is perfectly obvious that the harbour commissioners of Montreal were responsible, subject to the oversight, such as it was, of the then Minister of Marine.


Henry Elvins Spencer: Did they get the consent of the then Minister of Marine?


Charles Hazlitt Cahan: I do not know the secrets of the former government, but in any case, I have no access now to the approvals given by the former Minister of Marine. But the cost of that bridge is fully vouched for. I am giving the best information I can obtain, although it is not official. I am speaking as a member of this house; as Secretary of State I have nothing to do with the bridge or the expenditures on it; but as a representative of a Montreal division, I am interested in the matter. I have made inquiries and I have no doubt that the entire expenditure is properly vouched for. Further, it is undoubted that more stable and expensive abutments than originally contemplated were put into the bridge. I am also quite satisfied every bit of that expenditure was approved by the harbour commissioners of Montreal. I would infer that the larger expenditures, when contemplated, were approved in due course by the then Minister of Marine having oversight and supervision of that.


Robert Gardiner: Has the Secretary of
State looked up the legislation which gave the harbour commission permission to build this bridge, to find out whether the then Minister of Marine had the right to increase the expenditure over the estimate to the extent done without coming to parliament? Has the Secretary of State any information in that regard?


Charles Hazlitt Cahan: At one time I was familiar with that legislation, but I have not looked into it recently and I will not trust to memory for the purpose of discussing it to-night.


Richard Bedford Bennett: Chapter 58 of the statutes of 1924 cover the point which the hon. gentleman is raising. Section 1 reads:
Subsection 2 of section 22 of the Montreal Harbour Commissioners Act, 1894, as amended by section 5 of chapter 24 of the statutes of 1909, is further amended by adding the following paragraph thereto:-

"(6) (a) Build, own, maintain, manage, operate and use a bridge for general traffic including tramways across the river St. Lawrence from a point in the city of Montreal to a point on the south shore of the said river to be determined by the corporation, with all necessary or useful appurtenances or accessories."
Paragraph (b) covers the right of entry. Paragraph (c) covers the right of expropriation. Paragraph (d) refers to the right of crossings. Paragraph (e) deals with streets, highways, etc., in the absence of an agreement, the matter to be settled by the Board of Railway Commissioners. Paragraphs (f) and (g) read:
(f)	The plans of such bridge shall be submitted to and approved by the governor in council before beginning the construction thereof.
(g)	The corporation may, subject to the approval of the governor in council, charge and recover tolls for the use of or passage on such bridge.
Then paragraph (h) permits the corporation to receive grants and donations or grants in aid. Then paragraph (i) reads:
The corporation may, for the above purposes, and from time to time, borrow money or issue and sell or pledge bonds for such amounts, at such rate of interest and on such terms and conditions as it may determine, and it may secure such bonds or loans by a mortgage or hypothec on the said bridge and by a charge on the tolls and revenues thereof.
Section 2 reads as follows:
Any such loans or bonds shall as to form, terms and amount be subject to the approval of the governor in council, and the said securities or bonds may in whole or in part as to principal, interest or both be guaranteed by His Majesty. Any such gurantee may be in such form and on such terms and conditions as the governor in council may determine, and may be signed by the Minister or Acting Minister of Finance on behalf of His Majesty.
I think that answers the questions the hon. gentleman asked.


Peter John Veniot: Under the first estimate it
was not contemplated that a tramway would cross the bridge.


Richard Bedford Bennett: Oh yes. I will get the
Hansard.


Humphrey Mitchell: Who were the Montreal harbour commissioners in 1924?


Edgar Nelson Rhodes: I have no record before
me indicating who the commissioners were at that time.


Humphrey Mitchell: Perhaps the deputy
minister may have a record of it.


Edgar Nelson Rhodes: No, my hon. friend will
appreciate that as Minister of Finance my duty is prescribed by the statute, and I am

Supply-Finance
conforming to it. I did not contemplate that I would be called upon as Minister of Finance to furnish all the information which has been sought to-night-not that I am complaining that it has been sought.


Henry Elvins Spencer: Might we direct the question to the Minister of Marine?


Humphrey Mitchell: I should like to get
some details about the land that was purchased by the Montreal harbour commission.


Edgar Nelson Rhodes: I started a while ago to
give the items making up the total cost of the bridge, but the current of the discussion was deflected. The details I have before me are as follows:
Substructure, south half, piers
0 to 19	$ 1,124,868 39
Moving swimming club house..	1,812	80
Substructure, north half, piers
20 to 26	
2,020,642	15Filling on south shore	
265,313	70Filling on north shore	
8,001	00Concrete railways at approaches	63,739	75Subway, south approach, regarding fill, etc	
41,394	07Grading, etc., south shore plaza.	158,583	48Outlet toll station, south side..	6,028	50Outlet toll station, north side..	6,764	87
Black base pavement, south
shore plaza	 12,83199
Steelwork in bridge superstructure	 8,190,996	33
Reinforced concrete road, south
side	 233,308	22
Reinforced concrete road, north
side	
269,727	19Island abutments	
10,579	69Electric installation	
157,218	40Island pavilion, steelwork..	..	121,449	05Island pavilion, concrete structure	
325,105	55Island pavilion, tram rails.. . .	19,182	70
Engineering superintendence and
plans	
691,708	98Inspection of substructure.. ..	102,176	99Inspection of concrete superstructure	
8,312	24Steel inspection staff	
97,622	77Travelling and incidental expenses	
6,167	45Office furniture and fixtures.. ..	561	05Shed for inspection staff.. ..	1,150	00Office rental, advisory board. .	2,857	13
Land and property purchase,
north side	
1,937,886	01Agent's fees for properties purchased	
66,382	76Insurance on properties	
2,246	10Advisory board	
132,666	65Contract security bonds. .	. .	148,390	33Administrative expenses, H.C.M.	67,943	13Preliminary surveys	
50,500	00Rental of space for contractor's use	
36,948	30Clearing sites	
70,602	88Legal and notarial expenses. ..	143,840	77Office rental	
800	00Advertising	
1,518	64Sundry items	
7,671	48Soundings and borings	
9,572	55
Harbour dues on contractor's
materials	
1,170	08Bridge design (A. J. Lavoie).	5,000	00Surveys on south shore	
885	50Printing and stationery	
12,764	95City assessments for sidewalks.	561	70Telephone rental	
122	51Auditor's fees	
1,187	00Bond trustee fees	
1,306	00Interest during construction..	.	2,045,340	23
Bridge offices, furniture and
fixtures	
5,850	12Bond discount	
5,010	42

Less:	Credits for rental of
properties, etc	 65,008 69

This is the statement as verified by the auditors Clarkson, McDonald, Currie and Company.


Henry Elvins Spencer: I appreciate the fact that the minister has not been in office many months and cannot be expected to know the names of all the Montreal harbour commissioners. I should like to know, however, if he will be kind enough to get those names, covering the period from the time the matter was first discussed in the House of Commons until the present.


Edgar Nelson Rhodes: That is to say, the hon. , member wishes the names of the commissioners from the time the bill was first introduced in the house?


Henry Elvins Spencer: Yes.


Edgar Nelson Rhodes: I shall be very glad to get them.


Humphrey Mitchell: May we also have information as to how the land was procured, and the names of the parties involved in the transaction.


Edgar Nelson Rhodes: I cannot do that.


Humphrey Mitchell: I know something about municipal politics, and about buying land. The minister said something about the enormous price paid, and I would like to know why the amount climbed so rapidly from $6,000,000 to $18,000,000.


Edgar Nelson Rhodes: There would be nothing on record in my department which would enable me to answer the question, I am sorry to say.


Henry Elvins Spencer: Is there any item in the estimates of the Minister of Marine in connection with which some of these questions might be answered?


Richard Bedford Bennett: My memory is that there is an item in the supplementaries which will afford an opportunity for discussion.
Supply-Finance


Mr. CAMPBELL:: I think the point raised by the hon. member for Acadia should not be disregarded. There is a responsbility on the commissioners, or some body, for changing the plans of the bridge after the legislation passed this house. If there is to be an item in the estimates under which a discussion can take place I would suggest thait the minister get the information and let us have it at that time. If the discussion arises under the estimates of the Minister of Marine, the information should be available to hon. members. When we pass legislation empowering a commission to go ahead on a public work, and afterwards the commission alters the plans, we are dealing with a serious condition. The Secretary of State has pointed ouit that this is no case to be investigated by auditors; I think it should be investigated by engineers.


Richard Bedford Bennett: I am told I am in error as to there being a further item in the supple-mentaries. I think however that I can answer the question of the hon. member for East Hamilton. The real estate was taken in the name of a clerk in the office of the solicitors for the corporation. My memory is that when we came into power it was still standing in the name of that clerk. The consideration was expressed to be one dollar, and other valuable considerations. It was impossible to ascertain the exact sum paid. I believe that is the information the hon. member wanted, although his question was not very clear.


[Stage Direction]
Item agreed to.
To provide, subject to the approval of the treasury board, for salaries, reclassifications and increases, $500,000.
George Gibson Coote: What salaries are being provided for under this vote?


Edgar Nelson Rhodes: This is a continuation of a similar vote which has appeared in the estimates in all previous years. It is to provide for salaries and increases for which provision has not been made elsewhere in the estimates. This year the item is larger than it has been in previous years, due to the fact that departments have been cut down to the limit.


[Stage Direction]
Item agreed to.
To provide for the expenses of work in the interests of fire prevention to be carried on by the Department of Insurance, $9,300.
Mr. CAYLEY:: I notice this item has been reduced by several hundred dollars. In my view this is a very important work, and I should like to know whether the minister is going to curtail it.


Edgar Nelson Rhodes: There is no staff reduction. This item has held fairly steadily throughout the years. There is some reduction this year because of salary cuts, but that is the only difference.


Thomas Merritt Cayley: This is the department in charge of the reduction of fire waste in the dominion, which has reached a tremendous proportion. There is one source of fire waste, especially in the farming communities, which is causing considerable anxiety. I think through the medium of this department and the Dominion Fire Prevention Association, which I believe is in close touch with the department, that something might be done with the cooperation of the national research laboratories. I shall take a few moments of the time of the committee to give some figures concerning spontaneous combustion on farms.
Fires reported to have occurred from spontaneous combustion appear to be increasing in number. Their annual distribution was as follows:
Fires
Year	reported
1921		 302
1922		 364
1923		 283
1924		 326
1925		  218
1926		 286
1927		 394
1928		 253
1929		 475
1930		 410
1931	(nine months)	 387
Fires from spontaneous combustion represented twelve per cent of the total number of barn fires and occasioned a property loss of $9,080,642, or fourteen per cent of the total loss in farm barns. What proportion of the fires arising from unascertained causes might properly be charged to spontaneous combustion is problematical. That many fires of unknown origin do arise from this cause is indicated by analysis of the fires occurring from month to month during the entire period. The months during which hay and other produce is newly stored in farm barns are the months when the most frequent outbreaks occur, as these figures demonstrate:
Percentage of total number
Month-	of barn fires
January	 2.3
February	 2.2
March	 2.4
April	 4.1
May	 5.4
June	  7.0
July	 13.5
August	 16.8
September	 23.1
October	 10.8
November	 8.4
December	 4.0

Supply-National Defence
From this record it is clear that mors than one-half of all barn fires occur in July, August and September. In October of the present year the number of barn fires has been unprecedented and should be made the subject of special inquiry. If the conditions under which the produce was stored eliminates spontaneous combustion as a probable cause, a reasonable deduction is that market conditions may have contributed to the destruction.
I desire to bring to the attention of the minister the splendid work which is being done by the Dominion Fire Protection Association, of the executive of which I have the honour to be a member. I know that in the present financial stringency we cannot expect any increased grants, but I should like him to keep in mind that this association is doing very effective work in reduction of farm fires. Naturally this is a live question among the farmers, and I know they will be greatly pleased if the National Research Council would undertake some research work along this particular line.


Edgar Nelson Rhodes: My hon. friend will observe that there is no curtailment in this item.


Thomas Merritt Cayley: Seven hundred dollars.


Edgar Nelson Rhodes: It represents only salary
reduction. But, with respect to his observations on fire prevention, I am in entire accord. We are losing millions of dollars every year, faulty flues and jack-knife electric wiring being responsible for many fires in farm houses and farm buildings. I speak from experience, because when I undertook the responsibility of becoming associated with the government of Nova Scotia, I had an idea that I might be of very material assistance to the rural population of that province by introducing a system of wiring inspection, but I may say I stuck my head into a hornet's nest, the very men whom I desired to assist objecting most strenuously to my proposal. I feel that a tremendous amount of work along this line can be done for the benefit of the farming community by the saving of property and in some instances of life. This item may not be large enough, but it is designed to accomplish the very object my hon. friend has in mind.


[Stage Direction]
Item agreed to.

[Stage Direction]
Permanent force, $4,844,000.
James Shaver Woodsworth: Mr. Chairman, just before the committee took recess I was making a few remarks upon this item. It seems unfortunate that the only place in which we can discuss a great many of the more important policies of the government is in connection with some one item of this character. Now that the disarmament conference is at work in Geneva and we have subscribed to the Kellogg pact for the renunciation of war as an instrument of policy, it is high time we should reconsider the whole military policy of this country. It is unfortunate that from year to year we take it for granted that we are to go on in the same old way.
I know that on various, occasions there have been expressions of opinion that we desire the world should disarm, that all the other nations should disarm, and yet we ourselves are taking no steps along this line.


An hon. MEMBER:: There are no steps
to take.


James Shaver Woodsworth: One hon. gentleman suggests there are no steps to take. So long as we have items of this character there are certain steps we can take. We in Canada are in a peculiarly favourable position to carry forward a further measure of disarmament. We have confessedly no foes immediately at our gates. As far as we can see we stand in no danger of invasion. We have been told again and again that we have nothing to fear from the east or west, from the south or north. The Minister of Justice (Mr. Guthrie), whom I quoted this afternoon, took that attitude at Geneva, where he went so far as to say that the only force we have to-day is that made necessary to maintain law and order in this country. I suggested this afternoon that we were in a very desperate situation if we had to spend somewhere between $10,000,000 and $20,000,000 to maintain law and order in this country. Some time this evening I should like to find out whether the Minister of National Defence (Mr. Sutherland) agrees with the Minister of Justice in this regard, whether he thinks in reality our whole military force exists solely for the purpose of maintaining law and order. I do not think he will agree with that. Then we fall back on the other plea, that we need this military force as insurance against war. It is that point which I wish to discuss for a few minutes.
While we complain of other countries being rather hypocritical in this regard, we should remember that we have certain responsibilities ourselves. Some time ago I came across in the New Leader of April 18, 1930, a fable, a sort of satire dealing with the naval conference.. I will read it because I think it applies equally to the disarmament conference which is in session at the present time:
The Lion, the Eagle, the Tiger, the Crocodile and the Shark, met in conference to consider the advisability of holding preliminary conver-
Supply-National Defence

sations with a view to preparing the way for a meeting to consider the possibility of holding a conference to discuss the project of an eventual attempt to effect some limitation of teeth and claws.
The audience consisted of a Bear (who appeared to be amused) and, at some distance, a Deer and two Rabbits.
The Lion, who presided, was looking even more saintly than usual, for he had constructed a tin halo for himself which would have been still more impressive if the Tiger had not unfortunately licked off most of the gilt. On the halo were written the words, "My Glorious Mission."
The president opened the proceedings by saying that as there had been a great demand among the weaker animals for teeth control and the limitation of claws, it had been thought well to hold a conference to talk about these things.
The main thing was to talk, and for his own part he loved to hear his own voice, but he did not intend to have his own teeth taken out because he had always used his teeth and claws for the benefit of others, and never for his own advantage. Teeth and claws were essential to the existence of lions, they were not superfluities, in fact, he said, "Teeth is us." He realized also that in some degree this was true of all present. At this point the Crocodile shed several large tears.
The Lion, continuing, said that he thought they might all agree to the abolition of fins and propellers which served no good purpose. To this the Tiger and the Eagle signified assent, but the Shark and the Crocodile showed their teeth, the Shark observing that the prohibition of claws and wings would be more to the general good.
The Eagle said he was all for prohibition, but of teeth rather than olaws. He had been accused of devouring hares (the Rabbits disappeared at this juncture), but he could truly say that his action had always been for the uplift of these earth-bound creatures.
The Tiger observed that some people were rather too uplifted for his taste, and he agreed with the Shark that wings should be forbidden. He was tired of flap-doodle.
At this moment the Lion uttered a low growl, because the Eagle was twisting his tail, while the Tiger took opportunity to pull out some of the Eagle's feathers, and received in return such a peck on the ear as caused him to retreat hastily. Meanwhile the Shark bit off the end of the Crocodile's tail, and was rewarded with a scratch that turned the water red.
The meeting then broke up, and the following official statement was handed to the Press:-
"Our conference has been a striking success, complete agreement has been reached on all points, and the utmost cordiality has prevailed throughout."
That satire is only too true of past disarmament conferences, and from all that we can judge at this distance that depicts what is going on at the present time at Geneva. It does not seem fair that we should blame everyone else for the delay in disarmament.
I can very well understand how France might fear to disarm; I can understand her fear of a war of revenge. I can understand her sense

of a lack of security and all that kind of thing. I can understand how Germany feels at the present time, disarmed as she has been, yet with the other nations not having carried out their part of the contract. I can understand how through central Europe each nation is afraid to take the lead in disarmament. But in this country it does seem to me, although we are a very small nation, small in population and perhaps in influence, that it might be possible for us at least to make a gesture that would have considerable effect in Europe. Instead of simply going along year after year in the same direction we pursued before the war, and which the war proved did not provide anything like real security, we in Canada, in view of the whole world situation, might very well take some lead in a forward movement.
May I foe permitted to refer to-night to a very excellent article that appeared in MacLean's Magazine of August 1, 1931. It is headed "Salesmen of Death. The Truth about War Makers" by Lieutenant-Colonel George A. Drew. I wish to quote from this article because, though there may be nothing particularly new in it, it is provocative .of thought and should be widely read. In fact, in many respects the general public outside, with regard to matters of this kind, is in advance of the opinion, if we have any, which exists in this house; at least it is less apathetic than parliament regarding such matters. Colonel Drew sums up in one or two paragraphs his views:
One serious obstacle that must be overcome in convincing the people of the world that disarmament is everybody's business is the cynical attitude which is all too common that war is an inevitable evil and that the most we can do is to postpone it as long as possible and, when the time does come, hope to be just a little better armed than our enemy. Hand in hand with this attitude is the belief that we maintain peace by being better armed than our neighbour and thus preventing attack. An excellent example of this point of view is furnished in the following extract from an editorial in the Canadian Defence Quarterly of April 1931:
"The world to-day has prohibited aggressive warfare but defensive wars are permitted; therefore, the nations still regard the use of armaments as the ultimate instrument of national security. So long as this condition remains, human nature decrees that each nation will strive to be armed with armament superior in quality, and if possible quantity, to that of other nations. It is doubtful, therefore, if nations would forego the abundant benefits which result from private enterprise in the armament field."
Words like these have been repeated so often that they have acquired general acceptance without any appreciation of their full import. No one, yet, has been able to demonstrate the "abundant benefits" resulting from private enterprise in the armament field, unless they be the enormous increase in the casualties to all

Supply-National Defence
combatants, or the huge profits acquired by men like Zaharoff, Krupp, Schneider and Grace. . . . That these words appeared in so responsible a journal as the Canadian Defence Quarterly such a comparatively short time before the World Disarmament Conference emphasizes the fact that much remains to be done if the Canadian delegates are to have behind them a well-informed Canadian public opinion. . . . There is ample reason for demanding, as a first step, the elimination of "Propagandists of Hate" by a mutual agreement, effective throughout the world, dissolving the vicious alliance between armament production and profit-sharing corporate enterprise.
It seems to me that instead of going through these estimates as a matter of form, instead of following the old policy of keeping up a skeleton organization which may be expanded at any time for either defensive or aggressive purposes, we should devote ourselves definitely to eliminating the causes of war. Perhaps the Minister of National Defence will say that that is not his job; I can quite understand his taking that attitude, yet his predecessor said on one occasion that he considered himself not as a minister of war but as a minister of peace. If peace is our ideal, if we have renounced war as an instrument of national policy, the responsibility would seem to rest upon someone to do something to promote peace. I have referred to this article by Colonel Drew in which he mentions the enormous fortunes which have been made out of armaments. I do not know whether there are in Canada any armament firms shipping out armaments, but I do not think there are. The Prime Minister nods his head, and I am delighted that we are in that position.


Richard Bedford Bennett: The hon. gentleman
knows that we have small arms factories.


James Shaver Woodsworth: I do not know
whether there are-


Richard Bedford Bennett: These are not private
companies, but are the plants located at Lindsay and Quebec.


James Shaver Woodsworth: I am delighted that Canada is in this position. It is unfortunately true that considerable quantities of munitions have been sent from Great Britain to the Orient within the last few months. I understand that these shipments are being made under permit issued by the British Board of Trade after consultation with the Foreign Office. I do not know that Great Britain is any worse in this respect than any other of the large nations, but I do say that we can hardly hold up our heads as Britishers, that we can hardly be sincere in our condemnation of the trouble which has been going on in the orient for some months, while we know that
British firms are guilty of shipping armaments to nations supposed to be at peace yet in reality at war. As many hon. members are not aware of the extent to which this traffic has been carried on, I should like to give a summary of a few facts recently supplied by the London New Statesman and Nation.


Armand Renaud La Vergne: I do not think this is
relevant to the item under discussion.


James Shaver Woodsworth: It may not be
directly relevant, as this item has to do with the permanent forces. My contention is that if we are to be confined to passing estimates providing for the maintenance of military forces and for the supply of munitions, then we are not doing our part in the larger effort which should be made to promote peace. These are war estimates, and we are surely in order in considering the factors which are to-day tending to promote war. If the chairman insists that I may not give these facts, then I must submit to his ruling.


Armand Renaud La Vergne: I do not want to insist, but there is a standing order to the effect that discussion shall be relevant to the item under discussion.


James Shaver Woodsworth: I should think that this is very relevant.


Armand Renaud La Vergne: Not to the item before the committee.


James Shaver Woodsworth: Yes, to the item
before the committee.


Armand Renaud La Vergne: Standing order 58 reads:
Speeches in committee of the whole house must be strictly relevant to the item or clause under consideration.


James Shaver Woodsworth: Do I understand
that under this item it is impossible to discuss the various factors which might tend to promote war?


Armand Renaud La Vergne: I should think so. The hon. member has had many chances to express his views in the house by bringing forward a motion.


James Shaver Woodsworth: Yes, there are possible ways in which such a matter could be introduced.


Armand Renaud La Vergne: As long as the standing order is there I am bound to observe its provisions.


James Shaver Woodsworth: I think I am in order in asking a few questions of the minister. I should like to know whether the Minister of
297S
Supply-National Defence

Justice was correctly interpreting the attitude of the department when he made the following statement:
The armaments of Canada are practically negligible. We maintain only such military, naval and air forces as are necessary for the maintenance of law and order within our own border. Canada has no need for greater armaments.


Donald Matheson Sutherland: Of course I have every confidence in any statement made by the Minister of Justice, but it seems to me that what he meant was that the forces as we have them in Canada to-day are not more than might be necessary. However, that is not essentially the object or aim of the permanent forces in Canada; their main function is to act as an instructor to the militia and, incidentally, as an aid to the civil powers.


James Shaver Woodsworth: It is very interesting to hear the minister repudiate the statement of the Minister of Justice, but it is unfortunate that the Minister of Justice should have made this statement in such a magnificent assembly as the League of Nations. It is unfortunate, too, that it should have been given as the position of Canada,. when, after all, it was only a general remark called forth doubtless by the peaceful atmosphere which prevailed in that assembly. I should like to ask the minister: where lies the necessity to-day for the maintenance of a standing army?


Donald Matheson Sutherland: The essential and paramount duty of every government is to provide peace and tranquility in the country, and our permanent militia is the background of our Royal Canadian Mounted Police. That, along with the instructing role which I mentioned, is the sole object of the permanent forces.


James Shaver Woodsworth: Instruction is the
primary one, and that contemplates a state of war. Against what nation are we preparing our forces?


Donald Matheson Sutherland: We are preparing against no nation in particular. If the hon. gentleman will look at the estimates he will see that they have been reduced by several millions of dollars. That shows that we have no particular bellicose attitude.


James Shaver Woodsworth: I am glad to note that there has been some reduction, but I assume that is because of the general policy of economy rather than any desire on the part of the minister to have his military estimates reduced. As we are not preparing against any

one particular enemy, do I understand that the minister is still going on the assumption that armaments are more or less an insurance against war?


Donald Matheson Sutherland: Yes, absolutely; I think they are an insurance against war.


James Shaver Woodsworth: I am glad to have that statement; it is at least frank. I would point out that the last war did not indicate in any way that the very fullest armaments would prevent a country from being involved. I would point out also that this idea that armaments are insurance against war is out of keeping with the whole conception of the League of Nations. I should like, if I might, to ask the minister whether he thinks, now that we have declared we are renouncing war as an instrument of national policy, there should be any modification in our military policy?


Donald Matheson Sutherland: The hon. gentleman seems to lose sight of the fact that we are a small nation of ten million people and that we cannot control world policies. We are part of the world, and as long as practically every other nation maintains an army and is not satisfied that conditions are such as to warrant their doing away with it, we cannot do away with ours. It would be just as logical, say, for the city of Toronto to do away entirely with its police force while Detroit, Montreal, Buffalo and all the other large cities were maintaining theirs. There would simply be chaos; all the trouble would be concentrated in Toronto. As long as all other nations have armies, we must continue to have at least the nucleus of one.


James Shaver Woodsworth: The minister would not contend that an army is simply a police force. I take it that in the past armies were maintained in order that a nation might by means of force settle accounts with other nations.


Donald Matheson Sutherland: They are to maintain order, the same as a police force. A police force has its prescribed scope of activity in maintaining order. Armies are to maintain international order.


Mr. LUCHKOVICH:: What was the largest amount that was spent on national defence? I understand about five or six years ago it was $20,000,000, was it not?


Donald Matheson Sutherland: Yes.


Michael Luchkovich: To that extent I would congratulate the Minister of Defence on having made the reduction. We have a very valuable member in the hon. member for

Supply-National Defence
Winnipeg North Centre, and on many occasions he has rendered' this country useful service, but it seems to me, in view of the fact that these estimates have been so substantially reduced, that in making the argument he has presented this evening he is much like the man who drives a tack with a sledge hammer. It is not so long since I came back from Europe and I heard the hon. gentleman say something about promoting peace. The best way, so far as we are concerned, to promote peace, is to send delegates from this dominion to all the conferences held overseas and to tell the other delegates what a wonderful country we have. On one occasion I had an opportunity of speaking about the 4,000 miles boundary between Canada and the United States and of informing them that we had hardly a single soldier defending it. I am not averse to spending a certain amount of money on an army; we must maintain some sort of army commensurate with the importance of this country, and as I have already said, the minister is to be congratulated upon progressively making so many reductions in his estimates.
Not long ago we had a conference at Bucharest, at which we took up the question of disarmament. The question of an international force for the League of Nations was raised and as the Canadian delegate there I voted against this armed force for the League of Nations, because I thought it was a contradiction of the Kellogg peace pact which practically all the nations in the world had signed. I think we can do the cause of peace a great service if we send our quota of Canadian delegates to all the conferences overseas in order to point out the folly of increasing their armaments. There is no doubt in my mind that on the European continent they are substantially increasing their armaments. We in Canada, on the other hand, are decreasing ours, and that is a fact which the people on the other side of the ocean should take into consideration when such an important question as a policy of peace is being discussed.


James Shaver Woodsworth: I do not want to
prolong this discussion. I have already said that I am glad our armament is small and that there are decreases this year, but I still think that we ought to assume our share of responsibility in regard to general disarmament. As long as we, in the happy position in which we are, practically free from enemies, find it necessary to maintain even a small army, and as long as we uphold the doctrine that armaments are an insurance against war, I do not think we are doing what we might in promoting world peace.


Edward James Young: In reference to the skit
which the hon. member read at the beginning of his speech, where the animals could not agree to disarm, what would have happened if, let us say, at that conference the eagle had consented to part with his beak, wings and claws and the others had not?


James Shaver Woodsworth: I do not think that point can be pressed. But of one thing we are sure: as long as we are at the present game we are getting no further ahead. I am inclined to think we are gradually climbing out of the slime. There is no doubt the human race came up through a very bloody pathway, but I am glad to think we are gradually attaining some slight degree of reason in our dealings with one another, and one of these days we shall manage to get along without the teeth and claws.


Thomas Merritt Cayley: Is the hon. member suggesting that he is willing that we should completely disarm?


James Shaver Woodsworth: I am.


Thomas Merritt Cayley: Forthwith?


James Shaver Woodsworth: Yes, forthwith, so
far as I am concerned, for two reasons. This small army, if you like to call it such, that we are keeping up, is a mere irritant; it is provoking rather than helping to avoid war. More than that, our army is anything but efficient. I should like, if I might, to quote in this connection just one paragraph from a recent address by Sir Arthur Currie. I am not suggesting that he takes the position that I do, but I quote this paragraph from a recent speech of his. He refers to the ghastly toll of past wars. He says:
Some 11,000,000 dead; 9,000,000 war orphans; 5,000,000 war widows; 20,000,000 helpless, wounded, broken men; and 50,000,000 starving unemployed. In the background of this picture were ruins of churches, buildings and humane institutions which had been constructed by the toil and sacrifice of centuries.
Then he declares:
In a war of the future, there would be no use whatever to say that "We must not use poison gas; we must not spread disease germs; we must not kill civilians; we must not have submarine warfare; we must not destroy hospital ships; we must not bomb hospitals; we must not drop bombs on undefended towns.
All tlies things will be done."
Well, if all these forms of warfare will be resorted to, if we were thoroughly consistent and were going to be prepared for the next war, instead of pottering away with a few soldiers and officers as we are doing to-day, we would be arming along those lines and preparing definitely to carry on a warfare of
29S0
Radio Broadcasting

that description. Of course experts tell us that we cannot defend ourselves against attacks of this kind. I agree, we cannot, because there can be released enough germs, poison gas and so on to wipe out our cities in a very short time. If that be the case, why not let us frankly face the situation and attempt to discover some substitute for armament and prevent these disasters that will inevitably result from a war in the future.


[Stage Direction]
Item agreed to.
Progress reported.


[Stage Direction]
Right Hon. R. B. BENNETT (Prime Minister) moved that the house go into committee to consider the following proposed resolution :
Resolved, that it is expedient to bring in a measure to provide for the constitution of a commission to be known as The Canadian Radio Broadcasting Commission, for the purpose of acquiring, operating, regulating and controlling radio broadcasting in Canada.
Motion agreed to and the house went into committee, Mr. Smith (Cumberland) in the chair.
Richard Bedford Bennett: I do not propose at this stage, Mr. Chairman, to do more than say that the measure to be based on this resolution endeavours to embody the recommendations of the committee which unanimously reported to the house the other day, and which report was unanimously adopted by the house. If the committee is disposed to pass the resolution this evening I was proposing to submit the measure for its first reading and then leave it for its second reading to-morrow so that hon. members might have an opportunity of looking it through. There is one section in which a slight change will be made, as I mentioned this afternoon. There is nothing in the bill to be founded on the resolution except provisions to enable the country through the commission to acquire, operate, regulate and control radio broadcasting in Canada, the details being set out in the measure.
Resolution reported, read the second time and concurred in. Mr. Bennett thereupon moved for leave to introduce Bill No. 94, respecting radio broadcasting.
Motion agreed to and bill read the first time.


William Lyon Mackenzie King: Would it be
possible to have copies of the bill in both English and French to-morrow?


Richard Bedford Bennett: It is printed for revision. There are two or three words in one of the sections that I think will have to be amended, but the bill in its present form will be distributed either to-night or first thing in the morning. I think it is ready to-night in both English and French. There are no figures in the space for the salaries for the commissioners in the measure as submitted to the house.
As this matter has taken a very short time, perhaps the opposition would allow the Minister of National Defence to proceed with his estimates. I thought this matter would have taken a little longer or I would not have asked the committee of supply to rise until a quarter to eleven, but I thought it best to take a little longer in view of the possibility of discussion.

The house in committee of supply, Mr. Smith (Cumberland) in the chair.
Non-permanent active militia, $1,837,400.


Mr. RALSTON:: Would the minister tell
us what are the items making up the reduction from last year?


Donald Matheson Sutherland: I think there will
be a small item in the supplementary estimates of $50,000. In a general way the reduction is due to the reallotment of the days of training. There will probably not be as many days' training this year, perhaps only ten days where there were twelve before. The artillery did not get a chance last year to go to camp at all and use the mechanized equipment.


James Layton Ralston: How many days in camp and for how many men does the minister propose for this year?


Donald Matheson Sutherland: For the artillery,
twelve men to a battery. There will be no camps whatever for the infantry.


James Layton Ralston: How many men will go
to Petawawa?


Donald Matheson Sutherland: Just about twelve
men to a battery from eastern Canada. In western Canada they will go to Camp Hughes.


James Layton Ralston: If I understand correctly, there was no camp at Petawawa last year.


Donald Matheson Sutherland: Except for the
permanent force.


James Layton Ralston: Do I understand that
there is to be a camp at Petawawa this year, and still the vote is less than last year?

Supply-National Defence


Donald Matheson Sutherland: There is a reduction of $12,000 for maintenance charges in connection with the general upkeep of armouries, drill hall and rifle ranges. That, together with the smaller allotment for training makes up the reduction in this vote.


James Layton Ralston: But there is a reduction
of $163,000.


Donald Matheson Sutherland: There will probably be a supplementary vote of $50,000.


James Layton Ralston: I am afraid that I still
have not got the items making up the reduction of $163,000. Assuming that there will be a supplementary vote of $50,000, that will leave the reduction of $163,000 at $113,000. Would the minister just indicate generally- I do not want details-what is the cause of this reduction of, roughly, $100,000? Is it less days in training?


Donald Matheson Sutherland: Less days in training, yes.


James Layton Ralston: That is headquarters training, and not camp training.


Donald Matheson Sutherland: Headquarters training, yes.


[Stage Direction]
Item agreed to.
General stores, $663,500.
James Layton Ralston: Would the minister give
us the items making up this reduction of $600,000, approximately? The total redu-tion of $600,000, approximately? The total reduction is $1,700,000 odd, and nearly half of that is in this one item for general stores.


Donald Matheson Sutherland: The reduction is
made up as follows:
Clothing and necessaries, $8,500; miscellaneous stores, $141,500; artillery stores, $179,500; telephone signal and wireless stores, $12,500; inspection of stores, $6,500; army service corps, mechanical and water transports, $15,000; Dominion arsenal at Quebec, $199,000; Dominion arsenal at Lindsay, $500; inspection of ammunition, $6,500.


James Layton Ralston: How is the saving brought about for the dominion arsenal at Quebec? Will there be less ammunition manufactured this year?


Donald Matheson Sutherland: Yes, there will be less ammunition manufactured, and consequently the wages item will be lower.


James Layton Ralston: Probably so, but not to the extent of $200,000. The decrease in the manufacture of ammunition would not amount to anything like $200,000. How much less ammunition is being manufactured?


Donald Matheson Sutherland: The details of the estimate for the dominion arsenal show a total of $298,000 made up as follows: Salaries and wages, $221,000; maintenance, $30,000; removal of snow, $700; cordite contracted for, $20,000; bandoliers, $1,000; material for manufacturing, $106,000. From the total of these figures there has to be allowed $81,000 for materials on hand. The decrease is due to the ten per cent reduction in salaries, and the decision to close down the arsenal for a period of ten weeks in the summer.


Henry Elvins Spencer: Are any munitions manufactured by private firms in Canada?


Donald Matheson Sutherland: No, not to my knowledge.


[Stage Direction]
Item agreed to.
Cadet services, $100,000.
Henry Elvins Spencer: Could the minister tell the number of cadets in the different provinces?


Donald Matheson Sutherland: In Nova Scotia, there are 4,500; in Prince Edward Island, 900; New Brunswick, 3,400; Quebec, 67,500; Ontario, 44,700; Manitoba, 3,000; Saskatchewan, 3,900; Alberta, 7,400 and British Columbia, 6,000.


Henry Elvins Spencer: How is the reduction made out?


Donald Matheson Sutherland: I must say there will have to be a supplementary estimate brought in. This sum is not enough to carry on the work. There have been very strong representations made, and a supplementary estimate will have to be brought down.


Thomas Merritt Cayley: Since last year has there been any reduction in the number of cadets?


Donald Matheson Sutherland: There is an increase of about 4,000 cadets.


Mr. GERSHAW:: What is supplied to the cadets?


Donald Matheson Sutherland: There is no clothing given to them. They are given an issue of small 22 calibre rifles. The principal item, however, is instruction.


Henry Elvins Spencer: Are the cadets looked upon as part of the reserve army?


Donald Matheson Sutherland: No, not by the Department of National Defence. I am bound to say that every now and again we hear of some regiment with which there is a cadet corps affiliated. I do not, however, consider them in any way a part of the militia force.


[Stage Direction]
Item agreed to.
Supply-National Defence
[Stage Direction]
Administration, $320,000.
George Gibson Coote: I understand there has been some correspondence between the Canadian Legion, the British Empire Service League and the minister concerning the publication of the Canadian official history of the great war. Can the minister tell what progress is being made by the department in this connection?


Donald Matheson Sutherland: This subject has created a great deal of interest, and rightly so. Practically ever since the war a subdepartment has been gathering information and data. To be useful, any history must be exact. If the hon. member is particularly interested and will come to my department I shall be very happy to show him how exact that information is. From the information at hand, the officials know all the details of a battle on a certain date at a certain hour, and they have the detailed information concerning the companies, squadrons and batteries. At a time six hours later there are further details to show the changes which have been made. That preliminary work has now reached the stage where it is possible to begin writing the history. Probably it will consist of eight or nine general volumes, and two or three in addition dealing with particular services. Work will be started on the first volume immediately. It must be remembered that there are two kinds of histories of the war. One is official, giving days and dates, and quoting orders; another deals with certain incidents and embellishes them in an effort to make the subject matter readable. Some writer may comment on whether or not he approved of a certain general, or the practice of protecting the infantry by artillery fire. That may be a readable history, but it is not official. On the other hand, the official history may be used as a ground work for writers who may direct their thoughts along general lines. I hope that before parliament meets next year one volume will be ready.


Henry Elvins Spencer: Is it not a fact that Great Britain, Australia and other parts of the British empire are ahead of Canada, so far as the histories of their respective parts in the war are concerned?


Donald Matheson Sutherland: In some cases they have written the second type of history I have described, namely that prepared in sketchy and newsy form. Such histories, however, are not official. Great Britain is now writing her official history of the war, and it has been the practice of her officials to send to us anything concerning the Canadian troops, the information being checked by the officers in our 
department. Great Britain has begun work on the official history, but I would not admit that she is ahead of us in that particular work.


George Gibson Coote: Apparently the officials in
charge of this work have been thirteen jmars gathering data. I notice in a return which was brought down on April 24, 1929, that at that time they had sorted 135 tons of material; indexed and made available documents occupying 3,138 feet of shelving; selected and copied documents covering 20,000 pages with maps; supplied information to inquirers on a wide variety of subjects necessitating writing approximately 8,000 letters; and compiled historical information comprising approximately 6,432 pages, 150 maps, 4,288 charts and 12,000 cards. To any ordinary layman who is interested in the subject this would appear to be sufficient data on which to base the history. I suppose I could go over to the department and see how the data is gathered, but the men most interested in this history are the veterans themselves, and many of them feel they will be dead before the history appears. I think it would be not unfair to say that the men in charge of this work have been dilatory, to say the least. I was very glad indeed to hear the minister suggest that we might perhaps expect one volume this year. Who is to be given the task of writing this history, the man who is in the department now and has been engaged on the work for the last fifteen years?


Donald Matheson Sutherland: Colonel Duguid will write the history. He has been head of the sub-department for a number of years. I must correct the hon. gentleman when he suggests that Colonel Duguid or anyone else in that particular branch has been dilatory. He certainly has not been dilatory. He may not have been given the help he needed, but his is a very small branch. No one has worked harder, or put greater effort into the preparation of this history than has Colonel Duguid.


George Gibson Coote: How many men are engaged in this work, and how much has been spent on it already? Has not sufficient work been done and money expended to justify our expectations that some of these volumes might have been published before this?


Donald Matheson Sutherland: I do not think the hon. gentleman will find there is a great deal of dissatisfaction, for it must be remembered that it takes a long time to get exact information for the preparation of such a history. Several histories have been written in the older countries by some general or staff

Banking and Commerce-Report
officer giving his views on the strategy employed by the various generals. But that is not an official history in the sense in which we regard the history that is to be written for this country. Our history must be based on authentic information.


James Layton Ralston: I desire to second what the minister has said with regard to Colonel Duguid's work. It may be, as the minister suggests, that Colonel Duguid himself may not have had sufficient help. I think it would be rather difficult for him to use very much help in view of the technical nature of the work he is doiug. I know that for several years while I was in the department he was still opening boxes and packages and collecting data which was coming in from all sources, and at the same time he was busy answering inquiries from those in several parts of the country who were writing battalion histories. Wonderful work was done by the historical section in connection with the memorial chamber in this building. If I remember correctly, with respect to the Canadian war memorial which is'now being prepared, a great many ideas, if not suggested, were at least forwarded by Colonel Duguid's work. Dilatory is the last word my hon. friend ought to apply to Colonel Duguid; I do not know one whose heart is more in his work or who is more industrious.


George Gibson Coote: I do not know the gentleman at all, and it may be that he has done all he could do. Perhaps I should have said the department has been dilatory. At least that is the opinion of a great many returned men who are still looking for the official history of the war. As I have said, they are the men who are interested and many of them fear they will be dead before the history appears.


[Stage Direction]
Item agreed to.

[Stage Direction]
Training-all expenses in connection with the general maintenance of the air force including training personnel for civil air operations and provision of the necessary facilities therefor;
Civil air operations-flying operations for civil government departments in connection with aerial photographic surveys, forestry patrols, forestry and grain pests, transportation, etc., control of civil aviation; establishing aerodromes and airship bases; aeronautical engineering, etc.;
Air mail routes-to provide for expenses in connection with establishing and maintaining air mail routes; preparation and lighting of intermediate landing fields, etc., $1,750,000.
George Gibson Coote: Will the minister explain how he arrives at the decrease of $3,602,000 in this item? How many air force men have been laid off?


Donald Matheson Sutherland: One hundred and
eighty-eight men have been laid off, and the civil air operations they were engaged in have been very largely restricted.


George Gibson Coote: Is this decrease all due to the discharging of these men from the force?


Donald Matheson Sutherland: Oh, no. It is due mainly to the operations themselves having been cut down. This year we will probably be doing only five or six thousand hours flying, whereas last year we did about thirty thousand hours. Then there will be very few, if any, aircraft purchased. To the best of my knowledge now, there will be none.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Tuesday, .May 17, 1932.